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Question: Do you agree with this change?  (Voting closed: January 21, 2012, 02:56:01 AM)
Agree - 59 (45.7%)
Disagree - 40 (31%)
Bitcoinica is doomed (Neutral) - 30 (23.3%)
Total Voters: 128

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Author Topic: Vote for Bitcoinica Leverage Change Proposal  (Read 3832 times)
zhoutong
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January 18, 2012, 03:29:10 AM
 #21

Exactly.  Don't change the system because people don't know what they are doing.  We all are aware of the risks and this should be a lesson to those that overextended themselves. Unless this is something Bitcoinica needs to do to be profitable, leave it alone or move up and onward.

Big clients are using the reserves all the time, and it's definitely unfair if we don't have the money to back their trading potential. If just 2% of the customers were limited to 2.5:1 we wouldn't have to see the asterisk.

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January 18, 2012, 03:31:28 AM
 #22

This all adds up to 5 to 1 on avg for everyone..


I fail to see how this will help volatility.

Is not a delayed liquidation one way to go ? albeit hard

The liquidations happen because of the faux liquid market you are building here..

On further thought, its more like 4 to 1 levy for everyone

Liquidations happen because irrational people overleverage.  There is a big warning about this when they sign up.  I was long 100 BTC during the drop, but I still had enough margin to buy 50@$5.15 before it recovered.  I'm back in the green already.

If you don't like bitcoinica, fine, but let those of us who use it communicate with Zhoutong instead of slinging insults.

Im not slinging insults, I made a modest 3 bitcoins from this mess, no complaints..

But I see a bigger issue here, you should open your eyes..

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January 18, 2012, 03:32:08 AM
 #23

Big clients are using the reserves all the time, and it's definitely unfair if we don't have the money to back their trading potential. If just 2% of the customers were limited to 2.5:1 we wouldn't have to see the asterisk.

Even, if you will go this way, new limits should not affect old orders and positions (because it will be violation of contract).
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January 18, 2012, 03:34:08 AM
 #24

It is still possible to game this by creating multiple accounts and doing a coordinated trade.

Bitcoinica is doomed.

I like the proposal as on its face it addresses the limited reserves issue which seems key to me.

However, the use of multiple accounts for coordinated trades would only require a bit of bot work for those so inclined to implement it. There's someone both prepared to do so and chomping at the bit to try it, any other assumption would likely be wrong in a day or two anyway. It could be done with computer-directed meat-based mouse actuators sort of like one of those CAPTCHA-breaking type operations, but going the bot route would be easier to manage and cheaper for what would likely be a "what works today" effort, particularly if it eventually kills the host organism  Sad

The leverage Bitcoinica can handle is its problem to decide. Perhaps you need to cap everyone at 2.5:1 or 5:1 until you can grow the reserves more. I imagine that how that affects your profitability would also be part of striking a balance.

EDIT:
I am "neutral". If Bitcoinica continues to bite off more than it can chew, I would expect it to fail.

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January 18, 2012, 03:34:54 AM
 #25

Getting rid of the asterisk would be useful.  I'm not sure how I'd vote.

Don't day trade.
zhoutong
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January 18, 2012, 03:35:17 AM
 #26

Big clients are using the reserves all the time, and it's definitely unfair if we don't have the money to back their trading potential. If just 2% of the customers were limited to 2.5:1 we wouldn't have to see the asterisk.

Even, if you will go this way, new limits should not affect old orders and positions (because it will be violation of contract).

Active orders may be affected due to decrease of tradable balance (but you're allowed to place a 1000000 BTC order regardless of tradable balance anyway). But existing positions won't be cut off, definitely.

We never do that anyway.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

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January 18, 2012, 03:39:25 AM
 #27

Liquidations happen because irrational people overleverage.  There is a big warning about this when they sign up.  I was long 100 BTC during the drop, but I still had enough margin to buy 50@$5.15 before it recovered.  I'm back in the green already.

If you don't like bitcoinica, fine, but let those of us who use it communicate with Zhoutong instead of slinging insults.

Im not slinging insults, I made a modest 3 bitcoins from this mess, no complaints..

But I see a bigger issue here, you should open your eyes..

My eyes are open, thanks.... I understand quite well how bitcoinica works.  If you don't like it don't use it.  I anticipated the possibility of a huge squeeze, and traded accordingly.  Others overextended themselves and lost big.  Anyway, this is off topic, so if you feel the need to respond, please PM me.

https://www.bitcoin.org/bitcoin.pdf
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ArsenShnurkov
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January 18, 2012, 03:43:39 AM
 #28

Even, if you will go this way, new limits should not affect old orders and positions (because it will be violation of contract).

Active orders may be affected due to decrease of tradable balance (but you're allowed to place a 1000000 BTC order regardless of tradable balance anyway). But existing positions won't be cut off, definitely.

We never do that anyway.

This is not a complete truth. With changing reserve level you will increase zhoutong price for existing long positions,
and this may lead to premature liquidation of these existing positions
(and to losses which should not occur under current reserve level).
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January 18, 2012, 03:44:46 AM
 #29

I think the real solution is a combination of disclaimers and customer service.  Bitcoinica users control their own leverage -- they make their own wins / losses based on how they gamble.  Honestly, they are largely responsible for their own actions on Bitcoinica and cannot be protected from themselves.

That said, the most prudent path for a professional business to take is to provide quality customer service.  (apologies, offers of consolation when dissatisfied, etc.)

I am "neutral", but I do not believe Bitcoinica is doomed.

EDIT:  I voted "disagree".

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January 18, 2012, 03:48:37 AM
 #30

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.
zhoutong
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January 18, 2012, 03:49:24 AM
 #31

Even, if you will go this way, new limits should not affect old orders and positions (because it will be violation of contract).

Active orders may be affected due to decrease of tradable balance (but you're allowed to place a 1000000 BTC order regardless of tradable balance anyway). But existing positions won't be cut off, definitely.

We never do that anyway.

This is not a complete truth. With changing reserve level you will increase zhoutong price for existing long positions,
and this may lead to premature liquidation of these existing positions
(and to losses which should not occur under current reserve level).

No. It's the same 4%. I won't change.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

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Crypt_Current
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January 18, 2012, 03:51:41 AM
 #32

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree with this.  Zhou, I think this is important -- I understand you want to be as honest as possible, but there is a such thing as being "honest to a fault".

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zhoutong
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January 18, 2012, 03:52:41 AM
 #33

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree that. Most of our profits come from 2:5 traders and 5:1 traders. Not only 10:1 traders lost a lot themselves during volatile periods, we lost a lot due to market slippage as well.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

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January 18, 2012, 03:53:24 AM
 #34

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree with this.  Zhou, I think this is important -- I understand you want to be as honest as possible, but there is a such thing as being "honest to a fault".

you mean you don't like the Bullseye?
zhoutong
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January 18, 2012, 03:53:44 AM
 #35

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree with this.  Zhou, I think this is important -- I understand you want to be as honest as possible, but there is a such thing as being "honest to a fault".

We can't hide it anyway. If we don't have reserve, we will become a bucket shop if we don't tell our customers to stop buying/selling. So after all the only way is to distribute the trading power evenly to everyone.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

Donations for my future Bitcoin projects: 19Uk3tiD5XkBcmHyQYhJxp9QHoub7RosVb
Crypt_Current
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January 18, 2012, 03:54:13 AM
 #36

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree with this.  Zhou, I think this is important -- I understand you want to be as honest as possible, but there is a such thing as being "honest to a fault".

you mean you don't like the Bullseye?

Bullseye == TMI  XD

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January 18, 2012, 03:54:23 AM
 #37

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree that. Most of our profits come from 2:5 traders and 5:1 traders. Not only 10:1 traders lost a lot themselves during volatile periods, we lost a lot due to market slippage as well.

at least you admit what i've been warning about.  i wish you luck.
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January 18, 2012, 03:55:50 AM
 #38

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree with this.  Zhou, I think this is important -- I understand you want to be as honest as possible, but there is a such thing as being "honest to a fault".

We can't hide it anyway. If we don't have reserve, we will become a bucket shop if we don't tell our customers to stop buying/selling. So after all the only way is to distribute the trading power evenly to everyone.

I wonder what Forex brokers do when they run out of reserves?  Does that happen?  I have research to do...
Anyone who knows a lot about Forex, don't hesitate to provide clarity for me on this point.

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January 18, 2012, 03:57:18 AM
 #39

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree with this.  Zhou, I think this is important -- I understand you want to be as honest as possible, but there is a such thing as being "honest to a fault".

We can't hide it anyway. If we don't have reserve, we will become a bucket shop if we don't tell our customers to stop buying/selling. So after all the only way is to distribute the trading power evenly to everyone.

I wonder what Forex brokers do when they run out of reserves?  Does that happen?  I have research to do...
Anyone who knows a lot about Forex, don't hesitate to provide clarity for me on this point.


I thought I just read...Aren't you the one who's going to be writing the documentation for Bitcoinica when it comes to their Forex-based trading ?
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January 18, 2012, 03:58:39 AM
 #40

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree with this.  Zhou, I think this is important -- I understand you want to be as honest as possible, but there is a such thing as being "honest to a fault".

We can't hide it anyway. If we don't have reserve, we will become a bucket shop if we don't tell our customers to stop buying/selling. So after all the only way is to distribute the trading power evenly to everyone.

I wonder what Forex brokers do when they run out of reserves?  Does that happen?  I have research to do...
Anyone who knows a lot about Forex, don't hesitate to provide clarity for me on this point.

They have access to large, short-term loans.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
12jh3odyAAaR2XedPKZNCR4X4sebuotQzN
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