6 ms·
> Is this kind of thing still possible, or do exchanges prevent it these days? Why would exchanges want to prevent this? As far as I can see, it’s speculators
by runeks 9y ago
> Is this kind of thing still possible, or do exchanges prevent it these days?
Why would exchanges want to prevent this?
As far as I can see, it’s speculators battling against speculators. Why not just let the best speculator win? It’s not like it affects my ability to sell or buy bitcoins on Bitstamp — and I hope we can agree that there is no “right” price of a bitcoin — so what’s the incentive to stop it, other than to assist particular speculators (with particular strategies) in making profits?
- nerdponx 9y agoBecause it makes Bitcoin unusable for actual economic transactions.
- blunte 9y agoNot really. On most exchanges, the transactions never hit the blockchain - it's all internal accounting within the exchange. All this speculatory activity creates liquidity, at least on the exchanges where the speculation is taking place. That's generally good for outsiders who need to exchange bitcoin for something else (on said exchange). Except for a few flash-crash scenarios (or failures of the exchange), this shouldn't have much impact on price volatility on day/week scales that average people care about.
- paulpauper 9y agoI think it's possible for exchanges to exacerbate volatility. If all the trading were consolidated to a single exchange (like the NYSE or NASDAQ in America), it would mean that there would be more liquidity to the downside and price resistance to the upside, but instead everything is split up between 5 major exchanges. So if someone places a large order on one exchange, the others will mirror it, so effective liquidity is cut by 80%. This works to the upside too. A way to fix this would be to split the transactions evenly among all majors exchanges, executing all the orders at once instead of only at a single exchange, but most large traders probably don't do this.
- ryanmerket 9y agoIsn't that what Bitcoin Cash is for and why they split off? Bitcoin Core has super high transaction fees and will evolve not into a currency but a vehicle for wealth storage (much like gold).
- zwily 9y agoNo, even the Bitcoin Cash blockchain could not handle even a small percentage of HFT traffic. Like the poster above said, this activity is all internal exchange accounting.
- alphydan 9y agoI keep hearing about these high transaction fees but I've never seen them. When I send the equivalent of tens/hundreds of thousands of USD I pay a few cents of a dollar. It does take a few hours, sure. But what would it take in a fiat currency: walk to the bank, explain why you are sending so much money, set-up the order, wait a few days. No doubt with fees in the hundreds of dollars. So as far as I can tell fees are still ridiculously small. Large transactions are usually not that urgent.
- nebabyte 9y agoAand again, why would exchanges care? Unless they never cash out their fees to fiat (which I'm sure all do at least to some extent), they've got theirs.