Now I'm going to repeat some things I said before:
TruthCoin is basically an extension of SchellingCoin.
"Price-pegging" by portfolio replication is totally different, would be better called price-tracking. Tokens are issued which would track the price of BTC (or USD, or any other asset) through a decentralized hedging contract, described by vbuterin in SchellingCoin.
"""Whatever helps you think about it. I think SchellingCoin makes no sense, and misuses the Schelling Point idea, which requires a completely symmetric and simultaneous game with one information set and multiple equilibria all with exactly the same payout. Nothing even close to what Vitalik wrote about."""
Okay, so what I'm trying to understand here - and I've been asking this question a couple times already with no reply - what happens if the volume of tokens exceeds significantly the volume of Truthcoin?
Or even 250 BTC? Won't the system get out of balance / won't the spreads get too high?.
You could phrase my question in another way also - what will happen if daily trading volume of TruthCoin/Bitcoin is 5 BTC, and I want to make 10 BTC worth of contracts?
"""Everything can be pegged to everything, through the magic of basic finance, see the Excel file
, the tab labeled "MV Scaled", comment "This portfolio will be worth return(d1) regardless of what happens to d2."."""
kolinko, you are confused because you did not do as I suggested. If you had, you would see that PMs containing a Scaled Decision (which is what we are talking about) have a bounded range
(ie 0 to 1, "scaled" by a "scalar") and would then be something like (minimum = .01 USD/TRU, maximum = 1000 USD/TRU), if the True Exchange Rate went beyond 1000 USD, the market would only pay out 1000 USD-Worth-Of-Truthcoin (cashcoins) per Share, post-judgement. So there are bounds.
There's lots more to say. For example, you may wonder who sets these bounds, and what factors increase/decrease the likelihood that they will be appropriate (neither too short nor too wide). Or, "why are bounds required at all?". If so, I encourage you to open the Excel file and read!
I hope, in the future, I am better at ignoring these requests, to instead foster an actual understanding of the idea and code.