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Author Topic: Bitcoin7.com - Matching algorithm that steals money from you?  (Read 1395 times)
sonba
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August 14, 2011, 12:13:43 PM
 #1

Hi all,

I stopped using Bitcoin7.com when i had a closer look on my fullfilled orders. They don't match you with the best bid/offer but give you worse prices if you didn't specify it accordingly. To explain it a bit better, find attached my mail I wrote on the 24th of July to them. So far I'm still waiting for a knowledgeable reply which is more than "my help manual suggests...". Asked three times about the issue, only got a little reply as quoted below my request. It seems horribly tough for the devs to answer how their algorhithm works. *lol*

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Dear Sir or Madam,

I'm trading with Bitcoins on your account. However, I am curently
considering whether I want to continue this. The reason is that I have
trouble with your algorhithm for matching order/deciding on prices.
As I do not want to put in 3 orders when selling 10 BTC, I usually put
in an order at a low price so that it gets completely filled. ALL
professional exchanges (I work as a trader in real life) work that way
that they match you with the best existing bids/offers. For instance,
the order book looks like:

bids: 5@10; 5 @11 asks: 5@12, 5@13
I enter an order to sell 10 BTC @ 9. I would then get 11EUR for 5 BTC
and 10 EUR for 5BTC.
What happened though, is that I sold my BTC at 9 EUR. At that time there
were clearly bids above my order.
I checked another example, today, where I bought 0.1 BTC @ 10 EUR. I got
exactly 10 EUR, even though there were cheaper asks.
Attached the example trades: (I also have screenshots of the buy trade
showing what happened)

Trade Buy    0.09943    1.00 EUR    10.00 EUR    0.00057 BTC    0.57%    2011-07-24 14:44:14
Trade Sell    0.1    0.89 EUR    9.00 EUR    0.01 EUR    0.57%    2011-07-24 11:58:50
Trade Sell    5    44.74 EUR    9.00 EUR    0.26 EUR    0.57%    2011-07-24 10:57:17

Based on this background I would like to understand, how your matching
algorhithm works. As I could see, the best bid/offer got reduced
accordingly, when I hit it.
Does the person that I hit get the amount I pay (e.g. gets better than
what they asked for), i.e. it is more beneficial to put in an order as
you might get executed at a better rate or do you take the money in your
own pocket?

Thanks a lot in advance for your answer,

From their reply it sounds like the money/BTC you pay too much does not end up at your counterparty:

Quote
> I have to admit that I still don't have a ready answer for you.
> From my help manual I can confirm that a buying order (money for BTC) can not be executed with a higher price (an offer for 13.00 can not execute for 13.01),
> but I don't have exact information what happens if this offer covers a lower one (an offer for 13.00 matched with 12.99). I know for sure that during our promo period
> we gave back all money + fees back to the users (excluding the BTC fee) as promotion.
> I have to receive feedback from our development and confirm back to you.

So, what happens with the money? It stays directly at Bitcoin7.com? Neat Smiley From my point of view, I would consider that as legal scamming... I guess I'm done wiht Bitcoin7.com
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NothinG
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August 14, 2011, 12:36:50 PM
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They seemed fishy from the start.
Copying lot's of stuff from tradehill...getting lots of "n00bs" interested in their 20% referral deal...

I know they are probably attempting to do well, so I don't feel we should be too harsh on them.

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August 14, 2011, 02:12:20 PM
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Why do you trust bitcoin 7?  They seem to be pretty shady and haven't really been part of the community.  They've copied some of tradehill's pages word for word.

I wouldn't be surprised if they dissapeared from the web tomorrow. 

Why do you trust them?
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August 14, 2011, 02:49:01 PM
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This flaw was in there right from the beginning and is one of the main reasons why I did not use their exchange (besides for 1 test right when they started) any more.
One of the 0.1 spikes right at the start of the history is from me... I doubt that the guy who sold me this got anything more than he/she wanted even though I bought highly over price.

To be fair: You just get + pay what you enter in the box there. If you enter a zero too much by accident, this accident will be VERY expensive though. I still don't think it's ok that the exchange seems to keep the money that was paid too much, but just because every other exchange plays "nice" doesn't mean they have to. Just avoid them like me and switch to better options.

https://bitfinex.com <-- leveraged trading of BTCUSD, LTCUSD and LTCBTC (long and short) - 10% discount on fees for the first 30 days with this refcode: x5K9YtL3Zb
Mail me at Bitmessage: BM-BbiHiVv5qh858ULsyRDtpRrG9WjXN3xf
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August 14, 2011, 04:01:07 PM
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Why do you trust bitcoin 7?  They seem to be pretty shady and haven't really been part of the community.  They've copied some of tradehill's pages word for word.

I wouldn't be surprised if they dissapeared from the web tomorrow. 

Why do you trust them?


Imitation is the highest form of flattery. Although I see your point, I'd hardly call copying the entire look, feel, design and wording from Tradehill makes it anything more than just another fine example of the greedy and profiteering mindset of Bitcoiners who think that Bitcoin will somehow do something for them that they couldn't do with fiat currency. If it's useful, let them be.

Why are you so protective of shady businesses? First it was mybitcoin now its bitcoin7.

People shouldn't trust their money to people who dont really show their faces or make an effort to instill trust.  I don't believe in telling people what to do, but please don't complain when your funds go missing.
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August 14, 2011, 04:10:02 PM
 #6

Yeah, i am from the same country as the people who created b7. That is why i wont use them unless i want thugs showing up at my doorstep.

BTC:1AiCRMxgf1ptVQwx6hDuKMu4f7F27QmJC2
becoin
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August 14, 2011, 05:02:08 PM
 #7

and haven't really been part of the community.
How do you know they are not part of the community? Can you point me to the list of community members?

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August 14, 2011, 05:53:22 PM
 #8

and haven't really been part of the community.
How do you know they are not part of the community? Can you point me to the list of community members?

I'm sure they are part of the community, but bitcoin 7 itself doesn't have a community presence come on.  I've only seen one post.
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August 14, 2011, 06:19:52 PM
 #9

https://bitcointalk.org/index.php?action=profile;u=22480

I see 27 posts...
...in which they also explain their company name etc.

Just like MagicalTux they are not really active in the forums here though.

https://bitfinex.com <-- leveraged trading of BTCUSD, LTCUSD and LTCBTC (long and short) - 10% discount on fees for the first 30 days with this refcode: x5K9YtL3Zb
Mail me at Bitmessage: BM-BbiHiVv5qh858ULsyRDtpRrG9WjXN3xf
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