Bump as a request to the coders in the house. Can anyone confirm or deny that bitcoincharts has this functionality already in their api?
If you just want last price for various exchanges, yes. I'm not sure what "this functionality" is? I was referring to what hobbes posted - you can see it at the top of this page quoted |
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Bump as a request to the coders in the house. Can anyone confirm or deny that bitcoincharts has this functionality already in their api?
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Before we set up a website to do this, let's be a little clever, and only have a centralised algorithm based on this thread.
So, if everyone uses the same formula, and sticks it on their websites, sampling at an hour interval but not on the hour, we will have a bitcoin price that can't be manipulated due to centralisation!
If you want, I can write a quick script that can be cut and pasted but will follow this guideline that its your server fetching the samples, as this is the principle that prevents centralisation problems. For instance, and timeouts while sampling, automatically removes that exchange from the end price.
We just need a fancy name for the formula, like "real bitcoin" price, so people know what they are talking about this price.
Feedback?
I like that idea. But before you spend too much time working on it - lets see what we can get out of bitcoincharts first |
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Bitcoincharts has this already: Weighted Prices Bitcoincharts offers weighted prices for several currencies at http://api.bitcoincharts.com/v1/weighted_prices.json. You can use this to price goods and services in Bitcoins. This will yield much lower fluctuations than using a single market's latest price. Weighted prices are calculated for the last 24 hours, 7 days and 30 days. USD: {u'7d': u'103.74', u'30d': u'116.14', u'24h': u'103.02'}
EUR: {u'7d': u'79.91', u'30d': u'89.89', u'24h': u'78.27'}
With Bitcoin fluctuating wildly it might be interesting to have one for the last hour, too. Im not a coder - so I cant see what this actually is - but is it weighted by volume? If so, that's great. They should make a feature on the site as well. |
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Some good feedback which needs to be addressed. If you want the volume as well as the price, then the formula needs to be altered although the sampling per hour doesn't need to change. Just multiply the volume of the exchange by the price. Find the average of all the exchanges. Now just add the volume of all the exchanges and divide it by the average of all the exchanges for instance: exchanges 1 2 3 volume 100 200 50 price 10 12 8 Average bitcoin price 10 average bitcoin price by volume 10.87 This should work even better to break exchanges that try to be too cheap or too expensive compared to the world price. This gives you a MTGox style price, but without the centralised exchange!  Interesting - why do you feel using an average is more effective than using the totals? I also multiplied the price by the volume in each case, then summed them, then summed the volume and divided the (multiplied) number total by the volume total. |
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Monsterer - can you clarify why this wouldn't represent the actual tradeable value of the currency? The idea was not to make it artificially smooth, its just a byproduct when you are incorporating more data.
A 30 day weighted average will be extraordinarily laggy. You can't really escape it completely by reducing the time-frame, lag will always be present. So its highly likely that (since bitcoin is so volatile) the weighted average indicates one price, whereas the actual trade-able value on the exchanges is nowhere near since (for example) someone just dumped 20k BTC an hour ago. I suggest reviewing historical data and computing the average based on that, then compare that average to the actual traded price at the time to give you an idea just how bad/good this idea is. Cheers, Paul. Ah sorry if my original post wasn't clear, but I'm not using a 30 day weighted average price. I'm using the realtime price. The aggregate price is then weighted based on the volume that the exchange does over a 30 day time period. This ensures that the price is both real time and weights the most influential exchanges' price accordingly. This sounds brilliant. This would mean that Mount Gox would still be the most influential at the start as it has the most volume, but would give us a price that is not solely dependant on one exchange and who's influence can become independent of any particular exchange. I look forward to seeing it made Thanks - and yes this is exactly the idea. It helps transition away from mtgox as smoothly as possible and also paves a way for newer, more effective exchanges to come online seamlessly. |
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But here is the problem. Let's say we agree that a 7 day weighted avg. of top exchanges is a better valuation. And let's say that price is $105USD. But when we check gox that day the current price is $120USD.
So, who wants to sell me your BTC for $105USD? Unless people are willing to act irrationally and take an effective loss they will prefer the best guess as to the current price, which is the current Mt.Gox price. Their sheer domination of sales makes it so, even if we don't like it.
Its real time pricing which is weighted based on the volume of the exchange. |
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I am working on an API which will provide a global volume weighted exchange rate and glad to see others doing the same. However a 30 day period is just far far too long to be of use to anyone at anytime. Internally we use 24 hour, 1 hour, and 5 minute VWAP depending on the purpose.
Mixing in non USD is likely not going to be useful for most people. If you want to I would recommend making that an option (i.e. "pure USD" or "USD including converted non-US trades")
Nice - good to see its already being done - will yours be public or private only? VWAP = volume weighted average price? |
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Who would use this averaged price, what *practical* significance would it have?
If I were a merchant who somhow needs to peg the BTC prices of my products to the corresponding FIAT value (for whatever reason) then I would need to use the prices of the exchange that I am using and not some artificial average price from the other end of the world that is of no practical use for me because it does not represent the price of my Bitcoins here and now.
Well for example, localbitcoins and OTC are the most obvious choices. Over time, firms like bitpay and by extension, merchants might use the service. |
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If the idea is to have a price that is quoted, as the price of bitcoin, then the best option is to just do an average of averages.
For instance, if you have 10 different exchanges, you sample the price at each exchange on the hour, and average the price, having sliced the top and bottom prices from the sum.
This formula would be accurate enough to give info, but not too accurate to cause caching or logging issues. Anything more would be taken directly from the exchange being used to trade from.
If someone wanted to create a 30 day average price, they could from the figure created every hour, but for the rawest useful global number, I think this might work!
I thought about using a simple average, but didn't for two reasons: 1. The rate should be affected by the volume at each exchange. This makes it much less prone to manipulation and is a more accurate reading of where the trades are happening. 2. It provides a fluid transition mechanism for new exchanges to come on board without having to abruptly switch from one exchange to another. As their volume increases, so does their influence on the price and if one goes down, the rest carry the weight until its back up (if it comes back up). |
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Monsterer - can you clarify why this wouldn't represent the actual tradeable value of the currency? The idea was not to make it artificially smooth, its just a byproduct when you are incorporating more data.
A 30 day weighted average will be extraordinarily laggy. You can't really escape it completely by reducing the time-frame, lag will always be present. So its highly likely that (since bitcoin is so volatile) the weighted average indicates one price, whereas the actual trade-able value on the exchanges is nowhere near since (for example) someone just dumped 20k BTC an hour ago. I suggest reviewing historical data and computing the average based on that, then compare that average to the actual traded price at the time to give you an idea just how bad/good this idea is. Cheers, Paul. Ah sorry if my original post wasn't clear, but I'm not using a 30 day weighted average price. I'm using the realtime price. The aggregate price is then weighted based on the volume that the exchange does over a 30 day time period. This ensures that the price is both real time and weights the most influential exchanges' price accordingly. |
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You're going to have a problem when the weighted average doesn't represent the actual trade-able value of the currency.
IMO there is no point trying to fake a consistent price, you'll just have to wait for the currency to mature enough that the difference between value on different exchanges gets arbitraged away.
Cheers, Paul.
Monsterer - can you clarify why this wouldn't represent the actual tradeable value of the currency? The idea was not to make it artificially smooth, its just a byproduct when you are incorporating more data. |
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I for one am sick and tired of using mtgox's price as the default price for everything. This is a vulnerability and a weakness that can and should be fixed for a decentralized system. In order to take bitcoin's price discovery to the next level I propose that we use an algorithm which is based on the price of multiple exchanges which weights the price according to volume. I built a very simple formula which weights the real-time price based on the 30 day volume. You can see it for yourself here (its an open office .ods file): http://www.filedropper.com/pricediscovery1This example could easily be extrapolated all USD exchanges and eventually to aggregate the total numbers by incorporating numerous currencies. Questions for the community: 1. Is 30 days the best volume time set to use? 2. Is there another data piece which should be included? 3. What else am I missing? If enough people here agree with me that this is something useful and should be implemented, I will put up a bounty for a site to incorporate the data in realtime (and eventually offer API support). Thanks for your consideration edited for clarification |
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"Bitcoin is not in any other way a financial product as meant by the law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply."
Quite different from the view the U.S. government is taking. It's somewhat unfortunate for those of us living in the U.S. Over-regulating and overtaxing businesses that operate in an increasingly global marketplace is an excellent way to transfer wealth out of the country.
This. Even if you are resident elsewhere, they still fuck you if you are a citizen. |
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....
I would like to hear you undermine this claim of mine: The only reason why somebody would go and exchange fiat for bitcoin right now (not counting speculation, store of value) is to spend it on Silkroad. Nobody in right mind would go and exchange it to btc only to buy something they could have bought instantly with traditional methods. And the only thing that they can't, are silkroad goods. YES if you already have bitcoins then you might use them on other stuff, if you mine, you will use them. But this is minority of people. I'm talking about general public. 2 examples: 1. Someone in nigeria wants to buy an upgrade to their wordpress account. No other way to do that than with bitcoin. 2. Someone wants to send value across the world in less than an hour... they use bitcoin to do that. But your question is erroneous. There is no need for it to function in such an exclusive way at this point in the lifecycle. It's simply the latent functionality which will, if continued on its current course be for superior to the existing system. It's like comparing Usain Bolt as a toddler to and adult Chris Farley in a 100m dash. You know Chris Farley will win in the short term, but in the long term? Nope. |
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Lucas, I dont read this thread much but when I do I come in here and read something and its always you making some statement when you have absolutely 0 to back it up. Have you even heard of bitpay? Do you know how much they are processing alone? All the way back in march (before the peak of the bubble even) they were adding thousands of new merchants a month and processing over 5 million in orders... per month. http://blog.bitpay.com/2013/04/bitpay-eclipses-silk-road-in-bitcoin.html This is only one payment processor (theres no way to actually gauge the total, but you can be sure its far higher than that when you consider its only one processor among thousands of others. TLDR. Less typing out of your ass, more reading.As I said, Bitpay figures are largely inflated by Avalon sales. Actual commerce figures from bitcoinstore, Reddit Gold and Humble Bundle show the harsh truth. Right, because buying things in the bitcoin economy doesn't count. |
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As much as I would LOVE it to go to 50, what makes you people think its not a repeat from 3rd of May?
Huh? Why would you love that? Because this will mean that bubble is largely over and I can buy bitcoins at a price that likely will not halve, split the wallet file into three separate files and forget about checking damn clark moody more often than facebook for a year or two. So basically you want the whole Bitcoin economy to drop 50% so you can buy a few cheap coins. Did i read that right? You read 100% correct. There is no Bitcoin economy. (except for silkroad of course) I hope you are not another of hippies preaching that. The only reason why somebody would go and exchange fiat for bitcoin right now (not counting speculation, store of value) is to spend it on Silkroad. Nobody in right mind would go and exchange it to btc only to buy something they could have bought instantly with traditional methods. And the only thing that they can't, are silkroad goods. YES if you already have bitcoins then you might use them on other stuff, if you mine, you will use them. But this is minority of people. I'm talking about general public. I'm repeating myself but I enjoy seeing idealists try to desperately justify their opinion.  Lucas, I dont read this thread much but when I do I come in here and read something and its always you making some statement when you have absolutely 0 to back it up. Have you even heard of bitpay? Do you know how much they are processing alone? All the way back in march (before the peak of the bubble even) they were adding thousands of new merchants a month and processing over 5 million in orders... per month. http://blog.bitpay.com/2013/04/bitpay-eclipses-silk-road-in-bitcoin.html This is only one payment processor (theres no way to actually gauge the total, but you can be sure its far higher than that when you consider its only one processor among thousands of others. TLDR. Less typing out of your ass, more reading. |
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The Silk Road talk is so '2011ish. Came on. People sees that there's much more in BTC, besides of the fact that real economy is still reduced and that it's very speculation driven.
This baby needs to grow a little bit, but it's unstoppable.
The question is why the f--k would I want to internationally transfer my money to Japan, wait 4 days, pay transfer fees, buy one bitcoin and then buy a service I could pay for instantly with paypal? The only reason to go through hassle of getting bitcoin is using silkroad. Please tell me, why else would I want to use bitcoin to buy something over using credit card or paypal. It is a serious question, I expect a thought out answer.You expect too much. How did you even get here with this level of understanding of bitcoin? |
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All that needs to happen for the price to start rocketing again is for the big VCs to back a fully-registered, convenient-to-use, stable and secure exchange, eliminating all uncertainty from the market. Is that so far out of the question? Every major down-spike in the last few weeks has been due to the government or MtGox doing something wrong, but with all the VC money flowing in, things are going to get better. I can't wait to see what Bitcoin looks like on New Year's Day 2014  The last two 10% drops were not related to any news event. ...also, there is no VC that is going to put significant amounts of cash into something that is so heavily influenced by illegal activity. At the moment, the Bitcoin economy is still used 90% for Silk Road purchases. Tell that to Chamath P and Fred Wilson. |
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