The AI does not hate you, nor does it love you, but you are made out of atoms which it can use for something else.
—Eliezer Yudkowsky, Artificial Intelligence as a Positive and Negative Factor in Global Risk
My journey down the rabbit hole of DAOs has instilled in me profound hope (and fear) for the future. But enough abstract navel-gazing...
Today I would like to introduce a concept DAO. The bitshares address "nelson-hunt" likes silver... a lot. (http://open-explorer.io/#/accounts/nelson-hunt)
I would not want to stand between this man and his silver.
Background: In real life Nelson Hunt and his brother liked silver (and feared growing global market instability) so they decided to buy some. They bought over 100,000,000 physical ounces but were not satisfied with that. They decided to buy even more silver futures contracts on the Commodities Exchange market in Chicago. They bought so much physical and paper silver that people started to get nervous. "Did the Hunt Brothers know something that other investors did not know?" was the question around financial markets at the time. Eventually the US Government got involved and the Hunt Brothers were forced to relinquish their silver positions. Some people think that the centralized marketplaces responsible for price discovery on silver are highly controlled. This would be "illegal" if ever proved. I do not know whether that is the case - although I do recognize strong points on both sides.
Back to Bitshares: Bitshares is a global decentralized asset exchange that offers tools to gain synthetic exposure to any conceivable asset. Consider this the COMEX 2.0 (https://wallet.bitshares.org/#/market/SILVER_USD). The bts account "nelson-hunt" was created to test the price discovery mechanisms for silver. In an efficient market, the price for any good or service should be roughly equivalent across venues. This is justified by the concept of arbitrage. If an asset were trading for a premium in some venue then an enterprising trader would buy in the cheaper venue and sell in the more expensive venue - ultimately flattening any price discrepancies and resulting in price equilibrium.
The last trade on the bts exchange for silver was 23 bitUSD/bitSilver. This is a 50% premium to the published price on traditional commodities exchanges -
The bts address "nelson-hunt" will acquire bitSilver every weekday at 1600 E.S.T. If limit orders are used then bids will be published to those showing interest in this project. Otherwise market orders will be used to pick up bitSilver at the lowest asking price.
This is a rough draft concept so I welcome all comments and look forward to working with silver stackers and making this "experiment" into a reality.
