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Author Topic: New Deposit Methods For TradeHill via BitInstant Partnership  (Read 2574 times)
Gareth Nelson
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August 23, 2011, 08:42:22 PM
 #21

a solid infrastructure that handles risk management and fraud protection through the use of dynamic models derived from artificial intelligence techniques.
I'd like to have a reference about those "dynamic models derived from AI". Is this Pixelon 2.0 or something real?

Thanks in advance.

Mainly probabilistic and bayesian methods - we're slowly refining a model of what fraud looks like and what risky transactions look like using a collection of variables to uniquely identify users. Think k-means, bayesian networks and other classic machine learning methods. Nothing very unusual, but I do believe our use of these techniques is innovative.
Internally, we also have some smallscale R&D on trading algorithms to enable us to move more funds through the bitcoin network itself by buying BTC at the most optimal time possible considering all available information.
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August 23, 2011, 08:56:21 PM
 #22

Internally, we also have some smallscale R&D on trading algorithms to enable us to move more funds through the bitcoin network itself by buying BTC at the most optimal time possible considering all available information.
Hi Gareth!

I'm sorry I wasn't clear. I'd like to see a reference to a peer-reviewed publication (in the quantitative finance or artificial intelligence fields) that describes the research upon which your R&D team is working.

The Jared Kenna's words I quoted are almost exactly from Pixelon's prospectus, except they had "fractal geometry" thrown in for the good measure.

Would you be so kind as to ask your R&D team for the actual bibliographical references and post them tomorrow or later this week?

Thank you again.

Please comment, critique, criticize or ridicule BIP 2112: https://bitcointalk.org/index.php?topic=54382.0
Long-term mining prognosis: https://bitcointalk.org/index.php?topic=91101.0
Gareth Nelson
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August 23, 2011, 09:26:42 PM
 #23

Internally, we also have some smallscale R&D on trading algorithms to enable us to move more funds through the bitcoin network itself by buying BTC at the most optimal time possible considering all available information.
Hi Gareth!

I'm sorry I wasn't clear. I'd like to see a reference to a peer-reviewed publication (in the quantitative finance or artificial intelligence fields) that describes the research upon which your R&D team is working.

The Jared Kenna's words I quoted are almost exactly from Pixelon's prospectus, except they had "fractal geometry" thrown in for the good measure.

Would you be so kind as to ask your R&D team for the actual bibliographical references and post them tomorrow or later this week?

Thank you again.

Again, in the interest of transparency, there is no "R&D team" - i'm doing the R&D solo myself, but the algorithmic trading stuff is low priority for now.
There are no published academic papers on the precise application of the methods which we are using, but the methods themselves are pretty standard.

K-means is a clustering algorithm - it takes a dataset and identifies clusters of single items of data that share similarities. The standard example is a 2D plane:

(source: mathworks.com)

In the example above, we have a 2D plane with an X and Y axis, and we have various items of data plotted on it.

Let's imagine (it's more complex than this, but just to explain) the X axis represents time of day and the Y axis represents the transaction size - plot every single transaction and you'll get some natural clusters where there's larger transactions at certain times of day. Now, imagine if scammers like to move very large amounts of money during quiet hours when nobody is around to monitor, we'd get a large cluster during the quiet hours and this would be something that can be thrown into a model.

Now, clustering does nothing in itself to help you identify fraud, and clustering in only 2D is often pretty useless - so you'd identify clusters and then look at the transactions within them to analyse how many resulted in later fraud or had other warning signs, and you'd use that to build a probabilistic model by looking at the variables in your n-dimensional space and looking at what kind of relationships there are between fraud probability and increase/decrease of particular variables.

Combine this with everyone's favourite algorithm - a backprop neural network (not as amazing as most think) and feed it to a naive bayesian classifier and other models and have each classifier output a fraud probability, weight the output of each classifier based on past accuracy and then take a simple mean average across all classifiers. You then refuse transactions that score a fraud probability above your tolerable limit based on expected losses (lookup "expected utility").
See http://citeseer.ist.psu.edu/viewdoc/summary?doi=10.1.1.37.1595 for an academic paper dealing with this approach to classification problems.

With BitInstant, the internal model does not yet have a large amount of data but over time the intention is to refine it more and more. Right now, we've identified a few factors in Dwolla transactions that make them high-risk using simple common sense and natural intelligence (i.e our brains not our computers). These variables are screened for in all Dwolla transactions as a result.

I hope that explains sufficiently, i'm sorry that I can not explain more details as beyond the above the details of the actual variables being analysed and some of the other tricks we use are trade secret territory.
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Charlie 'Van Bitcoin' Shrem


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August 23, 2011, 09:38:28 PM
 #24

We have just updated our new fee structure, can be view here https://www.bitinstant.com/fees

Some examples:

Amount you pay   Amount you receive   Our fee

MtGox Coupons
$40 USD           $39.30000 USD           1.75000 %
$200 USD           $199.13333 USD           0.43333 %

Liberty Reserve:
$130 USD             $126.65000 USD   2.57692 %
$250 USD             $244.55000 USD   2.18000 %

Dwolla:
$60 USD               $59.35000 USD   1.08333 %
$250 USD             $249.01667 USD   0.39333 %

Let us know what you think!

Charlie

Bitcoin pioneer. An apostle of Satoshi Nakamoto. A crusader for a new, better, tech-driven society. A dreamer.

More about me: http://CharlieShrem.com
epetroel
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August 24, 2011, 12:09:53 AM
 #25

I can say that I've been using this for a week or so now (since the sneak preview started) and it is pretty slick.

As for the fees, you just have to look at it like any other service.  If the fees you have to pay to use the service outweigh the profits that you can make with that money, then you don't do it.  Personally I've used it about a dozen times to get money from MtGox over to Tradehill to take advantage of better pricing there.  When you look at the other options available (really just Paxum, which is expensive and takes forever) it can be pretty competitive, especially if you need the money there immediately.
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August 24, 2011, 05:55:08 AM
 #26

I hope that explains sufficiently,
Yes, it does. I'm glad to hear that you haven't made any extraordinary claims and are upfront about the initial paucity of the training data for the neural network. I will now assume that the unfortunate quote from Pixelon's marketing material was truly accidental.

Thanks again and good luck.

Please comment, critique, criticize or ridicule BIP 2112: https://bitcointalk.org/index.php?topic=54382.0
Long-term mining prognosis: https://bitcointalk.org/index.php?topic=91101.0
Gareth Nelson
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August 24, 2011, 11:11:41 AM
 #27

I hope that explains sufficiently,
Yes, it does. I'm glad to hear that you haven't made any extraordinary claims and are upfront about the initial paucity of the training data for the neural network. I will now assume that the unfortunate quote from Pixelon's marketing material was truly accidental.

Thanks again and good luck.

If we were using a neural network on its own, i'd question things myself Smiley
Neural networks are not the magical cure-all that everyone thinks they are.
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August 24, 2011, 12:04:16 PM
 #28

Is bitinstant a tradehill only service? I think I read some statements about tradehill being the exclusive partner, or something. At the moment there seems to be not even a reverse direction, tradehill->mtgox. I thought your idea is to become the instant money "web" between all exchanges - that would mean having all directions.

Second reason I am asking is because of Ruxum. I am on the Ruxum beta. I think Ruxum will rock the bitcoin world once it goes public. They already have 12 currencies and one can now *instantly* transfer funds between currencies. In other words they have an instant currency exchange built in. So it would probably an easy add for you, because having this currency exchange, one would only need to transfer USD there and can trade all other currencies too.
Gareth Nelson
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August 24, 2011, 01:08:15 PM
 #29

Is bitinstant a tradehill only service? I think I read some statements about tradehill being the exclusive partner, or something. At the moment there seems to be not even a reverse direction, tradehill->mtgox. I thought your idea is to become the instant money "web" between all exchanges - that would mean having all directions.
Withdrawals out of TradeHill are planned too, but otherwise we have an exclusive partnership deal with them which I believe has been of great benefit.

Quote
Second reason I am asking is because of Ruxum. I am on the Ruxum beta. I think Ruxum will rock the bitcoin world once it goes public. They already have 12 currencies and one can now *instantly* transfer funds between currencies. In other words they have an instant currency exchange built in. So it would probably an easy add for you, because having this currency exchange, one would only need to transfer USD there and can trade all other currencies too.
This sounds interesting, do you have more information?
epetroel
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August 24, 2011, 01:54:09 PM
 #30

Second reason I am asking is because of Ruxum. I am on the Ruxum beta. I think Ruxum will rock the bitcoin world once it goes public. They already have 12 currencies and one can now *instantly* transfer funds between currencies. In other words they have an instant currency exchange built in. So it would probably an easy add for you, because having this currency exchange, one would only need to transfer USD there and can trade all other currencies too.

I'm in on the Ruxum beta as well, and I think they have some real potential too.  The biggest problem I see with them now is that they don't yet have any kind of API...
Yankee (BitInstant)
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Charlie 'Van Bitcoin' Shrem


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August 30, 2011, 05:04:23 PM
 #31

W'ere back up with some updates!

Our current rates and limits
Payment method    External exchange    You pay            Fee            You receive
MTGox Coupon    TradeHill                    $150.0000 USD    0.4667%    $149.3000 USD
MTGox Coupon    TradeHill                    $300.0000 USD    0.2889%    $299.1333 USD
Liberty Reserve    TradeHill                    $150.0000 USD    1.1333%    $148.3000 USD
Liberty Reserve    TradeHill                    $300.0000 USD    0.6111%    $298.1667 USD
Dwolla    TradeHill                            $150.0000 USD    0.6667%    $149.0000 USD
Dwolla    TradeHill                            $300.0000 USD    0.4444%    $298.6667 USD

Any amount between $20 - $500.00 USD will be accepted instantly!

Payment method    External exchange    Limit per transaction    Limit per day
MTGox Coupon    TradeHill                    $20 - $500.00 USD    $4000 USD
Liberty Reserve    TradeHill                    $20 - $500.00 USD    $4000 USD
Dwolla    TradeHill                            $20 - $500.00 USD    $4000 USD

See our Fees page for more information- https://www.bitinstant.com/fees
Quoted limits and fees are correct as of Tue Aug 30 16:51:16 2011

Thanks

Charlie

Bitcoin pioneer. An apostle of Satoshi Nakamoto. A crusader for a new, better, tech-driven society. A dreamer.

More about me: http://CharlieShrem.com
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