I saw one of the first Macintosh computers, on PAFB, in the late 1960s, I learned early assembly languages and have kept up to date all the way to the newer, full stack, web what ever you like here, (web 2.0 ,4, 6, 8, whatever)
So, it was no real surprise to see bitcoin become so well for lack of a better word, (bloated)
In 2008, in the winter, I was running one of the beta versions of what is now (a very much different) bitcoin, there was no wallet at least not at that time.
Fast forward to now…
I mean there is a ton of stuff I could say about the beta how it worked, how it crashed, how it fried a video card, LOL, but that is mostly in the past by now..
What I find particularly interesting here is how some of these exchanges are literally flying by the seat of their pants and some of them are on fire…. The Pants that is... Their seats should be on fire too allegedly.
Over the last three months I have avidly taken an interest in what was going on in the world of bitcoin.
Mostly I have other things to do, but some of that I have been looking at has been a little disturbing...
Because I do not want to be booted off any exchange I will refer to exchanges here in a very general way. (not pointing the finger, at least not yet) and not in the way you think. LOL.
However, I feel it is essential to broadcast, a warning to some of these (know it all nannies,) who are running these exchanges, using a loose algorithm, That limits the ability of a trader to buy and sell at what should be a spot off price but is not.
I see a really large gaping hole in the way these exchanges are using their individual software and what I see as a serious failing of these organizations to participate in the leveraging blockchain activity that bitcoin was really meant to provide.
Right now, these “exchanges” are kind of manipulating, input and output, (that is not the exact way to put it) but it is as close as I think we need to get in order to have a serious discussion about these issues.
I say issues because that is what I see happening.
I see intentional or unintentional issues that are about to become more problematic mostly because what I see happening here is that Bitcoin is becoming more like a traded commodity than something you would use as a means to pay for or to buy products.
Without revealing the identity of this one particular exchange, we will just refer to it as “ADDRESSBOOK16” just for a little fun and perhaps even a riddle as well, but to make it more simplified, lets just say AB16,
AB16 may or might be engaging in some rather flighty protocols that tend to limit a trader from engaging in a meaningful and open ledger submission.
I studied the way that this system submits to the book and what happens when that submission is routed to the book.
I also noticed three changes to the way this system works.
I also identified a range of about 30 to 50 usd, where orders were falling off the books, unfilled.
To test this theory out, orders were placed, at market, at limit, at stop,
Never, would an order go through when the over all portfolio value, would be increased by 10 percent.
So, even if you bought, say at 29 and sold at 59 IF your over all portfolio value was at a certain value.
Then the trade would fail to execute. (Using Market)
So, I tested out a theory, using the Sell Limit form, and I was able to execute, at 25 percent higher rates than “AB16” was offering, I was able to do this because I could see the prices of previous trades, making it easier to anticipate the rate at which I could increase the sell price.
Now I basically said all of that to say this.
Changes were made to the system, perhaps they did not like it that I was able to move around in their system and make more than what they were willing to give.
If that is in fact the case then I suspect they are in some really deep trouble that will surface in the next quarter.
Now things have been changed,…
#1 It is now impossible to sell above a certain percentage of the total portfolio value, at least as of today.
What I mean by that is IF you purchase at X price, then later in the day, you try to execute a limit sell order where your portfolio value would increase then the order does not execute in the way that you meant for it to execute.
Lets, say for example, I set a limit sell, for .004 and the limit price is a value of the first four parameters of the sales price engine.
Now I should be able to increase the value in order to gain additional price value.
This is being prevented.
Which may or may not be a real huge issue.
I say that because I executed, a limit sell order, at 300 usd.
But what happened, was that the order executed at a level that was mathematically impossible.
The order executed at 287.00 Now when I saw this happen I was stupefied.
Because the engine should have executed or killed the order.
It did not do that.
So, I started to look at previous orders.
#2 Issue number two.
Prices of execution and USD cost pricing columns, have now been removed.
So once you start executing an order the details that should be present are no longer shown.
This is a second huge problem and one that should this exchange fail to fix… They may or may not find themselves in some serious regulation type problems.
This brings us almost to a close here.
#3…
The third and perhaps most egregious issue I found today is that when looking at the over all value of a portfolio.
I found that the inconsistent execution of limit fill or kill orders, were “MAGICALLY” the exact amount of the value of the portfolio minus the market cost.
What?
Do not feel bad if you are staring at your computer screen with your tongue out getting a suntan.
This completely dumfounded me but not for long.
To test this theory out, I went to the sell market tab, entered a value, (recorded that value in a notepad)
Then I subtracted, the amount of that market spot price, from the total value of the portfolio.
I recorded that data as well.
Then I went and I setup a limit sell, at lets say, 9000, When the order was received by the book it showed, the price, but as soon as the order was settled, the price was not at the correct rate…
The order had executed, at the previous market spot, price, Not the fill or kill price.
So I went back and did the math on this and discovered that the previous price that I had recorded minus the value of the portfolio was the highest allowed price point regardless of if the order had been entered at market or at limit or at stop.
(Perhaps they will “Discover” this error) and say Oh, did we make a mistake were so sorry.
But, I believe that this kind of behavior.
And I saw behavior because this is really more about manipulation than it is about some kind of programing mistake.
Looking at this situation from a birds nest view.
What I see or I must say what It appears to look like from this vantage point here is that there is a limiting feature that has been placed into the overall system.
What this does is to reduce the traders ability to buy and sell at a price that he can control, or at least at a spot price that does not include the spread and the value of the portfolio.
The spread should not be tied directly into the value of the portfolio.
Now, at this point we must use the term alleged. Mostly because we need to have a serious discussion about Honesty free of the politics of local tax considerations, which have no place at this figurative and virtual table.
Allegedly, this could be a coding error, a mistake, but I suspect that like one of the more infamous movie quotes, “ There are no coincidences, coincidences are plans other people make and just do not tell you about, Allegedly ;“
So, with these kinds of issues, it is important for these exchanges to understand that they do not really control the market like they believe that they do.
Mostly because they believe that there is a certain supply of (X amount) of active circulating coinage. They plan, (allegedly) on how they engage in the marketplace based on that one idea. The idea that they know how much circulating coin is capable of market integration.
But that is based on an assumption.
An Assumption that they know more about this coin than the people who made it.
Here is where I hope that this and other exchanges may be listening and perhaps they will “Rethink” what they are doing right now.
I hope they are listening and I suspect that they are.
So, here goes, IF you are listening, you should rethink, what you are doing right now.
The reason why you “should” consider changing the way that you are either intentionally limiting and or allegedly accidentally making coding mistakes in the order book, is that it is possible, that there are many more active blocks that you think are inactive and thus perhaps are making valuation criteria based on what you think is in the marketplace.
Should some of this odd behavior continue, it is also equally possible that inactive blocks might become active.
Not making any serious statement, not playing games either, just saying that when you first practice to deceive by taking things from the little people who are just trying to enjoy a free market, well that is something that some folks would consider a low class thing to do.
Just understand this not everyone that is trading have overlooked these issues.
IF We can see this Others can see it too.
Don’t mess up a good thing by getting greedy.
Because that will bring the regulators, Bitcoin has seen a great success recently but it has also attracted the eyes of politicians who would like nothing better than to tax bitcoin back down to the dirt.
I believe that there is plenty of money to be made here and we do not have to play dirty and manipulate a trading platform in dirty ways in order to make money.
Pay attention here because a lot of people are depending on honesty in trading platforms and it is very unfair to try to rig the game one way or the other.
The preceding statement in no way obligates the reader or the writer in any meaningful way. but only in hopes that the reader may tend to begin to examine what is actually happening on various trading platforms, exchanges, ect.
There is no intent to create and or instantiate any assertion of accurate or identifiable trade practices and or any business practices. This is meant only as an exercise in thought or a medium of a conundrum at least for now. Everything changes, mostly because we look at it. . .