A serious risk is MtGox lag causing them to be unable to force liquidate positions. Especially with a bias in position (more longs than shorts - sometimes as high as a 10:1 ratio according to the borrowed funds statistics), this could be a big issue.
In this case, we are relying upon the website to pay off loans of traders whose positions have gone negative.
Topic: [BETA]Bitfinex.com first Bitcoin P2P lending platform for leverage trading - page 38. (Read 137528 times)
March 29, 2013, 04:30:54 PM
March 29, 2013, 04:22:52 PM
Risks I can think of:
MtGox running with funds/loosing funds
No/not enough users on the platform who actually want to trade
Raphael or someone else from Bitfinex running with the funds
Platform gets hacked/defaced/??? and looses reputation and/or money - if the goal is having one competitor less, I guess it won't matter that the MtGox key cannot withdraw.
Banks. (--> Cyprus)
Laws + regulations. (both on my end (taxes?) and on Bitfinex' end (KYC?))
Internal errors and bugs in the system (e.g. mixing up two values after a midnight hacking session and suddenly dumping all coins)
Environmental risks (Raphael isn't immortal, neither are his servers)
Mismanagement and/or communication problems
Better competitors
No real insurance that I'm aware of (compared to FDIC - not that they could pay...)
Some of these are more likely than others and I bet I've forgotten quite a few.
Also it seems the bears are awaking from their hibernation slowly! This is gonna be an interesting weekend.
MtGox running with funds/loosing funds
No/not enough users on the platform who actually want to trade
Raphael or someone else from Bitfinex running with the funds
Platform gets hacked/defaced/??? and looses reputation and/or money - if the goal is having one competitor less, I guess it won't matter that the MtGox key cannot withdraw.
Banks. (--> Cyprus)
Laws + regulations. (both on my end (taxes?) and on Bitfinex' end (KYC?))
Internal errors and bugs in the system (e.g. mixing up two values after a midnight hacking session and suddenly dumping all coins)
Environmental risks (Raphael isn't immortal, neither are his servers)
Mismanagement and/or communication problems
Better competitors
No real insurance that I'm aware of (compared to FDIC - not that they could pay...)
Some of these are more likely than others and I bet I've forgotten quite a few.
Also it seems the bears are awaking from their hibernation slowly! This is gonna be an interesting weekend.
March 29, 2013, 04:07:29 PM
As a lender, is the primary risk that Bitfinex will go out of business? What are other risks that lenders are considering?
March 29, 2013, 03:59:34 PM
Well, you'd earn more interest if the price rises ( meaning in cases where you were better off buying). So far I've earned quite a bit (8% in 15 days) with lending out USD. Traders made far more than that of course, but also had much higher risk. I don't want to encourage you now, after all you'd compete with my offers... 
I simply went with gut feeling and also I made sure not to overdo it. This can give better returns still even without trading risk than what most customers of pirate got! It won't always stay that way, at the moment for example not all my USD are even lent out...
I simply went with gut feeling and also I made sure not to overdo it. This can give better returns still even without trading risk than what most customers of pirate got! It won't always stay that way, at the moment for example not all my USD are even lent out...
March 29, 2013, 02:37:23 PM
Do you believe I should deposit $10,000 or a similar sum with Bitfinex to be lent to leveraged longs? Any idea of risks? What can be the effective return (nominal return seems lucrative)?
March 29, 2013, 01:53:16 PM
I would guess that you then have a unified orderbook with orders from (for example) Bitstamp and MtGox at the same time. Crossovers might even get automatically arbitraged by the engine for some small profit on Bitfinex' side...
Yep, you got it, unified orderbook for maximal liquidity.
On a long term perspective, this is definitively the best thing you can do against the inherent risks of this CfD business. If you really pull this through and provide an unified interface for arbitrage, then Bitfinex will become an important building block for the whole Bitcoin world. But, as Sukrim already pointed out, implementing cross-exchange trading is by no way a trivial undertaking, because of the required liquidity routing; this is challenging both technically and on the business level.
Thus we (users) should be patient, allowing you to take the time it needs.
March 29, 2013, 08:11:20 AM
I would guess that you then have a unified orderbook with orders from (for example) Bitstamp and MtGox at the same time. Crossovers might even get automatically arbitraged by the engine for some small profit on Bitfinex' side...
Should MtGox then time out again, their orders simply would be dropped from the common order book and you'd only trade on Bitstamp for some time, until they fix their stuff. The more exchanges you have in there with a common interface, the easier it is if one single exchange fails for some time. Currently you only have internal + MtGox and as far as I've seen internal doesn't have sufficient depth at all.
A problem would be though to keep high enough amounts of USD and BTC on each exchange. Bitfinex exists for long enough already though that they can probably assess the amount of money they need on a daily basis.
Anyways - come on and take my money, damnit! Active loans are back to ~100k and there are lots of nice loan offers!
Edit:
https://bitcointalksearch.org/topic/announce-xchange-a-financial-exchange-library-for-java-v130-136989 might be interesting to check out
Should MtGox then time out again, their orders simply would be dropped from the common order book and you'd only trade on Bitstamp for some time, until they fix their stuff. The more exchanges you have in there with a common interface, the easier it is if one single exchange fails for some time. Currently you only have internal + MtGox and as far as I've seen internal doesn't have sufficient depth at all.
A problem would be though to keep high enough amounts of USD and BTC on each exchange. Bitfinex exists for long enough already though that they can probably assess the amount of money they need on a daily basis.
Anyways - come on and take my money, damnit! Active loans are back to ~100k and there are lots of nice loan offers!
Edit:
https://bitcointalksearch.org/topic/announce-xchange-a-financial-exchange-library-for-java-v130-136989 might be interesting to check out
Yep, you got it, unified orderbook for maximal liquidity.
Thanks for the link, it looks very very interesting.
Raphael
March 29, 2013, 07:52:51 AM
I would guess that you then have a unified orderbook with orders from (for example) Bitstamp and MtGox at the same time. Crossovers might even get automatically arbitraged by the engine for some small profit on Bitfinex' side...
Should MtGox then time out again, their orders simply would be dropped from the common order book and you'd only trade on Bitstamp for some time, until they fix their stuff. The more exchanges you have in there with a common interface, the easier it is if one single exchange fails for some time. Currently you only have internal + MtGox and as far as I've seen internal doesn't have sufficient depth at all.
A problem would be though to keep high enough amounts of USD and BTC on each exchange. Bitfinex exists for long enough already though that they can probably assess the amount of money they need on a daily basis.
Anyways - come on and take my money, damnit! Active loans are back to ~100k and there are lots of nice loan offers!
Edit:
https://bitcointalksearch.org/topic/announce-xchange-a-financial-exchange-library-for-java-v130-136989 might be interesting to check out
Should MtGox then time out again, their orders simply would be dropped from the common order book and you'd only trade on Bitstamp for some time, until they fix their stuff. The more exchanges you have in there with a common interface, the easier it is if one single exchange fails for some time. Currently you only have internal + MtGox and as far as I've seen internal doesn't have sufficient depth at all.
A problem would be though to keep high enough amounts of USD and BTC on each exchange. Bitfinex exists for long enough already though that they can probably assess the amount of money they need on a daily basis.
Anyways - come on and take my money, damnit! Active loans are back to ~100k and there are lots of nice loan offers!
Edit:
https://bitcointalksearch.org/topic/announce-xchange-a-financial-exchange-library-for-java-v130-136989 might be interesting to check out
March 29, 2013, 07:46:49 AM
Nah, I am fine with doing away with Mt.Gox. But I recall you saying buying a dedicated link from them, so the plan has changed? Also would you clarify what "add other exchanges" is all about? That sounds quite interesting.
We made them a proposition to buy a dedicated link, they haven't answer yes or no yet.
You'll soon know what I mean by "other exchanges", but there is no reason to have just mtgox after all
Raphael
March 29, 2013, 07:45:04 AM
Nah, I am fine with doing away with Mt.Gox. But I recall you saying buying a dedicated link from them, so the plan has changed? Also would you clarify what "add other exchanges" is all about? That sounds quite interesting.
March 29, 2013, 04:41:55 AM
I know you guys have bigger things to do right now, but for the future:
Is it possible to make the 'deposit wallet' information show immediately on the lending page? Right now I have to select another wallet first, then go back to deposit wallet to see how much I can lend out. It's only a stupid little thing but it is annoying.
Is it possible to make the 'deposit wallet' information show immediately on the lending page? Right now I have to select another wallet first, then go back to deposit wallet to see how much I can lend out. It's only a stupid little thing but it is annoying.
Hello Spaceman,
I'll try to improve that, I'm aware of the annoyance with this.
So is it true that I can no longer route my order to Gox manually?
It is a temporary restriction while we test hard orders (orders placed directly on mtgox). Don't hold your breath as they are some challenges to solve with this, and our priority now is to move away from Mtgox and add other exchanges.
I'm new with bitfinex for now, but anyone care to tell me why my lending offers (in USD) are deleted 5 minutes after i put them?
Edit: I tried variable rate, activated auto-renew and auto-lend. I already managed to lend 30$ yesterday, but it seems like a bug today.
Edit: I tried variable rate, activated auto-renew and auto-lend. I already managed to lend 30$ yesterday, but it seems like a bug today.
Hello Dani,
Could you tell me your username on BFX please? I'll have a look.
Raphael
March 29, 2013, 04:38:16 AM
I'm new with bitfinex for now, but anyone care to tell me why my lending offers (in USD) are deleted 5 minutes after i put them?
Edit: I tried variable rate, activated auto-renew and auto-lend. I already managed to lend 30$ yesterday, but it seems like a bug today.
Edit: I tried variable rate, activated auto-renew and auto-lend. I already managed to lend 30$ yesterday, but it seems like a bug today.
What did you mean by "deleted"? Was it already lended out or just shown on the list of loans available?
March 29, 2013, 04:14:17 AM
I'm new with bitfinex for now, but anyone care to tell me why my lending offers (in USD) are deleted 5 minutes after i put them?
Edit: I tried variable rate, activated auto-renew and auto-lend. I already managed to lend 30$ yesterday, but it seems like a bug today.
Edit: I tried variable rate, activated auto-renew and auto-lend. I already managed to lend 30$ yesterday, but it seems like a bug today.
March 29, 2013, 01:25:22 AM
So is it true that I can no longer route my order to Gox manually?
March 28, 2013, 06:55:29 PM
I know you guys have bigger things to do right now, but for the future:
Is it possible to make the 'deposit wallet' information show immediately on the lending page? Right now I have to select another wallet first, then go back to deposit wallet to see how much I can lend out. It's only a stupid little thing but it is annoying.
Is it possible to make the 'deposit wallet' information show immediately on the lending page? Right now I have to select another wallet first, then go back to deposit wallet to see how much I can lend out. It's only a stupid little thing but it is annoying.
March 28, 2013, 06:53:41 PM
I just want to bump this as the loans I am adding are not showing
i think thats because of merging on the table to save scroll space remove the grouping so we can see clearly
March 28, 2013, 06:26:00 PM
I dont want to sound like I am want to boss around traders but please do consider taking profits when the market is calm dont wait and then rush to sell when everybody and their mom panic sell like a herd
March 28, 2013, 05:43:19 PM
Well, it seems at first glance their was very few margin call, and that's a good thing. If the price bounces back everyone will be happy (especially those that currently bought the dip)
Raphael
Raphael
March 28, 2013, 05:35:14 PM
http://qkme.me/3tklso
Any movement is a good movement in my account, though I prefer traders also getting profits of course (so they can pay more interest!) and not just getting squished in a flash-crash.
Edit: Whoever is quite bullish and this stampede works out might reap a quick 10% in a few hours it seems...
Any movement is a good movement in my account, though I prefer traders also getting profits of course (so they can pay more interest!) and not just getting squished in a flash-crash.
Edit: Whoever is quite bullish and this stampede works out might reap a quick 10% in a few hours it seems...
March 28, 2013, 05:30:19 PM
@superbit and others
I did not give a clear answer because it was a clear manipulation, the ddos on bfx then another ddos on mtgox and price going down for me it was a clear attempt to create a panic sell so i did avoided to give a clear answer so it did not create more panic
i dont know if this can be used against me and call me a liar .... i kinda sux at damage control .... sorry
I did not give a clear answer because it was a clear manipulation, the ddos on bfx then another ddos on mtgox and price going down for me it was a clear attempt to create a panic sell so i did avoided to give a clear answer so it did not create more panic
i dont know if this can be used against me and call me a liar .... i kinda sux at damage control .... sorry
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