Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[wilfried]

exchanges should make it impossible to fill your own orders.

Not a chance.  It removes the option of "cross trades".

e.g You are a broker who has order to buy 200 and sell 100.

The broker would then buy 100 and then "cross" 100, resulting in 200 bought and 100 sold.

This is critical in open outcry exchanges.

plz, could you explain that for a 5year old? thx

[1714038307]

1714038307

[surfer43]

what does "bitcoin days destroyed" mean exactly???

It's really simple once you "get it" but it took me a while to wrap my head around it too.  I'll try:

If you send me 1 BTC and I spend it tomorrow, when I spend it, I will have destroyed 1 bitcoin-days.

If I wait till next month to spend it, when I spend it it will destroy 30 bitcoin-days.  

But I you send my 60 BTC and I spend them 12 hours from now, it would also destroy 30 bitcoin-days.  

So, it's a combined measure of the magnitude and oldness of the coins that are being spent.  If we see a huge spike in the amount of bitcoin-days destroyed, it's a good indication that someone just moved a lot of old coins.  

Interestingly: something akin to bitcoin-days is used by the bitcoin-network to determine the priority of a transaction.  AFAIK:

   priority = (# of BTC) * (age) / (size of TX in bytes)

This sounds like POS to me... Does this mean that the Bitcoin code could be changed to implement POS easily (if the miners agreed)

[surfer43]

exchanges should make it impossible to fill your own orders.

Not a chance.  It removes the option of "cross trades".

e.g You are a broker who has order to buy 200 and sell 100.

The broker would then buy 100 and then "cross" 100, resulting in 200 bought and 100 sold.

This is critical in open outcry exchanges.

Why not cancel the sell 100 order, buy 100, and avoid paying fees on 100? 

[Peter R]

what does "bitcoin days destroyed" mean exactly???

It's really simple once you "get it" but it took me a while to wrap my head around it too.  I'll try:

If you send me 1 BTC and I spend it tomorrow, when I spend it, I will have destroyed 1 bitcoin-days.

If I wait till next month to spend it, when I spend it it will destroy 30 bitcoin-days.  

But I you send my 60 BTC and I spend them 12 hours from now, it would also destroy 30 bitcoin-days.  

So, it's a combined measure of the magnitude and oldness of the coins that are being spent.  If we see a huge spike in the amount of bitcoin-days destroyed, it's a good indication that someone just moved a lot of old coins.  

Interestingly: something akin to bitcoin-days is used by the bitcoin-network to determine the priority of a transaction.  AFAIK:

   priority = (# of BTC) * (age) / (size of TX in bytes)

This sounds like POS to me... Does this mean that the Bitcoin code could be changed to implement POS easily (if the miners agreed)

LOL.  When I first read that I thought you were calling my explanation a piece of ....

I don't know much about Proof of Stake, but I understand that the current priority scheme is one of the denial-of-service protection measures in bitcoin.  It makes is so that legitimate 10 mBTC transactions built from coins that have been sitting in your wallet for a few days have a higher priority than someone ping-ponging coins back and forth every block trying to bloat the "unconfirmed transaction" and increase confirmation times for the average user: https://blockchain.info/unconfirmed-transactions

[KFR]

LOL.  When I first read that I thought you were calling my explanation a piece of ....

That's how I first read it too. 

[ampere9765]

i was promised cheap coins. are they coming or not? i sold some in 770s. 

[KFR]

Those darned Internet promises again.

[Nemo1024]

Look at the 10-day/15-minute chart with enabled Parabolic SAR on http://bitcoincharts.com/charts/bitstampUSD#rg10zig15-minztgSzm1g10zm2g25zvzps

It really looks like a dragon!   And its snout seems to point up

Happy Chinese New Year. Wonder where the horse will take us, but I am very tempted to go all in at this time.

[Mythul]

We got trolled by China thats for sure.

New exchange opening in Hong Kong in march. Thats what I call a crash...to the moon !

[Denton]

i was promised cheap coins. are they coming or not? i sold some in 770s. 

You have to hope for some bad news. 

[dave3k]

Happy Chinese New Year. Wonder where the horse will take us, but I am very tempted to go all in at this time.

I think I might wait for the year of the Goat

[adamstgBit]

had some fun with charts.



 

[ChartBuddy]

Explanation

[David M]

Not a chance.  It removes the option of "cross trades".

e.g You are a broker who has order to buy 200 and sell 100.

The broker would then buy 100 and then "cross" 100, resulting in 200 bought and 100 sold.

This is critical in open outcry exchanges.

plz, could you explain that for a 5year old? thx

Let's use Corn Futures as our commodity.

Broker X has 2 clients.

Client 1 makes breakfast cereals.
Client 2 is Jo Farmer with 5000 acres of corn that will mature in 2 months.

Client 1 wants to buy 200 tonnes in 2 months.
Client 2 wants to sell 100 tonnes in 2 months.

Broker X enters the market place and offers to buy 100 tonnes.
Broker Y sells him 100 tonnes.  Broker X immediately "crosses" 100 tonnes.

The "crossed" trade is a buy and sell at the same price.

Broker X has now bought 200 tonnes and sold 100 tonnes fulfilling both orders.

I was lucky enough to work in the Australian Futures Exchange during the "open out cry" era.  "Open out cry" is trading directly with a bunch of people that is monitored by officials who then relay the trades to the outside world.

Imagine 200 people in a circle 30 feet wide all trying to trade.   I was on the desk relaying buy and sell orders to the traders in the circle.   It was up to the traders to figure out when to "cross" or not.

The movie Trading Places shows this type of exchange.  HTH.

EDIT:  You cannot perform a cross trade unless you are already in a trade. 
In the example above, Broker X could not simply cross 100 without first trading with Broker Y.

[macsga]

Happy Chinese New Year. Wonder where the horse will take us, but I am very tempted to go all in at this time.

I think I might wait for the year of the Goat

I'm so waiting for this.

I'm going to have to host a massive party somewhere

bitcoin island comes to mind...

Best place evar! as I'm the local tyrant!

I'm gonna nominate for your PM. Free BTCooze for everyone. Yeah!

[DaRude]

Get your tinfoil hats on! Whomever is manipulating the price to keep it in this narrow range is going to run out of bitcoins eventually ;-)

I hear bitcoin days destroyed is goin crazy so maybe it's some of the early adopters at work... trying to keep the financial apocalypse at bay for just a little while longer...  

Close but not quiet there. So Winterflosss' have how many BTC? How about the SecondMarket (think i remember BTC70K been throwing around). That's a lot of BTC. At the meeting IIRC someone from the panel asked where they get their BTC, answer was muffled early adopters and other sources. I doubt early adopters are business people and what price do you offer them? If it was me to entice i'd offer some % on top of current exchange rate who would pass that up? And dump say 10% of the acquired BTC on the market. 70k bought, 7k BTC are dumped on market to guarantee the lower buying price. Small price to pay so you get as many coins and hold it from CCMFing. It'll continue as long as they'll be major trades off the market while relying on the exchange rates (what else would you use).

Edit: and for early adopter why sell on exchange and loose on slippage when you can sell for a premium and without slippage

[Pruden]

Not a chance.  It removes the option of "cross trades".

e.g You are a broker who has order to buy 200 and sell 100.

The broker would then buy 100 and then "cross" 100, resulting in 200 bought and 100 sold.

This is critical in open outcry exchanges.

plz, could you explain that for a 5year old? thx

Let's use Corn Futures as our commodity.

Broker X has 2 clients.

Client 1 makes breakfast cereals.
Client 2 is Jo Farmer with 5000 acres of corn that will mature in 2 months.

Client 1 wants to buy 200 tonnes in 2 months.
Client 2 wants to sell 100 tonnes in 2 months.

Broker X enters the market place and offers to buy 100 tonnes.
Broker Y sells him 100 tonnes.  Broker X immediately "crosses" 100 tonnes.

The "crossed" trade is a buy and sell at the same price.

Broker X has now bought 200 tonnes and sold 100 tonnes fulfilling both orders.

I was lucky enough to work in the Australian Futures Exchange during the "open out cry" era.  "Open out cry" is trading directly with a bunch of people that is monitored by officials who then relay the trades to the outside world.

Imagine 200 people in a circle 30 feet wide all trying to trade.   I was on the desk relaying buy and sell orders to the traders in the circle.   It was up to the traders to figure out when to "cross" or not.

The movie Trading Places shows this type of exchange.  HTH.

Thanks, but that's for two different brokers. We are talking about an account buying to himself.

[macsga]

Get your tinfoil hats on! Whomever is manipulating the price to keep it in this narrow range is going to run out of bitcoins eventually ;-)

I hear bitcoin days destroyed is goin crazy so maybe it's some of the early adopters at work... trying to keep the financial apocalypse at bay for just a little while longer...  

Close but not quiet there. So Winterflosss' have how many BTC? How about the SecondMarket (think i remember BTC70K been throwing around). That's a lot of BTC. At the meeting IIRC someone from the panel asked where they get their BTC, answer was muffled early adopters and other sources. I doubt early adopters are business people and what price do you offer them? If it was me to entice i'd offer some % on top of current exchange rate who would pass that up? And dump say 10% of the acquired BTC on the market. 70k bought, 7k BTC are dumped on market to guarantee the lower buying price. Small price to pay so you get as many coins and hold it from CCMFing. It'll continue as long as they'll be major trades off the market while relying on the exchange rates (what else would you use).

Edit: and for early adopter why sell on exchange and loose on slippage when you can sell for a premium and without slippage

Hmm...

The FBI now controls more than 144,000 bitcoins that reside at a bitcoin address that consolidates much of the seized Silk Road bitcoins. Those 144,000 bitcoins are worth close to $100 million at Tuesday’s exchange rates. Another address, containing Silk Road funds seized earlier by the FBI, contains nearly 30,000 bitcoins ($20 million).

That doesn’t make the FBI the world’s largest bitcoin holder. This honor is thought to belong to bitcoin’s shadowy inventor Satoshi Nakamoto, who is estimated to have mined 1 million bitcoins in the currency’s early days. His stash is spread across many wallets. But it does put the federal agency ahead of the Cameron and Tyler Winklevoss, who in July said that they’d cornered about 1 percent of all bitcoins (there are 12 million bitcoins in circulation).

http://www.wired.com/wiredenterprise/2013/12/fbi_wallet/

[hmmmstrange]

had some fun with charts.

 

I want expancive coins.

[David M]

Thanks, but that's for two different brokers. We are talking about an account buying to himself.

I have seen many instances of performing a cross trade for the same client.  

Imagine a stop loss order getting hit for a client who then immediately reverses his trade position.

e.g A guy is long 50 and then wants to go short 25.   In this instance if the broker has somebody who wants to go long 25, then a Sell 50 Cross 25 does the job.

The volume of the cross trade does not have to match the initiating trade volume.  As long as there are other trades to match the cross, then you can do whatever you like...

EDIT:  I just noticed you said "account".  That would be pointless as all you are doing is generating fees for the broker.