Bitcoin Forum

I think it's time to have another poll about a potential change. Honestly we're still exploring options, but we definitely want your opinions!

It's important to note that we are not going to have a formal agreement with any exchange. We will just be their client, until they shut us down (which is unlikely to happen.)

Now it's your time to vote. You have two votes. Please consider the following points when you make decisions:

- Market depth
- Trading fees
- Possibility of wide public adoption (if we plan to abandon Mt. Gox)
- Deposits and withdrawals (and withdrawal limits)
- Public reputation and trustworthiness.

Some facts to note:

- Bitcoinica is the largest Bitcoin trading platform if we exclude the hedging volume from Mt. Gox.
- Bitcoinica's hedging volume can be as high as 200,000 BTC in 24 hours.
- Currently Mt. Gox is the most "official" exchange.

EDIT:

A lot of people have chosen "Bitcoinica Independent Exchange" (it will be renamed to something different), I will simply share my ideas for this:

- Insanely low fees, like 0.1%. (Because we have no profit pressure.)
- Websocket API
- BitInstant support
- TCP-based API
- Rackspace Cloud Co-location (1ms to our server)
- Redis-based trading engine (thousands of orders per second)
- Full access to Bitcoinica's limit order liquidity
- Fully independent (You don't have to use Bitcoinica to use the exchange.)

Is it possible to just use the resources of both?  You could even pocket some arbitrage profit.

I hate bitcoinica for using mtgox, but I love bitcoinica because of Zhou, and his professionalism.

Who would you rather support people ?

I love that you listen and act Zhou.. dont stop. :)

If you could do arbitrage between all, or at least many, of the exchanges, mightn't that increase liquidity on every exchange? What are the downsides, apart from it being potentially difficult to get done?

I don't understand why people are voting Mtgox (Or Tradehill for that matter)... If it is technically possible and feasible, using more exchanges is going to be a good thing. It will increase liquidity on the other exchanges, will allow smaller spreads due to arbitrage opportunities for Bitcoinica and will stop Mtgox being a single point of failure.

In my opinion it would still be best if they would become an independent exchange though. They are the only ones currently, who have the funds, popularity and features to make this possible. It would also solve the single point of failure problem and would reduce slippage  even further, because they will be able to do high frequency trading and have the least amount of response times. On top of that, they won't have to pay Mtgox a 0.25% fee on every trade, reducing spreads even further! I'm not sure what's not to like?

Edit: And they will set the bar higher, forcing the other exchanges to innovate as well!

Excellent.  It will force Gox to go hard or go home.

All of this NEEDS to be repeated.. :)

I'd like to add:

- Predictable deposit/withdrawal procedures, times, etc. and predictable identity verification procedures if necessary
- Liquidity rebate (a fraction of the fees charged) to pay liquidity providers/market makers for providing order book depth

And eventually:

- Options and futures on BTCUSD (settled in USD for merchant hedging)
- Options and futures on BTCUSD and other exchange rates, stocks, indexes, commodities, etc. (settled in BTC for trading/synthetic investing in the outside economy)

You've got the knowledge and background of building excellent trading systems.  I think you should go for it.

Ok I'll bite.

Have you considered how difficult it would be for you to offer payment services?

You will have to have Dwolla available or I (and probably many others) will not be able to trade.

Sounds amazing to me. BTW any chance for PLN support? (Polish currency)

I have considered that. Things will be easy soon.

Anything to take dependence off of gox is good.  Even if you go independent I think you should still hedge on gox and tradehill.

And pay a 0.25% fee to Mtgox, have higher slippage risks due to slower response times and have problems with withdrawals processing because of the daily and monthly limits? The first two points will increase the spreads (so the costs) for the costumers, and the last one is downright inconvenient and borderline unacceptable. I'm all for an independent Bitcoinica exchange!

build it and they will come

kill gox! gox must die. don't give a fuck how you do it.

If Bitcoinica were it's own exchange, with a lower spread/fees, quicker updates/processing, I'd probably sign up.

I read some of the Bitcoinica threads with interest, not because I use the service, but because of the trouble people get themselves into.  This topic is worth commenting on as there is some incentive to reduce the dominance (and perceived problems with Gox).

Switching to TradeHill (or Intersango as the other apparently well run exchange) could do wonders for their liquidity, as Bitcoinica hedges their position in the market being measured against.

One idea is to offer two products, one pegged against Gox, the other against Tradehill - that will give people extra ability to vote with their feet, rather than having a possibly disruptive change in rules (moving from settling against one index to another).

Also, Bitcoinica appears to be working well and setting up an exchange will not necessarily work as well - stick to the thing that works - distracting into a second unknown could kill both.

+1
I'm all for an independent Bitcoinica exchange!

I'll bite.

Please! Realise "stop loss"! You will have an improbable success!
Zhou, thanks for what you are doing!

As much as I think becoming your own exchange is a good thing for everyone I do think we will be heading to a centralized exchange like stocks and currency is traded.  I know we all want a free market and options but I think at this point Mt. Gox is going to be the exchange that ends up becoming the central authority and the rest will simply be brokers.  We are still a ways off from that but I think its coming.

You should consider implementing an engine that interfaces with Mt. Gox, Tradehill, CryptoExchange and any other exchange.  You should also implement your own service.  Then you would code your algorithms that will pick the lowest cost trade to execute.  It would be easy for you to pick one exchange and implement that but the ultimate platform would be to interface with as many exchanges as possible, including one that you run.

Each exchange probably has their quirks so the difficulty would be making sure you take care of these quirks.

If Zhou wants to set up an exchange I'd welcome it, but

 - solve some of the most pressing issues of the existing exchanges which I see as being at the mercies of Western financial interests.

 - operate it completely independently of Bitcoinica, and as an competitor to both the other exchanges and to the Forex platform (Bitcoinica) itself.  In this way things would probably be significantly simplified and also made more robust against various types of system failures and legal attacks.

all exchanges have issues getting fiat in and out, why do you believe Bitcoinica will be any different?

in unrelated note, i was considering using TH, but looking how some people have troubles getting their funds from TH i decided to stick with mtgox they proved somewhat to be more or less reliable in that department for now above all other exchanges

Zhou,

i think u should set up your own exchange as well.  this would solve alot of my objections.

still not a huge fan of the leverage but lemmings will be lemmings.

btw, will Singapore be any more favorable towards regulations than what Gox is going thru?

My understanding is that Singapore is one of the freest markets in the world.

I like Intersango as it's easy,free & quickish for me to deposit £s there being a Brit, at least when they have a bank account that hasn't been pulled out from under them at no notice, otherwise I go via XeTrade (1.4% less than mid market exchange rates & no fees) to my US bank account, 1 day or so & then Dwolla for 25 cents to Gox & atm I'd rather hold $s or BTC than anything € or in too close a proximity to it - I vote for these 2 as I like Gox's BTC & $ redeemable codes, Yubi keys etc & sometimes better the devil you know

I do though really like the idea of Khou setting up an exchange, completely independent from Bitcoinica or I'd feel that I had too many eggs in 1 basket (actually they're all in Khou's basket atm anyway for super margin to guard against any more shocking price gyrations) & I expect such an exchange to be superb for innovation, enthusiasm, professionalism & shaking up the Gox, I needed 3 votes really

as for TH I never found an easy way to get funds to them without fees or complications that I didn't want to get in to & haven't looked in to them enough to try & gauge their staying power or accountability

I support anything that reduces fees.  The independent exchange seems like a good idea.

I suggest you create your own exchange. If you control the exchange, you could put in a circuit breaker to halt trading for, say, 10 minutes (or 2 blocks?) if there is a price swing of 10% either way, to allow time to warn people (text/email alerts) and let them set stop orders, deleverage, and/or add to their margin; as well as allow other traders time to place orders to catch the fall or rise.  There are obvious arbitrage opportunities if a circuit breaker is hit.  These kinds of circuit breakers are useful for leveraged traders, and now exist in all traditional exchanges (google "2010 Flash Crash" for details).

For example, when the price dipped to $5.00 yesterday, anyone with USD could have placed an order at $5.00, and might have prevented some liquidations and kept it from dropping to $4.8.  Everyone would have been happier with this reduction in volatility.

I had a liquidation yesterday because I had split my funds between a daytrading stake on Mt. Gox, long coins in my computer's wallet, and funds to back up my leveraged coins on bitcoinica.  I saw the squeeze coming, but couldn't transfer enough margin from Mt. Gox to Bitcoinica due to daily limits, and I couldn't get coins from my computer's wallet to bitcoinica fast enough.  I possessed more than enough margin (<1:1), but got clipped anyway because of the abruptness.  This wouldn't have happened if bitcoinica and Mt. Gox were the same entity.

Also, I think you should accept 1-block confirmations from customers, and perhaps even 0-block for trusted customers.  Just don't allow them to withdraw funds until 6 confirmations, which would eliminate your risk.

Wow! Great idea! This would improve things by quite a bit, by improving liquidity due to faster transfers. Smart thinking!

My opinion is that you make your own independent exchange. Even if the fees on the exchange might be so low that they only pay off its expenses, you will profit more simply because of the reduced spreads on bitcoinica (more people, like me, will use bitcoinica more often - I love bitcoinica but sometimes the spreads are just too high... simply because Gox has to have a piece of the cake)

You are the only one running an exchange type service who has excellent communication with their customers. Compare to gox which wont even reply to emails, will constantly "forget" tickets, will do crazy stuff like demand an ID and freeze up your money for no reason etc.

Actually, with 0.1% fees, you should profit off of that too, simply because you will take pretty much ALL the volume off of other exchanges (unless they tighten up their game that is, which doesnt seem likely). Traders will also most likely trade more. Spreads will decrease because traders will be able to profit off of smaller difference (e.g. buying and selling at a 0.4% difference would be profitable, compared to 1% needed in mtgox)


Why would you enter the thread just to say something negative? As an adult, dont you find it inappropriate to just enter the thread to dispraise a 17 year old in his business venture... As a matter of fact, it seems like mr.Tong is the adult (for not calling you an asshole, which you clearly are) and you are the "kid".

Is it perhaps jealousy? You have to realize that, since he offers better service than any other exchange, and is about to offer an exchange service for 1/6 the price of the top exchange, with same volume... The fact that he will offer BitInstant transfers (smart move there mr.Tong) means everyone from gox will most likely go to his exchange, unless of course they like being goxed.

Thank you mr.Tong for your service, and thank you for taking into consideration what the community might think of you opening up an exchange. To date, I have not seen a single exchange which can talk the talk (service) AND walk the walk (offer volume).

Very good idea..

Fuck mtgox.

It's just a subset of features of the ICBIT trading platform I'm developing.
I explained only the futures trading section of it publicly in this forum, but since my trading engine is universal, I was working on bringing up the currency exchange section lately. My platform is nearly ready, I will post an announcement about it tomorrow.

I sent Zhoutong a private message about this as I'm quite open for collaboration.

He would trade on MtGox/Tradehill when it is cheaper than matching with available orders on his books... he can hedge on more than one exchange, and he can trade internally when that's the best option.  Independent exchange + hedging on as many other exchanges as possible is the way to go.  He may even be able to offer negative spreads (and still make a profit) when there are arbitrage opportunities between Gox and TH.

hmmm, I did not interpret phantomcircuit's post like that at all

I thought he was just urging Z to build a portal out to the fiat economy, which we desperately need

I don't use bitcoinica but the indepedant exchange idea sounds great

I like this. Why not use all available resources?

Bitcoinica should go where the liquidity is. An ideal solution would be to look at each of the top exchanges and send orders in proportion to the liquidity on each exchange.

In my opinion one of the exchanges should offer aggressive rebates for adding liquidity. The spot traders would get a rebate for adding liquidity and Bitcoinica would find the liquidity in one place. Although, all the liquidity is at Mt Gox right now. It's just both liquidity providers and liquidity takers are charged a fee. If there is a smart exchange out there, they'll pay for liquidity.

Mt Gox had the lion's share of volume before Bitcoinica and Bitcoinica using Mt Gox has just consolidated volume even more there. For now, Bitcoinica is the volume, wherever they go, the volume will follow.

That's precisely what I was saying, improved liquidity would benefit everybody, even those of us seemingly working at cross purposes.

However a hint of caution is necessary.

Accepting wire transfers, bitcoins, and mtgox codes is orders of magnitude simpler than other payment mechanisms.

Currently about 10% of the intersango code base is actually about exchanging bitcoins ... the rest is handling idiosyncrasies of various insane payment systems.

So this is all you have to say to a young entepreneur? Dispraising comments? Is that how you would raise your kids? Worst case scenario, mr Tong learns from the experience.

Or is there perhaps another motive for the negative attitude? Why else would you "bite"?

I want REST (http://en.wikipedia.org/wiki/Representational_state_transfer)ful API for trading (optionally over https with elliptic curve certificates)

Thanks for your "hint of caution"!

Yes, I'm aware that real-world transactions can be difficult to handle due to non-standard interfaces. But that's not my competitive edge. I'm good at outdoing your 10% codebase.

Sure. REST API is a must-have for me too.

Bam.

I am eager to see how this progresses. Down with gox!

Intersango, Patrick, and Amir have a history of beef with Bitcoinica, even publicly saying "Bitcoinica is a way to separate fools from their money."  So, in my opinion there is indeed some negativity until there is some apology or proof.

That is a perfectly accurate way to describe Bitcoinica, and I would be surprised if Zhou Tong himself did not think so or even say so.  Big deal.  Lots of things are in that category, and Bitcoinica has more of value to add than many of them.

the problem with bitcoinica is, that it is mostly a casino - untill you really commit great amounts of time, knowledge and work into it. jut reading an wikipedia article about e.g. elliot waves won't give you enough knowledge to make profit in this market.

i would also like to see intersango getting a bit more attraction, since it is a reliable and for-free bitcoin exchange and has a great API (as far as i can tell).

why must bitcoinica use ONE exchange?!

i would suggest bitcoinica should hedge there orders on many exchanges, lowering the risk of possible 'market manipulation' and also probably doing a big favor to the stability of the bitcoin price across the various markets, cause it would likely reduce arbitrage and give a bigger liquidity as also bigger trading volumes.

@zhou tong: this is exactly what i told you in the first place about 2 months ago: use different markets, not just mtgox.

anyway, the problem of over-leveraged busts and over-leveraged booms won't be solved that way. but after all, that is what we asked for, isn't it?!
--> volatility

dude, what is your beef?  I don't see where you are getting all this.  Maybe you two have history in other threads that I don't know about...if not calm the fuck down man...jeez.

This would sell me! Though, I have no real complaints about Gox other than the API/Web Sockets.
I go where the volume is.

I think Bitcoinica should have practice trading platform so that users could practice on the site or test their API like Interactive Broker and most other forex exchanges.

That's what I am aiming at with ICBIT platform. In fact, I just put up the first part of it for live trading, the topic with explanation is here https://bitcointalk.org/index.php?topic=60548.0 (https://bitcointalk.org/index.php?topic=60548.0).

Crypto X Change hasn't been added as a voting option yet we have been #2 in USD & AUD Markets very often over the past couple of weeks, and we are gaining hundreds of users daily now.

The other point is our banking system, as displayed who want's to have their accounts frozen and money held up like what happening right now with the other mentioned exchanges?

There is Zero chance of this happening with Crypto X Change. First we built our financial / banking system, then we built our exchange on top of that to be legal and not have the effects everyone is seeing where accounts are shut down every second week!

So if you wan't a serious exchange, then Crypto is seriously the way to go.

Deposit from any country and native currency into our USD or AUD market for a flat $5 fee, no bank fees or Wire Fees, Unlimited amounts can be sent and withdrawn for the $5 Fee. We cal also payout to any currency / country also for withdraw. No other Exchange has anything even close to this!

We also have deposit & withdraw MtGox Vocuhers

Withdraw to PayPal and BitInstant.

www.cryptoxchange.com (http://www.cryptoxchange.com)

Zhou, please create or use an exchange apart from Mt Gox.

I am thinking about the future of BTC.

Thank You for your support.

+1, and TradeHill hit the nail on the head with free personal checks by mail.

Dwolla + personal checks = Win

After reading about all the problems people have had at Tradehill depositing and withdrawing funds I think you should stay away from that exchange.

What are you talking about?  I withdrew all my funds today no problem.

You must not be in the US.

https://bitcointalk.org/index.php?topic=56599.0 (https://bitcointalk.org/index.php?topic=56599.0)

Maybe not.  Is Illinois in the US?

Edit:  Then again, by funds I meant BTC.

That is weird. You must be one of the lucky ones. By the sounds of it you should stay away from tradehill from now on.

Well, I can't speak for wire transfers or Paxum.  I withdrew BTC just fine though.  But then again, I always break up BTC transactions into multiple payments to avoid manual approval.  Just common practice.

You know that not everything in a business is solved by coding right? In fact, coding itself is probably the least important activity. I have never ran an exchange or a business, but I can easily guess that you can't add support for lots of different payment methods in a snap.
Just look at the top complaints from people here. All you see is: "I can't withdraw.", "I need to verify the account.", "My bank transfer hasn't cleared", "MtGox doesn't answer my questions", etc. You don't see anyone saying: "Oh, MagicalTux clearly didn't write that method right. He should have used an HashMap instead of an HashTable". Running an exchange goes way beyond the ability to write Ruby.

My vote goes to anything but MtGox. I still believe that we can have a more balanced market.

(mail from Intersango in my inbox)

We should be glad that it's a small 0.65% fee though. A large 0.65% fee would just be too much in my opinion.

to go from no fee to their small 0.65% fee when the gox has an even smaller small starting fee of 0.6% on a sliding downward scale of smallness strikes me as loony, especially as their spreads are normally much wider due to their smaller volume  ???  which now will get even smaller I expect  ???

https://i.imgur.com/zaeSK.png (http://imgur.com/zaeSK)

To have a 0.0% fee strikes me as loony.