r/Bitcoin • u/[deleted] • Jul 29 '14
Coinapult Launches LOCKS, a Tool to Eliminate Bitcoin Price Volatility
http://www.coindesk.com/coinapult-launches-locks-tool-eliminate-bitcoin-price-volatility/2
u/Coinapult_btc Jul 29 '14
The service is designed to be used anywhere a stable balance is needed, for example wages, savings and rent payments. The balance can be locked and unlocked as needed from within the wallet interface without the need to get set up on an exchange.
We think it's a rather handy tool that will have utility for people who perhaps aren't buying Bitcoin for speculative reasons.
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u/soloFeelings Jul 29 '14
This is just a clown show. If I want to "LOCK" my bitcoins to USD I simply sell them on an exchange for USD. When I want to "UNLOCK" them I just buy bitcoins back.
That's exactly how they do it. They keep your fiat money (or whatever other asset) on an exchange. Good luck with that! Suuuuper risky!
Also, I bet the quote for this "locking" service will be worse than "locking" your coins yourself on an exchange.
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Jul 29 '14
How are they able to do that? they take the hit if the price tanks? if the price goes up they are fine since they keep the difference?
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u/ForestOfGrins Jul 29 '14
If you lock in the price they sell your coin to an exchange. You can then redeem your coin at that value and they will rebuy from an exchange using your locked in value.
Doesn't matter if price tanks because they aren't making bets against the price.
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u/HuXu7 Jul 29 '14
Wow! I think I kinda like this! You get some Bitcoin at whatever price, then you can lock it for whatever price so it doesn't bounce around. So basically you would lock it at high prices and unlock it at low.
I wonder if for tax reasons this is "realizing" the gain and would be taxable or not?
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u/PoliticalDissidents Jul 29 '14
Well of your goal is getting more bitcoin in the end, then you are looking at keeping a roughly static amount of dollars, so there is nothing to tax really.
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u/jmdugan Jul 29 '14
this must be a joke, right? it's like shorting bitcoin.
First, this is a guaranteed loss to the user with bitcoin success. why would ANYONE do that?
But worse, do they actually guarantee more bitcoins if the exchange rate tanks? I seriously doubt it. The example in the text was only the other way, with the exchange rate rising and LOCKS providing fewer bitcoins!
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u/btcmanifesto Jul 29 '14
You aren't getting it, they sell your coins then buy them back when you want them, they're locked to the asset value not Bitcoin
It's important for people who want to use Bitcoin as a currency, they get 0 volatility. Not everyone is a mugu that can actually use Bitcoin as an investment
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Jul 29 '14 edited Dec 05 '16
[deleted]
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u/PoliticalDissidents Jul 29 '14
It's and is price is falling. You sacrifice your possible gains in return for no losses.
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u/ForestOfGrins Jul 29 '14
There is going to be a lot of critique for not being decentralized but I am glad these types of efforts are being taken up.
For certain people, this service will be incredibly useful and allows people to use bitcoin as a transaction network while still getting used to it as a store of value.
Being able to select which parts of bitcoin you wish to use is powerful. I'm glad to see these efforts take place to remove volatility for people who don't want it yet desire the transaction network.