[users of the Bitfinex platform]

This is a thread for exchange of ideas and strategies, discussion and ramblings of users of the Bitfinex platform.

Note that there is an official Bitfinex thread, created and monitored by Bitfinex staff. If you want to reach the attention of Bitfinex staff it might be a better idea to post there. Some users expressed concern regarding the self-moderated nature of the official thread -- thus, here you'll find an basically unmoderated thread from users for users....

http://www.spiegel.de/netzwelt/netzpolitik/online-waehrung-warum-bitcoin-liberty-reserve-ersetzen-koennte-a-902496.html


Its just a "regional" newspaper (as in: its not a US newspaper).
But its one of the leading german magacines, so this is 1st class main stream media coverage for germany.

Auch wenn Liberty Reserve nicht nur von Kriminellen genutzt wurde, sondern auch von Menschen in Ländern, in denen Firmen wie Paypal oder Western Union keine oder nur eingeschränkte Dienste anbieten: Staaten wollen wissen, wer wem welches Geld schickt. Es könnte sich dabei ja um Schwarzgeld handeln, um Einnahmen aus kriminellen Geschäften oder um Finanzierung von Terrorismus.

Liberty Reserve hat dieses Anliegen gezielt unterlaufen. Für die Ermittler ist das Aus der Plattform ein Erfolg. Beim Online-Bezahlsystem Liberty Reserve gab es eine zentrale Anlaufstelle, eine Website, Profiteure mit Luxusautos, denen die Staatsgewalt zu Leibe rücken konnte. Bei anderen Zahlsystemen ist das schon schwieriger.

[.. in spite of LibertyReserve being used not by criminals solely, but also by people from countries wehre companies like Paypal or Wetern Union offered no or only limited services: the Governments want to know, who sends which money, and to whom. Theoretically it could be illegal payments, revenue from criminal business or terrorism financing.

Liberty Reserve deliberately subverted this claim [of the governements to know...]. For the investigators, the shutdwon of the platfrom is a success. The online payment system Liberty Reserver had one central point of service, one website, distinct benefitors with luxory cars, on which the powers of the state come down. With other payment systems, this might be somewhat more dificult...]

(note the subtle irony between the lines)

The rest of the article goes on to mention the Hawala networks, and then bitcoin as alternative to Liberty Reserve. It closes to mention Kino.to, zerocoin and filesharing and how the spectacular take-down of some platfroms did not end the questionable activities themselves

Personally I'd judge this coverage as accurate and neutral

Asking about people's and speculator's sentiment here.

No one knows the exact impact of Silk Road, and no one knows to what extent any effect is exaggerated by speculation.
Anyway, will be interesting to compare to past year's rates....

instead of trolling and bickering around, lets take a somewhat more serious snapshot of current speculator's emotions here.

We "all know" a serious Crash is imminent. Well or at least a correction Maybe we're just dreaming it up, hoping for a better buying opportunity....


Anyway, what is your guess regarding the current market dynamics? Assuming there will be some permanent downward move (not just a flash-ditch and immediate sell back). Where do you see the new equilibrium after such an event?

Speculating on the development of Oil / BTC is interesting, but certainly also risky; since the "official" oil market is mosly rooted in USD, both the BTC/USD and the general market situation are implicitly factored into this rate.

Long term the Oil price is likely to go up, maby even skyrocket. And BTC will go to tha moon, well eventually.  
But the most interesting question is of course what will happen righ now and in the near future, since the global economy isn't running so happily and we're about to face even more difficult times....

Well, almost for free 

All you need is about $200000 to start with

And here is the simple How-to:

Place a pair of Bid / Ask-Walls on Mt.Gox, each roughly 6000 conis size. Place a system of smaller bid and ask orders in between. The bid orders of course allways lower than the corresponding ask orders. When people have "taken" all your orders, then move your big barrier orders in a direction that the market sort-of expects. For example, move them down in some steps towards $10. Then repeat your game. When the small folks attack and take one of your barriers, just put up a new pair. Repeat until significant counter action appears beyond your barriers, which is the sign to reverse the direction of your action. At the end of the day, you've taken a nice amount of coinz out of the small guy's pockets...

I've toyed a bit with the BitcoinOPX platform. After the recent changes, it became more interesting, since you're now able to find any currently available options, and since the options can now be executed any time the're in the money (american style).

But I don't understand some details how the platform works? Can someone enlighten me?

I've created and successfully sold some Options (10 BTC lot size). Now, the escrow shows a negative balance. What does that mean?

• does it mean that the amount put into escrow wasn't sufficient, so my counterparty didn't get all I owed him?
• or does it mean that I made some additional profit??

Another question:
In the "Positions" table, there are columns "Last", "Change", "Profit/Loss". I'd guess these are related somehow to the gains/losses possible when trading existing options. But in my case, these columns allways show $0. So the question is: what is exactly the meaning of these values, and when will they start do differ from $0 ?

With this message, I want to put up a warning to everyone participating in the beta test of Bitdaytrade.com

Please excuse me in case I am overreacting --
it is not clear yet, if bitdaytrade.com had a breach, is just malfunctioning, or if just my account got hacked.


Anyway, when logging into the site right now, I've found that earlier this day 3 withdrawals had been initiated (now in processing state), which would result in removing all of the BTC in my underlying currency account. I've allerted the Bitdaytrade support, requesting to halt these transfers, if possible (they manually approve withdrawals).


The withdrawals where initiated at
2012-08-02 11:44:10
2012-08-02 09:15:56
2012-08-02 03:16:57

I am absolutely sure these weren't initiated by me. My PC was off during that time. I'm using secure passwords, access from a linux box, and changed my password just yesterday.

I'll follow up if I find out any new information


Update
Further investigation uncovered a bug in the display of withdrawals at Bitdaytrade.com
So these withdrawals turned out to belong to another customer, and just summed up to the size of my currency account by coincidence.

[contract for difference]

Hi all

since Kronos.io is now in alpha/beta testing and we're about to see what this is all about, I'd like to collect some informations about that new offering. I'm aware that the site isn't officially launched yet, and I take it that we'll get more accurate information in the near future. Anyway, I think its time to start collecting questions to clarify, so that we, as a community, are able to judge that new site.

The site is announced to offer a better security level then Bitcoinica -- this is highly appreciated. We'll know for real how resilient this website is actually, after it has been hacked for the first time. Thus, not much to add on that topic for now ;-)


Indeed, for the moment I'm far more interested in understanding the financial construction and the business model.

Judging from what is accessible now for beta testers, the site is pretty much a clone of Bitcoinica. Thus, for starters, it's also a contract for difference business. When compared with Bitcoinica, I noticed two differences.

- all accounting seems to be done in BTC solely (Yay!)
- while the offered leverage options are the same, the account size limits are a bit more conservative (400 BTC on 5:1 and 200 BTC on 10:1)


Based just on these observations, I'd like to pose the following questions.

• how does Kronos.io get its liquidity?
• especially how does it get the USD for going long on leverage?
• what mechanisms are in place to prevent customers from opening positions which aren't sufficiently backed by available liquidity?
• what mechanisms are in place to protect the business from collapsing when the market moves too fast while force liquidating positions?
• opening a position corresponds to -- exactly what?
  • is there an 1:1 relation, i.e every position corresponds to a trade made on some exchange
  • or does the site do a netting of all open positions and just trades the difference/excess on some exchange
  • or is there an internal buffer to work against, and actual trades will happen only when this buffer is exceeded
  • or are all positions just virtual and the site is thus speculating against its own users? (hopefully not)
• the displayed rates are connected to what exchange? (probably Mt.Gox?). How tight is that connection? How closely do those rates follow the exchange rates? How frequently are they updated?
• since the margin seems to be calculated in BTC (is that correct?), I'd expect this tradeable margin to be independent from the current exchange rate. So you can't be zhoutonged just by a decreasing BTC rate, correct?
• what values and properties are automatically and dynamically adjusted?
  • the spread, or even premium added on top of the current spread at the backing exchange?
  • interest rates? (where are they accessible?)

Hi all,

maybe someone might help to clarify that question...?

I am interested in the finance-technical side of that question. We all know that the site might have used better IT security measures. But anyone in the IT business (like myself) also knows that implementing IT security is expensive (especially in development time). And the stunning thing with Bitcoinica is for sure how fast it was implemented, operational and financially successfull (at least until the desaster happened...).

So my question is rather about the "financial mechanics". Several people claimed in this forum that a margin trading platform is impossible in such a shallow marked as Bitcoin is currently. And that a business like Bitcoinica is bound to fail and collapse.

Can someone please clarify what risks Bitcoinica was actually taking?


In my understanding, the only risk Bitcoinica was taking is that the rates move away between the time point when a position is force liquidated (you get zouthonged) and the time point when these closing orders are actually executed at market price. Because, as I understand it, they used the (margin) value of the currency accounts plus the initial spread added on every new position to back the liquidity given out as loan. And when that liquidity wasn't sufficient, the starfish would appear and no further active positions could be opened.

So please, explain why a margin trading platform with this construction might be financially unsound.

Thanks
--Ichthyo