ArtisticPhotography wrote:
I wouldn't go too heavy into it.

If it takes off, the government will regulate it.

If it stays as planned, someone will figure a way to manipulate it because it isn't very large.

If it dies, you're out of luck.

However, it seems like a good way for geeks to buy pizzas.

Good luck with it.

thanks, I'm not an investor in anything. Just a trader, speculator, arbitrageur.

actively working with multiple parties to find a way to short bitcoin, haha, so naturally, I want it to fail at limited times

I really like how much arbitrage there can be taken advantage of between exchanges! you can transfer coins between exchanges and accounts instantly, no settlement times

You are right about the government eventually going to regulate it. Currently it is a surprisingly convenient way to get money out of the financial system and obfuscated, and generally the Treasury doesn't like that. Bitcoins can be traced/followed but I realized that once I converted them to litecoins there isn't any to trace the origin (I bought litecoins from an exchange that I funded with bitcoins which were bought on another exchange with USD, no USD in the second account so therefore no KYC/AML regulations were needed to open the second account)

I also don't pay an electric bill so I should set up some machines to mine more coins.

Instinct Images wrote:
Looks like the government might step in to regulate it:

http://www.newscientist.com/article/mg2 … -high.html

This is what I said in my original post:

R A V E N D R I V E wrote:
The US Treasury released a memo about their limited regulation of cryptocurrencies on March 18th.

so that's exciting.

welcome to the party though! My cryptocurrency holdings are doing quite well, and am actively seeking a way to hedge these speculations so I can profit better while their price declines at some point in the future.

Digitoxin wrote:
So bitcoins have nearly doubled in value against the US Dollar?  How is that exchange rate determined?  And what arbitrage opportunities exist in conversion to other currencies?  Say, bitcoins to yen to dollars?

LOTS OF ARBITRAGE OPPORTUNITIES EXIST, mainly between the exchanges. The order books are pretty liquid but one exchange can have a 6% difference in price from another exchange. (the reason being that all CASH deposit methods on that exchange incur a fee, like 2% or whatever like all credit card transactions, so you can buy coins there cheaper and sell them on another exchange for more)

Everyone knows this too (as in, its not a secret that a few arbitrageurs are trying to keep secret) but it hasn't equalized and won't until all the exchanges have free cash deposit methods.

Right now, you could do this with all your capital like 1 a day, or 1 every 2 days, since it involves getting the cash out of the exchange to send it back to the first exchange again.

Stephen Dawson wrote:
I find the bitcoin thing interesting.

But I also consider the possibility that it could end up like on ponzi scheme.

Government will go after it, because it offers a way to launder money, and avoid blockades on countries like Iran.

But its decentralised design has a goal of being impossible to regulate.

Interesting.

there are real risk factors that exist. thats why I wish a bitcoin ETF would come out, just because their 10-Q would like all the RELEVANT risk factors

macroeconomic risk, interest rate risk, exchange rate risk, political risk


Mining with special hardware is a ponzi scheme. Specialized computers are coming out just to mine bitcoin, if you actually had one in your hand right now, you could be making thousands of USD a week, but by the time they actually ship everyone will have them and the amount of processing power to actually generate a bitcoin will have gone up accordingly. Making your investment in mining hardware pointless. Enriching the producer of the hardware though.

R A V E N D R I V E wrote:
LOTS OF ARBITRAGE OPPORTUNITIES EXIST, mainly between the exchanges. The order books are pretty liquid but one exchange can have a 6% difference in price from another exchange. (the reason being that all CASH deposit methods on that exchange incur a fee, like 2% or whatever like all credit card transactions, so you can buy coins there cheaper and sell them on another exchange for more)

Everyone knows this too (as in, its not a secret that a few arbitrageurs are trying to keep secret) but it hasn't equalized and won't until all the exchanges have free cash deposit methods.

Right now, you could do this with all your capital like 1 a day, or 1 every 2 days, since it involves getting the cash out of the exchange to send it back to the first exchange again.

I wrote a bitcoin arbitrage system in a day and a half. Problem was moving the money between exchanges, what with the fees and the daily limits. That, and trusting the people who run these things. Have you LOOKED at the "About Us" page of bitinstant??? No fucking way I'm going to hand my money to those guys.

Lawrence Guy wrote:

I wrote a bitcoin arbitrage system in a day and a half. Problem was moving the money between exchanges, what with the fees and the daily limits. That, and trusting the people who run these things. Have you LOOKED at the "About Us" page of bitinstant??? No fucking way I'm going to hand my money to those guys.

lmao

yep thats the problem

you can do OK Pay -> btc-e for a 2% fee,  and then buy bitcoins. bitcoins -> mtgox wallet and sell bitcoins for higher.

then sit on your hands and wait. limited to $10,000 withdrawal in a month = fail.

Stephen Dawson wrote:
I just watched a BBC story on Bitcoin.

It is certainly getting attention.

It has already attracted the attention of hackers and governments.

Governments will go after the interface points. Where you put money in, or get money out.

yep yep. so lets consider the US one of the more restrictive regimes for reporting requirements, there are already is an exchange (mt gox subsidiary) that is going to be regulated by (I believe) fdic for deposits, fincen money transmitter, and simply offer the perk of being able to buy and sell bitcoin.

I asked them about futures but they didn't want to have to deal with the SROs, Finra, and CFTC

but one step closer to wall street. (I really want a vanguard etf with options contracts)

R A V E N D R I V E wrote:

LOTS OF ARBITRAGE OPPORTUNITIES EXIST, mainly between the exchanges. The order books are pretty liquid but one exchange can have a 6% difference in price from another exchange. (the reason being that all CASH deposit methods on that exchange incur a fee, like 2% or whatever like all credit card transactions, so you can buy coins there cheaper and sell them on another exchange for more)

Everyone knows this too (as in, its not a secret that a few arbitrageurs are trying to keep secret) but it hasn't equalized and won't until all the exchanges have free cash deposit methods.

Right now, you could do this with all your capital like 1 a day, or 1 every 2 days, since it involves getting the cash out of the exchange to send it back to the first exchange again.

And there in lies the problem.... If this was a transparent market with near-perfect information in the market, there would be only vanishingly small opportunity for arbitrage.  The whole thing tastes like EMUs to me at the moment.

Digitoxin wrote:
And there in lies the problem.... If this was a transparent market with near-perfect information in the market, there would be only vanishingly small opportunity for arbitrage.  The whole thing tastes like EMUs to me at the moment.

The participants on the exchange in question simply priced in the CASH deposit fees. Their payment processor takes this and it is very transparent, it would be the same if they used any credit card processor whether it was paypal, authorize.net, square, google checkout....

You arent getting that this only effects users wishing to deposit and withdraw with cash, people that are liquid in cryptocurrencies can take advantage of this because they do not buy and sell cryptocurrencies for dollars on THAT exchange, therefore never effecting the orderbook on that exchange. You can generate litecoins, transfer them to that exchange, buy bitcoins on that exchange with ur litecoins. Transfer your bitcoins to another exchange, sell them for cash at a premium. The arbitrage to USD persists because there are other currency pairs.

As soon as that exchange has equally as convenient and free cash deposit and withdrawal methods that one exchange will stabilize in price

Kofi Hamilton Film wrote:
BITCOIN is a real concept based on a GOLD STANDARD!!..........the US Dollar is being hyper-inflated as we speak and is only worth 2% (or 2 cents) of its original worth!

We need a NEW gold standard to get the Global economy going again and i believe BITCOIN is just the start of the coming Gold standard!

Im all in with Bitcoin just like im in with Gold (Metal)

Emus or tulips.  Take your pick.

R A V E N D R I V E wrote:
so now I have bitcoins, litecoins and cash.

The US Treasury released a memo about their limited regulation of cryptocurrencies on March 18th.

so that's exciting.

Bitcoin may have won that round but if this Washington Post article:

http://www.washingtonpost.com/business/ … story.html

...is any indication. They'll be drawing further federal scrutiny from their money laundering operations.

Digitoxin wrote:

Emus or tulips.  Take your pick.

I pick GOLD and other precious metals!!....LOL!