Topic: [2017-04-22] How Cashaa Exploits Bitcoin Price Differentials for Remittances (Read 2655 times)
April 24, 2017, 05:23:09 PM
Arbitrage is always more difficult, more risky, and less profitable than it seems. Cashaa may find that the cost and difficulty of converting to pounds (or dollars) and then getting their money out of India and Nigeria may account for the discrepancies in prices between those two countries and UK.
April 24, 2017, 01:25:05 PM
Interesting service. I think for remittances Bitcoin is still a very good option, even with high fees.
If you want to solve this problem in a decentralized way, the main problem is that you probably would need some kind of secondary "fiat-pegged currency" to track the exchange rate. This would be possible with Ethereum or a Bitshares-like service, but you then almost surely would pay a plus for the bid-ask spread (that could be up to 10% like in Bitshares).
With Bitcoin, I imagine it could be possible with a sidechain with turing-complete smart contracts like RSK. But you still would need a service to do the exchanges between the "real fiat currency" and the "pegged fiat currency" (if you don't like centralized providers, it would be possible with services like Bitsquare).
My question is could a service like Cashaa be created as a layer on top of bitcoin or as a service in a platform like Ethereum so that users can take advantage of the price differentials on different exchanges?
If you want to solve this problem in a decentralized way, the main problem is that you probably would need some kind of secondary "fiat-pegged currency" to track the exchange rate. This would be possible with Ethereum or a Bitshares-like service, but you then almost surely would pay a plus for the bid-ask spread (that could be up to 10% like in Bitshares).
With Bitcoin, I imagine it could be possible with a sidechain with turing-complete smart contracts like RSK. But you still would need a service to do the exchanges between the "real fiat currency" and the "pegged fiat currency" (if you don't like centralized providers, it would be possible with services like Bitsquare).
April 23, 2017, 08:40:37 PM
According to the article this is what Cashaa does.
Founded in 2016, the service works by connecting traditional remittance participants with two traders, each of whom are able to execute bitcoin-fiat trades in each local currency. Due to price arbitrage opportunities that exist in the global crypto markets, the traders using Cashaa are able to make a profit while filling Cashaa's order book.
My question is could a service like Cashaa be created as a layer on top of bitcoin or as a service in a platform like Ethereum so that users can take advantage of the price differentials on different exchanges?
Read the full article http://www.coindesk.com/cashaa-exploits-bitcoin-price-differentials-remittances/
Founded in 2016, the service works by connecting traditional remittance participants with two traders, each of whom are able to execute bitcoin-fiat trades in each local currency. Due to price arbitrage opportunities that exist in the global crypto markets, the traders using Cashaa are able to make a profit while filling Cashaa's order book.
My question is could a service like Cashaa be created as a layer on top of bitcoin or as a service in a platform like Ethereum so that users can take advantage of the price differentials on different exchanges?
Read the full article http://www.coindesk.com/cashaa-exploits-bitcoin-price-differentials-remittances/
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