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Discussion in 'General Discussion' started by mateus1986, Aug 18, 2016.
What is more profitable? A master node or lend the Poloniex?
The counter party risk is much lower with a Masternode. It's no counter party risk actually. Just a hacking risk.
Poloniex is a large target and I would suggest more likely to be hacked than you.
Poloniex et al are very enticing, but I agree with Darren and have stayed away as a result.
imo... PRI does not seem to be anywhere near where it should be if loaning coins on the exchange ! tenths of 1% in interest ??? is the demand, from what I can tell...
If you are able to, go with the Master Node alternative. I would.
Poloniex..........how can I put this? I wouldn't borrow one Doge from them! And that's too generous IMO. If you have 1000 Dash and the knowledge, it's quite the no brainier, TBH.
You can earn more % (with bigger risk) by lending on Poloniex than operating own Masternode, but...
The main profit to Dash investors doesn't go as percentage from Masternode or percentage from lending on Poloniex.
The main profit is made from Dash Price rise, and...
1. When you are setting up Masternode - you are helping price to rise.
2. When you are lending your Dash on Poloniex - you are helping traders to push Dash's price Down.
So for me second option doesn't look as "more profitable", and event doesn't look as "smart investor behavior" (lower Dash price also means less development fund and so on...).
Do you make this statement because loaned Dash on Poloniex can be used to short?
Sure - they can be used only for Earning by shorting Dash.
Could you also borrow Dash on Poloniex to go long?
I would agrees that "net" Poloniex Dash would tend to push the price down relative to collateralized Dash in a Master Node. I'm just trying to get a better understanding...
So yes, lending DASH on Poloniex will result in someone selling so there would be an immediate (small) downward push on the price.
However, at some point in the future the borrower will need to buy back the dash, this will undo the downward push. Also the lender will earn interest. If the lender kept the interest as DASH then this will lead to a slight upward pressure on the price of DASH. These changes in price will be so small they are not worth worrying about.
I am beginning to think it is not worth having the coin tied up for even the 2 days!
but I am still learning...
and I DO agree w/ alex-ru ... MN is the best place for a large bag of DASH...
[QUOTE="alex-ru, post: 101823, member: 1771"
1. When you are setting up Masternode - you are helping price to rise.
Question... if I were to set up a Regular DASH node with unused PC would it be beneficial to the DASH project ?
Speedtest shows my link has ping 9ms 65mb/dl yet only 4.4mb u/l...
No. You borrow USD (aka margin) to go long on Dash or any other coin.
I loan on Pol in addition to my nodes, but only smallish amounts. I'm talking under 50 DASH at 1.4%. Made .3 dash in a few hours today, more than if I just sat on it in a wallet.
Hey, thanks for that, I think I'm starting to get it...a little. Am I correct in thinking that going long is an equity proposal, while going short is a debt proposal?
If you margin trade on poloniex, ya better know what ur doing. It's risky, the rates are pretty substantial, and I just don't like that exchange in general. Yes, you can make a couple coin doing so on poloniex, possibly a lot of coin. But in retrospect, you can also have your whole account liquidated quite quickly. Winner, poloniex. They don't lose, you do.
I agree, I've never margin traded because it scares me. I'm sure that if I tried it I would lose my butt. Anytime I sell, the price goes up, every time I buy, the price goes down.
I will elaborate more L8r. I'm shi+ lit atm. My long time friend is having a kid.
any short have to close at some point, and if price kept rising, those shorter will have to buy @ even higher price.
Man, are you serious?
I do not recomend using margin, especially with volatile cryptocurrencies.
Going long Dash on Margin would mean borrowing bitcoin and buying dash.
Going short Dash would mean borrowing bitcoin and buying dash.
on the exchange side, there is no debt or borrowing.
@Darren apparently you have given this much thought and consideration...
Would I be incorrect to consider margin trading is only a valid technique in futures that ARE in fact, volatile ?
What purpose would be served by attempting to margin trade any stock that was static in value ? ...other than paying loan fees to the lender ?
The reason people trade on margin is what is called leverage. Let's say I have 1 Bitcoin. I could:
1) no margin: buy ~41 dash and hold it out right
2) margin: borrow another bitcoin and buy 82 dash.
If dash then starts trading at 40 dash per bitcoin I could:
1) sell 41 dash for 1.025 bitcoin
2) sell 82 dash for 2.05 bitcoin return the bitcoin I borrowed and pay interest so that I would end up with 1.0495 bitcoin
In the second situation has the most profit .0495 compared to .025
The problem with margin is that the price of dash could go to 45 dash per bitcoin then
1) I could hold my 41 dash indefinitely currently valued at .9111 BTC which if I sold would realize a loss of .0889 BTC.
2) At some point I will need to pay interest on the bitcoin I borrowed. If I sell my dash to cover some of the interest or the original 1 bitcoin loan that will only provide 1.822 bitcoin yielding a loss of .178 + interest
I prefer situation 1)
If dash goes way down, say to 55 dash/BTC then it's possible in situation 2) there would be a margin call which would force me to sell at market to recover the value for the loan. I could lose most of my original bitcoin.
Margin trading at Poloniex is not for those with ADD you have to pick a coin out of Poloniex's 11 top alt coins (no brand new coins are on that list) that is being pumped or dumped the bigger the percentage of increase or drop (minimum 25% either way) the bigger the chance of making a profit. Short the dumps go long on the pumps. Sit and watch it don't go off and for the latest cyber distraction or you will do your arse. If you haven't got a profit after an hour max you aren't going to get one the steadily rising interest bill will take away any joy.
That's been my experience unless you have insider trading knowledge on the 11 just keep on mining something and sell it for Dash on the dips.
Do explain this vector to me...
If you don't have the knowledge; get it! Considering what's at stake, you'd think it would motivate a little effort and learning... @TaoOfSatoshi has a guide that can get even a complete retard up and running. Whether or not it's good to have complete retards running Masternodes is still debatable.
So I guess I should change the name to "TAO'S MASTERNODE SETUP GUIDE FOR RETARDS", eh, Camo?
Last week the rates on lending dash on polo were extremely high due to the sudden increase in value of dash and the subsequent massive shorting. Rates were at 2% for quite a while. Imagine 100 dash loaned out on 2% interest for 2 days. That's interest per day, not per year. It would take six times as long and ten times as much capital to make the same amount with a masternode.
I still have 80 DASH loaned out at 0.8% per day from that time, its building up nicely thank you.
Unfortunately, the rates have sunk back down to the normal, about 0.01 - 0.02 per day. IMO, it's only interesting for some spare dash that you can accept being locked away for a couple of days.
So there is definately a case for making money out of lending dash on polo but, as people above have stated, there is risk. There is risk that polo goes broke or gets hacked. Polo is a big target, you can be sure that people are trying. A masternode is a lot safer, depending on how good your personal security is.
I think shorting, or going long, leads to a more stable market, with less dramatic peaks and dips.
And finally a tip: if you are going to margin trade, then make sure you check the lending rates! The default rate in the box on Poloniex is 2% per day, which is way too high. And keep checking them ... some idiot still has 80 dash borrowed at 0.8% for almost a week after the rates have dropped back to 0.01% or less. 0.8% per day is 292% per year. 0.01% per day is 3.65% per year. Very different.
If you hold DASH on your local machine then there is a chance that machine gets hacked and the attacker could steal the Dash. I think this risk is low, but to be safe don't click on shady links, get phished etc.
[QUOTE="Otaci, post: 102382, member: 4832"f ...lending dash on polo... .[/QUOTE]
TY ! Good post !
If I were to lend my DASH, at .any. rate, would that return be considered as a hedge against a falling market price ?