REFER TO: http://letstalkbitcoin.com/forum/post/auction-vending-machines-are-now-operational?page=5#post-17581 Before Reading
@rob,
This is my (non-dev) understanding.
Proxy Bidding is not being used. I believe it should. Proxy bidding would automatically/automagically adjust a bidder's bid while the bidder in theory would need only place one bid and the highest bid that they are willing to bid on an auction. So as new bidders enter play and so long as your bid is higher than any of the bidders, the bid would be adjusted automatically until the high bid is breached and a new bidder has their high bid registered (rinse and repeat). This is how eBay works.
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Let's Say the minimum bid is 10,000
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Bidder Brian Bids 100,000 (this number is secret)
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Current Bid is now at 10,000 with Brian @ Top Bid of 10,000
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Bidder Rob Bids 25,000
- Current Bid is now at 25,250 with Brian @ Top Bid of 25,250
Notice that although Brian bid 100,000 that Brian could possibly win the auction with a bid of 25,250!
THE CURRENT SYSTEM
The current system registers the bidder's high bid without "stepping" up.
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Let's Say the minimum bid is 10,000
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If Bidder Brian Bids 50,000
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Current Bid is now 50,000
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Bidder Rob Bids 75,000
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Current Bid is now 75,000
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Bidder Brian Bids 100,000
- Current Bid is now 100,000
The current system encourages multiple bidding rather than placing a single bid.
And I believe to answer your (and @jamesmm ) question (and I could be wrong in this regards) that in the second scenario ....that my 100,000 bid is essentially competing with my first bid and therefore am Bidding 100,000 on top of the 50,000 of my first bid. If i'm the winning bidder at 100,000 then the 50,000 would be released from escrow (i'm not sure if i'm using this term properly here). Basically I sent 150,000 and 50,000 would be returned to me at the end of the auction. I would have 150,000 wrapped up in counterparty to enable the 100,000 winning bid
HOWEVER, in theory I could get outbid in a proxy auction ... decide to place a new high bid and the scenario would be somewhat similar to the second scenario---
I think Proxy bidding is the most fair and convenient way to conduct these auctions.
Convenient because under the present setup a smart bidder will strategically place a number of bids and likely stick around to snipe at the end of the auction---lots of time and effort.
With proxy bidding.. the bidder has the option to just bid as high as they are willing to bid and let the Robots take care of business.
@rob
@deweller
@jamesmm asked an extremely important question, that I'll reword based on my own lack of understanding how this works (after placing several bids and starting my own auction):
Let's say I bid 10,000, and I am later outbid, and my next bid needs to be 12,000 to regain the lead, do I send 2,000 more to bid 12,000, or do I have to send 12,000 (which I may not have, since I just sent 10K to lock in my initial bid)? I didn't think about how important Jamesmm's question was, until I started getting hands-on with this. I'm hoping the answer is I'd need to send 2K more to up my bid to 12K, as it makes the most sense to me. Problem is, I don't think it's intuitive, and needs to be explained in detail to bidders. And I'd volunteer to write up instructions for bidders and sellers, if I feel I'm totally understand what's going on.
I also can't help but wonder if the extremely high bids on the most recent LTB show ad auction were due to the bidders bidding 10,000, then 12,000 as a higher bid, not understanding they needed to bid just 2K on the second bid. @bcohen, is this what you meant, or is this a different theory than yours (on why the bids got so high)?
REFER TO: http://letstalkbitcoin.com/forum/post/auction-vending-machines-are-now-operational?page=5#post-17581 Before Reading
