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Author Topic: Zero trade fee exchanges - Just inviting manipulation?  (Read 861 times)
slothbag
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October 30, 2013, 12:26:43 AM
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Am I missing something here..  apparently BTCChina has zero cost trades at the moment, I haven't confirmed this myself, but doesn't this enable huge opportunity for market manipulation?

1. You can run up the exchange volume with your own bogus trades.. so the Volume metric becomes pretty much useless.
2. Whats to stop someone repetitively trading with themselves for no cost and push the price anywhere they like?

I don't like this zero fee model, trading should be restricted to only people who actually need to trade and/or are willing to pay for it.
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October 30, 2013, 02:59:39 AM
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Am I missing something here..  apparently BTCChina has zero cost trades at the moment, I haven't confirmed this myself, but doesn't this enable huge opportunity for market manipulation?

1. You can run up the exchange volume with your own bogus trades.. so the Volume metric becomes pretty much useless.
2. Whats to stop someone repetitively trading with themselves for no cost and push the price anywhere they like?

I don't like this zero fee model, trading should be restricted to only people who actually need to trade and/or are willing to pay for it.

The main thing stopping it would be clueless small timers which gum up the books, and other similar sized players who are out to steal one's lunch when a price shock is triggered.

Whether exchange operators take an interest in deterring such manipulation, participating in it, or being neutral is unknown to me as I don't trade at all in any capacity.

Probably the modest trading fees are minimal compared to the money one could make with a successful manipulation operation.  Thus, I don't see the zero-fee thing being particularly notable or alarming.  Anyway, as I read things it is just a marketing ploy in the case of BTCChina and will be done away with soon enough.

It is interesting to see that Mt. Gox, for instance, struggled for years to develop a matching engine which met minimal standards for reliability and robustness while BTCChina was able to do so much more quickly.  I suspect that there is some technical talent at work there.


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