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?
I am currently attempting to do just this.
There are two large problems I am facing:
- Getting USD into the exchanges. Due to the transaction costs, it might not be worth it to do this form of trading. Also, it is impossible to transfer USD between exchanges.
- Confirmation time makes it risky to do a BTC transfer between exchanges as price could change before your money gets there.
Solutions I see to these and other issues surround the Bitcoin markets:
- Exchanges need to allow 'day trader' activity in the form of instant transactions. If the pace of the Bitcoin exchanges picks up, 50 minutes of price changes could kill your position if you're trading with most of the money in your account and have to wait for a confirmed block to get your coins back.
- We need a common trading size on the exchange -- maybe 10 BTC -- so that more trades can go through in a standard way (similar to common stocks trading in 100 share blocks most often).
- Margin trading accounts that give around 4:1 leverage on larger accounts. Proper precaution would be taken on the part of the exchange / broker that all transactions must settle before finds may be withdrawn.