Bitcoin Forum

So I'm reading this article: http://www.coindesk.com/mark-t-williams-on-the-flaws-and-opportunities-of-bitcoin/
;which is a conversation between what I can only assume is grown adults that understand a bit about bitcoin. Then I get to the part about MT Gox setting their prices 8 to 10% above the other exchanges. WTF? Why do people think the exchanges set the prices? No wonder people don't want to buy bitcoins and think bitcoin is a scam. They think the exchanges are selling the coins to them at a price the exchanges decide behind closed doors. If even these so called experts can't figure out what is really happening in a bitcoin market, what hope is there of regular people understanding?

Stay a brokedummy you will not.

Because the way prices are set is when two people agree on a fair market price. That's usually by exchange sites.

Prices are set ON exchanges by two people agreeing to a price. But the article insinuates that one of these people was Mark Karpeles.

But usually people go on exchange site prices because they KNOW that people are accepting at that price, and don't want to haggle for a couple dollars if they can get instant liquidity. Like the offer to purchase FBI's 27k bitcoins seized from silk road for 15% below fair market price in order to offload all at once.

A lot of otherwise intelligent people still just don't understand how the price of a bitcoin is arrived at. I think a lot of people must think bitstamp and mt gox and btc-e bought a lof of bitcoins and now they are selling them? Perhaps we need some kind of education campaign to help them understand how the price is really determined?

Like I have friends that don't understand what gives a bitcoin its value. They just don't get that it's just other people buying the coins. It's so obvious to us, but for the people on the outside not so much.

Well the bitcoins are provided by miners if im not wrong, correct.

Is this really held by "people" or one person offering their minor conspiracy relating to MtGox, rather than spending 5 minutes to think of an alternative, rational market led reason, like new, keen people with fresh $ deposits pay a premium for convenience.  It is interesting if many don't get this, when its how other markets are priced: i wonder if they ignore how those markets arrive at a price or ignore that they are the same.  weird really.

These exchanges still operate on the model set forth by Mt Gox and will never be trusted by the masses. Bitcoin needs regulated markets and licensed brokers to be taken seriously.

Actually this is exactly what happened

so they set the prices above other exchanges and won't give back the BTC>  sounds like something's a brewing.  maybe their doing some magic math to boost bitcoin to $4000 we can only hope    :D

personally i tried signing up to Mt. Gox on several occasions but couldn't get past the fact it had "magic the gathering" in it's name.  i hate card games and tricks.  BitStamp for me ONLY    ;D

In reality, only you set the price! For your coins.

A person can be a genius in one area, and a fool in another. 

This is one of the reasons I created my index (linked in my signature), I believe price transparency is very important for Bitcoins mass adoption.

We currently track 7 major exchanges, as I write this there is a 5.4% variance in exchange pricing, I have seen it as high as ~20% since we began tracking on March 7th.

I'm going to graph the variance over time (give me a day or 2), I predict as we see the variance decline over time, it will signal greater mass adoption for Bitcoin....and less opportunity for arbitrage. (remember prediction is difficult, especially about the future)

https://www.evernote.com/shard/s91/sh/54adf716-759d-449a-972e-c92838c43c21/de55f2f64c444f0185ad88e58c514c68/deep/0/Bitcoin-Price-Index---Coin-Cadence.png (http://www.coincadence.com)

Most people don't understand how the price of anything is determined.

There is a lot of belief that exchanges "fix" prices because of how relatively easy it would be for several exchanges to collude and function as a market-maker of sorts. I'm not saying that it happens, but would you really be shocked if it did? I mean, the simple lack of auditability for virtually all bitcoin exchanges says a lot.

That's one of the biggest cons with an "unregulated" market.

CoinBase is actually the only one who does "set" prices right? Since it's not an exchange.

I can't blame you for included it on your site, but yeh it's not really an exchange ;)

Do any exchanges provide true transparency to see real time bids

Your right, CoinBase is not an "Exchange" in the true definition.

I included it because of it's ease of use, volume, and adoption rate.

Most exchanges provide a public API (i.e. one that does not require authentication to access), however the data reported by the API is what the exchange reports, it is not easily verifiable...

Hmmmm.... Here's the thing.... Unless almost all the exchanges colluded in unison, they would be screwing themselves.  Any price fixing in either direction would immediately invite arbitrage at their own expense.

100% agreed, another reason for the Index :)

I heard that since bitcoin was the first cryptocoin that it helps determine the prices by the market cap,

Market cap = Price X BTC in circulation

or

5.71B = $458.47 * 12,616,825

right now...

Data from: http://www.coincadence.com/bitcoin-index/

this make sense to me too. bitcoin is the medium

I disagree. If several exchanges colluded "strategically" it could happen. [Once again, this is just hypothetical...]

Although some will be able to take advantage with arbitrage, the transaction times of bitcoin end up helping the exchanges. Most people don't have enough funds spread through multiple exchanges. Think of this as a sort of dispersed "pump" or something.

Admittedly, we see this sort of thing with other exchanges dealing in alts (where there are fairly large spreads between exchanges). Although, relative illiquidity is the culprit in those scenarios.

You're partially right in that large spreads would help them get away with it (although that is also self defeating).

But it doesn't matter what "most people" do.  Even 1 competent arbitrager will take money from exchanges trying to set prices, which is enough to discourage it.

Bitcoin cannot be stopped by stupidity and ignorance, only stalled.
Every retard that get's an audience stalls the adoption, which makes now a better time to buy.
Functionality will overcome tards, just be patient and hold on to all your laughs. So you can throw them in their faces when u ride by
in your BTC payed for lambo aventador

You're right in the case that exchanges want to fix a price at set points.

But in the case that exchanges are okay with oscillating funds (still a type of price fixing), unless the person (or people) doing arbitrage has around the same amount of liquid money as the exchanges, the exchanges can still take advantage.