Yet Another Exchange?

[Mr. Bluesummers]

Hey All

I read the Bitcoin article on Slashdot and have been doing a lot of research since then.  It looks like this open-source currency idea has legs, but it's hamstrung on conversion and usage issues. 

I'd love to help get this off the ground with a project that's at least break-even.  I thought it would make sense to start an exchange service, but it looks like there are several already and more on the way.  I was also toying with the idea of miners, but I'm having trouble determining how to convert hardware to hashes-per-second to bitcoins-per-second after you've joined a pool.

Do we need another exchange service or should I find another way to help?  Any suggestions?

Thanks!

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[Bimmerhead]

The "do we need another exchange" question is partially dependent on where you live.  Since there's no PayPal->Mt Gox service anymore it is more painful for us Canadians to purchase bitcoins.  A Canadian exchange accepting either PayPal or email bank transfers would be a terrific addition to the economy.

[BitLex]

can there be enough exchanges?
everyone should exchange whatever currency to BTC and vice versa, then noone would have problems to cash-in, or -out.

[grondilu]

The more currency exchanges, the better.

[Anonymous]

Everyone should be an exchange. The simplest way to do so is start listing offers on #bitcoin-otc.

You dont even need a website to do that just a little perseverence with gpg.

[genjix]

I own Britcoin and our source code is open. If you contact me then I can get you setup for a small fee as I'm doing with CCCMikey. The more people we have using this same software, the easier I can turn it into a safe, secure, easy to install piece of kit for setting up a Bitcoin exchange.

Then we'll have lots of exchanges.

[jgarzik]

The source code for bitcoin central is also open: https://github.com/davout/bitcoin-central

[Nefario]

The source code for bitcoin central is also open: https://github.com/davout/bitcoin-central

Bitcoin central is not the easiest system in the world to set up.

[grondilu]

I own Britcoin and our source code is open. If you contact me then I can get you setup for a small fee as I'm doing with CCCMikey. The more people we have using this same software, the easier I can turn it into a safe, secure, easy to install piece of kit for setting up a Bitcoin exchange.

Then we'll have lots of exchanges.

This seem interesting.  I'll give this a try.  By myself first, and if I can't manage I'll contact you.

[Bimmerhead]

The only downside of a thousand different exchanges is that none of them will have enough activity to make a market.

Is there a way that these exchanges that are all using the same code, but are located in different countries, can somehow aggregate their bids and asks so that there can be trading between exchanges?

[nelisky]

There's even profit in the "aggregation" of exchangers... It always puzzled me why there's no known attempt to do that, as it would be fairly easy to have, say, bitcoinusa have a few bucks on mtgox and then offer theirs bids and asks at a slight markup, making the buy/sell on customer request. Hmm, how about an external proxy doing that on multiple exchangers?

[Anonymous]

There's even profit in the "aggregation" of exchangers... It always puzzled me why there's no known attempt to do that, as it would be fairly easy to have, say, bitcoinusa have a few bucks on mtgox and then offer theirs bids and asks at a slight markup, making the buy/sell on customer request. Hmm, how about an external proxy doing that on multiple exchangers?

Even better would be a client you can download and use that exchanges from your desktop with anyone else.

[Mr. Bluesummers]

Thanks for your replies!  Please- keep going!

I'm in the USA.  The Britcoin instance sounds promising but I have a confession- I'm a C# coder and I'd like to write a .net library if I can.  It sounds like one idea coming up here might be to build a hub of exchanges to make it easier to connect everyone together.

[nelisky]

There's even profit in the "aggregation" of exchangers... It always puzzled me why there's no known attempt to do that, as it would be fairly easy to have, say, bitcoinusa have a few bucks on mtgox and then offer theirs bids and asks at a slight markup, making the buy/sell on customer request. Hmm, how about an external proxy doing that on multiple exchangers?

Even better would be a client you can download and use that exchanges from your desktop with anyone else.

That works great for bitcoins, but how do you get the client to do USD/EUR/etc transfers? But a client where you can work all the exchanges at the same time would rock, except that the second person to use it would find all exchanges operating at the same exact rates... ooops

[Mr. Bluesummers]

There's even profit in the "aggregation" of exchangers... It always puzzled me why there's no known attempt to do that, as it would be fairly easy to have, say, bitcoinusa have a few bucks on mtgox and then offer theirs bids and asks at a slight markup, making the buy/sell on customer request. Hmm, how about an external proxy doing that on multiple exchangers?

Even better would be a client you can download and use that exchanges from your desktop with anyone else.

That works great for bitcoins, but how do you get the client to do USD/EUR/etc transfers? But a client where you can work all the exchanges at the same time would rock, except that the second person to use it would find all exchanges operating at the same exact rates... ooops

How bad would this be?  It sounds like you could get a reasonable price across several exchanges, leaving them to compete on client-side features and transaction costs.

[genjix]

I thought long and hard about this and in the end decided against it.

If I'm running an exchange and I have jon, bill and dave all handling various currencies then I must trust them not to make an exchange/be a scammer. In the end I decided going with the many various exchanges is the best plan.

[Mr. Bluesummers]

I'm still working on calculations to find out what kind of return on investment I can expect.  I noticed that the market is rather thin these days- only $5-10k daily volume is being recorded on bitcoincharts.com.  Is that comprehensive data?  If I'm going to put in a couple grand for a site, I'm going to need a more vibrant market in order to recoup costs.

Would it be fair to expect $50,000 USDe being converted every day across the entire bitcoin economy?  If not today, is this a target we may hit soon?

[genjix]

You're not being very realistic and depending on your expertise/requirements I could set you up for far less. Although it would be an operation you'd have to be actively involved in.

[Mr. Bluesummers]

Hey Genjix!

That's a mighty fine offer, and thanks again for your help here.  Can you tell me more about what part of my thinking is unrealistic?

[genjix]

>put in a couple grand for a site
That part.

However are you based in the US? Because I must warn you that you will have a major competitor in that market in addition to MtGox.