Whenever possible, for reasons i've stated in numerous ways in other threads, i will avoid dealing on Mt Gox again, as long as the dark pool exists there...  

  Это, брат, вопрос к кривому англо авторитету: какой туфтовый курс они из тёмных глубин Мт Гокс нынче решат гнать 

Right. I think that's an important point: if a perception – right or wrong – develops on Main Street, that the darkest and most manipulative practices of Wall Street are being implemented within the Bitcoin system, that sentiment would slow the acceptance and  damage the trustworthiness of Bitcoin on Main Street.

That would be a negative development for those of us, including me, who wish Bitcoin to succeed as no other currency has done before!

Well, if dark pools create “a more even playing field", then i want to play cards for real money with you, dude! 

You open your cards to me when we are playing, and i'll hold them hidden from you the usual way. That would make life easier for SOME participants, as you said... 

The bot functionality would work just as well trading in the open then, if it were in place just to make life easier for some.

The bot functionality is not implemented in the open in order to shield  large traders from the natural forces of the "free market" – the same forces they proselytize to others as the economic panacea.

If that were not so, small traders would be allowed to trade in the dark pools also.

Fantastic! No reason not to automate it for everyone then, in a "free market" where all have equal information and opportunities. Unless, of course, one would want some privileged group to have an advantage through cheating in a tried and true Wall Street way... 

The large investor is just as capable of watching the market, and making the trade in the open. In fact, they have the resources to have a script do it, as creighto mentioned.

So, dark pools and their participation limits are not really about privacy, extra workload for MtGox, or automation for the few. Dark pools are simply about giving large traders the ability to cheat the free market and its natural forces through hiding market real volume and pricing information, until they make their trade.


  If you are "not subject to any forces" of the marketplace, i congratulate you, because you are the only one that can honestly say that!
The rest of us are subject to them; the large investors even have dark pools available in order to avoid and cheat some of those forces.


Agreed, if the trade is all about you and your transaction partner in some isolated place where only the two of you can smell it. When it's happening in an open, worldwide, price-setting exchange, all its participants have to involuntarily inhale it to some degree... 

Agreed. They are not affected for that trade. That's the point: the pricing metrics for that trade would have been affected by the natural market forces , if the trade had been in the open. Dark pools are specifically set up for the large trader to cheat such unfavorable effects of the free market, as they continue to proselytize them as positive and unavoidable to others.

After the the dark trade, its public data does affect the subsequent pricing and trading decisions of all participants.


The truth is that not everyone can use them, because there is the lower limit. I do congratulate you though on your wealth in red herring with that script argument. If automation is so great in this case, then there is no reason to set an arbitrary participation limit on it. Let's all trade with dark pool automation!

Large dark pool dwellers wouldn't like that, because then the equal rules would remove their advantage... 

...As is your opinion, except that IF you benefit from the dark pools and similar scams, your opinion is biased... 

The economics lesson you are teaching us is one that is already being pounded into all of us by the hypocrites among the Wall-Street free marketeers though periodic financial crises: this education comes down to an acceptance of a simple double-standard.

The small investor is brain-washed to accept and embrace the infallible wisdom of the “free market”, because all participants have equal opportunities in it. Also to be accepted is that some are far more “equal” than others. 

For the small trader, it's the tough love, lack of trading privacy, full exposure to and full brunt of the market forces. For the large investor, it's the protection from all of that within dark pools, insider trading, and other “free market” shielding scams. If the crap really hits the fan, for the latter there is also the protection of the nanny state, which is not available to the small investor either.

You need remedial education of a far more basic kind: it's the kindergarten lessons, where we were all taught that any game works best if all players follow the same rules... 

You are right that there will be exchanges without dark pools or arbitrary limits.

It's pretty lame if MtGox actually processes all dark pool trades manually. The "extra work", imho, is as much of a red-herring argument as the "trading privacy" one. 

 

  That's where i usually look already.

Look at the microscopic volume of Btc trade in those other exchanges compared to MtGox. It's obvious to me that the players in those markets mirror the MtGox rates.

It may not always be so, but for now MtGox trading activity is the reference worldwide price setter for Bitcoiin.

Of course, an offer to trade can't harm others!

My point is that a large hidden trade on that hidden offer in the main exchange for a given commodity does affect and distort price discovery, and harms other market participants.

It's pretty clear how it works, and examples of such cheating rigs abound on Wall Street. I sense that those of you so staunchly defending hiding from the free-market forces while praising their virtues know how dark pools work from personal experience. Been a pretty lucrative way for you to game the system, has it?

That's fine; no law against free-market hypocrisy...

So, if you contend that it doesn't matter if the trade offer was public or not, just make it public. The truth is it does matter, because it allows you to avoid exposure to the dangers of the free market forces.

The dark pool trader gets to avoid that exposure, while its stench and effect shows up in the market as that recent trade is revealed after the fact, as you said.

It's like quietly farting in a crowded room and leaving, allowing everyone else to enjoy your intestinal aroma...

Didn't make myself clear again there. Sorry. I was responding to the point above, regarding whether or not one should be "forced to advertise their intentions."

I agree with ribuck that one should not be forced to advertise their trading intentions in a free market. Yet, the small investor IS forced to advertise his intentions, while the large one is allowed to hide them in the dark pools.

No amount of rationalization can change the fact that this is rigging the system to prrotect from the "free market forces" and favor the large trader.

With respect to this issue, to me, a free market is one in which the rules are the same for all traders, the level of "trading privacy" is the same, and the access to information is the same, regardless of the size of the trade. 

Sorry i didn't make my  point clear enough here: it wasn't whether or not MtGox is a private or public place, or whether or not it has a right to run dark pools.

My point was simply that MtGox is the place of worldwide Bitcoin exchange rate discovery, and one's house isn't.

Imho, dark pools distort that exchange rate in a systemic way.

What i think best reveals that dark pools are free-market forces avoidance and market manipulation tools for hypocritical free-marketeers is that there is an arbitrary lower limit set on participation in them.

If they were really for the purposes of trading privacy, that limit wouldn't exist. Let's all trade privately then, rather than just those above a certain arbitrary level of means. That would be great! 

The fact that dark pools are only available to large traders, really shows the privacy argument to be the red herring that it is... 

Agreed. That's the way it works in a dark alley also.  In a genuinely free market, imho, the open exchange of any commodity is a place where all the participants have equal information about the balance of market forces, for the purpose of fair price discovery – not just transact to mutual advantage in privacy.

Dark pools hinder and distort the results of that discovery...


Why should a con artist be prevented from doing his thing by exposing his intentions?  After all, that would interfere with his freedom to con people...
I think you are confusing freedom with ability to harm others through your actions, if you feel like it would benefit you. 


Just because there are dark alleys in which all kinds of shady private trades are happening, doesn't mean that the main price discovery marketplace for any commodity should include dark alleys. That is, of course, if you want that main exchange to determine that price accurately... 

In any walk of life, there is a way to game the system to your own individual benefit, at the expense of others. Why don't you not do that, if you can get away with it?

...Or do you already do that as a matter of routine??   

Your house is a private residence; MtGox is a public market.

The key difference is that worldwide price discovery for any commodity doesn't happen at your house.  It does happen for Bitcoin at MtGox.

What's really ironic to me about dark pools, is that they weren't forced on Bitcoin by oppressive governments, or plundering corporations, or any other outside forces of evil-doers. They were instituted by leaders in this community, who espouse the benefits of the above-mentioned pure free-market fantasies...

 

...Do you mean including cracking peoples' online accounts, lifting their wallets with java applets, and trading in dark pools?? Do you mean "due entirely to fair, free market forces" such as those?

Dream on, dude! lol Maybe by Chinese standards it will be due to "free market forces" - not by the likes of Adam Smith's.

When dark pools were implemented on the main Bitcoin exchanges, the Bitcoin markets stopped being free by definition, because they ceased being transparent to all. It's the same Wall Street scams for avoiding the "free market forces"   to benefit wealthy insiders, rigged under the guise of "stabilizing the markets for everyone..."

The truth is that the legal and illegal scammers who are cheating the "free market forces" are already in the Bitcoin system. Next, imho, will be the consolidation of mining toward oligopolization, the same way that exists in the current banking systems...

The governments won't be far behind, using those same dark pools and mining oligarchies to make "fair, free market forces" in Bitcoin as much of a fantasy, as they are in the corrupt markets on Wall Street...