The point of arbitrage is that its a zero risk game if done properly so no you cant ruin yourself in a day.
The only way to effectively arb is to keep track of how many BTC/USD shifting you need to do, how reliable is the output from exchange volume/walls however if you keep the shifting small enough there is literally 0 risk. All that happens is buying BTC at low exchange and selling the same amount of BTC at the high exchange thus making $x on the shift and still having exact same amount of BTC afterwards however gaining $ out of the deal.
The problem is that you need to keep ~50% of your balance in bitcoins in order to do these trades. So, for example, in November the bitcoin price dropped around 50% in one day. If you were doing arbitrage without additional security measures, you would've lost 25% of your money (in fiat). I believe that the fact that bitscalper pays in bitcoins and not in USD is also part of the strategy to defend agains such drops. Regarding 0.6% a day, yes it is acceptable. If I consider arbitrage alone I don't make as much, but bitscalper probably trades in much more markets than I do (and they probably have a better system). |
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Hey guys, btc newb here have some questions.
I'm trying to understand the advantages to one buying hashing pwr with btc. To me, there are two conditions that must be met for one to buy hashing pwr with btc, assuming one is in it to get as many btc as possible for the best price and not for ulterior purposes (attack the network, etc):
1. One is unable or unwilling to start a sufficiently efficient mining operation and,
2. One must expect to get more btc by buying hashing power than by buying btc on the market, albeit over a longer period of time (days-weeks).
For #2 to be true, one must bet that the combination of future price/difficulty will be such that over the length of the "contract", it will be more advantageous to mine (via buying hashing power today for a specified length of time) rather than to buy btc directly. At the same time, the miner must be of the (opposite) opinion that the btc he gets NOW for said contract are worth more to him in the moment than the btc (or the btc times the btc price) he is likely to get from keeping the fruits of his mining rig over the length of the contract. Does this sound right?
Thanks!
You are correct. But people could be interested in purchasing hashing power for other things than just plain profits. Read the last pages of this thread. |
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If its so profitable and you are able to do it yourself then it would be silly not to design it for yourself.
Something that is profitable is never a waste of time.
Exactly. And if I knew answers to that questions, I'd probably never even have mentioned it on a forum.  Is it profitable enough? - this is the question It really depends on how much you tune it, but I'll tell you something: even if you implement everything correctly, if you only arbitrage you will not earn much. A single day can ruin your efforts for the whole month (i.e. bitcoin price can drop 50% all of a sudden). People have been doing arbitrage for several months now (myself included) so this is not really new. And obviously bitscalper can't make 5% everyday. The bitcoin market works more like this: in a couple of days each month you have tons of arbitrage opportunities. During the rest of the time, the market usually sits quiet. |
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I would like to start small so I can show my parents that this is profitable, and am thinking of purchasing a used Radeon 5770 and putting it in the gaming machine that I already have. (It has a GTX 460 which I have heard is useless for mining). The 5770 would be mining 24/7 and I would still game on the nvidia GPU (is it possible to have both cards and drivers in a system like that?) Will this be worth it?
Also, I have seen Mhash/s and Ghash/s numbers being thrown around on here, how would I go about converting those numbers into bitcoins/day or something?
Check the Mhash/s for each card here: https://en.bitcoin.it/wiki/Mining_hardware_comparisonAnd write the value here: http://bitcoinma.appspot.com/Also, I personally don't think see mining as a very profitable investment. If the prices go down or if difficulty goes up you might never earn your money back. |
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Were there any special event that made BTC climb and fall so fast?
It was news all over the place. The media found out that bitcoin existed. |
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desktop might be a no go. my last chance is my friend who wants to mine. he has a macbook pro with nivedia geforce 9400m. any mining potential there? even for just a few bitcoins over time
If you want bitcoins, buy them. I advise you against mining in a macbook pro because it has a terrible airflow. Anyway, with that 9400m you would earn around 0.3 bitcoins per month if you mine 24h per day. |
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i do have a dell desktop downstairs, maybe that will have a chance at mining?
You need to know the exact model of the graphics card and then check if it is on the list I posted. If it isn't, then you are out of luck. |
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so theres no chance of mining?  and if i have an integrated graphics card can i even upgrade? Not on a laptop. If you want to mine you need to buy a desktop computer with one or more compatible GPUs. |
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What is your graphic card?
i have an hp pavillion laptop that i just bought this month the chip it says i have is the intel family graphics You probably can't mine with that hardware. You need to have an AMD or NVIDIA OpenCL compatible graphics card. Check this list: https://en.bitcoin.it/wiki/Mining_hardware_comparison |
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What is your graphic card?
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I gave up following this thing a while (months?) ago, due to the threads being just a headache to get any information out of. Someone just wanna give me a straight up answer if these things are shipping or not, or if anyone has received / used one?
thanks!!
I'll sum up 100 pages of posts for you: Inaba has seen and used one, but they are not ready to ship yet. Also, don't ask for shipping date predictions. When they arrive someone will post here. |
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Hmm... if there is money available on the other side (before doing the transfer), you could buy on Cavirtex, and sell on Gox at the same exact time and reduce the risk even more. Of course, that requires money on the other side which makes it less convenient.
Feel free to open a business that does currency conversion through bitcoin  |
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This answer is open to anyone, my question is: when you want to place a long a MtGox do you (a) just press 'buy' at the default price in the text box, or (b) adjust the price down a little.
It is up to you to decide. If you cover the sell you will get your coins instantly, but you will pay more. If you adjust the price down you will pay less, but it will take more time to fill. There is also a chance that the market moves up letting your order stuck down there for a long time. |
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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.
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. |
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We need market makers. I read some things about it, but it is risky. You need a strategy to defend yourself from price drops.
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Is your client synchronized with the network?
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I have read the entire thread. most of it is miners saying they want to join and others alerting you about possible security issues.
I am new to the whole Bitcoin business and simply asking for an explanation about how this service can be beneficial to either side?
Basically I am asking for examples of "use cases" for the service you provide.
I would say that most of the time is for testing purposes. For example, if you are setting up a new pool, you need hashing power to test it. http://bitcoin.stackexchange.com/questions/2269/why-would-someone-rent-hashing-power |
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Thank you for your contribution. How long have you been trading bitcoin?
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What are my options for selling my mined bitcoins and receiving payment in pounds. MTGox and tradehill seem to have very high fees for wire transfer, I've looked at britcoin(intersango) and the no fee appeals but I'm worried they don't have much liquidity are there any other options.
Additionally I was thinking about trading, could I register a dwolla account to transfer to/from MtGox and Tradehill, this service is US only at the moment but do they check the address you enter?
Thanks for helping
If you are dealing with small amounts why are you worried about liquidity? Intersango has free trades, free deposits/withdrawals in the UK and they have a considerable volume. It seems like the obvious choice to me. Not everyone is lucky enough to have a bitcoin exchange in their country... |
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