[OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading

[HowardF]

You are forgetting that many people don't have US$ to lend to others, but they have a unused BTC and don't want to take the risk of shorting them themselves. It's unimportant if you and other people help drive the BTC price to $200 in the short run, if in a long run you get more BTC then you initially started with. The preposition is that BTC will be one day worth tens of thousands of dollars or even more, and the only important thing is how many BTC you will have in that moment, it's unimportant if that moment will be in the year 2015, 2016, or 2020. Smart game strategy is to increase your BTC stack even if that means price goes temporarily to $10, as long as you believe that it is just temporary. IMHO it's much more logical the opposite of you are proposing, if you have BTC lend them to others so they can take the risk and short them, if you have US$ don't lend them buy new BTC stack instead.

I'm not saying bag holding is a good or a bad thing, but I think people sometimes don't realize how high BTC is going to have to climb to beat the other investments you can do in this space.  Based on my last years average return of 0.1026% on USD margin, lets look at some numbers:

Starting with $370 (current price as of posting this) and lending on Margin

On                          You'd Have
Dec 31st, 2014           $ 380.39
Dec 31st, 2015           $ 553.07
Dec 31st, 2016           $ 804.98
Dec 31st, 2017           $ 1,170.41
Dec 31st, 2018           $ 1,701.74
Dec 31st, 2019           $ 2,474.28
Dec 31st, 2020           $ 3,601.23


Whereas, my BTC lend average return was around 0.0018% so:

On                          You'd Have
Dec 31st, 2014           BTC1.00049
Dec 31st, 2015           BTC1.00708
Dec 31st, 2016           BTC1.01374
Dec 31st, 2017           BTC1.02042
Dec 31st, 2018           BTC1.02715
Dec 31st, 2019           BTC1.03392
Dec 31st, 2020           BTC1.04075

So, to be clear, you really have to believe that BTC is going ' To the moon!!! ┗(°0°)┛ ', if you think its going to beat converting the coins to USD and lending that way.  On Dec 31st 2020, they'd have to be worth more than $3,460.23 to actually make them a better investment (assuming interest averages hold steady for that long).



Edit:  Table formatting on this board....  ugh  

Edit2:  Screw tables, I'll just use spaces....

Edit 3: updated numbers because of double fee calculation error, made the difference even more pronunced.... 

[Wassupia]

I'm not saying bag holding is a good or a bad thing, but I think people sometimes don't realize how high BTC is going to have to climb to beat the other investments you can do in this space.  Based on my last years average return of 0.1026% on USD margin, lets look at some numbers:

Starting with $370 (current price as of posting this) and lending on Margin

On                          You'd Have
Dec 31st, 2014           $ 378.81
Dec 31st, 2015           $ 520.72
Dec 31st, 2016           $ 716.42
Dec 31st, 2017           $ 984.81
Dec 31st, 2018           $ 1,353.73
Dec 31st, 2019           $ 1,860.87
Dec 31st, 2020           $ 2,560.22

I agree with your conclusion, but as interests are paid daily the correct formula for balance after x years would be

f = (1+RATEPERDAY/100)^(365*YEARS*EFFICIENCY)*INITALBALANCE=

with EFFICIENCY = the percentage of time you expect your offers to be taken as opposed to waiting to be taken.

So the difference is even more pronounced.
Notice the way the funcion blows up for higher rates, gotta love exponentials

[HowardF]

I agree with your conclusion, but as interests are paid daily the correct formula for balance after x years would be

f = (1+RATEPERDAY/100)^(365*YEARS*EFFICIENCY)*INITALBALANCE=

with EFFICIENCY = the percentage of time you expect your offers to be taken as opposed to waiting to be taken.

So the difference is even more pronounced.
Notice the way the funcion blows up for higher rates, gotta love exponentials

That is the formula I used basically, except without the efficiency calculations since that is my actual average return rate after fees, and counting for efficiency, not just what I lend out at.  If you want more details on how I got this number, check here: https://bitcointalk.org/index.php?topic=865250.msg9607994#msg9607994

Edit:  oh, just realized I was double calculating the BFX fees though.  original post updated with new values. much more pronounced difference when you don't double the BFX fee  

[sangaman]

I'm trying to use the API, and things were going smoothly at first with authentication and retrieving my balances. But now when I try to call the offer/cancel, offer/new, or offer/status I'm getting a page not found error. Has anyone else encountered this?

For example, even if I go in my browser to https://api.bitfinex.com/v1/offers I get a JSON response saying the correct headers weren't sent. But if I go to https://api.bitfinex.com/v1/offer/new I get a page not found error.

[sangaman]

I'm trying to use the API, and things were going smoothly at first with authentication and retrieving my balances. But now when I try to call the offer/cancel, offer/new, or offer/status I'm getting a page not found error. Has anyone else encountered this?

For example, even if I go in my browser to https://api.bitfinex.com/v1/offers I get a JSON response saying the correct headers weren't sent. But if I go to https://api.bitfinex.com/v1/offer/new I get a page not found error.

To answer my own question, I figured this problem out and it was that I was doing the call as a GET instead of a POST by mistake. Trying it as a POST works. However, I've encountered another issue. I can cancel existing offers just fine, but I can't create new offers. No matter what rate, amount, or direction (lend or loan) I've tried I get back the error message:

{'message': 'This currency can not be used in swaps'}

I get this with with either 'btc' or 'ltc' as the specified currency. Can't find anything about the error message anywhere online.

[HowardF]

{'message': 'This currency can not be used in swaps'}

I get this with with either 'btc' or 'ltc' as the specified currency. Can't find anything about the error message anywhere online.

Try btcusd or ltcusd

[sangaman]

{'message': 'This currency can not be used in swaps'}

I get this with with either 'btc' or 'ltc' as the specified currency. Can't find anything about the error message anywhere online.

Try btcusd or ltcusd

Thanks, but I actually just got this to work by using 'BTC' or 'LTC' (upper case). The reason I was confused was when you check existing offers in the lendbook, you get back 'btc' and 'ltc'.

[DoubleSwapper]

Oh cmon, it seems like BFX is really in no hurry to change anything about the fuckin FRR

we're sitting at nearly 25 m in open swaps, the great wall of low interest was sieged multiple times, almost a million taken off in the last 24 hours and now we are going back down again. It's a joke. There is no reason why this wall of doom has to sit where it's sitting now I hope some people can get that into their brain as fast as possible. The depth of the book is pathetic after the wall. Not even 100k from 0.0709 to 0.121 because nobody in their right mind puts offers above a 2,5 m offer wall.

We've climbed from 23 to 25 m in the last 5 days and the rate went from 0.0715 to 0.0709. It just deoesn't care.
BFX, fix your shit, it's getting stupid. Lots of volatility, lots volume and swap demand and the swap "price" is inelastic as fuck....

[superbit]

Oh cmon, it seems like BFX is really in no hurry to change anything about the fuckin FRR

we're sitting at nearly 25 m in open swaps, the great wall of low interest was sieged multiple times, almost a million taken off in the last 24 hours and now we are going back down again. It's a joke. There is no reason why this wall of doom has to sit where it's sitting now I hope some people can get that into their brain as fast as possible. The depth of the book is pathetic after the wall. Not even 100k from 0.0709 to 0.121 because nobody in their right mind puts offers above a 2,5 m offer wall.

We've climbed from 23 to 25 m in the last 5 days and the rate went from 0.0715 to 0.0709. It just deoesn't care.
BFX, fix your shit, it's getting stupid. Lots of volatility, lots volume and swap demand and the swap "price" is inelastic as fuck....

Then don't lend.  If 25M worth of people weren't happy with these rates they wouldn't lend out at it.  Welcome to the free market.

[DoubleSwapper]

Oh cmon, it seems like BFX is really in no hurry to change anything about the fuckin FRR

we're sitting at nearly 25 m in open swaps, the great wall of low interest was sieged multiple times, almost a million taken off in the last 24 hours and now we are going back down again. It's a joke. There is no reason why this wall of doom has to sit where it's sitting now I hope some people can get that into their brain as fast as possible. The depth of the book is pathetic after the wall. Not even 100k from 0.0709 to 0.121 because nobody in their right mind puts offers above a 2,5 m offer wall.

We've climbed from 23 to 25 m in the last 5 days and the rate went from 0.0715 to 0.0709. It just deoesn't care.
BFX, fix your shit, it's getting stupid. Lots of volatility, lots volume and swap demand and the swap "price" is inelastic as fuck....

Then don't lend.  If 25M worth of people weren't happy with these rates they wouldn't lend out at it.  Welcome to the free market.

"Free market". You use that word yet I don't think that you actually understand what it means. How is "welcome to the free market" supposed to counter my criticism? Are you actually implying that every participant in this market acts rationally and that the design of a market doesn't have a huge influence on its behavior and that Bitfinex as the creator of this market can't change it as they please? I'm not happy with these rates and I'm even more unhappy with the way these rates are created by the stupid FRR feature which BFX has already announced to change yet I still lend out money because this situation is a classic dilemma. What now? What does this have to do with "free market"? Realise that the "free market" is a theoretical concept which has no relevance to this discussion. The maximum swap rate is 7%. For this reason alone this is technically not a free market......

[Mythoughts]

Often times when swap offers get taken, it's split up into LOTS of small ones, like this (this goes on for another whole page):



What's up with that? Kind of annoying.

[Timetwister]

I'm not saying bag holding is a good or a bad thing, but I think people sometimes don't realize how high BTC is going to have to climb to beat the other investments you can do in this space.  Based on my last years average return of 0.1026% on USD margin, lets look at some numbers:

That return is unsustainable unless Bitcoin keeps going up, and in that case, lending USD wouldn't be that profitable in comparison to lending BTC.

[HowardF]

I'm not saying bag holding is a good or a bad thing, but I think people sometimes don't realize how high BTC is going to have to climb to beat the other investments you can do in this space.  Based on my last years average return of 0.1026% on USD margin, lets look at some numbers:

That return is unsustainable unless Bitcoin keeps going up, and in that case, lending USD wouldn't be that profitable in comparison to lending BTC.

What makes you think that?  That average is over the last year since ~January 15th, a period in which the majority of the time we were going down, not up.  The problem isn't BTC going down or up, but going somewhere.  When prices move, USD gets lent out.  When prices sit still, USD lends sit still...

[noggin-scratcher]

Often times when swap offers get taken, it's split up into LOTS of small ones, like this (this goes on for another whole page):

[snip]

What's up with that? Kind of annoying.

From what I hear, when the swaps backing a position expire and new ones are taken out, if it's already fragmented, the fragmentation is maintained - the engine doesn't see a position backed by 3 $500 swaps ending simultaneously and decide to open a single $1500 swap as a replacement, instead taking out 3 new $500 swaps... which most likely creates new fragmentation as multiple swaps are taken to fill out each of those $500 chunks. The longer the position is held for, the worse it gets, with more and more tiny fragments created which can only be coalesced by the trader closing out their position and starting over.

So that process of ever-increasing fragmentation has eventually resulted in the fuckery seen in your image... so far as I can tell, the best way to try and avoid it is to have your swap offer taken as one of the last of several taken together (i.e. place your offers so that you're never the very best offer, but instead have a couple below yours to act as a buffer - let them get fragmented so you don't have to). But that's by no means foolproof, and may just be superstition on my part.

The actual best way would be for 'finex to fix their engine so it batches together swap-requirements so as to recombine fragments where possible, but I don't know the implementation details to really know how difficult that would be.

[noggin-scratcher]

Whilst we're on the subject of "Fix your shit"...



What on earth is going on there? Multiple distinct FRR entries in the list doesn't seem like a thing that ought to be able to happen.

(Going by BFXdata, looks like there are several fixed-rate offers at exactly the same rate as the FRR, including the 5th decimal place that isn't displayed)

[noobtrader]

Hi...

i have a question about TH1BTC, it says that Expiration Date: December 15, 2014 - 01:00:00 PM +00:00 (UTC). what does it mean what happen if i buy today worth 1 TH1BTC will it be sold at market and i also receive the divident at that date or  will i receive just divident at that time and i still have my TH1BTC


thanks

[nrd525]

I think the contract will be worth 0 at that point and you will lose it.  You will get dividends up until that point as blocks are discovered.  I guess they will also need to close all long and short positions with a TH1 price of zero.

[noobtrader]

I think the contract will be worth 0 at that point and you will lose it.  You will get dividends up until that point as blocks are discovered.  I guess they will also need to close all long and short positions with a TH1 price of zero.

in that case why ppl offering swap for 10 days or more isnt that free monies if TH1 price go zero in a week

[b4basit]

I think you guys are doing a great job and appreciate your answers in this thread.

[nrd525]

I think the contract will be worth 0 at that point and you will lose it.  You will get dividends up until that point as blocks are discovered.  I guess they will also need to close all long and short positions with a TH1 price of zero.

in that case why ppl offering swap for 10 days or more isnt that free monies if TH1 price go zero in a week

Dividends.  If you short TH1 you need to pay the dividends to the person who lent it out.  Currently dividends are 99% of the cost, the swap is negligible.