5 ms·

The lag is too high. Rarely can you buy coins, get them transferred in to your wallet, transfer them in to the new exchange and sell them before the price has c

by drakaal 13y ago

The lag is too high. Rarely can you buy coins, get them transferred in to your wallet, transfer them in to the new exchange and sell them before the price has changed. One of the biggest problems with Bit Coin is the delay. 5 minutes to move money between wallets is not uncommon. If you want to pay me, so I can pay the waitress we need 10 minutes. Doing a check out at the grocery store that takes 5 minutes is not going to go over well with the masses. Figuring out how to make the markets more fluid will likely be the biggest challenge for BTC, after is solves its issues with having huge swings in price such that everything in the grocery store would have to be retagged every hour to make pricing work. :-)

damian2000 13y ago
But the difference in the BTC price between MtGox and Bitstamp has been staying at USD50+ for days at a time recently (right now its USD 130). What does a lag time of 10 mins have to do with it?
- drakaal 13y ago
  At $1,000 a coin and 2.5% on each service (which would be cheap) you'd have 5% total. That's $50 in fees. At $130 it would be a good deal, but not at $50
Aqueous 13y ago
All you have to do is keep some money in USD and BitCoin in reserve on all the exchanges. That way you can buy some BitCoin on one exchange and then sell the same amount on the other at the same time, and then transfer over at your convenience.
- wmf 13y ago
  The imbalance is not random; MtGox always has a higher price so your money would be flowing in one direction and you'd end up with all your money in MtGox USD that's very difficult to access.
  - Aqueous 13y ago
    It goes in both directions. If you are running low on USD at BitStamp, you just deposit money there (assuming deposits take an acceptable amount of time) and withdraw the same amount from Mt. Gox (which might take a while). You still made money. Are you looking for a never-ending money cycle? You are creating a cyclical process of arbitrage. If arbitrage traders have large enough reserves they should be able to pretty consistently close the gaps, which means your opportunities will be few and far between anyway, giving you plenty of time to prepare. When buying and selling BitCoin becomes more fluid, that is.
    - wmf 13y ago
      There's no cycle if you can't withdraw USD from MtGox at all.
      - Aqueous 13y ago
        Well MtGox clearly has a problem with USD withdrawals, which is why this arbitrage opportunity exists in the first place and doesn't seem to be closing. If they fix the USD withdrawal problem, which I suspect they will do as they start to lose business to the other, better exchanges, expect arbitrage to obliterate the price difference between MtGox and other exchanges.
- drakaal 13y ago
  If you had a good probability of both exchanges having equal amounts of high and low, you would be right, but if you have to always go in one direction then this "buffer" won't work.
  - Aqueous 13y ago
    I mean, right now when the American exchanges are always trailing Mt. Gox, there is a pretty consistent arbitrage opportunity. But assuming Gox gets its act together (a big assumption) arbitrage opportunities could become fewer in the future. Which means you will have plenty of time to fill your reserves back up if a bigger opportunity comes along later.
- zwily 13y ago
  This works for one trade. Then you need to get your dollars out of MtGox, and it takes a month, and your arbitrage is stalled.
  - pbhjpbhj 13y ago
    Sounds like MtGox is hoarding. Seems that if they increase the delay they can cream of a percentage of the money and keep trading and that they benefit from the rising price by paying out slowly. How trustworthy is MtGox?
Jach 13y ago
Where's this 5-10 minute wait for groceries or restaurants coming from? If you're talking about waiting for your transaction to be included in the next block, it could even take longer than that by chance. Those restaurant merchants should just accept on the incoming notice which is very quick. There are precautions a merchant can take to make a race attack double-spend harder, but most people are honest and the threat is similar to a person dining and dashing. For large transactions, sure, wait at least 1 confirm and preferably 6 or more, but for a $20 or less meal? If you want to bust them you have the timestamp of the bad transaction, and you can look at your security camera logs.
- drakaal 13y ago
  If all this were true we wouldn't run Credit cards immediately. You'd swipe, and store, and process in bulk later which makes the transactions cheaper to run. Most merchant services accounts you can save about 50% if you process daily batches rather than authorizing each transaction instantly.
  - Jach 13y ago
    Sounds like a profitable venture for a bitcoin processing company, then. Merchant pays some sort of fee, company promises to eat any double-spends that happen due to accepting on 0 confirms. In fact BitPay already does this for over 12 thousand companies...

by drakaal 13y ago

damian2000 13y ago

But the difference in the BTC price between MtGox and Bitstamp has been staying at USD50+ for days at a time recently (right now its USD 130). What does a lag time of 10 mins have to do with it?

drakaal 13y ago
At $1,000 a coin and 2.5% on each service (which would be cheap) you'd have 5% total. That's $50 in fees. At $130 it would be a good deal, but not at $50

Aqueous 13y ago

All you have to do is keep some money in USD and BitCoin in reserve on all the exchanges. That way you can buy some BitCoin on one exchange and then sell the same amount on the other at the same time, and then transfer over at your convenience.

wmf 13y ago
The imbalance is not random; MtGox always has a higher price so your money would be flowing in one direction and you'd end up with all your money in MtGox USD that's very difficult to access.
- Aqueous 13y ago
  It goes in both directions. If you are running low on USD at BitStamp, you just deposit money there (assuming deposits take an acceptable amount of time) and withdraw the same amount from Mt. Gox (which might take a while). You still made money. Are you looking for a never-ending money cycle? You are creating a cyclical process of arbitrage. If arbitrage traders have large enough reserves they should be able to pretty consistently close the gaps, which means your opportunities will be few and far between anyway, giving you plenty of time to prepare. When buying and selling BitCoin becomes more fluid, that is.
  - wmf 13y ago
    There's no cycle if you can't withdraw USD from MtGox at all.
    - Aqueous 13y ago
      Well MtGox clearly has a problem with USD withdrawals, which is why this arbitrage opportunity exists in the first place and doesn't seem to be closing. If they fix the USD withdrawal problem, which I suspect they will do as they start to lose business to the other, better exchanges, expect arbitrage to obliterate the price difference between MtGox and other exchanges.
drakaal 13y ago
If you had a good probability of both exchanges having equal amounts of high and low, you would be right, but if you have to always go in one direction then this "buffer" won't work.
- Aqueous 13y ago
  I mean, right now when the American exchanges are always trailing Mt. Gox, there is a pretty consistent arbitrage opportunity. But assuming Gox gets its act together (a big assumption) arbitrage opportunities could become fewer in the future. Which means you will have plenty of time to fill your reserves back up if a bigger opportunity comes along later.
zwily 13y ago
This works for one trade. Then you need to get your dollars out of MtGox, and it takes a month, and your arbitrage is stalled.
- pbhjpbhj 13y ago
  Sounds like MtGox is hoarding. Seems that if they increase the delay they can cream of a percentage of the money and keep trading and that they benefit from the rising price by paying out slowly. How trustworthy is MtGox?

Jach 13y ago

Where's this 5-10 minute wait for groceries or restaurants coming from? If you're talking about waiting for your transaction to be included in the next block, it could even take longer than that by chance. Those restaurant merchants should just accept on the incoming notice which is very quick. There are precautions a merchant can take to make a race attack double-spend harder, but most people are honest and the threat is similar to a person dining and dashing. For large transactions, sure, wait at least 1 confirm and preferably 6 or more, but for a $20 or less meal? If you want to bust them you have the timestamp of the bad transaction, and you can look at your security camera logs.

drakaal 13y ago
If all this were true we wouldn't run Credit cards immediately. You'd swipe, and store, and process in bulk later which makes the transactions cheaper to run. Most merchant services accounts you can save about 50% if you process daily batches rather than authorizing each transaction instantly.
- Jach 13y ago
  Sounds like a profitable venture for a bitcoin processing company, then. Merchant pays some sort of fee, company promises to eat any double-spends that happen due to accepting on 0 confirms. In fact BitPay already does this for over 12 thousand companies...