quote author=hazek link=topic=16032.msg211912#msg211912 date=1307959401]
Raulo, yes small volatility sure, but not 40 or 50% swings in price in a mater of hours. Please realize that these swings happened because the market was getting incomplete information for a longer period of time, especially because we can only see up to 27% under spot bids and 73% over spot asks and just because dark pool orders.
[/quote]
Hahahahaaha.
Seriously.
Hahahahahaha.
Think that does not happen in the real financial markets?
It did not. It does now. Well, the trades then get cancelled. Nanex (also my financial data provider) is really nice investigating them. We talk of stocks going from 100 USD to cents in seconds, then back up.
Some examples:
http://www.zerohedge.com/article/todays-flash-crash-690-009-two-seconds - yes, that is a crash
And this one the other way:
http://www.zerohedge.com/article/2880-2600-two-second-thank-you-skynet
The second is some whares going from 28.8 USD to 2600 (!) usd in two seconds thanks to robots and a thin market.
Thank heaven in a real world the exchange is primarily (!) responsible for an orderly market, nothing else, and thus cancels all the trades afterwards.
The volatility is not bbecause of incomplete information, it is beacuse of bad exchange rules at MtGox, a small illiquid market, no circiuit breakers and trade limits in place over weekends when money flow and attention is limited.
Topic: mtgox might just kill Bitcoin's chances of success - page 2. (Read 11054 times)
Raulo, yes small volatility sure, but not 40 or 50% swings in price in a mater of hours. Please realize that these swings happened because the market was getting incomplete information for a longer period of time, especially because we can only see up to 27% under spot bids and 73% over spot asks and just because dark pool orders.
No, it had nothing to do with that. The swings were a result of an impatient seller who dumped about 100,000 BTC (my educated guess) in a few pieces triggering some additional selloff from others. There is really nothing you could do about it.
At best, you could have mitigated it and slowed it down. Mtgox Saturday problem was that the database couldn't handle the load and for instance I tried several times to pickup these dumped BTCs without success. The system made me wait until the trading is over. And when the mysterious seller stopped his dumping for a moment, the price rocketed because it was the first chance anybody could put some buy orders. So, yes, Mtgox is guilty of some of the swings but the drop to a bit over 10 BTC would have probably happened anyway (may be it have had stopped a bit higher). Because it was the point where the mysterious seller lost his motivation to sell or run out of BTCs.
Btw what makes you think people aren't using trade bots already? (In case it's not clear, this is a rhetorical question)
I never said people weren't already.So what's your god damn point about no dark pool orders then? Are we done with these childish posts and are you going to finally admit that the market has less info with dark pools then they would have without? Actually don't bother answering.
Raulo, yes small volatility sure, but not 40 or 50% swings in price in a mater of hours. Please realize that these swings happened because the market was getting incomplete information for a longer period of time, especially because we can only see up to 27% under spot bids and 73% over spot asks and just because dark pool orders.
Mtgox has its flaws (I for one think the trade is much too large for its capacity to handle it) but the volatility has nothing to do with mtgox. Dark pools can more or less emulated with bots and you will never know what is the market. Moreover, anybody can have gazillion dollar/BTC deposited and just waiting for a good moment to trade. Let me repeat it: you never know the true demand and supply.
The volatility is inherent to Bitcoin. I think one of the biggest reason of it is that we don't know the ownership structure of bitcoins. For publicly traded shares, we know how much is free float, how much belongs to the major stockholders. The major stockholders have no incentive to dump the shares all at once on the market. Instead, they negotiate deals outside of market. Bitcoin price should stabilize when there will be more bitcoin "free float". However, I'm afraid bitcoin will never be as stable as currencies. It might be only as stable as major stocks at best.
The volatility is inherent to Bitcoin. I think one of the biggest reason of it is that we don't know the ownership structure of bitcoins. For publicly traded shares, we know how much is free float, how much belongs to the major stockholders. The major stockholders have no incentive to dump the shares all at once on the market. Instead, they negotiate deals outside of market. Bitcoin price should stabilize when there will be more bitcoin "free float". However, I'm afraid bitcoin will never be as stable as currencies. It might be only as stable as major stocks at best.
Anyone can use a trade bot and everyone can see their bot working.
There's absolutely no way to know from mtgox's public info that there is a bot hiding the amount of a big order by placing small orders at chosen moments.There's usually no way to tell there's a bot at all.
Btw what makes you think people aren't using trade bots already? (In case it's not clear, this is a rhetorical question)
I never said people weren't already.
My point was that 90% of all trade being concentrated on mtgox and them providing a skewed picture of supply and demand is the cause of this crazy volatility.
And davout one more time, no one but the person who placed a dark pool order knows about it. Anyone can use a trade bot and everyone can see their bot working. I really really don't understand what is so hard to get about this? I also don't care what this forum has had endless dabates on and the conclusions you drew from those debates if they are wrong.
Btw what makes you think people aren't using trade bots already? (In case it's not clear, this is a rhetorical question)
And davout one more time, no one but the person who placed a dark pool order knows about it. Anyone can use a trade bot and everyone can see their bot working. I really really don't understand what is so hard to get about this? I also don't care what this forum has had endless dabates on and the conclusions you drew from those debates if they are wrong.
Btw what makes you think people aren't using trade bots already? (In case it's not clear, this is a rhetorical question)
Which sane merchant would want to receive such a volatile commodity in return for his goods and services?
After what I saw this weekend I will be recommending that my friend offer the intraday low for staying in his hostel. If you as a customer think this is just a wobble in the price you can always wait a day for it to go up.
I'm not sure if you are serious. If you are I suggest you ask 20 merchants if they'd want to use a currency that can have 40% daily swings and see how many you find. My bet is not one would.
I am serious. I think it would do his business good to accept BTC. I am NOT suddenly suggesting to him that he takes BTC *because* it is swinging so wildly, rather I am suggesting he takes BTC in general and needs a way of not getting burnt in the short term until things settle down.
I agree with you totally something swinging so wildly is deeply unattractive to any merchant. That is why my suggestion is that he only takes the days minimum rate. The customers can take it or leave it. If they think the rate is unusually low they can wait till it rises.
He would need to move it to an exchange and transfer it to dollars pronto. He is unlikely to lose on a sustained basis by doing this (ie the rate may rise or fall on any given day from the time he quotes a price to the time he converts to dollars)
Forgive me if I am bit off topic. It is less about Mt Gox and more about how a volatile BTC is making it hard for me to make a case for a "real merchant" to accept them.
Tim
Wrong. Anyone can write a trade bot. No one can see dark pool orders except the owner. You continue to amaze me with your "sound" logic.
If there is no possibility to place a dark order, then people will make their big orders look small by placing them using a bot, therefore you will never have the information detail level you want. Is it that hard that to understand ?This has been discussed countless times on the forums, lurk a little more.
I already did so. I withdrew everything from mtgox before I wrote the OP and deposited in tradehill.
I mean, go make your own exchangeDon't need to, there already is an exchange that offers perfect transparency.
Oh and ty for proving my logic is correct seeing as you have to attack my character (a control freak) instead of my arguments.
Control freaks are people who say "everyone needs to do this now because blah blah blah" instead of "i'm doing this because i think it's smarter", and I don't usually lose time with control freaks.In conclusion: I wrote this post with the intention of raising this issue and making a plea to everyone who shares my hopes of success for Bitcoin. I don't care what mtgox does, they can do whatever the hell they want. But please listen to me and please strongly consider switching over to tradehill.com where there are none of these shenanigans and we can all see everything and make educated decisions about what our Bitcoins are worth and maybe just maybe maintain a more stable price, stable enough for merchants to see it as a viable option and adopt it.
Thank you.
Thank you.
Ah yes, I'm such a control freak, real nazi, right?
As for your logic, remove dark pools and people will use trading bots (and then you'll probably start complaining about how 'unfair' they are, and about how they leave you with 'incomplete' information, and how the world is going to collapse if people don't listen to your insightful rants).
Wrong. Anyone can write a trade bot. No one can see dark pool orders except the owner. You continue to amaze me with your "sound" logic.
Which sane merchant would want to receive such a volatile commodity in return for his goods and services?
After what I saw this weekend I will be recommending that my friend offer the intraday low for staying in his hostel. If you as a customer think this is just a wobble in the price you can always wait a day for it to go up.
I'm not sure if you are serious. If you are I suggest you ask 20 merchants if they'd want to use a currency that can have 40% daily swings and see how many you find. My bet is not one would.
I already did so. I withdrew everything from mtgox before I wrote the OP and deposited in tradehill.
I mean, go make your own exchangeOh and ty for proving my logic is correct seeing as you have to attack my character (a control freak) instead of my arguments.
Control freaks are people who say "everyone needs to do this now because blah blah blah" instead of "i'm doing this because i think it's smarter", and I don't usually lose time with control freaks.As for your logic, remove dark pools and people will use trading bots (and then you'll probably start complaining about how 'unfair' they are, and about how they leave you with 'incomplete' information, and how the world is going to collapse if people don't listen to your insightful rants).
I mostly just wanted to talk about the guy screwing up the chart at TradeHill with his $999.99 ask price!
Tradehill needs to sort that kind of rubbish out quickly.
That is irrelevant. It doesn't matter what they draw on a graph, they can change that all they want. I don't care if mtgox shows only 10% under spot bids and 10% over spot asks if they at the same time have the entire depth table available. But that's not the case, not only they do not draw all the bids and asks they don't even provide the depth table.
Plus if you look at the depth of tradehill on bitcoincharts instead you can see a perfect picture of how the supply and demand looks like.
Which sane merchant would want to receive such a volatile commodity in return for his goods and services?
After what I saw this weekend I will be recommending that my friend offer the intraday low for staying in his hostel. If you as a customer think this is just a wobble in the price you can always wait a day for it to go up.
Information is always imperfect in the real world. Even if Mt Gox was absolutely perfect, people can always trade outside of it, in other exchanges, over the counter, etc. That's why true free markets never exist. It's just a fact of life, you have to accept it.
Perfect information does not exists, but there is better and worst information distribution. Talking about perfect information is just derailing the topic.
Also, free markets does not imply the existance of perfect information. That would be silly. Free market can exist and have existed.
I already did so. I withdrew everything from mtgox before I wrote the OP and deposited in tradehill.
Oh and ty for proving my logic is correct seeing as you have to attack my character ("a control freak") instead of my arguments.
Oh and ty for proving my logic is correct seeing as you have to attack my character ("a control freak") instead of my arguments.
And if enough people understand this and there is an exchange that offers complete transparency, and there is, people will switch and mtgox will have to adopt or lose it's customers. And that, sir, is a fact of life.
Stop being a control freak, and put your two little hands at work where your mouth is. I mostly just wanted to talk about the guy screwing up the chart at TradeHill with his $999.99 ask price!
Tradehill needs to sort that kind of rubbish out quickly. I would argue that any ask or bid price simply not be accepted if it is too far off the current price. This is what happens on online share trading. Try putting in a bid price for google at $1 or an ask at $100,000... aint gonna happen.
Speaking someone who is trying to get a business owner to take BTC I find it totally bizarre that an exchange trading in USD will not settle to a USD checking account. Once my friend saw Liberty Reserve listed he said "what the F*** is that ? Why dont that just use a normal bank - is this stuff legal?" and I have to admit I was at a bit of a loss to explain it myself.
I am pleased that Tradehill simply has a US bank account and Dwolla. I would say that something like that looks a lot more legit.
Tim
You are wrong stakhanov.
Mtgox can either be completely transparent or not. It can either give out all the available information or they can withhold information. This might not be of crucial importance in a particular moment but a market that doesn't get to see the full supply/demand picture is bound to swing in the wrong direction to far which then causes massive corrections and price volatility which is something we absolutely do not want.
I'm not saying that if mtgox was completely transparent we wouldn't have had the correction from the $31 top all the way down to almost $10, but what I am saying is that if mtgox was completely transparent we wouldn't have even reached so high and needed a correction in the first place.
And if enough people understand this and there is an exchange that offers complete transparency, and there is, people will switch and mtgox will have to adopt or lose it's customers. And that, sir, is a fact of life.
EDIT: Oh and I find you are being hilariously ironic with your false statements in your post about there being no perfect information in the real world and your signature under it offer a gadget with perfect information for your desktop. Good job.
Mtgox can either be completely transparent or not. It can either give out all the available information or they can withhold information. This might not be of crucial importance in a particular moment but a market that doesn't get to see the full supply/demand picture is bound to swing in the wrong direction to far which then causes massive corrections and price volatility which is something we absolutely do not want.
I'm not saying that if mtgox was completely transparent we wouldn't have had the correction from the $31 top all the way down to almost $10, but what I am saying is that if mtgox was completely transparent we wouldn't have even reached so high and needed a correction in the first place.
And if enough people understand this and there is an exchange that offers complete transparency, and there is, people will switch and mtgox will have to adopt or lose it's customers. And that, sir, is a fact of life.
EDIT: Oh and I find you are being hilariously ironic with your false statements in your post about there being no perfect information in the real world and your signature under it offer a gadget with perfect information for your desktop. Good job.
Information is always imperfect in the real world. Even if Mt Gox was absolutely perfect, people can always trade outside of it, in other exchanges, over the counter, etc. That's why true free markets never exist. It's just a fact of life, you have to accept it.
In principle I agree with OP, but most likely the fundamental problem is that MtGox has such a huge market share of public exchanges, maybe 90-95% or so. The dark pools on MtGox can only be damaging as long as MtGox has this large market share. All holders of bitcoins who do not want to see a repeat of the bust of last weekend, would do well to trade elsewhere.
Let me try to explain better: the dark pools on MtGox only offer an advantage to wealthy bitcoiners *AS LONG AS* there is a large list of public asks and bids on MtGox to draw from.
1. If you don't like the advantages dark pools offer to large traders, then take your BTCs elsewhere.
2. If you want price stability, then don't trade on any exchange that has an excessively large market share.
Let me try to explain better: the dark pools on MtGox only offer an advantage to wealthy bitcoiners *AS LONG AS* there is a large list of public asks and bids on MtGox to draw from.
1. If you don't like the advantages dark pools offer to large traders, then take your BTCs elsewhere.
2. If you want price stability, then don't trade on any exchange that has an excessively large market share.
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