The coming change at mtGox and its implications

[Le Happy Merchant]

If I just did a calculation with my ass, it's gonna make the complexity roughly O(m*log(n)) instead of O(log(n)), and m could be easily larger than log(n).

I suspect there are many badly-programmed bots relying on this out there.

If m > log(n) > 1 this is bad for the complexity.
If 1 > m > log(n) this is good for the complexity.

What are you trying to say?

[SkRRJyTC]

Are there people actively taking advantage of this deficiency? Gox is  lagging even if there are only several orders being placed in total, WTF?

Would be silly not to take advantage, since it is extremely easy.

[hgmichna]

Not allowing users to place an order if they do not have the funds at the time the order is placed seems wrong to me. The order needs the funds only when it is executed, not before. Consider that Mt.Gox is there to fulfill its users' needs, not the other way around. Provided, of course, that the users pay appropriately for the service.

The user could have a combination of orders that works, even though not all orders are funded beforehand. There could be sufficient funds coming in before an order is executed. I see no need to check funding before an order is actually executed. I would not complain if they did that though. They can do what they like, as long as they don't alienate their users.

I do see a need though for a fixed base fee for transactions, like every other online broker has. If necessary, there could even be a base fee for placing an order or a punishment fee for trying to execute an unfunded order. It seems that Mt.Gox is wasting their limited computer power on lots of tiny nuisance orders. The whole bitcoin system is not designed for large numbers of tiny transactions. There is a block size limit, for example. Bitcoin is not a micro-payment system. This will become ever more obvious as bitcoin trade volume grows.

[molecular]

Not allowing users to place an order if they do not have the funds at the time the order is placed seems wrong to me. The order needs the funds only when it is executed, not before. Consider that Mt.Gox is there to fulfill its users' needs, not the other way around. Provided, of course, that the users pay appropriately for the service.

The user could have a combination of orders that works, even though not all orders are funded beforehand. There could be sufficient funds coming in before an order is executed. I see no need to check funding before an order is actually executed. I would not complain if they did that though. They can do what they like, as long as they don't alienate their users.

I do see a need though for a fixed base fee for transactions, like every other online broker has. If necessary, there could even be a base fee for placing an order or a punishment fee for trying to execute an unfunded order. It seems that Mt.Gox is wasting their limited computer power on lots of tiny nuisance orders. The whole bitcoin system is not designed for large numbers of tiny transactions. There is a block size limit, for example. Bitcoin is not a micro-payment system. This will become ever more obvious as bitcoin trade volume grows.

I see the need to check funding of order before they are displayed in the public order book. Unfunded order should not be in the book because they cannot be fulfilled.

[dancingnancy]

Not allowing users to place an order if they do not have the funds at the time the order is placed seems wrong to me. The order needs the funds only when it is executed, not before. Consider that Mt.Gox is there to fulfill its users' needs, not the other way around. Provided, of course, that the users pay appropriately for the service.

The user could have a combination of orders that works, even though not all orders are funded beforehand. There could be sufficient funds coming in before an order is executed. I see no need to check funding before an order is actually executed. I would not complain if they did that though. They can do what they like, as long as they don't alienate their users.

I do see a need though for a fixed base fee for transactions, like every other online broker has. If necessary, there could even be a base fee for placing an order or a punishment fee for trying to execute an unfunded order. It seems that Mt.Gox is wasting their limited computer power on lots of tiny nuisance orders. The whole bitcoin system is not designed for large numbers of tiny transactions. There is a block size limit, for example. Bitcoin is not a micro-payment system. This will become ever more obvious as bitcoin trade volume grows.

I see the need to check funding of order before they are displayed in the public order book. Unfunded order should not be in the book because they cannot be fulfilled.

True.  This is what bitcoinica was doing as well, IIRC.  You could post anything you wanted to the order book, but it was another thing if you had the money in your account.  Seems entirely messed up, not really sure what to think about all that.

[myself]

well in stock and forex u cant advertise that you want to buy or sell a currency or a stock if you dont freaking owned it first

[molecular]

well in stock and forex u cant advertise that you want to buy or sell a currency or a stock if you dont freaking owned it first

what about naked short selling?

[shmadz]

Not familiar with Gox.

Over at virtex, every bid or ask that you place puts that money into escrow. so if you don't have the money (ex. if I want to buy right now, but all my money is tied up in lower bids) I have to cancel some bids to free up the money.

From the sounds of it, this is not the way it works at Gox?

Is the escrow system just dumb? or is it something that Gox will have to implement to get around this problem?

(was thinking of trying Gox out, once coinlab takes over Can/US payments, since virtex % is ridiculous (they started out at 0.6% - now they're up to 3% for low volume accounts)

[hgmichna]

Not familiar with Gox.

Over at virtex, every bid or ask that you place puts that money into escrow. so if you don't have the money (ex. if I want to buy right now, but all my money is tied up in lower bids) I have to cancel some bids to free up the money.

From the sounds of it, this is not the way it works at Gox?

Is the escrow system just dumb? or is it something that Gox will have to implement to get around this problem? […]

From what I have read here, Mt.Gox allows orders without complete funding. In my view this is not a problem, unless users heavily overuse this feature. But Mt.Gox could protect itself against this easily, as they have the whole account history and could easily put up a simple rule that prevents the overuse of this feature.

As I have mentioned before, their real problem is the large number of tiny nuisance orders. I think they should first demand a small fixed fee for each order or for each transaction to get rid of micro-orders.

[myself]

well in stock and forex u cant advertise that you want to buy or sell a currency or a stock if you dont freaking owned it first

what about naked short selling?

you cant do that no broker allow you to do that

[hgmichna]

well in stock and forex u cant advertise that you want to buy or sell a currency or a stock if you dont freaking owned it first

what about naked short selling?

you cant do that no broker allow you to do that

Outside bitcoin it is normal within some reasonable margin, so I'd expect it to become normal for bitcoin too, as soon as the bitcoin market is a bit more stable and mature.