Why not leave bitcoinia in maximum leverage?

[Dan The Man]

Because of liquidity and volatility issues, even forced margin call trading might not happen fast enough for some accounts.  It is then possible to lose more than you have in your account.  As a result you would then have a negative balance and owe Bitcoinica money   

Having 10X leverage means you can end up owing a lot more than you ever wanted to.

Now what ends up happening is some traders will go negative and just open a new account.  That's a problem for Bitcoinica, as I've seen mentioned before, so it may end up that identity (and maybe a credit check even) will be necessary for highly leveraged (5X) accounts or eventually for all accounts even someday.

I have ditched several temp Bitcoinica accounts with negative balances. It helps to keep your risky plays from overlapping into your main fund to separate them into a new account.

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[Dan The Man]

Here is a situation in which you would want to choose your leverage:



1) With 10:1 leverage, your account can short or long up to 100 BTC. (For the sake of simplicity, let's say this stays true throughout this example).
2) You have a long position of 50 BTC.
3) You think that having a long position of 100 BTC is too risky, but a long position of 50 BTC is good.
4) You set an ask order for 50 BTC, but don't set any bid orders (too risky).

Now here is where setting the leverage comes in.

5) You set your leverage to 5:1.  The maximum you can short/long is now 50BTC.
6) In addition to setting the ask order for 50 BTC, you also set a bid order for 50 BTC.



-If the market goes down then up, your bid order is canceled (not enough leverage), then your ask order is executed.  This is is the same as steps 1-4.
-If the market goes up then down, you made money without taking unacceptable risks!



Being able to set your leverage has limited use since it is global for all trades.  If you could set it for each trade it would be a lot more useful.

this is just the same thing as putting stops on your trades.

[Stephen Gornick]

I have ditched several temp Bitcoinica accounts with negative balances. It helps to keep your risky plays from overlapping into your main fund to separate them into a new account.

http://en.wikipedia.org/wiki/Moral_hazard

You get to keep your gains yet your losses are shared with the rest of Bitcoinica's customers (when paying larger than necessary spreads).

That's basically is what happened to our banking system in the U.S. after Glass-Steagall was repealed too.    Though with Bitcoinica, nobody is forced to participate.  With the banking crisis we all paid (and are still paying) regardless of whether we wanted to or not.

[Dan The Man]

I have ditched several temp Bitcoinica accounts with negative balances. It helps to keep your risky plays from overlapping into your main fund to separate them into a new account.

http://en.wikipedia.org/wiki/Moral_hazard

You get to keep your gains yet your losses are shared with the rest of Bitcoinica's customers (when paying larger than necessary spreads).

That's basically is what happened to our banking system in the U.S. after Glass-Steagall was repealed too.    Though with Bitcoinica, nobody is forced to participate.  With the banking crisis we all paid (and are still paying) regardless of whether we wanted to or not.

Bitcoinica set up the system that way. It is a decidedly profit driven enterprise catering to profit driven individuals in an anonymous setting.

[guruvan]

I have ditched several temp Bitcoinica accounts with negative balances. It helps to keep your risky plays from overlapping into your main fund to separate them into a new account.

http://en.wikipedia.org/wiki/Moral_hazard

You get to keep your gains yet your losses are shared with the rest of Bitcoinica's customers (when paying larger than necessary spreads).

That's basically is what happened to our banking system in the U.S. after Glass-Steagall was repealed too.    Though with Bitcoinica, nobody is forced to participate.  With the banking crisis we all paid (and are still paying) regardless of whether we wanted to or not.

Bitcoinica set up the system that way. It is a decidedly profit driven enterprise catering to profit driven individuals in an anonymous setting.

Wow. And so in an anonymous setting its ok to leave everyone else with the bill for your lack of risk and financial management?

[Dan The Man]

Yuhuh, everyone agreed to play by the same rules. And there is no rule that you have to cover a negative balance.

[fcmatt]

zhou is well aware of ppl creating new accounts and does not appear very worried about it... so until then...
p.s. i have two accounts. the first i forgot the passwd to. balance is basically zero if i recall correctly.

[IIOII]

zhou is well aware of ppl creating new accounts and does not appear very worried about it... so until then...
p.s. i have two accounts. the first i forgot the passwd to. balance is basically zero if i recall correctly.

It seems that he is not worried about anything related to other people's BTC. He doesn't even care to credit deposits:

http://help.bitcoinica.com/discussions/questions/144-missing-500-usd-deposit-and-zhoutong-ignores-me

http://help.bitcoinica.com/discussions/questions/169-deposited-btc-have-not-arrived

http://help.bitcoinica.com/discussions/questions/134-what-is-going-on-i-deposited-15-coins-here-and-they-never-showed-up-wtf-didnt-you-say-something-on-the-deposit-page

[disclaimer201]

zhou is well aware of ppl creating new accounts and does not appear very worried about it... so until then...
p.s. i have two accounts. the first i forgot the passwd to. balance is basically zero if i recall correctly.

It seems that he is not worried about anything related to other people's BTC. He doesn't even care to credit deposits:

http://help.bitcoinica.com/discussions/questions/144-missing-500-usd-deposit-and-zhoutong-ignores-me

http://help.bitcoinica.com/discussions/questions/169-deposited-btc-have-not-arrived

http://help.bitcoinica.com/discussions/questions/134-what-is-going-on-i-deposited-15-coins-here-and-they-never-showed-up-wtf-didnt-you-say-something-on-the-deposit-page

The first guy seemed to have a technical problem with a MtGox code. Hard to tell what happened there, even harder to act without evidence. Give him 500 just like that? It'll have to be addressed to MtGox I think.

The second guy is complaining about 1 Bitcoin. There could be many reasons why that single bitcoin wasn't credited. More likely those reasons have more to do with him than with Bitcoinica. Perhaps...

...he used the old deposit address that was hacked as the third guy seems to have done. He is complaining he didn't know about it. Tough luck, if a company I work with is hacked, I'd read about everything that has to with that first before >continuing to use this company< as if nothing had happened.

Then, there is another guy that complains that he forgot his password to his 1000$ Bitcoinica account. I mean, seriously, if Zhou has to deal with such crap on a day to day basis, a wonder his service can still run so smoothly. He must answering people's emails and telling them they are total idiots 24/7.

[zhoutong]

zhou is well aware of ppl creating new accounts and does not appear very worried about it... so until then...
p.s. i have two accounts. the first i forgot the passwd to. balance is basically zero if i recall correctly.

It seems that he is not worried about anything related to other people's BTC. He doesn't even care to credit deposits:

http://help.bitcoinica.com/discussions/questions/144-missing-500-usd-deposit-and-zhoutong-ignores-me

http://help.bitcoinica.com/discussions/questions/169-deposited-btc-have-not-arrived

http://help.bitcoinica.com/discussions/questions/134-what-is-going-on-i-deposited-15-coins-here-and-they-never-showed-up-wtf-didnt-you-say-something-on-the-deposit-page

The first guy seemed to have a technical problem with a MtGox code. Hard to tell what happened there, even harder to act without evidence. Give him 500 just like that? It'll have to be addressed to MtGox I think.

The second guy is complaining about 1 Bitcoin. There could be many reasons why that single bitcoin wasn't credited. More likely those reasons have more to do with him than with Bitcoinica. Perhaps...

...he used the old deposit address that was hacked as the third guy seems to have done. He is complaining he didn't know about it. Tough luck, if a company I work with is hacked, I'd read about everything that has to with that first before >continuing to use this company< as if nothing had happened.

Then, there is another guy that complains that he forgot his password to his 1000$ Bitcoinica account. I mean, seriously, if Zhou has to deal with such crap on a day to day basis, a wonder his service can still run so smoothly. He must answering people's emails and telling them they are total idiots 24/7.

I think these problems have been resolved. Relating to deposit problems, I always try to fix the issue as soon as possible, and the customer should be notified by email once the deposit is completed. However, I didn't usually respond to these requests because they have already been notified.

Some customers are kind enough to close their requests, or post an update for me, and I really appreciate that. Others don't but they should be satisfied and stopped complaining.

I think resolution is the ultimate thing. It takes me more time to type a reply than fixing such simple issues. It's definitely not that I don't care.

[IIOII]

The first guy seemed to have a technical problem with a MtGox code. Hard to tell what happened there, even harder to act without evidence. Give him 500 just like that? It'll have to be addressed to MtGox I think.

The second guy is complaining about 1 Bitcoin. There could be many reasons why that single bitcoin wasn't credited. More likely those reasons have more to do with him than with Bitcoinica. Perhaps...

...he used the old deposit address that was hacked as the third guy seems to have done. He is complaining he didn't know about it. Tough luck, if a company I work with is hacked, I'd read about everything that has to with that first before >continuing to use this company< as if nothing had happened.

Then, there is another guy that complains that he forgot his password to his 1000$ Bitcoinica account. I mean, seriously, if Zhou has to deal with such crap on a day to day basis, a wonder his service can still run so smoothly. He must answering people's emails and telling them they are total idiots 24/7.

Disagree. Bitcoinica is a for profit operation. Therefore full responsibility applies.
From my point of view it is fully justified that a customer losing assets due to misconfigured or insecure offerings of a commercial operator demands refund. (The lost password is an exception.)

Calling customers idiots because they lost assets this way does not seem appropriate to me at all.

[disclaimer201]

The first guy seemed to have a technical problem with a MtGox code. Hard to tell what happened there, even harder to act without evidence. Give him 500 just like that? It'll have to be addressed to MtGox I think.

The second guy is complaining about 1 Bitcoin. There could be many reasons why that single bitcoin wasn't credited. More likely those reasons have more to do with him than with Bitcoinica. Perhaps...

...he used the old deposit address that was hacked as the third guy seems to have done. He is complaining he didn't know about it. Tough luck, if a company I work with is hacked, I'd read about everything that has to with that first before >continuing to use this company< as if nothing had happened.

Then, there is another guy that complains that he forgot his password to his 1000$ Bitcoinica account. I mean, seriously, if Zhou has to deal with such crap on a day to day basis, a wonder his service can still run so smoothly. He must answering people's emails and telling them they are total idiots 24/7.

Disagree. Bitcoinica is a for profit operation. Therefore full responsibility applies.
From my point of view it is fully justified that a customer losing assets due to misconfigured or insecure offerings of a commercial operator demands refund. (The lost password is an exception.)

Calling customers idiots because they lost assets this way does not seem appropriate to me at all.

I'm just saying if you go and read about people's issues it's sometimes strange to see how quickly people jump to conclusions. I'm talking about human behavior where people grow impatient and complain about services they didn't even know existed shortly before but suddenly believe the world owes them something. I'm not saying they shouldn't complain if something went wrong. Make a transaction while your internet connection fails....it's the system's fault. Forgetting your password to your own money and blaming others is stupid and that's why I find such harsh words appropriate. You read about people who speak out general warnings like "don't put any money there, it is a scam! while missing a single bitcoin. Really? Could it be people are making a big fuzz about the service "jumping on the bandwagon" so to say because they are frustrated they gambled away all their money? So if you have a problem, report it. Personally, from what I've read I wouldn't worry too much for your 5 bucks. He seems to be taking care of it. Read around the forums, the guy is legit. He lost hundreds of thousands of dollars, he's gonna find your bitcoin, I'm sure. Give the guy a break, and stop blaming the casino for everything.