Topic: [BETA]Bitfinex.com first Bitcoin P2P lending platform for leverage trading - page 8. (Read 137528 times)
May 08, 2013, 09:27:31 PM
Hi, Raphael and everyone, thanks for the FOK!
May 08, 2013, 05:01:26 PM
Is there an API for trading on bitfinex?
May 08, 2013, 10:49:39 AM
Insurance menu can be viewed here https://community.bitfinex.com/showwiki.php?title=Wiki%20img:lending-%20insurance-menu.jpg
May 08, 2013, 10:32:23 AM
I M P O R T A N T A N N O U N C E M E N T
Dear customers
starting from this moment loans can be insured.
You can find the option on the deposit page, inside the "insert loan" window.
Insured loans will be subject to a 30% cut on interest (instead of 10%) but will be fully reimbursed no matter what happens.
The maximum total insurable amount is 50,000 usd and 500 BTC.
This quota will be allocated on a "first in first served" basis.
Lenders have 3 possible options when issuing a loan:
a) Do not insure
b) Make a loan only if insured
c) Make an insured loan, but if no insurance is available make it anyway
75% of the extra cut (i.e. 15%) will be re-invested in growing the 50,000$/500BTC pool, whilst 25% (i.e. 5%) will go in the pockets of the insurer.
Please read this message 3 times before asking questions.
Have a good day
Giancarlo
Customers Relations
Bitfinex Team
Dear customers
starting from this moment loans can be insured.
You can find the option on the deposit page, inside the "insert loan" window.
Insured loans will be subject to a 30% cut on interest (instead of 10%) but will be fully reimbursed no matter what happens.
The maximum total insurable amount is 50,000 usd and 500 BTC.
This quota will be allocated on a "first in first served" basis.
Lenders have 3 possible options when issuing a loan:
a) Do not insure
b) Make a loan only if insured
c) Make an insured loan, but if no insurance is available make it anyway
75% of the extra cut (i.e. 15%) will be re-invested in growing the 50,000$/500BTC pool, whilst 25% (i.e. 5%) will go in the pockets of the insurer.
Please read this message 3 times before asking questions.
Have a good day
Giancarlo
Customers Relations
Bitfinex Team
May 07, 2013, 05:20:40 PM
Bitfinex manually processes withdrawal requests, so if due to extreme circumstances a large number of positions go negative - the money from the positions (and lenders) that are positive cannot all disappear.
By that I mean people with positive positions are likely to share in the loss. So you'd get some of your money back (a fixed percentage after the hair cut).
By that I mean people with positive positions are likely to share in the loss. So you'd get some of your money back (a fixed percentage after the hair cut).
May 07, 2013, 05:15:42 PM
In general the site requires that traders maintain a margin to cover their losses.
Ideally if your position is approaching zero value, the website closes it (sells your BTC or converts your USD to BTC) before you can go negative. So long as this works, lenders won't lose money.
The system fails if Bitfinex is unable to close your position. This used to happen when MtGox lagged out In the past, MtGox's lag has reached as high as 20 minutes and they have not fixed their lag problems. Recently Bitfinex added a connection to Bitstamp which means that it won't have this problem unless both exchanges lag out. While this is less likely to happen, I wouldn't be surprised if it did.
In the future if there is more internal exchanging/trading on Bitfinex, if there are problems with other exchanges we will be able to use the site's market price to close positions and that will solve most of the connection problem. Though you could still have a denial of service attack on Bitfinex.
Ideally if your position is approaching zero value, the website closes it (sells your BTC or converts your USD to BTC) before you can go negative. So long as this works, lenders won't lose money.
The system fails if Bitfinex is unable to close your position. This used to happen when MtGox lagged out In the past, MtGox's lag has reached as high as 20 minutes and they have not fixed their lag problems. Recently Bitfinex added a connection to Bitstamp which means that it won't have this problem unless both exchanges lag out. While this is less likely to happen, I wouldn't be surprised if it did.
In the future if there is more internal exchanging/trading on Bitfinex, if there are problems with other exchanges we will be able to use the site's market price to close positions and that will solve most of the connection problem. Though you could still have a denial of service attack on Bitfinex.
May 07, 2013, 05:04:34 PM
I said, my money not BTC
BTC is money the rest is paper 
May 07, 2013, 05:00:05 PM
I said, my money not BTC
BTC is money the rest is paper May 07, 2013, 04:55:58 PM
I don't understand well the last topic, but I wanted to know:
Is my money safe at Bitfinex in case of a Bitcoin-death?
in case of bitcoin death the risk is 100% for USD (long side) not for BTC( short side)Is my money safe at Bitfinex in case of a Bitcoin-death?
example
1 i am a trader that borrow 1000 btc and short the market
2 atm the price is 106 USD
3 bitcoin goes to 0.000001 USD
4 i spend 0.001 USD to buy back the 1000 btc i own you
5 i made about 106 000 USD
I said, my money not BTC
I mean, if the price begins to fall rapidly, I guess that most Bitfinexers will sell Bitcoin and/or close longe positions very fast.
And most will try to go short (will there be anyone lending BTC? Not many, if any)
So most of BTCs that came in to Bitfinex will be sold
So bitfinex will soon "owe" a lot more $ than before to the members. How does the money from MtGox arive (all the sold BTCs and opened shorts)?
I guess I am having problems to understand the structure jet....I'll read the suggestions
good move my friend
Giancarlo
Customers Relations
Bitfinex Team
May 07, 2013, 04:44:24 PM
I don't understand well the last topic, but I wanted to know:
Is my money safe at Bitfinex in case of a Bitcoin-death?
in case of bitcoin death the risk is 100% for USD (long side) not for BTC( short side)Is my money safe at Bitfinex in case of a Bitcoin-death?
example
1 i am a trader that borrow 1000 btc and short the market
2 atm the price is 106 USD
3 bitcoin goes to 0.000001 USD
4 i spend 0.001 USD to buy back the 1000 btc i own you
5 i made about 106 000 USD
I said, my money not BTC
I mean, if the price begins to fall rapidly, I guess that most Bitfinexers will sell Bitcoin and/or close longe positions very fast.
And most will try to go short (will there be anyone lending BTC? Not many, if any)
So most of BTCs that came in to Bitfinex will be sold
So bitfinex will soon "owe" a lot more $ than before to the members. How does the money from MtGox arive (all the sold BTCs and opened shorts)?
I guess I am having problems to understand the structure jet....I'll read the suggestions
May 07, 2013, 03:40:59 PM
I'd recommend reading or skimming the entire thread before investing more than $100.
May 07, 2013, 02:55:30 PM
I don't understand well the last topic, but I wanted to know:
Is my money safe at Bitfinex in case of a Bitcoin-death?
Is my money safe at Bitfinex in case of a Bitcoin-death?
Capoeira
I strongly suggest you to read the following announcements in order to better understand the dynamic of money lending on Biftinex:
https://community.bitfinex.com/content.php/22-Insurance-on-loans-and-new-trading-partner
and this
https://community.bitfinex.com/content.php/20-urwhatuknow
I hope that helps
Giancarlo
Customers Relations
The Bitfinex Team
May 07, 2013, 02:52:25 PM
I don't understand well the last topic, but I wanted to know:
Is my money safe at Bitfinex in case of a Bitcoin-death?
in case of bitcoin death the risk is 100% for USD (long side) not for BTC( short side)Is my money safe at Bitfinex in case of a Bitcoin-death?
example
1 i am a trader that borrow 1000 btc and short the market
2 atm the price is 106 USD
3 bitcoin goes to 0.000001 USD
4 i spend 0.001 USD to buy back the 1000 btc i own you
5 i made about 106 000 USD
May 07, 2013, 02:40:50 PM
Define Bitcoin death. Bitcoin price falling to zero? Government regulation? A fork?
someting like that.
or a fall of the price below the level were it won't survive. Perhaps after a possible Chinese Buble, much bigger one than the last > panic > 1BTC = $10....something like that
May 07, 2013, 02:26:07 PM
Define Bitcoin death. Bitcoin price falling to zero? Government regulation? A fork?
May 07, 2013, 02:13:39 PM
I don't understand well the last topic, but I wanted to know:
Is my money safe at Bitfinex in case of a Bitcoin-death?
Is my money safe at Bitfinex in case of a Bitcoin-death?
May 07, 2013, 02:07:48 PM
Another reason to have $50,000 insurance is to shore up investor confidence. This is good if investors are over-estimating the risk. It is bad if investors are under-estimating it.
A recent instance (and not by any means directly comparable) of this is Pirate's side-bet with Micon - where he tried to shore up confidence in his ponzi.
Personally I think investors are over-estimating risk (otherwise the US APR would be lower), and the bitfinex team is under-estimating it. This is probably true for many projects.
...
A bit after the price collapse I predicted that US rates were falling down to 20-60% (I think). I wonder if that is finally happening? The USD volume is low (327k) and the BTC volume is high (2.8 k). It is one of the few instances when the BTC volume had equaled the US volume.
A recent instance (and not by any means directly comparable) of this is Pirate's side-bet with Micon - where he tried to shore up confidence in his ponzi.
Personally I think investors are over-estimating risk (otherwise the US APR would be lower), and the bitfinex team is under-estimating it. This is probably true for many projects.
...
A bit after the price collapse I predicted that US rates were falling down to 20-60% (I think). I wonder if that is finally happening? The USD volume is low (327k) and the BTC volume is high (2.8 k). It is one of the few instances when the BTC volume had equaled the US volume.
May 07, 2013, 09:02:57 AM
Uninsured lending however has the same risks but far higher rewards, I guess that's what he wanted to point out.
Very wise observation, as usual.
I agree with you, but the purpose of this insurance has to be seen as a service Bitfinex provides his customers with.
That's why we don't offer our customers to contribute to the pool and whether it's better to insure or not your loans remains more of a philosophical question than a mathematical problem.
In other words some people might estimate that the potential losses due to a black swan event will be less than the extra cut the insurance takes.
As a matter of fact at 100% APY it's better to take a 10% loss on loans than insuring them if the black swan event occurs less than 3 times a year.
Some people simply can't cope with losses, some other don't cope well with a bigger cut.
That's why Bitfinex will soon be offering a flavor for every taste.
A little more patience, we are almost ready.
:-)
Giancarlo Devasini
Customers Relations
Bitfinex Team
May 07, 2013, 07:23:48 AM
Uninsured lending however has the same risks but far higher rewards, I guess that's what he wanted to point out.
May 07, 2013, 03:47:13 AM
I posted this on community announcements (bitfinex site) as well:
The more that I think about this, the more I feel that the insurance plan this is a horrible move for the investor. If you have a VIR of 100% APR - then the investor is expecting a 5% annual probability of a 100% wipe-out event or less (or obviously a greater probability of a smaller loss -- but the same math still applies - the summation of losses will be 5% or less over the year).
If they are only expecting a 5% chance of a 100% wipe-out, they are better off investing the $50,000 in the lending market. After one year that gives them 5% chance of 0 money - 95% chance of 200% money. By contrast their insurance has a return of 5% chance of 0 money, at 95% chance of 105% money (or maybe as high as 110% if they can invest the money somewhere else while it is a "reserve").
The investor should be asking for something like 50-90% of the interest in exchange for insuring.
Am I missing something?
Ok in practice, the APR varies from 50% to 300% - and you aren't loaning out 100% of the time, but the logic still applies. Whether the APR is 50% or 300% - you are still better off lending than insuring.
The more that I think about this, the more I feel that the insurance plan this is a horrible move for the investor. If you have a VIR of 100% APR - then the investor is expecting a 5% annual probability of a 100% wipe-out event or less (or obviously a greater probability of a smaller loss -- but the same math still applies - the summation of losses will be 5% or less over the year).
If they are only expecting a 5% chance of a 100% wipe-out, they are better off investing the $50,000 in the lending market. After one year that gives them 5% chance of 0 money - 95% chance of 200% money. By contrast their insurance has a return of 5% chance of 0 money, at 95% chance of 105% money (or maybe as high as 110% if they can invest the money somewhere else while it is a "reserve").
The investor should be asking for something like 50-90% of the interest in exchange for insuring.
Am I missing something?
Ok in practice, the APR varies from 50% to 300% - and you aren't loaning out 100% of the time, but the logic still applies. Whether the APR is 50% or 300% - you are still better off lending than insuring.
“If you are in a poker game and after 20 minutes, you don’t know who the patsy is, then you are the patsy.”
Warren Buffett
Yes sir, you are missing something.
Here's the catch: In case of a black swan event the losses might not be the full amount, unless Bitcoin go to zero.
When at the beginning of April the price went from 266 to 50 in 2 days the total losses were only 10% of the total amount.
So the insurer estimate the chances bitcoin will survive (and not of a black swan event) to be higher than 95%.
I hope this helps
;-)
Giancarlo
Customers Relations
Bitfinex Group
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