Bitcoin Central, now featuring dark pools !

Binford 6100

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Quote from: Littleshop on February 23, 2011, 06:50:41 PM

Quote from: Binford 6100 on February 23, 2011, 06:06:16 AM

elsewhere in this forum is written that without dark pools the exchange rate of btc would be .10 cent

Probably not that low. Probably not even 20% lower then it is now. But dark pools hide large sellers, and there are very large blocks of BTC waiting to be sold. I think it would express more confidence in the future BTC of we did not have dark pools.

i forgot to write that the quote is from december 2010, when price was about .30 $

TiagoTiago

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Seems darkpools at most give more money to the exchange markets than they would get if the people were trading hiding but without using them

Binford 6100

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Quote from: Littleshop on February 23, 2011, 06:50:41 PM

As these dark pool implementations are not standardized.... Is the volume accurate reflecting all trades or just the non-dark pool trades?

does it matter? the volume of transactions is in the blockchain
is it important to know which transfer was exchange for currency and which was for goods/services?

in the museum of finland's central bank is a counter that shows volume cleared transactions in the finish electronic payment system. it does not have sub counters, just volume since last reset.
i see a similar approach should be just fine. velocity of bitcoins for past 24 hrs. no need to aggregate data from all known exchanges and attach the $/eur equivalent. what is it good for? ( i know what is it good for to know the volume of trades, but dark pools do not harm imo, same way as listing sum of all transactions does not represent exchanged value)

TiagoTiago

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What is the difference between a dark pool and someone selling stuff outside the big trading markets?

Littleshop

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Quote from: Binford 6100 on February 23, 2011, 06:06:16 AM

elsewhere in this forum is written that without dark pools the exchange rate of btc would be .10 cent

Probably not that low. Probably not even 20% lower then it is now. But dark pools hide large sellers, and there are very large blocks of BTC waiting to be sold. I think it would express more confidence in the future BTC of we did not have dark pools.

Large block owners could still list smaller blocks. But as it stands now they get to 'lie' to the market saying.... "I only have 1000 BTC to sell" while their intention is to sell more.

Question...
As these dark pool implementations are not standardized.... Is the volume accurate reflecting all trades or just the non-dark pool trades?

Binford 6100

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Quote from: TiagoTiago on February 23, 2011, 10:35:53 AM

Do they back those claims?

i had the impression it was half jokingly, half truth

i can imagine that bulk trades between "founding members" and exchangers happens at serious discount
and are hidden from broadcasted exchange data with good looking exchange rates. but i can't proove it

TiagoTiago

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Do they back those claims?

Binford 6100

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Quote from: doublec on January 08, 2011, 06:41:02 AM

I don't understand what the benefit of a dark pool is. Can you explain why someone would use the dark pool? Or why someone wouldn't use the normal pool and should only use the dark pool?

elsewhere in this forum is written that without dark pools the exchange rate of btc would be .10 cent

S3052

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just to clarify one thing and secondly comment on dark pools

1) my relationship to mtgox and all the other exchanges is the same as for everyone else.
I dont see any completely dark pool order.

2) overall, it does not make any difference to the market no matter if you have dark pools , semidark pools or none.
there are already enough traders and professional-enough investors participating in the BTC market who know what's going in the market.
they can " test the water" and find out if there is resistance via a dark sell order
or support by a dark buy order or not.
in the end it does not matter.

Raulo

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Completely dark pools, like mtGox, ones is not a good idea. I've never seen anything like that in any real market. However, partial hiding of the size of the order is done and should be rather beneficial for both the market and for the large order owners.

Suppose the minimum shown order size is 1000 BTC. If you want to sell, say 100000 BTC, you can mark only 1000 BTC visible (and 99000 hidden). If someone buys 1000 BTC, the order gets filled and another 1000 BTC on the ask side is shown (and the hidden part is now 98000). If someone buys 2000 BTC, 1000 BTC is sold from the ask part, then another 1000 BTC is immediately fulfilled by another part of the hidden pool and another 1000 BTC is shown (and 96000 hidden). If someone buys 100 BTC, 900 is left on the visible order. The hidden pool will be moved to the visible order only after the visible order is gone.

This way, you can hide some of the volume and not "scare" the market and the potential buyers can see that there is some order and can buy it and not act completely in the dark.

ColdHardMetal

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Quote from: Local on January 09, 2011, 04:29:19 AM

What is the benefit of having an orders appear at all? What would happen if they were all dark pools?

I suppose we would get in the habit of making offers that we thought we're absurdly good for ourselves to see if they fill, then make them a little better a little at a time until they get taken or we don't want to go any lower. Fumbling around in the dark so to speak. But ultimately what's changed? The impatient pay more or get less, maybe it's a good way to price discriminate. They aren't likely to leave for another market over it since they aren't too price sensitive anyway.

We waste a lot of our time. Much quicker to be able to just see what's on offer and if it fits your needs you buy/sell.

Local

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What is the benefit of having an orders appear at all? What would happen if they were all dark pools?

I suppose we would get in the habit of making offers that we thought we're absurdly good for ourselves to see if they fill, then make them a little better a little at a time until they get taken or we don't want to go any lower. Fumbling around in the dark so to speak. But ultimately what's changed? The impatient pay more or get less, maybe it's a good way to price discriminate. They aren't likely to leave for another market over it since they aren't too price sensitive anyway.

doublec

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Quote from: nanotube on January 08, 2011, 08:48:02 PM

so you'd rather not have the dark pools at all, i take it?

Correct, I'd rather not have dark pools. Mainly because I don't understand why they exist and it seems harmful to me. It seems to me that the point of a market is to trade the currency with the price reflecting demand. Don't dark pools defeat this?

fabianhjr

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Do The Evolution

No, the market should be open and free to move in price by the forces everyone imparts on it. I rather not even had the concept introduced. Volume is a great indicator when performing Technical Analysis and S3052 could come and explain us more. I believe he has access to MtGox's darkpool so he can surely tell us by facts.

nanotube

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Quote from: doublec on January 08, 2011, 08:30:13 PM

Quote from: nanotube on January 08, 2011, 08:06:07 PM

davout: have you given any thought to the idea of compromising between transparency and stability, by hiding only the dark pool order volume, but not the fact that an order exists?

If the volume is hidden though it discourages me from using the market. If people use the dark pool then the volume on the market always appears low and makes me think there's no trading going on. So I look for a busier market or assume bitcoin is not being traded.

so you'd rather not have the dark pools at all, i take it?

doublec

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Quote from: nanotube on January 08, 2011, 08:06:07 PM

davout: have you given any thought to the idea of compromising between transparency and stability, by hiding only the dark pool order volume, but not the fact that an order exists?

If the volume is hidden though it discourages me from using the market. If people use the dark pool then the volume on the market always appears low and makes me think there's no trading going on. So I look for a busier market or assume bitcoin is not being traded.

Local

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And you will report the trades (volume and price) after the fact like MtGox, correct?

nanotube

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dark pools do add stability to the market price. but at the cost of transparency.

davout: have you given any thought to the idea of compromising between transparency and stability, by hiding only the dark pool order volume, but not the fact that an order exists?

davout

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1davout

Quote from: ColdHardMetal on January 08, 2011, 06:52:26 AM

I guess the theory would be that since these are shallow markets placing large orders will move the price too much.

Yes

Quote from: ColdHardMetal on January 08, 2011, 06:52:26 AM

I don't really see how it helps someone get a better price though. If their order has to be filled, whether it's visible or not, before the price breaks through a certain level then people being able to see that the order is there shouldn't matter in my view.

I see it merely as a convenience for people who think it does matter, placing a dark pool order is much easier than writing a trading bot that will progressively place bids/asks until their need has been satisfied.

ColdHardMetal

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Quote from: doublec on January 08, 2011, 06:41:02 AM

I don't understand what the benefit of a dark pool is. Can you explain why someone would use the dark pool? Or why someone wouldn't use the normal pool and should only use the dark pool?

I guess the theory would be that since these are shallow markets placing large orders will move the price too much. I don't really see how it helps someone get a better price though. If their order has to be filled, whether it's visible or not, before the price breaks through a certain level then people being able to see that the order is there shouldn't matter in my view.

Topic: Bitcoin Central, now featuring dark pools ! (Read 7016 times)