4 ms·
Not really. On most exchanges, the transactions never hit the blockchain - it's all internal accounting within the exchange. All this speculatory activity cre
by blunte 9y ago
Not 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.
- lsseckman 9y agoAre you actually sending that amount around?
- lsseckman 9y agoAre you actually sending that amount around?
- JumpCrisscross 9y ago> 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. When was the last time you sent a wire? For accounts with $15,000 minimums it's usually free, can be set up from your phone and, depending on your bank, either clears within minutes or by close of business.
- alphydan 9y agoGood point. I assume you are talking about national transfers (within the same country) and during the week? What is your experience wiring $X0,000 abroad as a consumer?
- JumpCrisscross 9y agoMy last international wire was for $60,000. It arrived same day in Switzerland. I set it up from Citi's iPhone app and paid nothing for it.
- popol12 9y agoIt's more complex than that. Both Bitcoin Core and Bitcoin cash teams want to scale things up, Bitcoin cash is doing it one way and Core another way (look for "Lightning Network"). Nobody in both camps want Bitcoin to remain a store of value, we all want it to replace fiat.