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1  Alternate cryptocurrencies / Altcoin Discussion / Re: Ripple Giveaway! on: May 10, 2013, 03:50:36 AM
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2  Economy / Service Discussion / Re: Bitcoinica LP (In Liquidation) form request on: December 17, 2012, 01:54:20 AM
How do you claim for an open position on the form? Does the total claim include the open position? Do you assume the open position is paid in BTC or USD?

ie.
 - Do 5a & 5b (the Total Cash & BTC Owed) include the open position, or are they just the collateral?
 - If 5d (Total Claim) includes the open position, the cost of my open position makes my USD balance negative (I funded the account in BTC). Is that right? Has anyone else had this issue? (eg. if I funded 100 BTC and bought +150 BTC @ 5 USD/BTC = Total claim of +250 BTC and -750 USD)

Thanks!
3  Bitcoin / Bitcoin Discussion / Inflation in Argentina on: June 25, 2012, 08:40:07 AM
Argentina has some severe inflation and currency exchange restrictions, is anyone promoting Bitcoin there? Does anyone here live in Argentina?

http://soberlook.com/2012/06/as-argentinas-economy-hits-wall.html

4  Bitcoin / Legal / Re: US Accountant recommendations? on: March 24, 2012, 06:49:42 PM
Thanks, I'll check them out. I've also found an accountant who's willing to look in to it, and a professional to work out the cost basis for my MtGox and Bitcoinica transactions http://www.investotek.com/
5  Bitcoin / Legal / US Accountant recommendations? on: March 18, 2012, 05:40:51 PM
Can anyone recommend a US accountant to help file US personal taxes associated with Bitcoin trading?
6  Bitcoin / Press / Re: Bitcoin press hits, notable sources on: March 01, 2012, 03:08:12 AM
FT : Sean Park, co-founder of investment firm Anthemis, predicts a future of "billions of currencies" - including Bitcoin.
http://ftalphaville.ft.com/blog/2012/02/29/895801/space-opera-beyond-finance-edition/
7  Bitcoin / Legal / Re: Interest on deposits on: January 02, 2012, 08:18:03 PM
I was envisaging the exchanges paying interest to build their reserves. For example. Bitcoinica is short of USD at the moment.

Currently, lending Bitcoins to a person you met on the internet seems insanely risky, there is no enforceable way to make the receiver repay the funds. Maybe if they signed a contract it would help, or had other assets in escrow as security for the loan.
Lending BTC to a company (eg. an exchange) might be possible for small amounts, as they put their reputation at stake.
8  Bitcoin / Legal / Re: Interest on deposits on: January 02, 2012, 05:13:30 AM
After Googling, I think the key is these are "demand deposits", i.e. the firm agrees to pay the account holder when demanded. Usually other investments that pay an interest (bonds, loans, preference shares, etc.) have some capital risk or illiquidity. I'm not a lawyer & this is probably the danger of doing your own legal research, as I would have expected Paypal to immediately fall under this category.
9  Bitcoin / Legal / Re: Interest on deposits on: January 02, 2012, 02:30:50 AM
Possibly related EU/UK legislation, which might affect an exchange in the EU when issuing USD coupons similar to MtGox.

"electronic money issuers will not be allowed to grant interest or other benefits related to the length of time e-money is held"
http://www.fsa.gov.uk/smallfirms/resources/one_minute_guides/systems_controls/e_money.shtml

You also have to be authorised if you take deposits, in the UK & the US. http://en.wikipedia.org/wiki/Non-banking_financial_company No idea about Japan / Singapore.
10  Bitcoin / Legal / Interest on deposits on: January 01, 2012, 09:49:51 PM
I believe giving interest on fiat deposits is a regulated activity. Does anyone know if this would prevent a BTC exchange from offering interest?
11  Economy / Speculation / Re: Bitcoinica: How it works on: January 01, 2012, 09:44:23 PM
Zhoutong, if your reserves are short of USD or BTC, have you considered offering interest on balances held at Bitcoinica?
Although I think offering interest on fiat deposits is a regulated activity, that might cause problems
12  Bitcoin / Press / Re: Bitcoin press hits, notable sources on: January 01, 2012, 04:59:13 PM
If you read the header, that ZeroHedge post was a guest post from Brandon Smith at alt-market.com.
13  Bitcoin / Development & Technical Discussion / Re: Custom Bitcoin transaction with an override key? on: December 28, 2011, 04:02:54 AM
Interesting, thanks.

Thinking of uses, if everyone trusts the overseer, I could get my coins back if they're stolen. Alternatively, a government could regulate bitcoin by requiring merchants to use this type of transaction.

Also, how would this transaction appear in the Bitcoin client? Would both the owner & the overseer see the bitcoins in their account? Presumably the client can't spend them in the GUI.
14  Bitcoin / Development & Technical Discussion / Re: Custom Bitcoin transaction with an override key? on: December 28, 2011, 01:31:09 AM
Can you do a "1-of-1 or 2-of-2" transaction, where either the overseer spends the coins, or both the overseer & the holder spends the coins?

I could open an account with the overseer & use a non-bitcoin currency, but you would lose the bitcoin's benefits of the inability to arbitrarily mint new currency, and the public transaction ledger. ie. if they stole it you would know immediately.
15  Bitcoin / Development & Technical Discussion / Custom Bitcoin transaction with an override key? on: December 27, 2011, 11:57:39 PM
Is it possible to construct a custom transaction in which either your key, or the key of an "overseer" can spend the coins? And add a feature such that all subsequent transactions you make also have to include the overseer's override feature?

Would be useful if you wanted to give a trusted organisation the ability to retrieve your bitcoins if they were lost/stolen.
16  Bitcoin / Legal / Re: There is a way we can trade Bitcoin without getting shut down constantly - read on: December 27, 2011, 03:44:01 AM
There is a major unmentioned problem - liquidity. The market price of the ETF/bond would only truly track the price of bitcoin if the two were convertible as a regular occurance. This is the role of an ETF Authorised Participant http://www.investopedia.com/terms/a/authorizedparticipant.asp#axzz1hhYB1nQP - ie. the AP would take dollars and buy bitcoins, then issue a Bitcoin ETF unit to the market. Bond ETF APs do this once a week or so, liquidity is an issue there too. But if there is insufficient liquidity, a "large" transaction isn't possible or sensible. So the market price of the ETF would detach from the market price of bitcoins.

For example, imagine an investor has $10mm USD for investing in bitcoin, and BTCUSD is $4. He will want at least 2mm BTC. I don't think that would be possible even over 1 week. The price would shoot up before even a small part of the order was filled. Any big investor will know this, so they're not interested - they don't want to give everyone else a free lunch, and anything less than $10mm isn't worth the time of day.

Before listing an ETF, we need the BTC market cap to be back at $200mm, and daily trading of $10mm.

What about creating shares in a private company, and trading on SecondMarket.com?
17  Bitcoin / Bitcoin Discussion / Re: What do you want in a new Bitcoin Exchange? on: December 25, 2011, 03:05:33 AM
 - Dark-pool auction settlement every N seconds (eg. 30+), rather than continuous settlement, to reduce fees for people who don't want bitcoins immediately, just at some time.
 - Scheduled buy/sell orders, (eg. buy $10 of bitcoins every hour, +/- 10 minutes, or VWAP trades)
 - OpenTransactions support, so fiat money & bitcoins aren't stored on the exchange
 - BTC/Gold trading or quantos
 - Margin trading
 - Yubikeys
 - Pre-filled forms for US tax reporting

Also, the Bitcoin community needs to prefund organisations to support future legal issues with Bitcoin. There will be legal cases in future, and we will need at least one organisation to stand against the vested interests of fiat money. At the moment the best origin for this organisation is one of the exchanges, where the money is being made.
18  Bitcoin / Bitcoin Discussion / Re: Buying physical gold - another killer application for bitcoins? on: December 22, 2011, 06:00:39 PM
Has anyone yet bought or sold physical gold for bitcoins? It would be interesting to find a gold dealer who accepted BTC.
19  Bitcoin / Legal / The TD F 90-22.1 Form for Bitcoin on: December 21, 2011, 04:22:26 AM
Anyone know if & how Bitcoin relates to the foreign account holdings form for US persons? http://www.irs.gov/businesses/small/article/0,,id=210244,00.html
20  Bitcoin / Bitcoin Discussion / Re: Buyer Beware. Proposal for a non high-frequency manipulatable exchange. on: December 21, 2011, 02:56:48 AM
Lots of great posts, lots of interest. To summarize, my goal is to make trading BTC fairer, more stable, and less expensive.

I strongly suspect both MtGox and Bitcoinica's matching engines have a weakness. For example,
 - From my Bitcoinica outage experience yesterday (previous post), I was able to cancel Bitcoinica orders whilst the matching engine is busy.
 - Similar outages have been observed at MtGox, e.g. the infamous time when the price dropped to 0.00001 took several hours. The MtGox engine was filling one super order. I could make & cancel new orders as it was being filled. This is a critical weakness.

This is how I expect the HFT manipulates the market :
1) Spam exchanges with lots of small orders or trades. Keep their matching engines very busy to slow down orders.
2) Place large market orders up and down to clear out the existing static order book
3) Place your own orders to fill up the book. You now control the price.
4) When a significant buy order is placed by another person, (e.g. buy @ $4, best offer is $3.5), the matching engine will start to fill the trade. This will take time, especially if you've populated the order book with 1000 tiny orders.
5) Knowing that a big order is in progress, you can cancel your outstanding orders in the book, forcing the other person to pay a much higher price than they expected to trade. If the exchange forced you to keep the existing order, you could withdraw funds instead (which is probably not blocked on the matching engine thread).
6) After their order is filled, you can push the price down immediately by adding more (fake) sell orders to the book.

They could also get a timing advantage by being closer to the exchange, or by delaying/DOSing the market data that other participants rely on (MtGoxLive, MtGox websockets, etc)

BTW, calling it HFT is a poor comparison to the real-world HFTs, but my manual trading lag time is probably 10-30 seconds including human reaction, data entry & internet lag time

Auction Exchange : The advantage of choosing a longer time before the auction occurs is to build up a bigger at-the-money order book. Assuming the exchange is non-profit (low transaction fees was the main idea of bitcoin, remember?), a larger number of filled orders would be crossable, so you could fill large orders without moving the market and people would have more confidence in the value of the currency. I would prefer to buy a large number of BTC with a super-long auction than drip-feed it in to MtGox. One additional restriction, the auction order book can't be visible before its executed. Otherwise it would lose its value.
Another way of looking at it, what do you gain if you were only able to trade every ~10 seconds? What would you lose? If you can't value it, you're the free lunch. Same reason Facebook is free.

Question : Does MtGox use PHP for its matching engine as well as its API? It should be written in C, with someone dedicated looking for timing arbitrage problems like this.

@Fireball : The advantage you advocated for is provided by automated market making, not just HFT. Automated market making would also be available for a discrete time auction exchange. HFT can destroy for profit too, e.g. Nanex - The Disruptor http://www.nanex.net/Research/EMini2/EMini2.html

@cbeast : Worship of financial maths will get you as far as CDOs and mark-to-model. When the model fails, you'll need real people to untangle the expensive mess.
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