This would be a US-based bitcoin market maker, adds liquidity to the order books of both the currency and futures and options market.
Needs a lot of capital for such a venture, any interest in this? This is something I mainly want to organize and begin discussions on, because there is a need for this.
This is a bad idea for a couple of reasons. What you are essentially saying is, you want a lot of money to force what you think the spread should be. Real market markers learned the hard way this doesn't usually workand nowadays people stick to HFT, naked short selling, and jumping in front of people's trades. If you want to follow down that road you will either ruin yourself and your money or you will become dirty like them. Even the quants themselves don't like being quants. They even made a movie about it. It's called Quants.Bitcoin trading volume is at a low as of time of writing. Larger market participants are unable to consider bitcoin with its low trading volume, thin order books, lack of liquidity and lack of hedging capabilities.
For a direct comparison, CBOE - Chicago Board of Options Exchange would be the model this company would be like.
Ideally this would be a market maker for existing exchanges, but the company would seek a maker-taker liquidity rebate model, that does not exist on any current bitcoin exchange.
This company could do its part in solving some of the growing pains of bitcoin by adding liquidity.
Anyway, I hope to open a discussion on it at the very least, to refine a potential offering.
There is a solution to all this, but people around here won't like it very much. It's also being worked on. By several groups. And it's considered a highly secret thing. The group that comes out with the solution will become millionaires overnight, future billionaires, and will control the bitcoin economy. I guess we will see where they take us, although I do wonder if anyone is interested in a community solution I do not think the community is really ready to work together on an idea like that. Well this market making system is based on an algorithm that can do HFT. Basically the fact that it can determine orders to create and route to/from exchanges in nanoseconds. Obviously it will be milliseconds due to the locations bitcoin exchanges, but there is nothing technical limiting it. TL;DR this is an HFT. The difference between this, and the fund I wanted to set up using HFT is that this is not looking to make a profit from aggressive order placement, and hunting out people's orders. This instead is looking to receive liquidity rebates, all day, every day. I would like to point out to skeptics that HFT was novel in 2005 and this is 2013, 8 years later. Despite what sensational Forbes articles might say, there is really nothing special about dark pools and the "secrecy" behind HFT. Program trading contributed to the flash crash on Black Monday in 1987. And now, there are bitcoins exchanges which all use modern API's, broadcast for free. (Nasdaq data feeds are $6000/month, for example, trickled down to Direct Market Access participants for about $80/month... and the FIX protocol is antiquated shit) In a direct example, 65nm die processes were novel in 2006 and now every factory in Shenzhen can do it and make ASICs for the price of 1btc. Anyway this algo's core code has been co-located on systems in datacenters alongside exchanges in New York. It judges networks latency as well as a factor in decisions. What is the solution you are talking about, being worked on by several groups. I thought you were going to say what that was in that paragraph. |
|
|
|
insider price fixing coupled with lack of transparency ..hmmm
well, large shareholders frequently conduct off-exchange large sales in auctions. this keeps the share price depressed for some time while these shares get filled and those new shareholders try to take advantage of arbitrage opportunities on the exchanges. it basically takes a while for the market to digest it before AM can continue its upward trajectory. |
|
|
|
|
Is there an order book that shows the international best/bid ask for bitcoin from multiple of the largest exchanges in USD?
I need a consolidated order book.
Most preferably I would like an android widget that displays this, without me having to manually switch the exchange I want to see, in the settings.
So does this already exist, is there an api service that provides this, is there an android widget that already pulls from this API?
BTC-E has had higher bitcoin/usd bids than Mt. Gox many times in the previous months, even with BTC-E's priced-in expensive withdrawal options. Its not apparent when this happens, and too many API's rely on Mt. Gox data.
|
|
|
|
Aww man! Can't believe I missed out. Do you know of another one that might occur in the future?
every Monday 5-7pm but really a different group should just make a different time because they are missing out on a whole demographic |
|
|
|
|
so BASIC-MINING is priced to give out a 6% APR. basically steady dividends and the share price rises to reflect that. every time the dividends there rise, the share price rises to keep the APR at the same %
ASICMiner has a muuuuuch higher APR yet a muchhh lower share price in comparison. IE. if ASICMiner was priced like BASIC-MINING (for a 6% APR) then its share price would have to be much much higher...
why is ASICMiner shareprice so low in comparison? Its mining business is more flexible than BASIC-Mining's and the hardware sales are also a better bet since they are both "selling shovels and mining" simultaneously, something not very possible in previous gold rushes.
I understand this can be a factor of the offering structure, different # of shares outstanding, different % held privately, etc. but can someone shed some light onto this, in a 1:1 comparison? thanks!
|
|
|
|
Nice thread title.  thanks |
|
|
|
Exchanges would be interested in this because it attracts liquidity from other exchanges. This is how NASDAQ, ARCA, EDGE, NYSE and other larger exchanges operate. They make larger commissions from market orders and anything removes limit orders from the order book, and give a smaller rebate to orders that add liquidity to the order book.
Right, I know how market makers work, but I don't see how they'd be able to succeed in Bitcoin..simply because the trading volume isn't terribly high, not to mention pricing can be insanely volatile. With the amount of money required to start something like this to provide 'true' liquidity (e.g. more flexible than Mt. Gox at this time), you're better off manipulating the markets than trying to take over the bid/ask gap. I've been pretty active here actually if you have capacity for less cynicism. One of the main criticisms previously was that my bitcointalk account was young.
Cynicism is seemingly bred here in Bitcoin as the "Trust No One" mantra rings true day after day. You choose to remain anonymous while asking for thousands of Bitcoins for your various ideas ..history has taught us that this scenario doesn't work out in the investor's best interest. some people have met me and I have a rep thread. there are plenty of quite arbitrary methods of validity in this community that do nothing to actually quell the trust concerns that you all should be focusing on, and refining the business ideas themselves. |
|
|
|
I think if you wish to make money in BTC stock market than AM is the only option as long as I have seen.
BASIC MINING has just tripled its share value in the past few weeks. Doubled over last night. |
|
|
|
LOL Orphaned! That'll teach me to pay out before getting paid.  Yes, sorry about that, I figured when I read about it in the BitParking thread. Are you considering other pools (e.g. with PPS) or do you plan to stick with BitParking only? Yeah, just read that post by doublec. My own bad, I should've checked. I've tried out bitminter, slush, and btcguild a few times, but I always go back to bitparking. The payouts always seem more consistent over time. Slush is being reported as dead on the Avalon cgminer config though, I need to look into it when I have more time. I'd likely set up slush as first or second failover. Cheers. bitminter was the best for me paying 1.5% for immediate payout, when stales/orphans were about 6% over time, subsidized by the namecoin payouts as well. Best deal for me. But I think mining across two big pools may keep your luck consistent |
|
|
|
|
what was basic mining's hashrate before this ASIC arrived?
|
|
|
|
|
what is the current yield for this contract?
I've more than doubled holdings with ASICMiner and would have with BASIC MINING had I kept some capital there too
but I did like the daily dividend notifications but I am currently unfamiliar with the yield, insight?
|
|
|
|
Sounds interesting, but do you have any ideas on how you plan to implement this?
Yes, getting exchanges to switch to a maker-taker rebate model would require discussion with Mt. Gox and BTC-E, with the promise of added liquidity and larger orders. If you can secure a serious discussion with Mt. Gox [or CoinBase for the U.S] and BTC-E (obviously they'd have to verify your business plans), then yes, I would be interested in this. Maybe you can answer this, but why in the world would any exchange be interested in something like this? API based trading algorithms are an asset STS Limited already possesses. In this case, this Bitcoin Market Maker company will only seek to get rebates once that infrastructure exists. These won't be fake walls, and it will take both sides of the order book to tighten spreads.
Ah yes, the same trading algorithms you tried to market to us before? Seems you've fallen off the map a bit there.. I can only imagine why  Also, what's STS Ltd's CRD# or SEC#? Exchanges would be interested in this because it attracts liquidity from other exchanges. This is how NASDAQ, ARCA, EDGE, NYSE and other larger exchanges operate. They make larger commissions from market orders and anything removes limit orders from the order book, and give a smaller rebate to orders that add liquidity to the order book. The High Frequency algorithm fund would also accomplish similar goals but more so in the interest of the fund than actually providing a service to the bitcoin economy. What reasons exactly do you think I or that thread have "fallen off the map" for? I've been pretty active here actually if you have capacity for less cynicism. One of the main criticisms previously was that my bitcointalk account was young. Trading algorithms are not that complicated, a series of subroutines (methods, if you are familiar with object oriented programming) that may instruct an algorithm to buy and then sell when volume rises above X average can easily be altered to buy at bid and not sell. This is based on the same system that can also make high frequency orders, the profit model is different in this venture. In a fast market the existing algorithm can adjust its bids and asks in fractions of a millisecond. Programs that enter orders are not required to file disclosures nor are their programmers required to hold any licences with FINRA, unlike humans that trade on behalf of others. This is not an investment advisory service that conducts auto-trades for subscribers. Similarly, market makers are not brokers. STS Ltd would therefore not be in the brokercheck system, just like most corporations, partnerships and LLCs are not in the brokercheck system. |
|
|
|
Interesting idea.. I think something like this would be a good for getting some additional major players involved in BTC trading.
Good luck with your project! Wish I had the BTC required to make this happen.
Ian
Thank you |
|
|
|
You cannot even come up with your own tagline?
could, but how does that make you feel Makes it look like you see ASICMINER and go "hmm I want something as successful as that". Not necessarily bad, but not being blatantly unoriginal helps. Its something people can relate to, thanks for your input |
|
|
|
Sounds interesting, but do you have any ideas on how you plan to implement this?
Yes, getting exchanges to switch to a maker-taker rebate model would require discussion with Mt. Gox and BTC-E, with the promise of added liquidity and larger orders. Upcoming exchanges in the United States would be easier to get to come out of the door with this model and liquidity efforts will shift to them. This company will practically always be receiving the liquidity rebate for being a market maker. And the orders will be placed algorithmically. API based trading algorithms are an asset STS Limited already possesses. In this case, this Bitcoin Market Maker company will only seek to get rebates once that infrastructure exists. These won't be fake walls, and it will take both sides of the order book to tighten spreads. It will also be adding liquidity to currently non-existant options markets, making them large enough to give the company an ability to hedge its holdings |
|
|
|
You cannot even come up with your own tagline?
could, but how does that make you feel |
|
|
|
|
This would be a US-based bitcoin market maker, adds liquidity to the order books of both the currency and futures and options market.
Needs a lot of capital for such a venture, any interest in this? This is something I mainly want to organize and begin discussions on, because there is a need for this.
Bitcoin trading volume is at a low as of time of writing. Larger market participants are unable to consider bitcoin with its low trading volume, thin order books, lack of liquidity and lack of hedging capabilities.
For a direct comparison, CBOE - Chicago Board of Options Exchange would be the model this company would be like.
Ideally this would be a market maker for existing exchanges, but the company would seek a maker-taker liquidity rebate model, that does not exist on any current bitcoin exchange.
This company could do its part in solving some of the growing pains of bitcoin by adding liquidity.
Anyway, I hope to open a discussion on it at the very least, to refine a potential offering.
|
|
|
|
|
its not a direct comparison into buying mining hardware vs getting weekly dividends
you are missing the point that shareholders get huge weekly dividends which is an anomaly, yet ASICMiner does actually sell things and do things which people can verify up to an extent and are comfortable with
other assets dont offer that, anywhere across any markets
|
|
|
|
|
BTCT.CO has options on the securities trading
including S.DICE
|
|
|
|
...
ASICMiner plans to increase its hashing capabilities by a large factor putting it closer to 33% or 40% of the hash rate, and this is not currently priced in to the stock price.
...
Imho this would be a very bad move, even 25% could be considered a threat to the system as they could potentially hold enough hardware in stock to exceed half the network capacity and at 40% they would almost certainly be capable of that. It might be good for dividends but it would be a potential threat and so devalue Bitcoin. ASICMINER never said they plan to grab 33-40% of the network, afaik. My guess is that their goal is to maintain the equivalent of < 50% of the network if you were to remove the largest mining pool. they plan on adding X hundred terahashes, thats all I currently know |
|
|
|
|
Show Posts
