Bit20 - The Cryptocurrency Index Fund
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isnt iconomi a crypto index fund?
>51K
Interesting but I don't have the funds and can invest it myself
About Bit20:
>Bit20: Composition, revision and history
>Composition:
>Choosing how many cryptocurrencies would be included in the index
>Including ten cryptocurrencies was our first approach for the index, however we thought that we were overlooking some interesting projects currently ranked in the 11th - 20th range, so even if the market capitalization of these coins is lower than the top 10 cryptocurrencies we felt they deserved to be part of the index since they have a lot of growth potential, we incorporated these coins with less weight on the Bit20 index and we left out coins below the top 20.
>Exceptions:
>Ripple was intentionally excluded from the index since it constitutes a private and centralised institution, it is not considered a cryptocurrency and it is similar to a bank using the blockchain technology. Future bank cryptocurrencies won't be included either.
>The derivatives of real assets based on a cryptocurrency won't be part of the index. The reason is simple, a derivative is a copy of the underlying asset price. This asset doesn't represent the value a cryptocurrency project, thus, it doesn't belong in the index.
>We won't includes Tether (copy of the dollar), DigixDAO (gold bullion), BitUSD, BitCNY, BitSilver, ...
>Percentage by coin:
>If we added the total market cap of the top 20 cryptocurrencies, we would obtain the total market capitalization of all of them. If we were to use the respective percentage of each cryptocurrency in the top 20 to define which part of the index they should have, we would end up with an index moving in parallel with Bitcoin which represents around 80% of this total market cap of all these coins.
>Therefore, we opted for using the same system applied by traditional indexes which consist in having a maximum percentage by asset inside the index. So we proceeded by topping the first one, Bitcoin, at 10%. It left us with 90% to share on the remaining total market capitalization of the last 19 cryptocurrencies. Litecoin (july 2015) was the second biggest one and it also represented more than 10% of the total, so we capped it too. The same process was done to all of the 18 remaining cryptocurrencies, only the few biggest coins reach 10% and the vast majority have percentages going from 9% to 1%.
>Initial value:
>Having the distribution well balanced was a precise task to do. To give a value to the index, we just had to arbitrary chose one. It could have been one dollar, the price of a cereal box or the national debt of a country. To keep things simple and elegant, we chose to gave to our index the price of an ounce of gold on his birthday date, the 21 of july 2015.
>The average of several sources on the gold price created the initial value of Bit20 at: 1103.4733333333 USD.
>With this value in mind and the percentages of each cryptocurrencies in the index, we can determine how much of each cryptocurrency will constitute the index.
>Revision:
>Once a month, the scripts involved in the composition of the index run a calibrating algorithm to redefine the coins that constitute the index. Without running this revision we would still have the same coins as they were in the top twenty on the 21th of july 2015. If we run this revision too often, the index is not stable. We consider once a month was enough time to have stability and also allow the index to evolve with the new cryptocurrencies in the top 20.
>The revision consist in calculating the percentages of the top cryptocurrencies by market cap, just as we did upon the creation of the index. Once we have the new percentages, we determine how much each cryptocurrency will constitute the index NOT with the value of an ounce of gold BUT with the last value of the index in $.
>Once the correction is done, the new composition smoothly replaces the one from the month before and no variation in the price is caused by the revision. We will notice that on each revision, some coins disappear from the index and new ones appear.
>Technical Details:
>BTWTY has been made in a way that even our team couldn't manipulate it after it has been launched. It is fully trustless and decentralised. It was necessary to reach that point of security. We want the index to be considered as a serious economic tool able to manipulate important funds.
>There are two main key parts in the index structure.
>As we've just seen, the algorithm creates the index itself. This algorithm calculates the weight ( % ) of each coin in the index.
>The second key part is the mechanism producing the price and publishing it in the BitShares Blockchain.
>The witnesses represent the highest representation of trust and decentralisation in the BitShares ecosystem. They have the code to produce the index price using the composition created by the first algorithm.
>We had to provide the index composition for the witnesses but we couldn't risk to have it on a centralised server. This situation would have created a potential way to hack the index and change its composition and gaming the price. To solve that problem, we've used the BitShares Blockchain to store the index composition. Every month, we send the new composition in a standard transaction memo.
From the FAQ:
>Where does BITWTYs come from ? Who sells them ?
>It’s a free market. BTWTY team doesn’t create nor sell BTWTYs. Short sellers (traders) are the ones creating BTWTYs by locking 200% collateral of their value in BTS and then sell them. Once they are created and sold, they are acting as any other asset in the market and can be sold again and again.
>How secure is BTWTY ?
>BTWTY is a smartcoin in the BitShares blockchain and does possess the same properties as the core asset BTS. We can agree that Blockchain technology has demonstrated so far that is more reliable than centralised online exchanges.
>Can BTWTY team manipulate the price to dishonestly win money ?
>No we can't ! The new composition of the index is monthly sent in a BitShares Blockchain block. Once in a block, it can not be changed. The nodes of the BitShares blockchain (called “Witnesses”) are reading this composition, calculating the price and sending it into the next block so it can be displayd in the market BTS : BTWTY. The number of witnesses and their high reputation in the system guarantee the decentralisation of the price production and its trustless characteristic.
tl;dr
Bit20 is a smart contract running on the BitShares platform that acts as an ETF/index fund of the top 20 assets which re-balances every month, It is 100% trustless and fully decentralized (unlike Iconomi).
This leads me to the reason I made this thread in the first place, why is everyone sleeping on this?, Aside from the official topics on bitcoin.talk and bitshares.talk this is not being discussed anywhere.
Stock market index funds are consistently safe with a good amount of returns so why are people not investing into this?, I'm trying to help out with some exposure to it if nothing else since it doesn't seem like it's been brought up here.
Bit20 and Iconomi's ICNX are basically the same thing, but they have different implementations. Bit20 is simply a fully-decentralized smart contract running on the BitShares network whereas ICNX is "controlled" by Iconomi.
Looks like a scam
>100% trustless and fully decentralized
how is it a scam?
>why are people not investing into this?
because it's only available in the BitShares exchange (OpenLedger), if this asset was on any other exchange it would have blown up instantly
>Replying to yourself
Go away scammer
I bought some. I would buy more, but bitshares is such a horrible site, I honestly hate going there
Index Funds are legitimately better than Actively-Managed Funds the only problem is that the ones available right now (Bit20 and Iconomi) are either obscure or straight up fraudulent.
But the moment any of these assets become popular is when crypto is finally going to go mainstream, Bit20 and/or Iconomi are going to give normies a way to invest into crypto without having to worry about managing their portfolios or storing every single coin in a wallet etc...
>>>>>>I don't understand how this works so I'll just say it's a scam!!!
Bit20 didn't even have an ICO
So which should I buy?
Bit20 or Iconomi?
I'm still confused about both....
Apparently iconomi doesnt even pay you anything!?
ICONOMI does not have an index fund you can invest in yet (irc it's in beta and it's going to be released in August), the ICN token you see on coinmarketcap acts like a "share" of the actual ICONOMI company but does not represent the index fund (ICNX).
Bit20 has the goal of tracking the market and in my personal opinion it's the one that most closely resembles a proper index fund but it has the disadvantage that it's only available in the bitshares network.
If I had the money I would go in balls deep into both of them (50% into bit20 and 50% into ICNX once it comes out)
as market cap rises these funds should continue to gain value right? is it even possible to lose money with these funds?
unless the entire market crashes it really is impossible to lose money with ETFs
Jesus Christ you guys were right, Open Ledger sucks ass
There are ID's on this board bud
I know, I'm just trying to get some discussion going even if it's obvious I'm samefagging
Can you post the full list of currencies they included in the index?
this.
and how is it weighted? by market cap, price, or some kind of smart betas?
Top 20 cryptos by market cap excluding coins like Tether, Ripple, bitUSD etc...
as for the weights:
>If we added the total market cap of the top 20 cryptocurrencies, we would obtain the total market capitalization of all of them. If we were to use the respective percentage of each cryptocurrency in the top 20 to define which part of the index they should have, we would end up with an index moving in parallel with Bitcoin which represents around 80% of this total market cap of all these coins.
>Therefore, we opted for using the same system applied by traditional indexes which consist in having a maximum percentage by asset inside the index. So we proceeded by topping the first one, Bitcoin, at 10%. It left us with 90% to share on the remaining total market capitalization of the last 19 cryptocurrencies. Litecoin (july 2015) was the second biggest one and it also represented more than 10% of the total, so we capped it too. The same process was done to all of the 18 remaining cryptocurrencies, only the few biggest coins reach 10% and the vast majority have percentages going from 9% to 1%.
Why did they exclude ripple?
>muh decentralization
>muh bank software
>it's not a real cryptocurrency!!!
Those are the reasons pretty much, to be honest I think it should be in the index even if it's issued by a company, after all it has the third largest market cap.
this is so pathetic im embarrassed for you OP
don't worry about me man, I've shilled far worse coins (that thankfully have turned out alright), this is nothing in comparison.
The crypto world is full of scams and people are right to be careful with their money but this actually seems like a really nice investment.