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I'm puzzled by the big spread between Mt. Gox and the other exchanges. For the last week, Mt. Gox has been running about 5 USD above the other exchanges, even though you can't get USD out of Mt. Gox. That seems backwards.
Mt. Gox has now used up 9 of their 14 days of their 2-week delay, and we're in the middle of a weekend. If they were actually going to fix the problem, they probably would have announced their new banking relationship by now. Didn't happen. That's a strong indication it won't happen.
The 2 weeks run out on July 3. So we can expect that they'll blame the holiday when they don't resume USD transfers. Then they'll let a few transfers through so that they get some favorable comments, and the fanboys will say everything is now all right. It's worked for Mt. Gox before.
They don't have to totally stop outbound transfers to keep the thing going. They just have to slow them down to the level of inbound transfers. Bernie Madoff made that work for 20 years.
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That's just a vending machine for Bitcoins. It won't pay out cash for them. |
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[23:08] <MagicalTux> we broke their system due to the volume
[23:08] <ineededausername> the bank's system?
[23:08] <ineededausername> what do you mean broke?
[23:08] <MagicalTux> yep
[23:08] <MagicalTux> it's broken
[23:08] <ineededausername> a technical problem?
[23:08] <MagicalTux> yep
[23:09] <MagicalTux> they're working on fixing this, and we're opening new bank accounts in other banks as I speak to resume transfers (it takes 2 weeks)
Mt. Gox claims they overloaded Mizuho Bank, the second largest bank in Japan, with 515 branches, 26 million customers, and revenue over one trillion yen. Yeah, right. |
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One thing you need for an exchange is a solid contractual banking relationship with a major bank to handle money transfers in and out. One that binds them to handling your transactions and does not allow them to terminate at will without paying a substantial penalty.
Then you need insurance, in case something goes wrong. Commercial errors and omissions coverage, and employee bonding. Like every other business that handles lots of money.
You'll need a reasonable amount of capital behind the business, at least a few million.
Talk to Tradehill, which has done all that, and ask them why they don't handle small retail customers.
Now you're ready to run a "no excuses" exchange. One where, when someone demands their money, they get it.
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Potentially you could hedge against Bitcoin shocks with a futures contract. ICBIT has those. But the futures market is so thin that protection is expensive. Also, it may not work. The party on the losing side can fail to replenish their margin and limit their loss.
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The notion that wallstreet is behind these “pump and dumps” is retarded. At its peak the bitcoin market cap was what $2.5 billion maybe $3 billion. Wow!!! The size of a mid-cap stock! Jee-wiz!! I could probably name 500 companies that none of you have heard of, that have a larger market cap than bitcoins. In the investment world a $2.5 billion market cap is nothing. The reality is, bitcoins act like a thinly traded penny stock. If a hedge fund manager really wanted to do a pump and dump, they would just use a small stock. The entry/exit is 1000000x easier than bitcoins.
Right. Bitcoin's "market cap" isn't that big. About 7 million early Bitcoins never show up in transactions. (See Shamir's paper.) Some are lost, generated by early users when the difficulty and value were both very low. Some are being hoarded. We can't tell which. The active float is about 4 million Bitcoins, worth about $400 million today. (Twice that last week, half that two days ago.) This isn't a big market by financial standards. It's really tough to exit. Right now, you could sell about 500 Bitcoins on Mt. Gox without moving the price too much. |
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We have to make people want to list their prices in BTC. That means it has to have some semblance of stability. Bitcoin could use an anchor business. No big business accepts Bitcoins. If you could buy iTunes tracks with Bitcoins (from Apple, not someone selling their gift card), or phone minutes (from an actual phone service), and people actually did that, it would tend to provide some price stability. If Amazon or Alibaba accepted Bitcoins, it would become a real currency overnight. |
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Exchange lock-in works by making withdrawals slow and difficult. The Bitcoin exchanges have no "fail to deliver"penalties against the exchange. (US brokerages pay big penalties if they can't pay out on demand.)
Arbitrage should lock the prices on all the exchanges closely together. It doesn't, though. Right now, there's about an 8% difference between exchanges. That should be exploited in seconds by an arbitrage 'bot. But that's not happening. Probably because the people doing that can't get their cash out of one exchange and into another fast enough.
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Getting cash out of the "exchanges" quickly is even harder. Mt. Gox puts all kinds of obstacles in the way of withdrawing USD. - "All methods below are subject to a withdrawal limit of 1000 USD per 24hr period and 10000 USD per 30 Day period:"
- "Note: Wire transfers are currently taking up to 1 week to process due to the volume of withdrawal requests in queue. If your withdrawal is larger than 10,000 USD, it will take at least 2 weeks to process." (That's been on Mt. Gox's FAQ since at least November 2012.)
That last strongly indicates that Mt. Gox doesn't have all the cash it should. (Under Japanese money transfer law, they're required to have 100% of funds deposited with them in a bank account separate from their own funds.) The transfer methods that involve non-bank third parties (Dwolla, AurumExchange) all have a history of losing or delaying funds, and Mt. Gox tends to blame the user or the other party. |
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It's been 4 years already, and nobody is really using Bitcoin as a currency to buy anything real or do anything important. ... Where are the REAL websites supporting a Bitcoin payment infrastructure, such as an eBay that only accepts Bitcoins or an Amazon that only accepts Bitcoins? Nobody can price anything real in Bitcoins with this kind of volatility. |
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Why is anyone still even trying to trade there, just move to one of the other 8 big ones.
Because most of them are currently down, running far behind, are showing prices way out of sync with other exchanges, or have a huge spread that blocks trading. btce and bitstamp look usable, but Bitstamp is at $70, Btce is at $80, and Mt. Gox is at $90. If you could get funds in and out of exchanges rapidly, you could make money on arbitrage. http://bitcoincharts.com/markets/currency/USD.html |
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It's not just that they go down for trading. It's that they go down for withdrawal of funds. That's convenient for them; otherwise, everyone would pull their funds out during trading interruptions.
Tradehill is up, but there's no market there: Bid: $ 76.00 Ask: $ 120.00
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They could make enormous profit if the rigged the buy sell offers. Because of 5 min lag! They get 2 market orders, 1 bid and 1 sell. They execute bid for high, they execute bid for sell. They profit off the spread with no risk.
That's called "front running". |
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Intersango claims to be located at 3RD FLOOR 14 HANOVER STREET LONDON ENGLAND W1S 1YH. That's just a mail drop. Here's what's really there: London Budget Address. 3rd Floor, 14 Hanover Street, Hanover Square, London W1S 1YH *A Mailing Address only location* A prominent business address, situated in London's famous Mayfair district, 14 Hanover Street is a location that’s sure to impress any client.All mail addressed to you will be forwarded on either daily or weekly. ... Hanover Street Mailing Address - £49.00 per month Call 08000 199 944 or email contact@moneypenny.co.uk |
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Not sure if the countdown is finished but a new layout was just revealed. That I am assuming was the big countdown. There doesnt seem to be any functional difference.
That's all? They redesigned their web site? Big deal. |
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How do you guys not see the history and the cycle? It happens every single effing month. The price crashes by ~20 to 50%, people panic and say Btcoin is dead, It stays down for about a week then the price rises, and people all say that this is the turning point. Eventually the price falls in line with the same straight (log) line of slow decline that it has been on since the middle of the summer and everyone declares that Bitcoin has stabilized. Then it happens again. It happened first in June, it happened in July, it happened in August, it happened in September, it happened in October, and now it's happening in November yet everyone is surprised every month.
Right.  BTC/USD, last 5 months, with 30 day trailing moving average.I've been saying "long, slow slide" for months. It's still not clear what the endgame is. It hardly matters at this point, though. As I point out occasionally, if one business the size of a typical single supermarket used Bitcoins, liquidating their daily receipts would crash the market. Bitcoin is now too dinky to be used as a currency. |
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what gonna happen 1. dec? mtgox have some kind of countdown thing.
That's when they take the money and run. |
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Send the bitcoins back to MtGox to repeat the trade and you'll have your answer.
Right. Notice that by the time the value transferred, it was too late for arbitrage. There are at least two people running arbitrage 'bots. They maintain balances in both USD and BTC on both Tradehill and MtGox. So when a price difference bigger than the commissions involved appears, the 'bots pounce on it immediately. Unless the arbitrageurs run out of USD or BTC on one exchange or the other, the exchanges don't stay out of sync for long. Arbitrage opportunities last about an hour. (Could be worse. Arbitrage opportunities between exchange-traded funds and the underlying stocks last milliseconds.) |
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That attack isn't a problem. Bitcoin will tank long before all possible Bitcoins have been issued and mining is only for keeping the block chain alive.
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 Bitcoin, last 5 months, on log scale. Brown line is 30 day trailing moving average.The long, slow slide is right on track. It's been all downhill for 5 months now, and the trend is consistent Currently, the price is cut in half every 5-6 weeks. Every once in a while, there's a big drop, and then the price recovers. But it never recovers all the way. |
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