Bitcoinica - Advanced Bitcoin Trading Platform

[gyverlb]

Yes, there was something wrong with support. I didn't receive your email. (Now it should be working fine.)

I have looked up your account, and it seems that you really only have 34 BTC in your position. Can you please verify your orders again?

BTW, it's advantageous to you because Bitcoinica implements a net-accounting system. It seems that this is a lost trade, so you should have lost less if your position is 34 instead of 35.

Such mathematical errors shouldn't happen at Bitcoinica. But yesterday's maintenance has caused some database locking issues (duplicated orders, etc). We haven't seen obviously wrong numbers though.

To make it fully transparent to everyone, here is my full orders page :

By gyverlb at 2011-09-20

As you can see (when filtering invalid or canceled orders),

- I started with 8BTC (from a MtGox code)
- sold them,
- tried to catch up with a rise using the leverage and took a position on 35BTC,
- found out I was too late and tried various things (probing along how bitcoinica spread was following the MtGox exchanges),
- in the middle I had a misclick on SELL,
- canceled the corresponding order,
- found out that my account was 1 BTC short without $ compensation and believed it to be a temporary state,
- finally sold 34BTC during a dive. taking my losses.

Now where has my 1 BTC position gone too ? Either it should still be in my positions (which it isn't) or I should have got $ instead.

[zhoutong]

Yes, there was something wrong with support. I didn't receive your email. (Now it should be working fine.)

I have looked up your account, and it seems that you really only have 34 BTC in your position. Can you please verify your orders again?

BTW, it's advantageous to you because Bitcoinica implements a net-accounting system. It seems that this is a lost trade, so you should have lost less if your position is 34 instead of 35.

Such mathematical errors shouldn't happen at Bitcoinica. But yesterday's maintenance has caused some database locking issues (duplicated orders, etc). We haven't seen obviously wrong numbers though.

To make it fully transparent to everyone, here is my full orders page :

By gyverlb at 2011-09-20

As you can see (when filtering invalid or canceled orders),

- I started with 8BTC (from a MtGox code)
- sold them,
- tried to catch up with a rise using the leverage and took a position on 35BTC,
- found out I was too late and tried various things (probing along how bitcoinica spread was following the MtGox exchanges),
- in the middle I had a misclick on SELL,
- canceled the corresponding order,
- found out that my account was 1 BTC short without $ compensation and believed it to be a temporary state,
- finally sold 34BTC during a dive. taking my losses.

Now where has my 1 BTC position gone too ? Either it should still be in my positions (which it isn't) or I should have got $ instead.

If you have 1 BTC extra, you will have more losses, not less.

Because as I said, Bitcoinica is using net-accounting system, which means that a position carries the data of profit/loss. Selling 34 BTC doesn't result in a immediately credit of 34 BTC worth of USD, instead, the system will just add/substract the supposed difference between your base price and the currently market price. Less units are better when you lose.

It may be because of the recent database locking issue. We have seen some abnormalities during these days. Our system has detected some customers that are short in balance, and we have credited all of them respectively. However, your account was identified to be "better off without correction", so it was ignored.

In cases like this, especially during a huge spike/crash, we only adjust errors (caused by our system) that will either 1) make customers better off or 2) result in a significant loss for Bitcoinica.

Currently the problematic algorithm that causes database locking error has been fixed. And most of the user accounts have been restored. We will make a public statement soon regarding this matter.

If you have less profits than expected, please email us at support@bitcoinica.com. (If you have less loss, or more profit than expected, it's yours!)

[gyverlb]

If you have less profits than expected

I think I understand better what happened. But it's hard to know if I have less or more profits. Yesterday when the exchange rate was diving it was a benefit to have this 1 BTC position removed (at a $5.2659 value if my math is correct) but today with a BTC at ~$6, it's a loss :-)

That's not much of a problem (I only put 8 BTC on this account to test Bitcoinica, I was ready to lose them all), but currently you should label your service as beta, it seems you need to take a careful look at how you handle your database transactions and locks (as you seem to have started doing) before you encourage serious traders to move in.

I'll wait and see.

[zhoutong]

If you have less profits than expected

I think I understand better what happened. But it's hard to know if I have less or more profits. Yesterday when the exchange rate was diving it was a benefit to have this 1 BTC position removed (at a $5.2659 value if my math is correct) but today with a BTC at ~$6, it's a loss :-)

That's not much of a problem (I only put 8 BTC on this account to test Bitcoinica, I was ready to lose them all), but currently you should label your service as beta, it seems you need to take a careful look at how you handle your database transactions and locks (as you seem to have started doing) before you encourage serious traders to move in.

I'll wait and see.

Hi,

Thank you for your feedback.

As I have mentioned in the email. Database locking issues were started because of concurrency. Since every money-related transaction in Bitcoinica is running through a queue, there shouldn't be any locking problems if there's only one worker process.

However, recently we need to scale up a bit so we increased the number of worker processes. During the spike several hours ago (frequent price updates, possible forced liquidations and a lot more trades), everything turned into a mess.

Luckily, now we have settled almost all the issues according to other redundant data in our database.

You can refer to the email for more details on this error.

Again, thank you!

[Nagle]

That's not much of a problem (I only put 8 BTC on this account to test Bitcoinica, I was ready to lose them all), but currently you should label your service as beta, it seems you need to take a careful look at how you handle your database transactions and locks (as you seem to have started doing) before you encourage serious traders to move in.

I'll wait and see.

Agreed. What Bitcoinica is doing is complex, financially risky, and apparently not well tested. It's much more complex than a straight exchange, like Mt. Gox, and look how much trouble Mt. Gox has had.

[M4v3R]

From your FAQ:

Currently we guarantee up to ฿50 of liquidity for market orders in both directions.

What does exactly this mean (without forex jargon)? When for example, I have a bid position of 150 BTC @ 5.8 and the price rises significantly, can I expect to get all the profits from this rise?

[ParrotyBit]

In a free market,  Zhoutong is not the king of Bitcoin,  but he IS the king of Bitcoinica.

He can ban,  or allow, anyone to use the site for whatever reason he pleases.

Just as the rest of us can decide to use,  or not use, Bitcoinica for whatever reason we please.

This is the only moral and fair system of property rights.

Indeed! I can't believe all those people who were crying about mybitcoin.com when Tom Williams, the Grand Nagus of mybitcoin.com, wasn't obligated to give anyone anything. He could have banned you all from his site for whatever reason he pleases. What, your BTC is still there but you can't log in? Not his problem, he got his! No one forced people to use mybitcoin.com anyway, and it turns out his site shut down anyway. The free market works!

This is the only moral and fair system of property rights.

[evoorhees]

In a free market,  Zhoutong is not the king of Bitcoin,  but he IS the king of Bitcoinica.

He can ban,  or allow, anyone to use the site for whatever reason he pleases.

Just as the rest of us can decide to use,  or not use, Bitcoinica for whatever reason we please.

This is the only moral and fair system of property rights.

Indeed! I can't believe all those people who were crying about mybitcoin.com when Tom Williams, the Grand Nagus of mybitcoin.com, wasn't obligated to give anyone anything. He could have banned you all from his site for whatever reason he pleases. What, your BTC is still there but you can't log in? Not his problem, he got his! No one forced people to use mybitcoin.com anyway, and it turns out his site shut down anyway. The free market works!

This is the only moral and fair system of property rights.

Do you really fail to see the difference between A) setting rules on one's own site and B) stealing peoples' money?

Theft is never permissible and is the opposite of a free market.

[zhoutong]

In a free market,  Zhoutong is not the king of Bitcoin,  but he IS the king of Bitcoinica.

He can ban,  or allow, anyone to use the site for whatever reason he pleases.

Just as the rest of us can decide to use,  or not use, Bitcoinica for whatever reason we please.

This is the only moral and fair system of property rights.

Indeed! I can't believe all those people who were crying about mybitcoin.com when Tom Williams, the Grand Nagus of mybitcoin.com, wasn't obligated to give anyone anything. He could have banned you all from his site for whatever reason he pleases. What, your BTC is still there but you can't log in? Not his problem, he got his! No one forced people to use mybitcoin.com anyway, and it turns out his site shut down anyway. The free market works!

This is the only moral and fair system of property rights.

The guy owed me $995 after a forced liquidation. He has no incentive to pay me back.

Why can't I just block the account?

[btcbaby]

In a free market,  Zhoutong is not the king of Bitcoin,  but he IS the king of Bitcoinica.

He can ban,  or allow, anyone to use the site for whatever reason he pleases.

Just as the rest of us can decide to use,  or not use, Bitcoinica for whatever reason we please.

This is the only moral and fair system of property rights.

Indeed! I can't believe all those people who were crying about mybitcoin.com when Tom Williams, the Grand Nagus of mybitcoin.com, wasn't obligated to give anyone anything. He could have banned you all from his site for whatever reason he pleases. What, your BTC is still there but you can't log in? Not his problem, he got his! No one forced people to use mybitcoin.com anyway, and it turns out his site shut down anyway. The free market works!

This is the only moral and fair system of property rights.

The guy owed me $995 after a forced liquidation. He has no incentive to pay me back.

Why can't I just block the account?

And so it begins...

[flower1024]

The guy owed me $995 after a forced liquidation. He has no incentive to pay me back.

Why can't I just block the account?

+1

btw if he would not have blocked the account he couldn't do anything anyway (as he had a negative balance anyway).

[TTBit]

In a free market,  Zhoutong is not the king of Bitcoin,  but he IS the king of Bitcoinica.

He can ban,  or allow, anyone to use the site for whatever reason he pleases.

Just as the rest of us can decide to use,  or not use, Bitcoinica for whatever reason we please.

This is the only moral and fair system of property rights.

Indeed! I can't believe all those people who were crying about mybitcoin.com when Tom Williams, the Grand Nagus of mybitcoin.com, wasn't obligated to give anyone anything. He could have banned you all from his site for whatever reason he pleases. What, your BTC is still there but you can't log in? Not his problem, he got his! No one forced people to use mybitcoin.com anyway, and it turns out his site shut down anyway. The free market works!

This is the only moral and fair system of property rights.

Do you really fail to see the difference between A) setting rules on one's own site and B) stealing peoples' money?

Theft is never permissible and is the opposite of a free market.

When someone sends coins to Mybitcoin, they are now Mybitcoin's coins, and sender receives an IOU for same amount of coins in return. It is easy to say "I have 100 coins" when that person means "I have an IOU for 100 coins". If it was blatant, then it is fraud and not theft. We should all be careful when sending coins, if they dont have a reason to honor the IOUs, or don't protect their coins well enough, we shouldn't send in the first place.

[nrd525]

Bitcoinica could use a terms of service. It is currently in the process of being written according to the website.

[Nagle]

When someone sends coins to Mybitcoin, they are now Mybitcoin's coins, and sender receives an IOU for same amount of coins in return. It is easy to say "I have 100 coins" when that person means "I have an IOU for 100 coins". If it was blatant, then it is fraud and not theft. We should all be careful when sending coins, if they dont have a reason to honor the IOUs, or don't protect their coins well enough, we shouldn't send in the first place.

This brings up an important legal point. When you have "deposited" something with a depository institution, are you a creditor with just an IOU?  Or do you still own the thing and they're just storing it for you?

There are laws in this area, and what happens varies with the type of institution. For a bank, all you have is an IOU.  That's why banks are so strongly regulated.  For a US stockbroker, though, stock in your account belongs to you. Even if the broker goes bankrupt, the stock still belongs to you, and it had better be there. That's why Bernie Madoff is now Federal Prisoner #61727-054 and is sitting in a prison cell right now. That's also the law on money transfer firms in Japan, which is where Mt. Gox operates.

Even where assets are aggregated, as in a grain elevator or gold vault, you can still have actual ownership. There's a whole system of warehouse receipts for that sort of thing, and the law of the Uniform Commercial Code to back it up. That's been settled law for a century.

So you have more than an IOU. You have ownership of the asset. A non-bank depository institution which takes it is guilty of theft. Bankruptcy does not relieve them of that responsibility.

[Chris Acheson]

What do the superscripts next to the buy and sell prices mean?  For example:

4.9518⁵ / 5.1188¹

What do the 5 and the 1 mean there?

[zhoutong]

What do the superscripts next to the buy and sell prices mean?  For example:

4.9518⁵ / 5.1188¹

What do the 5 and the 1 mean there?

It's just 4.95185 / 5.11881.

The subscript is called a pipette. Forex brokers display quotes in this format so that clients can easily identify a "pip", which is 0.0001 for most currency pairs.

[allten]

Question to BitCoinica.
      If the majority of the Bitcoinica user base decides to buy on maximum leverage, who guarantees or loans the dollar funds to purchase all those bitcoins?
Are you deeply enough funded to handle this? If not, what mechanisms are in place so the market can't leverage itself past the point of no more funds?

[caston]

How is Bitcoinica going? I find myself getting logged out occasionaly if I click on the Bitcoinica logo. I also tried to withdraw $18.95 as mtgox code and I got errors. I was only able to withdraw $10. At the moment it's
not an ideal market because it seems pretty flat and the spreads are high.

[zhoutong]

How is Bitcoinica going? I find myself getting logged out occasionaly if I click on the Bitcoinica logo. I also tried to withdraw $18.95 as mtgox code and I got errors. I was only able to withdraw $10. At the moment it's
not an ideal market because it seems pretty flat and the spreads are high.

Hi, you can actually click the "Trade" button at the top to get back.

We had cache for the homepage last time but we didn't update because we're currently developing the next release.

For the withdrawing issue, we are sorry about it. In fact, the Yubikey of our main Mt. Gox account had a short circuit and stopped functioning. A replacement is on the way. Currently the only way for us to access our account is through APIs (so hedging and deposit is not affected, but withdrawal is disabled). If you need to urgently withdraw money, please email support@bitcoinica.com for manual withdrawals.

Thank you for your support!

[caston]

No problem. I'm excited about the next release and i'm glad to say i've never had a forced liquidation as I always watch my positions and the market trend like a hawk.