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Author Topic: Do the people running Mt. Gox trade on their own exchange?  (Read 988 times)
Nagle
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June 27, 2011, 08:05:20 PM
 #1

Do the people running Mt. Gox trade on their own exchange?

It's striking how different the trading pattern was when Mt. Gox was offline. Tradehill settled down around 15, got some market depth, and Bitcoins started acting like a stable currency. Once Mt. Gox came back up, the volatility went way up. That's backwards. A bigger exchange should be less volatile.

Something funny may be going on behind the scenes here.

Watch for limit orders not being executed when they should be, or delays before trade execution. That's an indication of front-running.
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fxgmblr
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June 27, 2011, 08:34:21 PM
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its the most popular bitcoin exchange in the world, after being down for days and all of a sudden re-open you expect the price NOT to be volatile?
do you remember how the markets were after 9/11 when they re-opened?
datguywhowanders
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June 27, 2011, 09:53:43 PM
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Don't feed the trolls.

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hamdi
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June 27, 2011, 10:33:07 PM
 #4

nagle´s points are not tooo stupid...

kokojie
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June 28, 2011, 12:34:06 AM
 #5

they are not suppose to as they state "we are never a counter party to a trade on mtgox"

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DrYe5
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June 28, 2011, 12:53:19 AM
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Do the people running Mt. Gox trade on their own exchange?

It's striking how different the trading pattern was when Mt. Gox was offline. Tradehill settled down around 15, got some market depth, and Bitcoins started acting like a stable currency. Once Mt. Gox came back up, the volatility went way up. That's backwards. A bigger exchange should be less volatile.

Something funny may be going on behind the scenes here.

Watch for limit orders not being executed when they should be, or delays before trade execution. That's an indication of front-running.

Data going through any exchange needs to be transparent (i.e. Public) and independently verified. Is there no way this functionality can be built into the bitcoin client?

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Nagle
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June 28, 2011, 02:55:27 AM
 #7

Data going through any exchange needs to be transparent (i.e. Public) and independently verified. Is there no way this functionality can be built into the bitcoin client?

A distributed exchange is only possible if the nodes can hold, transmit, and receive at least two tradeable forms of value.  So you need a client that understands both Bitcoins and at least one other system.

It seems possible to make a distributed exchange work without a trusted intermediary if the client broke up transactions into small amounts (say $1 to $10) and one of the low-cost money transfer systems like Liberty Reserve or Dwolla could  do an end to end transaction in seconds.  Then you could do a trade where you agreed on a price and quantity with another party, then the client did the trade by sending say $5, waiting for the agreed value in Bitcoins to show up, and repeating until the transaction was complete. Ripoffs are possible but limited to $5, and a reputation system can be used to keep anybody from pulling that more than once.  New accounts with no reputation would get maybe $1 at a time until they built up some reputation points.

LR charges 1%, minimum $0.01; Dwolla charges $0.25 based on transaction size, so you need units of $25 to get down to 1%.  Whether either system is fast enough for this is not clear.
DrYe5
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June 28, 2011, 03:34:17 AM
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A distributed exchange is only possible if the nodes can hold, transmit, and receive at least two tradeable forms of value.  So you need a client that understands both Bitcoins and at least one other system.

I'm not sure that's true. The client could perform decentralized verification and authorization without holding any real currency.

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FooDSt4mP
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June 28, 2011, 03:44:53 AM
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A distributed exchange is only possible if the nodes can hold, transmit, and receive at least two tradeable forms of value.  So you need a client that understands both Bitcoins and at least one other system.

I'm not sure that's true. The client could perform decentralized verification and authorization without holding any real currency.

Yeah, just add a few transaction types to the block chain: First, a proposed exchange (limited to $x, where $x is agreed upon by the two exchanges), followed by an approval of terms from both exchanges.  Exchanges handle transmittal and then confirm receipt of funds as another transaction.  No need to unnecessarily burden the client with transmittal.  This would throw out reversibility of trades though.

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dr.bitcoin
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June 28, 2011, 05:02:31 AM
 #10

I guess MagicalTux sells the bitcoins he gets from us (0.65% x 2 = 1.3% of each transaction) on MtGox.
But wait! Isn't he running the exchange? Maybe he does know when the price WILL hit a maximum  Grin
makomk
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June 28, 2011, 10:15:40 AM
 #11

Watch for limit orders not being executed when they should be, or delays before trade execution. That's an indication of front-running.
Hmmmmm. I hope this thread isn't related...

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