Proof of Brain has Moved
It's as if I had been evicted from my home and my baby had to starve inside. The decided to pull the plug on my domain registration. I was given a link to 'confirm' my email. This link never did work when I clicked on it though. So update your browsers and bookmarks to www.proofofbrain.blog. I thought this one is even more appropriate a name than the .org one. What was I thinking?
I'm Using the Testnet at home
When I'm at home, I run a copy of the site on my local computer but I run it using the Hive testnet. This allows me to be more adventurous. Of course the real site will always work on the main net.
This is a screenshot of part of my wallet, it is showing that I am converting TESTS to TBD. Which are the testnet equivalents to HIVE and HBD respectively.
Reworking of "Collaterialized Convert" Transactions
Digging through the C++ code of Hive, I discovered the subtleties of the "collateralized conversion" operation. According to the documentation. When you use this operation the cost of conversion is 5% and a special rate that gives you less is used to get the immediate amount of dollars. To make matters seem worse you have to put up twice the collateral of that number to do this.
For example, suppose Hive is trading at $0.24 but the minimum price is $0.21, the value used is going to be $0.21. Then they take off 5% (-$0.01), and then the cut it in half (-$0.10).
So if do this "collateralized conversion" of 1 Hive, you'll immediately get $0.10 HBD. After 3.5 days however, things change. The worth of the 1 Hive is recalculated using the median market price, which could be higher or lower after three days. Suppose it is $0.24 USD/Hive and then it is calculated how much Hive should be charged for $0.10 USD. Including the 5% fee, the rate is $0.229 USD/Hive and so this means that the $0.10 HBD is retroactively is assessed as worth 0.437 Hive. So here 0.563 Hive is returned to the user. In a way you in this scenario you get $0.229 HBD/Hive when you could have just traded it for $0.24 USD/Hive?
So what price should you do this operation? You have to consider distance between the best price to sell and the best for buying; and transaction and trading fees if you're going to use an centralized exchange other than Hive Dex. If you have HBD and you want to get Hive anyway, it might make sense if it HBD is above $1.00, because it could easily beat the market. If you want to cycle from HBD to Hive and the use the market to get back into HBD again, you may run into too much friction to make a profit this way.