Different Prices don't make sense/MT Gox hack

[m4ckg]

I'm new to btc but theres one thing that continues to erk me and holds me back from investing (other than mt gox getting hacked).  And thats the fact that different exchanges have different prices for btc relative to usd at any given time.  How can this be? does each exchange keep a certain type of this currency or can i sell btc I got from one exchange on another? and if so why wouldnt people just buy from the cheapest and sell on the more expensive exchange.  It is also astonishing to me that Mt Gox can reset the price back to 17.5 when its clearly trading below those prices atm.  A little clarification would be much appreciated

PS - If I were to mine BTC in theory could I sell it on any exchange I wanted?

[luxgladius]

Like any other commodity, bitcoins are only worth what people will pay for them. The exchanges are only estimating what the current price is based on what people are offering for them and what people are willing to sell them for. They all have different data, so they'll come up with different answers.

[Grant]

I'm new to btc but theres one thing that continues to erk me and holds me back from investing (other than mt gox getting hacked).  And thats the fact that different exchanges have different prices for btc relative to usd at any given time.  How can this be? does each exchange keep a certain type of this currency or can i sell btc I got from one exchange on another? and if so why wouldnt people just buy from the cheapest and sell on the more expensive exchange.  

Different exchanges have different payout methods (and that has a lot of value for people). For me mtgox has SEPA, while virwox has other kinds of payouts, which for me is more valuable than an exchange that doesnt have the transfer options those 2 exchanges offer. And there are other advantages ie customer service and stuff like that which ppl attach value to.

It is also astonishing to me that Mt Gox can reset the price back to 17.5 when its clearly trading below those prices atm.  A little clarification would be much appreciated

PS - If I were to mine BTC in theory could I sell it on any exchange I wanted?

They can't reset the price, the market sets the price. What they said is that they'll roll back trades that caused the crash (which was when BTC was trading at 17.5 all the way through 0.01).

[cecil w.]

Yes, you can make money selling between the exchanges. The problem with that is that your money is usually tied up in transfers. It takes a few hours to transfer bitcoins and it takes even longer to transfer dollars between sites (sometimes a day or two). Also, there isn't a whole lot of volume traded outside of Mt. Gox (previous to the hack.) So it depends on the volume.

[iya]

Differences between exchanges are usually minimal because of arbitrage.
As to how MtGox will reset the price to 17.50, I have no idea.
If they intend to restore all bids and asks from before the crash, there will be a huge rush from people trying to change their orders and/or make a quick bug.

[Grant]

If they intend to restore all bids and asks from before the crash, there will be a huge rush from people trying to change their orders and/or make a quick bug.

I do hope they will clear the orderbook before enabling trading, otherwise it will be a disaster.

[BitBuster]

While I feel bad for those affected, I don't see why or how trades can just be reversed?

Yes, it was caused by a criminal act - but then so was the Enron disaster?


BB.

[vampire]

Actually prices different on a real stock market also, for example ADR shares vs shares. Also there are a bunch of electronic exchanges that might have a different price then NYSE or NASDAQ.

[Grant]

While I feel bad for those affected, I don't see why or how trades can just be reversed?

BB.

In rl trades do reverse when it is doable and proven illegal. (that's why they do those trading halts so often)