Do you think Bitcoinica should switch to TradeHill? [Edited]

[jimbobway]

You should consider implementing an engine that interfaces with Mt. Gox, Tradehill, CryptoExchange and any other exchange.  You should also implement your own service.  Then you would code your algorithms that will pick the lowest cost trade to execute.  It would be easy for you to pick one exchange and implement that but the ultimate platform would be to interface with as many exchanges as possible, including one that you run.

Each exchange probably has their quirks so the difficulty would be making sure you take care of these quirks.

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[tvbcof]

If Zhou wants to set up an exchange I'd welcome it, but

 - solve some of the most pressing issues of the existing exchanges which I see as being at the mercies of Western financial interests.

 - operate it completely independently of Bitcoinica, and as an competitor to both the other exchanges and to the Forex platform (Bitcoinica) itself.  In this way things would probably be significantly simplified and also made more robust against various types of system failures and legal attacks.

[Serge]

If Bitcoinica were it's own exchange, with a lower spread/fees, quicker updates/processing, I'd probably sign up.

all exchanges have issues getting fiat in and out, why do you believe Bitcoinica will be any different?

in unrelated note, i was considering using TH, but looking how some people have troubles getting their funds from TH i decided to stick with mtgox they proved somewhat to be more or less reliable in that department for now above all other exchanges

[cypherdoc]

Zhou,

i think u should set up your own exchange as well.  this would solve alot of my objections.

still not a huge fan of the leverage but lemmings will be lemmings.

btw, will Singapore be any more favorable towards regulations than what Gox is going thru?

[jojo69]

My understanding is that Singapore is one of the freest markets in the world.

[Otoh]

I like Intersango as it's easy,free & quickish for me to deposit £s there being a Brit, at least when they have a bank account that hasn't been pulled out from under them at no notice, otherwise I go via XeTrade (1.4% less than mid market exchange rates & no fees) to my US bank account, 1 day or so & then Dwolla for 25 cents to Gox & atm I'd rather hold $s or BTC than anything € or in too close a proximity to it - I vote for these 2 as I like Gox's BTC & $ redeemable codes, Yubi keys etc & sometimes better the devil you know

I do though really like the idea of Khou setting up an exchange, completely independent from Bitcoinica or I'd feel that I had too many eggs in 1 basket (actually they're all in Khou's basket atm anyway for super margin to guard against any more shocking price gyrations) & I expect such an exchange to be superb for innovation, enthusiasm, professionalism & shaking up the Gox, I needed 3 votes really

as for TH I never found an easy way to get funds to them without fees or complications that I didn't want to get in to & haven't looked in to them enough to try & gauge their staying power or accountability

[nrd525]

I support anything that reduces fees.  The independent exchange seems like a good idea.

[old_engineer]

I suggest you create your own exchange. If you control the exchange, you could put in a circuit breaker to halt trading for, say, 10 minutes (or 2 blocks?) if there is a price swing of 10% either way, to allow time to warn people (text/email alerts) and let them set stop orders, deleverage, and/or add to their margin; as well as allow other traders time to place orders to catch the fall or rise.  There are obvious arbitrage opportunities if a circuit breaker is hit.  These kinds of circuit breakers are useful for leveraged traders, and now exist in all traditional exchanges (google "2010 Flash Crash" for details).

For example, when the price dipped to $5.00 yesterday, anyone with USD could have placed an order at $5.00, and might have prevented some liquidations and kept it from dropping to $4.8.  Everyone would have been happier with this reduction in volatility.

I had a liquidation yesterday because I had split my funds between a daytrading stake on Mt. Gox, long coins in my computer's wallet, and funds to back up my leveraged coins on bitcoinica.  I saw the squeeze coming, but couldn't transfer enough margin from Mt. Gox to Bitcoinica due to daily limits, and I couldn't get coins from my computer's wallet to bitcoinica fast enough.  I possessed more than enough margin (<1:1), but got clipped anyway because of the abruptness.  This wouldn't have happened if bitcoinica and Mt. Gox were the same entity.

Also, I think you should accept 1-block confirmations from customers, and perhaps even 0-block for trusted customers.  Just don't allow them to withdraw funds until 6 confirmations, which would eliminate your risk.

[Mushoz]

Also, I think you should accept 1-block confirmations from customers, and perhaps even 0-block for trusted customers.  Just don't allow them to withdraw funds until 6 confirmations, which would eliminate your risk.

Wow! Great idea! This would improve things by quite a bit, by improving liquidity due to faster transfers. Smart thinking!

[guywhogotgoxed]

My opinion is that you make your own independent exchange. Even if the fees on the exchange might be so low that they only pay off its expenses, you will profit more simply because of the reduced spreads on bitcoinica (more people, like me, will use bitcoinica more often - I love bitcoinica but sometimes the spreads are just too high... simply because Gox has to have a piece of the cake)

You are the only one running an exchange type service who has excellent communication with their customers. Compare to gox which wont even reply to emails, will constantly "forget" tickets, will do crazy stuff like demand an ID and freeze up your money for no reason etc.

Actually, with 0.1% fees, you should profit off of that too, simply because you will take pretty much ALL the volume off of other exchanges (unless they tighten up their game that is, which doesnt seem likely). Traders will also most likely trade more. Spreads will decrease because traders will be able to profit off of smaller difference (e.g. buying and selling at a 0.4% difference would be profitable, compared to 1% needed in mtgox)

Ok I'll bite.

Have you considered how difficult it would be for you to offer payment services?

Why would you enter the thread just to say something negative? As an adult, dont you find it inappropriate to just enter the thread to dispraise a 17 year old in his business venture... As a matter of fact, it seems like mr.Tong is the adult (for not calling you an asshole, which you clearly are) and you are the "kid".

Is it perhaps jealousy? You have to realize that, since he offers better service than any other exchange, and is about to offer an exchange service for 1/6 the price of the top exchange, with same volume... The fact that he will offer BitInstant transfers (smart move there mr.Tong) means everyone from gox will most likely go to his exchange, unless of course they like being goxed.

Thank you mr.Tong for your service, and thank you for taking into consideration what the community might think of you opening up an exchange. To date, I have not seen a single exchange which can talk the talk (service) AND walk the walk (offer volume).

[teflone]

Also, I think you should accept 1-block confirmations from customers, and perhaps even 0-block for trusted customers.  Just don't allow them to withdraw funds until 6 confirmations, which would eliminate your risk.

Wow! Great idea! This would improve things by quite a bit, by improving liquidity due to faster transfers. Smart thinking!

Very good idea..

[legitnick]

Fuck mtgox.

[Fireball]

- Websocket API
- BitInstant support
- Redis-based trading engine (thousands of orders per second). (by Fireball: In case of ICBIT, the trading engine is even more advanced, it stores data in redis as distributed storage and pub/sub mechanism, and uses data trees optimized for very low latency orders execution in the trading engine itself).
- Fully independent

It's just a subset of features of the ICBIT trading platform I'm developing.
I explained only the futures trading section of it publicly in this forum, but since my trading engine is universal, I was working on bringing up the currency exchange section lately. My platform is nearly ready, I will post an announcement about it tomorrow.

I sent Zhoutong a private message about this as I'm quite open for collaboration.

[notme]

Anything to take dependence off of gox is good.  Even if you go independent I think you should still hedge on gox and tradehill.

And pay a 0.25% fee to Mtgox, have higher slippage risks due to slower response times and have problems with withdrawals processing because of the daily and monthly limits? The first two points will increase the spreads (so the costs) for the costumers, and the last one is downright inconvenient and borderline unacceptable. I'm all for an independent Bitcoinica exchange!

He would trade on MtGox/Tradehill when it is cheaper than matching with available orders on his books... he can hedge on more than one exchange, and he can trade internally when that's the best option.  Independent exchange + hedging on as many other exchanges as possible is the way to go.  He may even be able to offer negative spreads (and still make a profit) when there are arbitrage opportunities between Gox and TH.

[jojo69]

Ok I'll bite.

Have you considered how difficult it would be for you to offer payment services?

Why would you enter the thread just to say something negative? As an adult, dont you find it inappropriate to just enter the thread to dispraise a 17 year old in his business venture... As a matter of fact, it seems like mr.Tong is the adult (for not calling you an asshole, which you clearly are) and you are the "kid".

hmmm, I did not interpret phantomcircuit's post like that at all

I thought he was just urging Z to build a portal out to the fiat economy, which we desperately need

[Bro]

I don't use bitcoinica but the indepedant exchange idea sounds great

[P_Shep]

He would trade on MtGox/Tradehill when it is cheaper than matching with available orders on his books... he can hedge on more than one exchange, and he can trade internally when that's the best option.  Independent exchange + hedging on as many other exchanges as possible is the way to go.  He may even be able to offer negative spreads (and still make a profit) when there are arbitrage opportunities between Gox and TH.

I like this. Why not use all available resources?

[EuSouBitcoin]

Bitcoinica should go where the liquidity is. An ideal solution would be to look at each of the top exchanges and send orders in proportion to the liquidity on each exchange.

In my opinion one of the exchanges should offer aggressive rebates for adding liquidity. The spot traders would get a rebate for adding liquidity and Bitcoinica would find the liquidity in one place. Although, all the liquidity is at Mt Gox right now. It's just both liquidity providers and liquidity takers are charged a fee. If there is a smart exchange out there, they'll pay for liquidity.

Mt Gox had the lion's share of volume before Bitcoinica and Bitcoinica using Mt Gox has just consolidated volume even more there. For now, Bitcoinica is the volume, wherever they go, the volume will follow.

[phantomcircuit]

Ok I'll bite.

Have you considered how difficult it would be for you to offer payment services?

Why would you enter the thread just to say something negative? As an adult, dont you find it inappropriate to just enter the thread to dispraise a 17 year old in his business venture... As a matter of fact, it seems like mr.Tong is the adult (for not calling you an asshole, which you clearly are) and you are the "kid".

hmmm, I did not interpret phantomcircuit's post like that at all

I thought he was just urging Z to build a portal out to the fiat economy, which we desperately need

That's precisely what I was saying, improved liquidity would benefit everybody, even those of us seemingly working at cross purposes.

However a hint of caution is necessary.

Accepting wire transfers, bitcoins, and mtgox codes is orders of magnitude simpler than other payment mechanisms.

Currently about 10% of the intersango code base is actually about exchanging bitcoins ... the rest is handling idiosyncrasies of various insane payment systems.

[guywhogotgoxed]

Ok I'll bite.

Have you considered how difficult it would be for you to offer payment services?

Why would you enter the thread just to say something negative? As an adult, dont you find it inappropriate to just enter the thread to dispraise a 17 year old in his business venture... As a matter of fact, it seems like mr.Tong is the adult (for not calling you an asshole, which you clearly are) and you are the "kid".

hmmm, I did not interpret phantomcircuit's post like that at all

I thought he was just urging Z to build a portal out to the fiat economy, which we desperately need

That's precisely what I was saying, improved liquidity would benefit everybody, even those of us seemingly working at cross purposes.

However a hint of caution is necessary.

Accepting wire transfers, bitcoins, and mtgox codes is orders of magnitude simpler than other payment mechanisms.

Currently about 10% of the intersango code base is actually about exchanging bitcoins ... the rest is handling idiosyncrasies of various insane payment systems.

So this is all you have to say to a young entepreneur? Dispraising comments? Is that how you would raise your kids? Worst case scenario, mr Tong learns from the experience.

Or is there perhaps another motive for the negative attitude? Why else would you "bite"?