Is LocalBitcoins now the most reliable price indicator?

[Carlton Banks]

Just browsing the comedic spread of exchange rates we have, and the theme seems to be that the more convincingly that the BTC and/or fiat belongs to the exchanging parties, the higher the price. And that makes sense, if coins are only making a temporary stop with LocalBitcoins for fees, there's no real scope for any "leveraging" (borrowing) of user deposits. LocalBitcoins model couldn't function if they suddenly started saying "er, bitcoins are, um, stuck in transit, er, we haven't got the right amount of employees to press the "send" button to complete your transaction, yep that's it". So, the LocalBitcoins price is the advertised price with the highest liquidity in deposits and withdrawals, because of their model.

Seems like the overall message is "Buying assets on an online marketplace? At a good price? Anyone can join, by virtue of being a person? Oh no, this won't do, that's not for the little people"

Perhaps I'm trying to look too far ahead, but, prepare yourselves for a possible widespread rollout of the Coinbase model, everyone (witness Safello). Buying the troughs and selling the peaks is starting to look like it is getting slowly cancelled. So maybe amateur trading markets aren't allowed, and this situation is an example of how they're punished. We should realise by now we're operating in gangster territory, pretty much.

[oda.krell]

If only there were groups/companies working on developing a provably secure (as far as the non-fiat side is concerned, at least), scalable, decentralized exchange setup *nudge* *wink*

[Hyena]

actually it's a good idea. conventional exchanges suck big time, only problems. Yesterday someone from my social circle came to me asking to buy 1 bitcoin because "the price was pretty good finally for buying in". I laughed into my palm and asked 600 euros for 1 bitcoin. The dude then said "that's too much" and we never talked again. These idiots are now popping out and thinking that gox prices should be demanded everywhere

[afbitcoins]

Its a good point. Only slight difficulty with local bitcoins is the spread is so big, making pinpointing an actual market price quite tricky

[Carlton Banks]

Its a good point. Only slight difficulty with local bitcoins is the spread is so big, making pinpointing an actual market price quite tricky

In the current climate, not as serious a drawback (spread is smaller than the market as a whole, think about that). It also has the secondary advantage that bots (especially bots running with effectively zero-latency as a part of the centralised exchange platform) are pointless. I've been watching the Gox volume and wall movements, thinking "who exactly is willingly participating in this?". It's difficult to think who would be, but maybe I'm unique or eccentric or something.

[Hyena]

But what if localbitcoins is the future of exchanges? I feel pretty OK with that idea. I'm not into selling my bitcoins but I'd put some orders on localbitcoins just to support the idea.

[knightcoin]

BTW, ...What happened to google's venture buttercoin ? code is based in disruptor ( http://lmax-exchange.github.io/disruptor/ )  .. I already played a bit with disruptor in c# version .. without much success though ... some stuff still bit confusing for me ...

Anyways in order to understand an exchange order matching system I decided to following a book called Pratical.NET for Financial Markets, Yogesh Shetty and Samir Jayswal ... why ? I need to understand the code, classes, etc since the business logic, UML cards, and so on ... otherwise I just cant trust the code ... but is not to became a pro ...  just as hobby and to feed my autodidactic blood  

[Carlton Banks]

But what if localbitcoins is the future of exchanges? I feel pretty OK with that idea. I'm not into selling my bitcoins but I'd put some orders on localbitcoins just to support the idea.

I'm agreeing with that for now, there's no need to sell coins for fiat or anything else when the price is obviously going south. It's tempting to work from the opposite end of the problem, and advertise LocalBitcoins bids

If only there were groups/companies working on developing a provably secure (as far as the non-fiat side is concerned, at least), scalable, decentralized exchange setup *nudge* *wink*

Are you saying there is a viable decentralised exchange in development, or that there's not? If you've made a useful observation in the decentralised exchanges arena, then please share it.

[Peter R]

If only there were groups/companies working on developing a provably secure (as far as the non-fiat side is concerned, at least), scalable, decentralized exchange setup *nudge* *wink*

Are you saying there is a viable decentralised exchange in development, or that there's not? If you've made a useful observation in the decentralised exchanges arena, then please share it.

I assumed Oda was referring to this: http://alphatesters.secretbitcoinproject.com.  Personally, I have no idea what Jed is up to. 

[jimhsu]

If only there were groups/companies working on developing a provably secure (as far as the non-fiat side is concerned, at least), scalable, decentralized exchange setup *nudge* *wink*

Are you saying there is a viable decentralised exchange in development, or that there's not? If you've made a useful observation in the decentralised exchanges arena, then please share it.

Perhaps there are...

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The larger problem though is liquidity. The spreads for localbitcoins are insane, and for good reason too.

[knightcoin]

Exactly ... big and central exchanges got that positive side... they have better liquidity and price discovery ...

[Carlton Banks]

I don't know about the liquidity/price discovery arguments.

Centralised markets have the properties of maximum response, which results in the narrow range of possible prices for a given moment in time, with instant "settlement" of trades. Just like the regulated corporate financial markets. But if you're anything like me, you'll have heard the voices in the wilderness that say all the systemically important markets are rigged in multiple ways. Some of that stuff is too OTT, but some of it is definitely the truth.

So, it seems as if the desire to emulate the "real" model for markets is not pursuing such a desirable system. Turning the price discovery mechanism into something resembling a ghost train crossed with a rollercoaster crossed with a protection racket creates situations like we're seeing play out.

Any centralised system from now on is going to be as controlled as Coinbase, or perhaps something worse than that is possible. And all involved are at the mercy of all the conditions the exchange has to deal with. If the same "influences" that are causing bank workers to commit suicide start tapping you on the shoulder, most people will fold to the pressure. Do you really want to send coins to any person who may be subject to being pressurised somehow? Maybe it worked out OK the last 7 or 12 times you did it, but that is a simplistic guarantee.

I wonder how many times an exchange website can get Goxed before people begin to learn that the safety of their funds there is slippery. The first you know about any issues, it could be too late. rpietila often mentioned the inherent risk of deposits at the exchanges, I only wish I'd been more responsive to the warning. I only ever sold small amounts at highs on Gox, and didn't keep more BTC there than needed to do so. Still hurts that those small hedges against price volatility are possibly gone. The idea of taking the same risk with someone operating in basically the same environment is not very appealing right now.

[oda.krell]

Are you saying there is a viable decentralised exchange in development, or that there's not? If you've made a useful observation in the decentralised exchanges arena, then please share it.

There are several groups working on them in ways that look professional to me. "I'd be willing to invest in them" professional, I mean. And I didn't even know the one Peter R. linked to. Decentralized exchanges will, almost certainly, hit our market big time, within one, maybe 2 years. The question is if, and if so, which one of them will became the "standard" system, how much of the total (fiat) exchange pie they will take up, and what amusing, as-of-yet unforeseeable consequences this change in our btc ecosystem will have (some form of  "network of escrows" will probably be unavoidable, and I'm already looking forward to the discussions and drama around how those will act)

[ShroomsKit_Disgrace]

Are you saying there is a viable decentralised exchange in development, or that there's not? If you've made a useful observation in the decentralised exchanges arena, then please share it.

There are several groups working on them in ways that look professional to me. "I'd be willing to invest in them" professional, I mean. And I didn't even know the one Peter R. linked to. Decentralized exchanges will, almost certainly, hit our market big time, within one, maybe 2 years. The question is if, and if so, which one of them will became the "standard" system, how much of the total (fiat) exchange pie they will take up, and what amusing, as-of-yet unforeseeable consequences this change in our btc ecosystem will have (some form of  "network of escrows" will probably be unavoidable, and I'm already looking forward to the discussions and drama around how those will act)

It has been developed, and it is being testing for nxtcoin:

https://bitcointalk.org/index.php?topic=460343.0

[HairyMaclairy]

I don't often buy Bitcoin. 

But when I do I rely on the Windex. 

[oda.krell]

Are you saying there is a viable decentralised exchange in development, or that there's not? If you've made a useful observation in the decentralised exchanges arena, then please share it.

There are several groups working on them in ways that look professional to me. "I'd be willing to invest in them" professional, I mean. And I didn't even know the one Peter R. linked to. Decentralized exchanges will, almost certainly, hit our market big time, within one, maybe 2 years. The question is if, and if so, which one of them will became the "standard" system, how much of the total (fiat) exchange pie they will take up, and what amusing, as-of-yet unforeseeable consequences this change in our btc ecosystem will have (some form of  "network of escrows" will probably be unavoidable, and I'm already looking forward to the discussions and drama around how those will act)

It has been developed, and it is being testing for nxtcoin:

https://bitcointalk.org/index.php?topic=460343.0

You missed my point. "It has been developed" is like saying "There is an exchange" 2 years ago. There was (almost) always more than one, and only time will tell which one will come out on top. That said, I'm not a big fan of NXT. Without getting into the semantics of whether it makes sense to say that a proof-of-stake coin is pre-mined in the sense that has been used as criticism against scammy alts, I don't like their 'founders monetization model' for the lack of a better term.