Bitcoin Forum

We seriously apologize for any inconvenience.

When Bitcoinica was first built, we included a circuit breaker feature to stop trading at one direction when we are out of USD or BTC. However, it has almost never been triggered until today.

Unfortunately, we have a lot of long positions are we're currently unable to fulfill everyone's request to buy. Even though we do not want to interrupt regular market trading activity, we have no case because we don't want to be trading against our customers in this extreme situation.

Liquidation of short positions is also affected but we had no choice. Withdrawal in USD is obviously, also affected. When some more people decided to liquidate their long positions or go short, or more USD funds are deposited, we will adjust the redflag accordingly to allow buying trades.

TL;DR: Bitcoinica can only sell for you at the moment.

ohhhhhhhhhhhhhhhhhhhhhhhh shit  :o
edit: Do you have a plan for what happens if the market keeps going up like I think it will?

There are limit orders from the positions of long people. So there will be more selling soon.

Also, forced liquidations will still happen (but never at insane prices), but we will eat all the risk. :-(

Oh dear.... :O
SELLL!

My sell order also got "No Reserve", why?

This was a code error (the system didn't remove the redflag when needed). I have fixed this already.

I understand that you will take all the risk of forced liquidations, but what about people that are currently short who would like to liquidate their position _before_ they get forced liquidated?

Well, they are screwed :(

Then we have to eat more risk if we allow liquidations of short positions other than forced liquidations.

Hi Zhoutong, I accidentally input a limit sell order by enter "4,3" instead of "4.3" to the price field but the system interpret it as "4.0" and executed immediately. I know it is my fault but there should be a better way to handle this kind of situation.

Thank you very much for your feedback. I will think about a fix soon.

LOL!  please think of a fix that will make everyone money.

Well, the best way for you to make money right now is to take advantage of the imminent long squeeze.

Why do you believe there will be a long squeeze?

IMO, it's the other way around:
-Because you can't buy BTC on Bitcoinica, anyone who wishes to buy BTC will need to buy them on on MtGox, leading to higher prices.
-Because you can't buy BTC on Bitcoinica, any bull with BTC will be LESS likely to sell because they can't re-buy them if they sell too low.


I don't see your logic.  If something is in short supply, its price goes up, not down.

Am I missing something?

If you have enough fund, you can change or manipulate market. ;)

There are a lot of long positions on Bitcoinica, so anyone with the power to push the price down will cause a lot of forced liquidations, and Bitcoinica will sell at very low prices.

Basically it's you sell X BTC, Bitcoinica will then sell X BTC to you at bottom price.

They can always do this.  How is this different from normal?

Now the opportunity is huge. And it's confirmed.

In normal situations, there are not that many long positions.

Hi Zhoutong, are you sending the signal to "The Manipulator"? :)

I'm not, but everyone knows this.

So I assume that the Manipulator already knows and I just want to let traders know how serious this can be.

It's different because there are more longs... therefore the squeeze will be more severe.  I'm not saying someone will be willing to risk it since this is a very bullish indication, but if you could drop the price low enough (below 3.5 should start the ball rolling) you could buy a lot of coins at a discount.  However, there are so many buy orders on MtGox, this would take roughly $300k... or $30k on 1:10 margin.  But to trade on margin you have to use Bitcoinica, and much of your sale would be filled by pending Bitcoinica buys before it hits MtGox.  Probably not going to happen, but Zhoutong probably wishes it will.  Otherwise, he may have a liquidity problem for a while as people will be unwilling to take smaller profits out of the fear of not being able to reenter.

So, what is your recommendation for normal trader like me?

no, you are not.  this prolonged rise in the market has placed Zhoutong in an untenable position IMO.  when you go long, he has to go short.  IMO he is caught in a massive short squeeze and is desperate to get you guys to either sell or go short to provide btc liquidity so he can cover his losing positions.  i think the dam has broken and his advice smacks of manipulation in the name of self preservation.

when are you guys going to learn?  problem after problem after problem keeps cropping up.  Bitcoinica is doomed.

That depends entirely on your timeframe.  Short term, we may see a big dip.  Longer term, there are obviously lots of buyers -> price rise, just make sure you don't use too much leverage or you will get liquidated in the squeeze if it occurs.  Personally, I have liquidated my long position for a nice profit and will reenter if it dips.  If it doesn't most of my margin balance will be moving to MtGox for my bot to play with.  Except for the recent profit (which I assume can't be converted) it's all BTC, so technically I'm still long, just no Bitcoinica position.

I do not believe the price will be going up further. There is simply too much profit to be made by squeezing out the longs. The temptation to pull the trigger is ramping up and up, and the market is already seriously overbought. And even if the bulls don't decide to cash out, bitcoinica is going to have to replenish their USD balances somehow.

I could be wrong, but it is going to be interesting finding out.
I'll be staying up for another few hours. I have moved 100% into USD.

unfortunately, this is the first time i've seen a character flaw in Zhou.  a market maker like him should NEVER be talking like this.  the only reason he is IMO, is b/c he's trapped.

i've told you what i think has happened.  in a small, immature market, the short selling Zhou provided has caused a long term unnatural suppression of the price over the past several months.

now we're seeing market fundamentals snap back in a vicious way.  lotsa ppl are going to get hurt...

IMO, it has snapped back already and has overshot. It will be correcting in the other direction over the next few days/weeks.

not until the carnage has occurred...

OH FUCK
this is going against my expectations in a huge way

i smell blood in the water. 

btw, Dow futures are ramping right now and the USD is plunging again.  reflation is here. 

hold onto your Bitcoins.

It has only gone up 10c, or are we looking at different charts?

+1

BTC price won't be held down by Bitcoinica trading alone anymore and it's showing.

I see upward momentum despite a massive amount of USD trapped in an insolvent bucket shop.  This is insanely bullish.

Thanks for your advice. I also have some Bitcoin holding (mining and profit from previous long position) besides current long position. I may consider to liquidate my current long position.

What I see is people buying without considering the implications of bitcoinica being insolvent.
I think whoever just bought those couple thousand coins is going to get burned badly.

this prolonged upward move has placed you into this untenable position.  further upward movement will make it even worse. 

so who will step up and sell to Zhou to allow him to cover and get out of a losing position?

i have lots of btc but am i going to sell to help you out?  NO.  you allowed everyone to sell them to me.

no, they are going to make a fortune as the price continues up to its equilibrium fundamental price which is MUCH higher than this.

are you short?

That couldn't have been one trade, there was price fluctuation as the 7k went thru the pipes.

Bitcoinica is never insolvent. We now have tens of thousands of Bitcoins, and that's it.

Too many people have long positions and we couldn't fulfill any more buy orders.

And now it has already been fixed. Buying and selling are normal now.

can everyone see that massive $236,000 @ $3.90?

soon that is going to tumble over to the right and crush all the asks. they are getting impatient.

Let's see $5 today or tomorrow! ;D

I don't use bitcoinica. I am 100% in USD right now though, as I have already mentioned a number of times, and have been discussing moving into fiat over the past couple of days. I'm not trying to sway opinion, just giving my own. I might be wrong, but all of my data was telling me to get out.

that makes no sense.  if you have thousands of Bitcoins, why aren't you selling to all the ppl who have complained here on the Forum of not being able to buy or cover short positions?

listen up shorts who are caught not being able to cover;  Zhou just said he has thousands of Bitcoins that he's not selling to you to allow you out of your shorts...

then you are a smart man.

Bitcoinica never trades against its customers. Price movements have almost no effect on my profits. However, our system couldn't process too many buy orders when our reserves were depleted. This has been fixed now because more people start selling.

I don't have to cover any losing positions. It's just a precautionary procedure to ensure that we don't have any losing positions when people are trading in one direction. Same thing can happen on the selling side too.

And what about the invisible 200,000 bitcoins that have been mined over the past couple of weeks but not yet made it onto the exchanges? They could be insane bulls, I'll grant you, but I am of the opinion that they are just being greedy. Rationality will kick in soon.

No, Bitcoinica has a lot of Bitcoins, and when people want to buy on Bitcoinica, the system has to hedge by buying more Bitcoins.

So the system was out of USD, and we couldn't allow more buyers to buy.

wow, how many contradictions lie within those statements and the ones before.  i would stop talking if i were you...

I'm with mjcmurfy... these >$4 prices are frankly shocking to me and it means that I now am mining at a substantial profit rather than just barely covering power. I don't see them staying this high for long, but in the meantime I'll happily sell off all my mined coins and wait to buy back in at <$2.50.

Keep waiting, buddy.   ;)

i am an insane bull but i am not greedy.  i will sell when the time comes at MUCH higher prices.

+1

I saw at least 1k BTC worth the sells during that ramp.


He isn't selling them because they are held by his users in positions.  It makes perfect sense.

Sorry, it's only you with some terrible assumptions. I can't see any contradictions.

I'm always asking myself, could be cypherdoc never understands how Bitcoinica exactly works?

It seems to me that you are spreading FUD and coming to conclusions based on the fact that Z doesn't 'speak' perfect english.

but i am observant.  and i see problem after problem after problem.

i think his English is excellent and there can be no confusion as to his terms.  they just contradict themselves.

Care to point out?

sure.  you have thousands of bitcoins on hand but you won't sell them or allow ppl to cover b/c you THINK there are too many long positions?  LOL.

Yes, I have 3k+ long posion

Z, please correct me if I'm wrong, but I'm pretty sure the issue WAS (it's fixed now) that all the BTC were held in long positions.  He can't sell BTC that belong to his users.

There are thousands of accounts on Bitcoinica, and there's one Mt. Gox account called Bitcoinica.

When Bitcoinica customers buy Bitcoins, we will hedge on Mt. Gox to buy for them, and they will have positions.

If we have too many Bitcoins and no USD, they can't buy more Bitcoins simply because we don't have.

Bitcoinica is a brokerage, not a bucket shop. We don't sell Bitcoins to people who want to buy it. We just buy on behalf of people who want to buy. It seems that you had misunderstanding since day one.

I agree with cypherdoc that bitcoinica is a basket case. I have been pleading with zhou for transparency for weeks, and trying to warn people about the dangers of margin trading in an anonymous marketplace. Just have a look through my posts in this thread (https://bitcointalk.org/index.php?topic=53837) a few weeks back. But I don't subscribe to his permabull outlook. I'm a long term bull, but a market correction is long overdue.

It's also correct if you explain like this. All the coins belong to customers, not me.

i think this is where the problem lies.  when the market goes straight up, the delay btwn when your customers buy from you and when you hedge on mtgox puts you into a losing position.

We delay the execution of all orders by 1-2 seconds. When the orders are executed, we always have the latest price.

Which is why there's that thing called spread... so anyone who thinks Bitcoinica is losing a lot of money by the price going up, I don't think that's the case. They're probably making a ton of money is all, as they take about 1-2% out of every transaction.

if this were the case, you wouldn't be having reserve problems with btc and you'd let those buys and short cover orders through.  if you had 10,000 in stock you'd always have 10,000 in stock with perfect execution and hedging.  but you don't so there is slippage somewhere that you're NOT telling us.

if he were, he wouldn't have halted trading.

He never had BTC reserve problems.  He ran out of USD.

ok Zhoutong, prove it to me.

OPEN UP ALL BUYING AND SHORT COVERING RIGHT NOW.

Our customers have leverage, and we don't have. When they buy a lot on margin, we are practically on fractional reserve on USD. When our USD reserve is depleted, we can't fulfill any more requests.

It's the same if we don't have any Bitcoins for people to short sell, we will have to halt selling.

It has been opened for a few hours. Over 13,000 BTC sell orders processed.

If someone put in a long position for 10K BTC at $3.50 and Bitcoinica bought 10K BTC at $3.50, as long as no one is putting in a short position to counter that they will not sell the 10K BTC that they purchased. The reason they were liquid before is because lots of people were taking up contrary positions, but if everyone starts going the other way then they would stop allowing people to go long until/unless they get more actual USD with which to buy additional BTC.

Now, that doesn't explain why someone who took a short couldn't liquidate at a loss, which is the more confusing/problematic issue at hand. If Bitcoinica is out of USD because everyone goes long and I come along and put in a short at $4.30 or whatever, then if I chose to liquidate that short at a loss right after taking the position there's no reason to not allow that.

If you liquidate your short position, you are still buying. It's the same as opening a long position.

Practically, this is a problem, and I don't really know how real world brokerages resolve this problem. I only know that some forex brokers actually trade against their clients.

Emphasis mine.


Emphasis added.


Just sayin...

well at least you admit, Zhou. 

they co-locate onto the exchange to limit slippage.

This has nothing to do with slippage.

We are talking about running out of USD reserves.

and thats a problem in the sense that the shorts can't get out if the price keeps rising.

This is the real issue, and has unfortunately been drowned out by cypherdoc.  I believe it solution is to treat a short position like you are treating a long position.... You won't sell the bitcoins out from under the longs, don't sell the USD out from under the shorts.  They are effectively holding dollars, and you sold their dollars.

I'm pretty sure that real world brokerages have access to really quick short term loans.

he will have to if the price keeps rising.

that means you're broke.

Unless your consider BTC valuable  ???

Nah, it just means existing shorts are screwed unless they get out (which they probably can't all do) and no one with half a brain will go short until this is fixed.  We'll be back to no shorting and we'll bubble again unless they can come up with the USD reserves to cover all shorts.  I have removed all my funds from Bitcoinica until this is sorted out.

This is a temporary issue and we have already resolved this.

let the coins flood

Zhou claims that when ppl buy or sell btc on bitcoinica he just buys or sells for them on mtgox and collects the fees on the pass through.

what did he do when all the shorts shorted btc on bitcoinica since mtgox doesn't allow shorting?  sounds to me he exposed himself by actually buying the shorted btc with his USD reserves?

Alright, your words proved to me that you didn't understand Bitcoinica since day seven (not day one).

Users can deposit both USD and BTC into their Bitcoinica accounts. You can short BTC with USD, and you can also long BTC with BTC (or short USD with BTC).

There's never a net short on Bitcoinica. If no one is holding any Bitcoins, you simply can't short sell. Short selling is a feature of Bitcoinica as a result of margin trading.

cypherdoc has wasted so much of his time debating a possibility that can't exist.

Normally, sell orders and buy orders will be cancelled each other but if the market go pure bearish or bullish and everyone fully utilized leverage Bitcoinica will definitely run out of fund because essentially you are lending fund out with 0% interest rate.

well, that certainly may be so since its so hard to tell exactly what you're doing behind the curtains.  but nevermind me.

i'm not so sure you know what you're doing; otherwise why are there so many problems (revisions to the code and reversing of trades) and why no USD reserves?

what was the magic solution, BTW?

It's not some big mystery.
I'm pretty sure I could set up a competing operation. (I just don't have the startup capital), but that's not the point.

Stop it with your fud already.

As I understand it, you will not use the BTC belonging to long positions to allow shorts to cover themselves but you will allow the USD belonging to the short positions to allow longs to cover themselves.  If this is incorrect, please explain where I went wrong.  If it is correct, it is an unresolved issue.

As I understand it, when a Bitcoinica customer goes long more than that customer has USD balance for, or goes short more than he has BTC balance for, he is effectively borrowing from the balances of other Bitcoinica customers to do so. That's what Bitcoinica is all about: pooling resources of varied customers to facilitate trading beyond their means. Of course this requires that either some customer balances aren't being fully used, or some of their positions are in the opposite direction of others'.

This means when Bitcoinica customers are predominately long, you may not be able to withdraw USD or go long or cover shorts because others have borrowed your USD. Vice versa for withdrawing BTC, going short, covering longs, when most are short.

Am I on track zhoutong?

lets clarify terms.  "cover" means "buy to cover" and is a term reserved for short positions, not longs.  longs don't get "squeezed" per say but shorts do.

Meh... long Bitcoin is just short USD.  A stupid semantics argument only detracts from the goal of getting a straight answer from Zhoutong.  But to be clear, when I say cover, I mean whatever is necessary to close the position.

AKA a bank run

if i were to have designed Bitcoinica from the beginning, i probably would have only allowed funding in USD's upon which you could then buy, sell, or short bitcoin just like regular brokerages do with their paper assets.

by allowing btc to leverage up more btc, its almost like building a derivatives tower on paper.  the volatility kills you and the demand for USD is just too great.

Any broker allows you to short EUR/USD with USD.

EDIT: Remember, everything is relative, including volatility. If BTC/USD is volatile, both BTC and USD are volatile. Longing BTC with BTC (or shorting USD with BTC) and shorting BTC with USD (or longing USD with USD) are essentially the same in terms of financial risk and volatility.


I can't believe that you have any financial experience. This is exactly how leverage works. In security trading, you use purchased securities as collateral to borrow more capital to purchase more.

Or maybe you're saying that Bitcoin is paper.

Anyway, we have been running for more than 3 months, and actual risk is minimal. The out-of-reserve redflag has been implemented long ago, and today is the first time that it's triggered in a large scale. Even 9/11 was completely fine for Bitcoinica.

Longs will need BTC reserves to cover themselves because they are essentially selling to cover.

I don't think Jon Corzine sees it that way.

Ok, so if I have a long position, and most others go short, I can get stuck in my position like the shorts got stuck today.  At least you offer an equal opportunity screw job.

Yes, the opportunity of screwing up is programmed to be equal.

unless he get's access to quick money (really short term loans at rates that he doesn't lose money on) this is, of course, a possibility.

Hi Zhoutong, could you let us partially cash out profit from our position? Currently, we have to liquidate our position to make the profit move into USD balance, I would like to buy real BTCs using my profit balance. ;)

Yup.  Real brokerages have capital which is loaned to customers, so they can buy on margin.  If that starts running out because the customers are net long, they'll raise more by increasing the margin requirements.  

That's what COMEX did at least twice over the past year (2011), probably because traders' net positions on silver and gold were too long for them.

Each time COMEX raised margins it triggered corrections in gold and silver (some quite severe), but that's because COMEX was the market.  I wouldn't expect this Bitcoinica issue to trigger a correction in bitcoin, because bitcoinica isn't the market (MtGox is).


More people opened short positions because Zhou alerted that so many folks were long, and they wanted to be contrarians.  

Also, some folks who were long on bitcoinica probably closed their positions because of the hiccup.  Even if they withdrew their funds, less people long at 1:5 margin, is more margin available.

All your unrealized profits are automatically leveraged again for trading.

Your tradable balance should already include the profits.

Maybe he wants to withdraw some of the profit to his wallet outside Bitcoinica.

Yes, if we can move partial P/L$ balance to USD$ balance then we can do whatever we want to it like converting to BTC or withdraw it

Interesting~~

Sorry for my misunderstanding.

If you have profits to support your position, technically you can already use the Exchange or withdraw feature to do whatever you want, just like the real USD balance. However, the limit is your actual USD balance, as it can't be negative.

Unfortunately but we don't offer the service to let you withdraw more USD than what you have.

Ok, so I have to liquidate my position completely in order to make use of my profit. Another small suggestion, could you make the exchange system deduce USD$ from positive profit balance?

Sorry to disappoint you. *removes sell stop order*

just joking, I'm all long on bitcoinica.

And here I was with the impression he had full reserves, but if that were the case we would see either deposit limits (you can only deposit x if we have 2.5x spare reserves) or changing margins.

as much as some of us wish Bitcoin to be money, at this point, it is still a speculative asset.  so allowing investors to use Bitcoin as collateral to leverage up 10:1 is irresponsible given the volatility and reeks of what the primary dealers did at the peak of 2007.

at the time, they were using bonds of all sorts, junk, subprime, FNM bonds, mortgage bonds, UST's, as "money" to provide collateral for their overnite trades.  how'd that turn out?

With proper margin requirements this should never happen.

"No reserve" again :(

hey Zhou, how's that recommendation to sell working out for your clients?

;D ;D ;D ;D ;D

Happy New Year!

I wonder who actually listened to him.

By the way, in my opinion what he did should be called market manipulation and is criminal.

Price at the time: ~4.2

That's not a market recommendation. I was just saying that I was not going to take advantage of this. And I didn't think anyone would.

You can assume that it's a good opportunity to manipulate the market when Bitcoinica is out of reserves. We had no way to hide the "insider information".

I agree.  Those long-squeeze statements were out of character and a bad move on his part.  Doesn't change anything for me with regard to Bitcoinica.  I haven't used it and don't have any intentions to, not because I think it's necessarily a bad service, but because I simply don't want to get involved in that sort of leveraged trading.

This situation only proves that he is an honest guy.
Otherwise he'd just get some USD by selling the customer's BTC.

Obviously bitcoinica needs an investor who'd put some cash in - it cannot go on like this.

I can see both sides of it.  Overall I think Zhou does a good job of presenting himself and maintaining a good character, though I still think he shouldn't have made the explicit recommendations he did.

I apologize for the words that shouldn't come from the mouth of a broker. I was too angry (or maybe excited) dealing with the flood of non-sense and unreasonable arguments. Really, it was beyond my logical control.

Please do not take it as a market recommendation. I just wanted to tell everyone that I was not going to take advantage of the possibility, and anyone who did would be out of my responsibility.

It's better to do a public "recommendation" explaining the reason for it, rather than secretly betting against own customers.

Same here, although I thought about buying Bitcoins with all my Bitcoin savings as margin, but ended up leaving it at a test of 2 BTC for 2 BTC, which are up from 3.5.

I’m not going to use it because it’s too risky for me, but if you are really certain about a move (or certain about a bottom), it should be a great tool.

I wonder if the ability of buying BTC on margin will have the same disastrous effect upwards as shorting had downwards?

Now I think both are wrong. I'm really sorry about the explicit "recommendation".

A post in some thread on the Bitcoin forums’ speculation section is not the place to do a public announcement for Bitcoinica.

edit:

Good to see you acknowledging that, zhou.

For every BTC shorted at Bitcoinica, a BTC was needed by Bitcoinica. How did Bitcoinica get those BTC? By buying them. You are correct it can have an upward effect though. (The investors of) Bitcoinica provided USD that can be used to buy more BTC, which in turn will drive up the price.

And I must say I agree that the "market advice" Zhoutong provided was unprofessional and out of line for someone in his position. I'm glad he apologized and hopefully such a thing won't happen again :)

Actually our BTCs come from customers. Since the first week of launch, we allowed BTC deposits until now. BTC deposits are worth about 45%-55% at today's price in Bitcoinica's total portfolio.

Basically Bitcoinica is a pool of shared resources for everyone to utilize. There are limits sometimes (like today, once again, :-/ ), but generally we are very well balanced.

you know what?  i'm tired of being nice to you just b/c you're a 17 yo kid.  f*ck you prick!

i've rooted out several valid problems with the way Bitcoinica functions.  while i had to do some catching up with exactly how your service works b/c its so opaque, it turns out that most of my suspicions are real. 

and i would posit that NO ONE around here knew that your service could freeze up like this and prevent shorts and longs from covering or buying due to a red flag event.  too bad your short clients will have to be liquidated.  its either you or them who will take losses Zhou.  who will you choose?

the fact that you're constantly having to "revise" your algorithm is testament to this.  the fact that i was able to jam your algorithm as up to 4.95 10d ago is fact, not fiction.

you need to keep your mouth shut.

Good lord calm down man. 

Calm down. The spread algorithm has already been fixed, and behaved perfectly during this rally. Also the prevention of people being able to liquidate has also already been fixed. And Zhoutong already said he would take the risk of the people unable to liquidate. I'm not sure how he could have possibly responded better to these problems? It's good, no great, you're bringing up (potential) problems, but there's no need to become disrespectful here.

this is the first time i've lost my temper with him.

if you go back thru the threads, i've tolerated alot of disrespectful comments from him.

True, and I agree with you there. But no need to become disrespectful towards him just because he has been disrespectful towards you. This forum would become a mess if everyone responded like that.

you're right.

This forum already is a mess, it was designed as a quarantine, after all. ;D

I really appreciate your feedback. However, all the problems you pointed out had already been pointed out by someone else.

All in all, just a few issues in recent month:

- Transparency (pointed out by mjcmurfy, I already released the hedging volume data, and continue improving.)
- The spike algorithm (pointed out by phantomcircuit with solid data support. I reversed all wrong trades and apologized to affected customers. Fixed the issue in 3 days. Plus I released a nice chart to show all history prices to be fully transparent. You pointed out this problem after everything has been fixed.)
- Can't close position problem (pointed out by some customers, and further suggested by Mushoz. Fully fixed, plus some nice little features.)
- My "recommendation" (I regret saying that, and I'm really sorry.)

I feel sad that you felt that I was disrespectful to you. But really, there's almost no value to repeat others' valuable feedback and turn them to negative comments like angry complaints without being a customer at all. And removing all the repeating issues that you brought up, you had these original things to tell me:

- Bitcoinica's business model is doomed.
- Short selling is harmful.
- cypherdoc never used Bitcoinica before.
- Bitcoin leverage trading is like speculative derivative paper tower.
- Bitcoinica is always losing money!

These don't help me at all. We're a community that makes everyone better off. We need creative solutions and innovative ideas, not superficial complaints. Bitcoinica is a proven viable business and we have attracted a lot of interest from investor-like people. Bitcoinica believes in free market spirit and economic liberalization. Bitcoinica aims to push up the web-based development standard and professionalism of the whole community.

No disrespect here. I'm always listening. You just have to make sure what you said actually made a difference rather than merely making someone upset.

i suppose i have been too negative about Bitcoinica.  most of it centers around philosophical issues more than fundamental issues with your service.  for instance:

i do believe that short selling should never have been implemented at such a young age in Bitcoin's evolution.  i think its like letting your 5 yo smoke.  you may not realize it's bad until 50 yrs later when he has lung cancer.  i think it has been very detrimental to the btc price as well as to the economy as it generates a very negative sentiment.

i also don't agree with the amount of leverage you're offering to customers.  i'm not sure i agree with leverage at all given what we're trying to accomplish here with Bitcoin. while you may have algorithms in place to protect Bitcoinica, i think its asymmetric protection and doesn't protect your customers nearly as well.

i understand that these are my own beliefs and that many others will disagree and that you are just offering a service that apparently has demand so in that sense i don't blame you.  but i do think ppl are getting hurt; perhaps deservedly so as this is the market sorting things out.  

my other source of extreme pessimism comes from what i was able to do to your algorithm 10 days ago:

https://bitcointalk.org/index.php?topic=55970.msg667447#msg667447

and i'm just one guy.  what happens to your customers when a larger more motivated competitor comes along?

the fact that you have to keep adjusting the algorithm every time an issue comes up is concerning.  it seems like you're always playing catch up and its costing someone money; either you or your customers.

i'm just glad that the short selling didn't drive the Bitcoin economy off the cliff for good.  now that we've made the turn back up i'll try to be a little more objective when it comes to Bitcoinica.