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There are a lot of question marks in your comment and I'm sure some of them are meant to be rhetorical and maybe some aren't. Also you mentioned something about

by minimax 13y ago

There are a lot of question marks in your comment and I'm sure some of them are meant to be rhetorical and maybe some aren't. Also you mentioned something about exchanges talking to central banks which isn't something that happens. Your fictional example is: I've got 150,000BTC, please convert that into dollars for me at the market rate. What? No worries I'll just wait here. You can wire the dollars to this account here ... That isn't the kind of thing you do at the teller window. That kind of liquidity doesn't exist in bitcoin (though it would be a cinch in other major currencies). At this point you are in need of a really clever broker to find you someone to take the other side of the trade at a price that doesn't totally suck. Though that probably isn't very likely... You seem to imply that the exchange has some responsibility here that I don't understand. The exchange matches buyers and sellers at a price they can both agree on. If there are no buyers for what you are trying to sell, that's too bad but it isn't the exchange's problem. Go look on the CME product list and you'll see tons of contracts that are listed but have no bids because nobody is interested in trading them. If you want to trade a shitload of a questionable thing then you just might find there's no bid. See also: people selling mortgage backed securities in 2008. The price for not being able to sell a thing is paid by the people that own the thing (especially if they purchased the thing with borrowed monies and they are forced to price the thing by marking it to the market). I think maybe your question is just "What happens if you want to sell bitcoins and nobody wants to buy them?" and in that case the sellers are just screwed.

ChuckMcM 13y ago
I think maybe your question is just "What happens if you want to sell bitcoins and nobody wants to buy them?" and in that case the sellers are just screwed. Nicely summarized. We are talking about the same thing. That particular point is lost on a lot of people who are looking at Bitcoin. They see the surface aspect. Gee 1 BTC gets me $X and $X gets me 1 BTC. And from that they leap to 1 BTC is $X. That leap doesn't work because there is no equivalent of a market maker in BTC. I explain to folks who are wondering about BTC like this, "the more you want to trade the less they are worth, probably all the way to zero." So unlike Euros where 100 euros might be worth $132 and a million Euros $1.32M$ 100 BTC could be worth $X and a million BTC could be worth (small fraction x (10000 x $X)). It is the difference between a currency and a collectibles market. Euros are the former, BTC are the latter. Funny anecdote. My brother in law was buying property in europe and needed to do the transaction in Euros, prior to closing escrow he noticed that at the Hotel desk in the Caribbean where he was staying they had a better conversion rate than the bank had quoted him. The down payment was about $100,000 USD. On a whim he asked the desk clerk if he could change $100,000 USD to Euros and the clerk said, "Cash or check?" That one really through my brother-in-law for a loop! I agree though, generally large foreign exchange transfers are scheduled things but they aren't all that complicated and seem to happen in the same 24 hr transaction window that other wire transfers do.
- Dylan16807 13y ago
  >It is the difference between a currency and a collectibles market. What, the size? I bet there are currencies from small countries that are harder than bitcoin to exchange without crashing the price. I don't think your distinction is a good one.

by minimax 13y ago

ChuckMcM 13y ago

I think maybe your question is just "What happens if you want to sell bitcoins and nobody wants to buy them?" and in that case the sellers are just screwed. Nicely summarized. We are talking about the same thing. That particular point is lost on a lot of people who are looking at Bitcoin. They see the surface aspect. Gee 1 BTC gets me $X and $X gets me 1 BTC. And from that they leap to 1 BTC is $X. That leap doesn't work because there is no equivalent of a market maker in BTC. I explain to folks who are wondering about BTC like this, "the more you want to trade the less they are worth, probably all the way to zero." So unlike Euros where 100 euros might be worth $132 and a million Euros $1.32M$ 100 BTC could be worth $X and a million BTC could be worth (small fraction x (10000 x $X)). It is the difference between a currency and a collectibles market. Euros are the former, BTC are the latter. Funny anecdote. My brother in law was buying property in europe and needed to do the transaction in Euros, prior to closing escrow he noticed that at the Hotel desk in the Caribbean where he was staying they had a better conversion rate than the bank had quoted him. The down payment was about $100,000 USD. On a whim he asked the desk clerk if he could change $100,000 USD to Euros and the clerk said, "Cash or check?" That one really through my brother-in-law for a loop! I agree though, generally large foreign exchange transfers are scheduled things but they aren't all that complicated and seem to happen in the same 24 hr transaction window that other wire transfers do.

Dylan16807 13y ago
>It is the difference between a currency and a collectibles market. What, the size? I bet there are currencies from small countries that are harder than bitcoin to exchange without crashing the price. I don't think your distinction is a good one.