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