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Show HN: I built a live Bitcoin price aggregator with multiple indexes

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Re: Show HN: I built a live Bitcoin price aggregator with multiple indexes

#41

Post by ph0rque »

minimax wrote: post #19

Now that I have a huge stash of bit coins I was thinking of making a service/startup where you could lend out your bit coins to people who would agree to pay you back a slightly higher number of coins in the future. Kind of like a bank but not corrupt and full of banksters like the federal reserve and JP Morgan. Once I have traction I can IPO but instead of sell my shares for cash I would sell them in bit coins. I th…

you could lend out your bit coins to people who would agree to pay you back a slightly higher number of coins in the future.

Is this something that can be written into the Bitcoin protocol?

Re: Show HN: I built a live Bitcoin price aggregator with multiple indexes

#42

Post by minimax »

onebaddude wrote: post #32
minimax wrote: post #19

Now that I have a huge stash of bit coins I was thinking of making a service/startup where you could lend out your bit coins to people who would agree to pay you back a slightly higher number of coins in the future. Kind of like a bank but not corrupt and full of banksters like the federal reserve and JP Morgan. Once I have traction I can IPO but instead of sell my shares for cash I would sell them in bit coins. I th…

> Kind of like a bank but not corrupt and full of banksters like the federal reserve and JP Morgan Sounds like you're very knowledgeable about the money-lending space. Where do I send my money?

The only thing I'm knowledgable about is disrupting corrupt, inefficient industries/governments. I will send you a note as soon as the API is ready. There will be an API endpoint you can use to send me bit coins.

Re: Show HN: I built a live Bitcoin price aggregator with multiple indexes

#43

Post by fchollet »

gibybo wrote: post #30

So, assume I already have Bitcoins on Coinbase and have a verified account to sell them easily. Theoretically, my plan for free money would look like this: - Say I have 11 BTC on Coinbase. Wire $10k to OKPAY ($25 bank fee, 0% OKPAY commission) Send OKPAY money to BTC-E, $200 fee (2%). - Now I have $9,775 on BTC-E. Within ~1 second of each other, I enter a market order to buy 10.754 BTC on BTC-e for $9,775, and sell 1…

Correct, expect arbitrage is risky in illiquid markets. Here your BTC will take a while to get into your wallet after buying them on Coinbase or BTC-e (about 10 days on Coinbase). Your wire transfers will also take a few days to clear. During these wait periods the prices of BTC will be subject to wide swings.

And at last, your arbitrage profit will get severely eaten by the fees of the banks and BTC exchange platforms.

It's never easy to make a profit in an arbitrage scheme (unless you have a crushing competitive advantage such as transaction speed): if it were easy, enough people would use the scheme, bringing the price differences back to a range were turning a profit would be difficult again... so if there are significant price differences between exchanges, it's a signal of arbitrage difficulty.

Re: Show HN: I built a live Bitcoin price aggregator with multiple indexes

#45

Post by qrohlf »

ph0rque wrote: post #41
minimax wrote: post #19

Now that I have a huge stash of bit coins I was thinking of making a service/startup where you could lend out your bit coins to people who would agree to pay you back a slightly higher number of coins in the future. Kind of like a bank but not corrupt and full of banksters like the federal reserve and JP Morgan. Once I have traction I can IPO but instead of sell my shares for cash I would sell them in bit coins. I th…

you could lend out your bit coins to people who would agree to pay you back a slightly higher number of coins in the future. Is this something that can be written into the Bitcoin protocol?

No. Bitcoins are designed to act like cash, so he would need to ask for some kind of collateral to ensure that people don't just run off with his bitcoins.

Re: Show HN: I built a live Bitcoin price aggregator with multiple indexes

#46

Post by gibybo »

fchollet wrote: post #43
gibybo wrote: post #30

So, assume I already have Bitcoins on Coinbase and have a verified account to sell them easily. Theoretically, my plan for free money would look like this: - Say I have 11 BTC on Coinbase. Wire $10k to OKPAY ($25 bank fee, 0% OKPAY commission) Send OKPAY money to BTC-E, $200 fee (2%). - Now I have $9,775 on BTC-E. Within ~1 second of each other, I enter a market order to buy 10.754 BTC on BTC-e for $9,775, and sell 1…

Correct, expect arbitrage is risky in illiquid markets. Here your BTC will take a while to get into your wallet after buying them on Coinbase or BTC-e (about 10 days on Coinbase). Your wire transfers will also take a few days to clear. During these wait periods the prices of BTC will be subject to wide swings. And at last, your arbitrage profit will get severely eaten by the fees of the banks and BTC exchange platfor…

I already have the Bitcoin in Coinbase though, I don't have to wait for anything. It's true that the wire transfer will take time, but the value of the dollar isn't going to change much in that time. If my only risk is the Bitcoin fluctuating in that time, it seems like free money for anyone who is already holding Bitcoin and would already be subject to that risk.

Re: Show HN: I built a live Bitcoin price aggregator with multiple indexes

#47

Post by edwardy20 »

minimax wrote: post #36
edwardy20 wrote: post #25

Earlier quoted context omitted.

Why would anyone want to borrow money in a deflationary currency (Bitcoins) rather than an inflationary one (dollars)?

You want to borrow bit coins so that you can improve your business and then pay back the coins with increased profits due to the improvements. Isn't that obvious? I'm not interested in dollars because I don't think they are particularly useful. I convert all my dollars to bit coins whenever I can. Look at the price of bit coin in dollar terms and you'll see everyone else is doing the same thing. Do you think the API…

OK, so why don't you borrow dollars, convert to bitcoins, and actually make money on the loan through deflation?

Re: Show HN: I built a live Bitcoin price aggregator with multiple indexes

#48

Post by skizm »

gibybo wrote: post #30

So, assume I already have Bitcoins on Coinbase and have a verified account to sell them easily. Theoretically, my plan for free money would look like this: - Say I have 11 BTC on Coinbase. Wire $10k to OKPAY ($25 bank fee, 0% OKPAY commission) Send OKPAY money to BTC-E, $200 fee (2%). - Now I have $9,775 on BTC-E. Within ~1 second of each other, I enter a market order to buy 10.754 BTC on BTC-e for $9,775, and sell 1…

Check withdraw limits. You might have $10k+ on an account like BTC-e and have to withdraw it over several days. If you keep arbitraging you will have more and more money in an exchange that is risky (BTC-e isn't trusted because it is written by one dude Bulgaria or something like that and the owner could just close up shop at anytime and you're fucked).

Also while all your transfers are clearing bitcoin could swing one way or the other totally screwing things up (coinbase takes several days to clear bitcoin buys (not sure about sells))

Re: Show HN: I built a live Bitcoin price aggregator with multiple indexes

#49

Post by makomk »

edwardy20 wrote: post #25
minimax wrote: post #19

Now that I have a huge stash of bit coins I was thinking of making a service/startup where you could lend out your bit coins to people who would agree to pay you back a slightly higher number of coins in the future. Kind of like a bank but not corrupt and full of banksters like the federal reserve and JP Morgan. Once I have traction I can IPO but instead of sell my shares for cash I would sell them in bit coins. I th…

Why would anyone want to borrow money in a deflationary currency (Bitcoins) rather than an inflationary one (dollars)?

Based on previous businesses that've offered Bitcoin loans, a common reason to borrow money in Bitcoins is because the person has no intention of paying off the loan. It doesn't take a large proportion of loans going bad before lenders start losing money on average at any reasonable interest rate, and increasing the interest rate will just increase the proportion of bad loans to good loans.
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