Decentralized trading: the Next frontier

My latest adventure began a few days ago when I conducted my routine check of UtopianFuture’s most recent posts on the Bitcoin Forum. The main piece of information I’m always after with these checks is an approximate launch time for NEM coin. I have a stake in this up and coming NXT-like crypto so I want to make sure I have a wallet client and whatever else I need to claim my piece of this pie once it’s divided and distributed.

The current projected launch date is sometime in late August or early September of this year. But people who are eager to sell or gamble their stake can do so now. UtopianFuture issued a thousand virtual tokens each representing one million NEM, which I believe is the equivalent of one share. People who bought more than one share can only receive one token. Only people interested in selling out need to apply for a token.

Since I have no interest in selling my share of NEM I did not apply for a token, but I thought it would be fun to monitor the NEMstake market and see if I might be able to pick one up at a decent price. But how to do that?

One of the websites dedicated to NXT has a page listing assets available on the Next Asset Exchange but I did not find NEMstake listed there. And it didn’t look like there was any actual trading platform on that site anyway.

I was stymied for a few days, not to mention I had other priorities, so I let it go. But then this morning I decided to ask where exactly was this asset exchange on the thread dealing with NEMstake. I was told I could access the asset exchange through my wallet client as well as where to download one.

Oh well, here goes… I thought. My last attempt to update my wallet had been a miserable failure. When I’d asked Graviton about it he told me that in a day or so there would be a new release which would provide the option of deleting the block chain from my computer, and that if I selected that option the client should work fine.

For something like the tenth time I clicked on the link to download a Next wallet client–the latest release of Offspring. This time, it wasn’t just a zipped file, but an entire installer. All I had to do was click on it and walk through the wizard–a lot like the kind of software programs I got used to before I even knew what cryptocoins and their wallets were all about. Actually my first attempt did not work too well, because the default folder Offspring tried to write to was a folder that required administrator privileges. On my second attempt I changed the destination folder to one I knew would not be a problem and the install worked beautifully.

The first time I opened the wallet it showed me a dialog box asking me (actually urging me quite strongly) to delete the block chain. I agreed and the wallet opened up and then took a half hour or so to re-download the block chain. It’s been working as expected ever since then. Finally I could access the small amounts of NXT which had remained in the wallet addresses connected to my client.

The wallet client has a new section called “Trader.” This section had been present in the previous version but it was basically empty, with nothing more than the “coming soon” message. In the current version, that section is alive and well. It contains a list of assets which has already grown to contain over one hundred listings. When I click on an asset ticker name, the client calls up a chart, the buy and sell orders and most recent trades. It also has a section where my own buy and sell orders and owned assets are listed. The asset exchange tab at the top allows me to place buy and sell orders.

I scrolled down the list of assets for NEMstake and found it listed. When I clicked on it, it called up all its market information, and showed me the price had already climbed to 18,000 NXT for one stake.

The price didn’t surprise me because I had already been able to check it out on NXT Reporting. But it is out of my price range. I’m going to have to watch for a dip in price before I’m willing to buy one. Fortunately, I at least already have my stake so I don’t have to kick myself over not having gotten in early.

And I also understand a bit more what the author of this alt coin analysis article was talking about when he wrote about how people were able to sell their initial NXT stake for orders of magnitude higher than what they’d bought it for. When I was made aware of the opportunity to purchase a stake in NEM, the first price of 0.025 BTC had already expired. I bought my share for 0.03 BTC and then started to wonder if that was 0.03 BTC I would never get back. I also had the option of paying NXT for it, and the price was 300 NXT. So just to make the math easy, let’s assume that 0.03 BTC and 300 NXT are the same value. If I ask UtopianFuture for a NEMstake token, I could sell it for 18,000 NXT right now. This represents a six-fold return on my initial investment. If I had been willing to shell out 0.06 or 0.09 BTC for two or three shares (which we were allowed to do, provided each one came from a different address), I would very likely sell one of them and hold the remaining one or two. Then from that point on I would know that no matter what happened to NEM, I’d already done way better than break even.

Since I only have one stake, I’m going to just hold onto it for now. Something which just occurred to me, though, is that I can divide up my stake into ten parts. It might not hurt to sell one tenth of my stake. More on that later.

A few hours ago I did some brief calculations to figure out what NEM are worth in terms of Bitcoin right now, months before they have even begun to exist. If I sold one tenth of a stake for 1800 NXT, that would be 100,000 NEM. Based on the BTC/NXT market of a few hours ago, each NEM would be worth 214 sat. That is over ten times the price of Devcoin, and this coin doesn’t even exist yet! The amount of Bitcoin I’d get for that tenth stake would be right around 0.21–seven times my initial investment of 0.03 BTC, and I’d still have nine tenths left.

It is important to note, however, that since I ran these numbers the prices of both NEMstake and NXT have dropped. This is quite the volatile market. It may be worth requesting a NEMstake token after all and trying to sell off one or two tenths of it. The main reason I’m not going to do this, though, is because once the token gets sent to me, if I lose my wallet password or for some other reason cannot access it, then I have lost my entire stake in NEM and there’s nothing anyone can do about it. While I have never lost a wallet password, because of all the other issues I’ve had with NXT wallet clients, I consider that to be too much of a risk. I could sell off one or two tenths of my NEMstake and then something blows up with the wallet client, and then I go weeks or months before I can access my NXT address and the NEMstake again. Suppose the window for claiming the actual NEM coins takes place during that time?

I’d rather keep my claim with UtopianFuture until it’s actually time. Then once I obtain my first NEM coins, I will sell off some of them at that time to hopefully make back my initial investment and then some. If I can also make back the entire Bitcoin I put into NXT, that will be even better. Then I can look at anything that comes my way through NXT and NEM as gravy. But I believe that in this case, it’s worth holding out for something that has a finer divisibility than ten, as well as something which is less likely to get lost in the next NXT wallet hiccup.

Since NEMstakes are too expensive to buy right now, I thought I’d try my hand at using the decentralized trading platform to buy something a little cheaper. OK, a lot cheaper. NXT Reporting lists over one hundred assets. I spent a few minutes working my way down the list. As expected with a completely unregulated trading platform I found quite a few completely lame assets. But I also found a few really good ones which still had good prices. My favorite asset was the ConnectTropolis tokens by CoinTropolis. With a professional website, a detailed forum announcement, and an affordable price of only 6.5 NXT each, what wasn’t to like?

I had enough in my wallet to snag one, so I decided this was going to be my learn-the-new-decentralized-trading-platform trade. It worked smoothly and I’m now the proud owner of a millionth interest in CoinTropolis. Once that order went through I pulled out my 30 NXT which were remaining in the NXT Blacksmith Workshop and placed a buy order for four more at the same price. The asking price has already increased so my buy order is still waiting to fill. When I went back to the forum thread while writing this post I noticed that the launch of this asset happened only hours ago. I got in early on it. I’m actually tempted to sell off some of my DGEX shares at a loss and turn them into ConnectTropolis shares. On the other hand, I have plenty of experience where share prices drop right after the IPO is over, so it might be wise to wait.

In any case, I now have the ability to majorly diversify my NXT holdings. Back when I bought DGEX I thought that was all there was. Now an entire new frontier of decentralized trading right from my wallet client has opened up.

No wonder the price of NXT enjoyed such a major rally recently. Too bad I sold off 173 of them and bought Devcoins with them. I could have had so much fun buying ConnectTropolis shares instead.

Oh the multitude of opportunities presented by the many and varied cryptocoins on the scene!

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