Earlier quoted context omitted.
Mt Gox has an API: https://mtgox.com/support/tradeAPI
I was looking for things more along the lines of the theory behind constructing an automated trader
I'd be interested in some pointers on this too, if you got 'em.
Bitcoin Miner does the math, calls it quits
81–90 of 101 posts
Re: Bitcoin Miner does the math, calls it quits
#82I should point out that this is classic blogspam: You can see that the forum linked is dead except this one link. Original post where the text was copied from is this: https://forum.bitcoin.org/index.php?topic=26099.msg325505#ms... Incidentally, the original poster is fairly infamous troll/critic in the biggest bitcoin forum. (Sadly, I agree with most of his conclusions and pessimism). Pretty sure it is NOT original…
I thought I recognized this rant...same one that has been repeated for the last 2 months in the BTC forums. Miners don't care...I should know, I am one...and given my current power cost I may be one of the last. I will start worrying about mining profitability when Vladimir starts shutting down one of his 3 data centers...since he pays 7 times the power I do. At that point folding@home or seti gets my GPU cycles...that is if nobody figures a better way to profit from leasing these machines for other than bitcoin use (legal ways that is).
Re: Bitcoin Miner does the math, calls it quits
#83To be honest, when I read the original idea behind the bitcoin, I was thrilled. I thought This Is It (TM). The monetary system, as it exists today is based on debt as a lever for growth. Banks can get a deposit of 1$ and God/King/Char/President/Whatever gave them the right to lend 5$ with it, and hold the 5th person under obligation of debt, to pay back that one dollar which the bank that gave it to him DIDN'T HAVE i…
It's a nice thought but BitCoin doesn't change the debt-leveraged practice of the banks. Sorry to rain on the parade.
The fractional reserve requirement allows the banks to lend multiples of their incoming deposits no matter what the currency. BitCoin is just another currency, like the dollars. M1/M2 in circulation is much smaller than the actual money used in the economy. BitCoin will be the same way.
The banks can very well open BitCoin accounts, allowing people to deposit actual BTC. The bank then lends the BitCoin out in multiple of deposit, like 5BTC lent out for 1BTC deposited. The BitCoin lent out are not delivered in actual BTC, just some numbers in the borrowers' accounts. Only when the borrowers withdraw that they get back BTC. Like the dollar accounts, most people don't withdraw large amount of dollars; they just write checks or wire transfer them. Same way for the BitCoin accounts. Thus the debt-leverage economy with BitCoin will arrive.
If everyone withdraws from the BitCoin accounts, there would be a run on the bank and the bank won't have enough BTC reserve to meet the demand and collapses. Banks can put daily withdraw limit like ATM and tell people to write BTC check. It's just as good as BTC.
The digital nature of BitCoin will probably allow people to withdraw more easily and thus lower the possible leverage multiplier.
Re: Bitcoin Miner does the math, calls it quits
#84I'm a bitcoin speculator. So far, I've made a very good ROI on a relatively small (4 figure) investment. It's been a lot of fun, really. MtGox, and other exchanges (though I've got less experience with them) publish raw market data. I've written some analysis tools using mongo and python, they run on an Ec2 instance and buy/sell automatically. I send myself an SMS when I make a trade. It's been so much fun to build.…
Sure, sounds like fun...
I hope people understand that the success of bitcoin speculation in no way demonstrates bitcoin's practicality as a currency. A currency doesn't benefit from being the subject of speculation - it benefits from having a stable value so you can just use it to buy and sell stuff.
Re: Bitcoin Miner does the math, calls it quits
#85Earlier quoted context omitted.
In fact, it's worse than that, because the global rate of BTC production goes down over time. After 2025, hardly any new bitcoins will be generated. https://secure.wikimedia.org/wikipedia/en/wiki/Bitcoin#Monet...
That's the whole point. As the amount of Bitcoins gets closer to the maxim, it will become harder and harder to mine them. But ideally, this should be overcome by Bitcoin's increasing popularity and value. This isn't happening right now, and it appears to have stagnated, but that's not a problem for Bitcoin's future, because the continous mining of Bitcoin is not necessary to ensure its success. This simply means tha…
It doesn't matter how many people are mining, coins are generated at a fixed rate. The difficulty to mine coins is varied automatically to assure this.
It's this difficulty that affects miners when more folks start mining. In effect they are taking the known portion of the pie (coins to be mined in a given time frame) and slicing it into many more pieces. This means that you have to work for a much longer time to have a nice large piece of pie with plenty of room for ice cream and whipped cream on top.
Re: Bitcoin Miner does the math, calls it quits
#86Earlier quoted context omitted.
It isn't right. It would only be true if every miner was immediately liquidating the bitcoins they were awarded. Such a massive oversupply would likely overwhelm demand and push the price much lower. In reality this is not what BTC miners are doing (from what I can see). They are mining and hording BTC for later use meaning that the mined coins require $0 to enter the system to maintain equilibrium.
That doesn't mean the math is wrong. What he's saying is each day the total value of bitcoins is going up by that amount because # of bitcoins * current price. He's also saying that it doesn't make sense, he sees irrationality in the behavior. If more bitcoins are added than value created, prices should go down, but aren't, they are stable. Something seems to be out of whack, the market isn't behaving rationally. Ess…
This is just the market cap effect. You can't buy or sell a company for its market cap; usually the real price is much higher or lower. Likewise just because you can buy or sell 1 BTC for $15 does not mean that 6.7M BTC are really worth $103M.
Re: Bitcoin Miner does the math, calls it quits
#87I'm a bitcoin speculator. So far, I've made a very good ROI on a relatively small (4 figure) investment. It's been a lot of fun, really. MtGox, and other exchanges (though I've got less experience with them) publish raw market data. I've written some analysis tools using mongo and python, they run on an Ec2 instance and buy/sell automatically. I send myself an SMS when I make a trade. It's been so much fun to build.…
Sure, sounds like fun... I hope people understand that the success of bitcoin speculation in no way demonstrates bitcoin's practicality as a currency . A currency doesn't benefit from being the subject of speculation - it benefits from having a stable value so you can just use it to buy and sell stuff.
Currencies (and other assets) benefit from liquidity: someone willing to buy it when you want to sell and to sell when you want to buy. It can be difficult to distinguish beneficial market-making activity (which still involves turning a profit) from harmful speculation, regardless of the way it's described by the person doing it.
Re: Bitcoin Miner does the math, calls it quits
#88The hardware doesn't have to pay for itself, just the discount if you want to resell it. So maybe 20-30% of the initial cost.
Re: Bitcoin Miner does the math, calls it quits
#89Earlier quoted context omitted.
Not to mention the lack of proper regulation. Particularly at the exchanges: http://nerdr.com/bitcoin-exchange-scam-bitcoins-are-worthles... I was days away from entering the Bitcoin marketplace until I read that. Now I realize it's speculation propping up an artificial market price. Saying that, I would be open to hearing opinions on estimates of the true value of a Bitcoin, based on it's use cases and value proposi…
How is that a scam? He charges $1.05 for a BTC when everyone else is charging $1.00. That's not a scam, that's just setting your own prices. Unless I am missing something here.
In reality, where people use money to purchase goods and services, the exchanges cannot unilaterally decide to advertise a best bid and offer price worse than reality and then pocket the difference.
Re: Bitcoin Miner does the math, calls it quits
#90Earlier quoted context omitted.
Mt Gox has an API: https://mtgox.com/support/tradeAPI
I was looking for things more along the lines of the theory behind constructing an automated trader
The system has a very simple view of the market. It keeps a current score. Above a certain number, it buys, below another number, it sells. But it's programmed to believe in a general upward trend in the market so it won't sell at a loss, unless the score falls to a lower-bound. Even then, it won't sell, it'll just b---h at me via SMS until I tell it what to do in the form of placing a standing sell order that will either liquidate when it hits a certain score that I define or cancel itself if the market starts moving the other way. That logic was added because of the market "panics" at Mt Gox (The big one everybody knows of was preceded by a smaller event that shook a lot of market confidence there)
Ok, so the score itself... More than anything it's using the http://en.wikipedia.org/wiki/Stochastic_oscillator. Since the market doesn't every Close, it calculates every hour. It uses a moving average of a number of periods. If we had a normal daily close, convention is to use a 3 "period" (day) moving average. In my case, the number of HOURLY periods used in my moving average is based on the volume being traded (depth of market).
I tweak it often in ways that truly bada-- automated trading systems probably do automatically -- to try to input market sentiment into the algorithm -- and I try to automate more and more of that as I have time. But I've made attempts at that which, when run against the corpus of market data I have, just don't work.
I've had a lot of fun building this, and it gave me chance to play with Mongo, something I've wanted to do for a while.
My advice: Go for it. Yes, the MtGox issue was deplorable. But I didn't actually lose any money and never really felt i was in danger of losing money, aside from just not being able to participate in the market when it was down. I plan on integrating other exchanges like https://www.tradehill.com/ as they expose APIs. ...I do scrape them for info, though. And it would be very easy to place trades thru their web UI if i had to go that route to dump mtgox entirely. But I don't like adding that complexity and failure point.
Oh, and living in the US, I used Dwolla to fund my account. If you want to do this at all, open a dwolla account and link your checking account -- it took me at least a week to get their microdeposits approved and my first deposit to clear.