Zipcoin part 2

Zipcoin was a random solution to using bitcoin as base money. Random in that one person downloaded a trading pit into the sandbox and made the fair trading pit boss leep the bitcoin-zipcon variances within 12%. Now bitcoin is going to be boat anchor, zipcoin worthless, I concluded the person engaging in the activity created a web wallet, a place to store his bot coins.

Npw, this single person can easily snooker his pit boss, buy 10,000 zipcoins as per the agreed par price, and let the thing run. The pit boss has one bit coin and the owner has 10,000 zipcoins on acount. It can buy its own bit coin back at a 12% discount, no one else has zipcoins. Then wash rinse and repeat, and your zipcoin pile should wobble around fixed point increased, by logarithm, I think. Have not worked it out.  But you are a monopoly market.

What if other played the game, it is like a numbers game.  Under fair play rules, each play is allowed an opportunity to bid on each ask, congestion managed by cycle price.   In that case, I think the growth in zipcoin stops. The maximum 12% gain gets split up into smaller amounts as players increase. If transaction costs are truly zero and cycle price kept at zero then pricing never gets resolved, bid/ask are continually updated, and hey will orbit about the surface just inside the 12% barrier. The job of pit boss goes away.

Now, an outside observer notices this and thinks,these are still zipcoins, trading at 10,000 to a bitcoin, or some wiener process away from that value.  So this is a constricted ratio, it is limited in excursion.  That person can use zipcoin to dump loose inventory,that has high holding costs, like ground beef. The butcher says,sure give me zipcoin, transaction costs is zero and he was about to mark the beef down by 40% anyway. The Overstock guy, for eample.

Now the pit boss and all the numbers players have an insider using the zipcoin, its real ratio to bitcoin must be discovered, it is no longer a random number game as a supply chain is providing inertia. The players have to wait, get a hint of how much flow this Overstock guy is having. The Overstock guy can trade on insider information.

But, there is a risk,   The pit boss will on occasion scatter and gather zipcoin sin bit error losses and gains.  So, that means the even money safe bet still has a 12% currency risk, it is even money with measuring error. The pricing ring imposed will consist of buyers/sellers for whom a bitcoin standard ledger system hedges their their business  enough to cover the potential zipcoin losses.. Overstock uses the zipcoin, and its innovations will cause the pit boss to compress prices, now and then.

The original numbers players become consumers with zipcoin, simply having a large N. It is like selling meals in the casino for chips, why not use the local money? The Bitcoin casino, it is a likely sales location for things that glitter, especially of all your players have the glitter stick in hand.