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tbretagn


Total Posts: 252
Joined: Oct 2004
 
Posted: 2017-09-22 17:21
For trade finance the problem arises when people use the L/C multiple times to get financing (cough cough Chinese Copper). Having a ledger where the financing of deals is kinda secured by the blockchain would help.

Et meme si ce n'est pas vrai, il faut croire en l'histoire ancienne

rftx713


Total Posts: 99
Joined: May 2016
 
Posted: 2017-09-22 20:00
That's a good point and interesting as well. Apologies for being a bit of a pain in the ass, but that issue could be solved with regular electronic solutions, I don't get why you have to use a blockchain. Clearly with an LC you trust a third party (the banks involved), so if you trust them, you don't need a trustless solution... just one that they control rather than the counterparty.

Or, since we're assuming that we surmounted the trust issue, abstract it one level higher and ICE could set up something similar to ECONF+LC clearing. Everyone is familiar with FIX and there's no need to trust some blockchain that doesn't have recourse, except through that trusted third party...

JTDerp


Total Posts: 44
Joined: Nov 2013
 
Posted: 2017-09-22 21:02
rftx ["...using hype of a technology to push through political/social changes where the first best choice was resisted."]

That's what I was speculating on as being the case, not to say that PGP is better/best in any regard, as I barely know anything about it, and nothing about Blockchain. Just that cryptos have greater mainstream momentum behind them...sort of Web 1.0 vs Web 2.0.

The clouded mind seeks; the emptied mind finds.

rftx713


Total Posts: 99
Joined: May 2016
 
Posted: 2017-09-23 18:37
JTDerp: makes total sense to me, I think that's one of the few merits to the technology. Interestingly, it's not actually the technology itself that has the merit, it's the idea of it :)

tbretagn


Total Posts: 252
Joined: Oct 2004
 
Posted: 2017-09-27 16:07
Got sent a presentation for a bitcoin hedge fund with returns of 6000%. Do you think I should invest. They use ML and NLP, and the founders seem to be at least out of high school.
There's no risk involved right? I will be able to recoup my capital?

Et meme si ce n'est pas vrai, il faut croire en l'histoire ancienne

jslade


Total Posts: 1102
Joined: Feb 2007
 
Posted: 2017-09-27 20:18
@Cheng:

"PGP type things, you have to trust something

I think you lost me. You have to trust the algorithm, ok, but the same argument holds for blockchains where you have to trust the hash function. What else belongs to "something"?"

The payment system and timers for example. Smart contract put up at time T, address X gets paid (in somewhat imaginary money) when Y happens. If you just PGP sign a regular contract and store it in some arbitrary place, well, who cares? Who owns the clocks that define when it was signed? Why not just sign a regular piece of paper and fight it out in the courts?

"Learning, n. The kind of ignorance distinguishing the studious."

Cheng


Total Posts: 2838
Joined: Feb 2005
 
Posted: 2017-09-28 14:11
Ok, thanks.

"He's man, he's a kid / Wanna bang with you / Headbanging man" (Grave Digger, Headbanging Man)

EspressoLover


Total Posts: 254
Joined: Jan 2015
 
Posted: 2017-10-16 00:36
The segwit2x hard fork is almost here. Last time there was an event like this (the Bitcoin Cash fork), there was a pure arbitrage opportunity. At least at Bitfinex, longs received forked BCH, but shorts didn't owe any BCH at the time of the split. The free lunch was to take offsetting positions, and get BCH for free.

(More details from Matt Levine here)

I'm looking for a similar exploit with the segwit2x fork. As far as I can tell, Bitfinex has improved their accounting, in a way that doesn't allow for the arb on the upcoming fork. For any crypto maestros out there: 1) Am I missing anything with Bitfinex, is there any arb left open by their procedure? 2) Are any other other exchanges handling the situations in an exploitable way like Bitfinex did with the BCH fork?

Edit Addendum: Somewhat related, didn't realize there was also another fork coming Oct 25 - Bitcoin Gold (BCG). It appears that Bitfinex isn't supporting this fork. So the simple arb is to short BTC at Bitfinex, then hold an offsetting position in a wallet. After the fork, split the wallet, use the BTC to cover the short, and end with free BCG. (Minus the 1 day lending fee.) Though I don't know how much the forked coin will be actually be worth, given that basically no one's supporting it.

As for Segwit2x (B2X), from what I can tell Poloniex isn't supporting it. Same story holds here, short at Poloniex, hold in wallet and split your own coins. A lot more counterparty risk with Poloniex, but the rewards seem pretty high. The B2X futures at Bitfinex are forecasting a price of 0.15BTC. As far as I can tell, this also seems to be the case with BitMex. And maybe GDAX, though it was unclear if they're going to unconditionally credit B2X, or just credit it in the scenario that it "takes over" BTC.

Cheng


Total Posts: 2838
Joined: Feb 2005
 
Posted: 2017-10-25 10:41
Can someone explain me what the latest fork (BitCoin Gold) is all about?

"He's man, he's a kid / Wanna bang with you / Headbanging man" (Grave Digger, Headbanging Man)

eläin


Total Posts: 63
Joined: Jun 2010
 
Posted: 2017-10-25 12:46
It's an altcoin that distributes the "initial" coins based on the Bitcoin blockchain. You have one Bitcoin, you get one Bitcoin Gold. The creators of Bitcoin Gold have designed it so that they get extra Bitcoin Golds. They hope that using the name Bitcoin in the name of their altcoin and distributing coins to existing Bitcoin users makes it more public, and the fact that you are asking about it, shows that their strategy works. The next step for them is to find people to sell their Bitcoin Golds to. It's basically a scam, if it works (they find people who are willing to buy their coins) there will be many more forks like this.

mtsm


Total Posts: 206
Joined: Dec 2010
 
Posted: 2017-10-30 16:42
Does anyone here have views on APIs offered by various exchanges?

It seems to be the case that a lot exchanges offer predominantly websockets in addition to REST. Some exchanges offer the fix protocol, but I hear that the implementations are often considered to be shitty and the de facto standard seems to be websockets.

Any thoughts?

contango_and_cash


Total Posts: 72
Joined: Sep 2015
 
Posted: 2017-10-31 23:40
fwiw i use gdax.

no issues and very easy to interact with.

no comments on anything meaningful (shorting, higher frequency etc)

Nonius
Founding Member
Nonius Unbound
Total Posts: 12706
Joined: Mar 2004
 
Posted: 2017-11-01 02:34
I've tried Kraken's API. don't know how it compares to others.

Chiral is Tyler Durden

mtsm


Total Posts: 206
Joined: Dec 2010
 
Posted: 2017-11-01 15:54
Thanks, do you mean you use GDAx with WS or FIX?

It's definitely my favorite exchange for BTC and ETH, but if you want to handle sh!tcoins you need to look elsewhere like Bitfinex, Bitterex or HitBTC, etc...

Kraken too, but it's no got for NYS residents.

mtsm


Total Posts: 206
Joined: Dec 2010
 
Posted: 2017-11-03 17:54
EL, did you find anything to milk segwit2x?

EspressoLover


Total Posts: 254
Joined: Jan 2015
 
Posted: 2017-11-04 00:23
Yeah, actually. There appears to be two tenable approaches.

Option 1 is some trade that looks like this. Short BTC futures at Bitmex (which explicitly is not supporting Segwit2X). Buy spot BTC and hold at Bitfinex, GDAX or in your own wallet. Lock in the B2X price with the BT2 tokens at Bitfinex (which are basically pre-fork forwards for B2X). At the fork you should receive B2X from the long spot position, which is then used to pay the BT2 position. Unwind the futures and spot position, which should hedge against any market movements in BTC.

Right now the futures and spot prices are trading at a significant basis. Which they weren't at the time of my post. So to really be risk-free you have to lock in B2X with BT2. Otherwise if B2X ends up pricing below the basis you paid at entry, you will lose. (The basis probably will revert to zero almost immediately after the fork). As of now the basis is priced at approximately 0.06 BTC, whereas the BT2 tokens are trading at 0.15 BTC. So the above arb should guarantee 0.09 BTC per unit of notional BTC. (Minus transaction and funding costs, which should be comparatively minor).

The annoying thing about this trade is that even though your position is hedged it's at two separate exchanges. So if you trade it with leverage, you'll have to monitor BTC's price. If it jumps up or down, you'll have to rebalance funds between exchanges to avoid margin calls. Given the leverage available at Bitfinex/GDAX and Bitmex, you can probably lever this trade up 2:1. So you're looking at a 15-18% return on capital.

Option 2 is a little less of a pure arb, but offers substantially higher potential returns. Rather than explicitly holding over the fork, you can bet that the spot/futures market will eventually converge to rationality at least immediately prior to the fork. The solution is to trade the basis directly betting that it will converge to the implied B2X price. You can even drop BT2 from the equation, because it would have to fall by over 50% before the basis was overpriced. So far it's been pretty narrow around 0.15BTC.

The nice part about this is you can run the whole trade at Bitmex, by using the swap to trade spot. That's an option because you're betting on the basis to converge prior to the fork, so you don't have to worry about Bitmex's lack of B2X distribution. Worse case if it's 24 hour prior to the fork, and the basis hasn't converged, then you can still put on the trade from option 1.

This property allows you to deploy a lot more leverage. Both because Bitmex allows for 100:1 leverage, and because you can cross margin the futures against the spot. Even if BTC jumps up or down, you're not at risk for a margin call. Your only mark-to-market losses come from a change in the futures-swap basis.

It'd be highly unlikely that basis moves to less than zero before the fork. Since it's trading at 0.06BTC now, you can use 15:1 leverage or more and still be pretty safe. Let's say you exit if the basis converges to 10% of the implied B2X price. In that case you'd be looking at a PnL of 0.075BTC on the notional. That'd be a return of 112% on capital. But unlike the pure arb you do have risk if the basis widens, and doesn't converge before the fork.

JTDerp


Total Posts: 44
Joined: Nov 2013
 
Posted: 2017-11-05 17:26
Anyone come across online discussions of BTC's volume/liquidity in comparison to its price ranges, whether during these last several months of exceptional upward momentum, or during earlier timeframes? And moreso, any notions of arbitraging liquidity among the several exchanges (BTC-China especially, also Bitfinex, Kraken, Coinbase, Poloniex, etc)? My contrarian-c*nt side can't help but wonder if a handful of large operators are running the 'penny stock playbook' on price manipulation. A brief search netted this article from Coindesk, which at least shows an old snapshot bar chart of trading volume across several exchanges, but not much more insight than that.

I have no position in any cryptos, but am now taking an active interest in learning about the mechanics of the market, beyond the tip of some college kid's hot tip of "d00d, just BTFD, it's going to 10,000 next week."

After reading about Ripple & IOTA a bit, it _seemed_ to affirm a belated 'a-ha' moment as to the intrinsic values of Blockchain, but as for the recent gains in BTC, I have to wonder *why* prices have excelled so much...most recent memory being that CME announced last week their plans to add BTC futures by year-end, but jeez, it's gained another thousand points since then...

The clouded mind seeks; the emptied mind finds.

TSWP


Total Posts: 383
Joined: May 2012
 
Posted: 2017-11-07 12:20
Some sort of legitimization of Bitcoin seems to be in progress with Bitcoin Futures on CME (useful link, saves google search: http://tinyurl.com/yaa6rz3t).

Since contracts appeared and later died on exchanges, what CME is doing is not a proof of Bitcoin's future (sorry for the pun), but it makes it harder to believe that Bitcoin is about to disappear soon, as implied by many crypto-doom-sayers.

Cheng


Total Posts: 2838
Joined: Feb 2005
 
Posted: 2017-11-08 08:48
Funnily CME seems to be afraid of the volatility BitCoin brings and plans to implement the standard circuit breakers of 7%, 13% and 20% intraday. My guess is they will need someone standing at the switch to restart trading three times a day Big Smile.

"He's man, he's a kid / Wanna bang with you / Headbanging man" (Grave Digger, Headbanging Man)

jslade


Total Posts: 1102
Joined: Feb 2007
 
Posted: 2017-11-08 21:49
Some of the recent price action is attributable, more or less, to merger arb type effects, as mentioned above. Both ETH and BTC have potential chain splits in the near future. Apparently BTC (segwit2) split was just deferred this morning. Hold a crypto coin before a split, you have two of them after the split.
There's other factors; the Japanese housewife carry trade is to some extent being pushed into Cryptos, CME, the fact that it's in the news, taxi drivers trading it, etc.
FWIIW poloniex isn't cash settled; that thing you're seeing on there that looks like dollars is something called a USDT -a bitcoin derived "tether" to USD. It's half genius and half insane; it remains tied to USD because, well, people believe it should be.
If the whole thing blows up next week, it will be a fascinating data set for financial economists if nothing else.

"Learning, n. The kind of ignorance distinguishing the studious."

pj


Total Posts: 3353
Joined: Jun 2004
 
Posted: 2017-11-11 18:06
WRT Ferriss podcast mentioned by chiral3
IMHO it deeply sucks.
Unless you know absolutely
nothing about cryptocurrency and want
"to construct a wrong mental model". Piss

The older I grow, the more I distrust the familiar doctrine that age brings wisdom Henry L. Mencken

rftx713


Total Posts: 99
Joined: May 2016
 
Posted: 2017-11-11 20:35
pj - not that I'm disagreeing at all (I have my own issues with it), but would be curious to hear your specific reasoning why it's horrible

rowdyroddypiper
NP Wrestling Champion

Total Posts: 1181
Joined: Apr 2004
 
Posted: 2017-11-13 03:09
@JTDerp - you can look at this from coinmarketcap to get an idea. It will break it down by exchange and then by pair. This should at least give a rough idea of what's going on. I'm not sure what inspired you to eureka about IOTA but it's written for and by idiots. Cannot recommend avoidance strongly enough. A cryptocurrency that "goes down" for a few days because the central server is nuked doesn't seem to be ideal. As for your intuition on price manipulation, well yeah, it's real. Go look at price depth, then consider the players that have lots of coins at an extremely low basis and think about what kind of games you'd play to monetize that pile since there's no way you can just sell it.

@jslade - tether is a big scam. If you follow @bitfinexed on twitter he does, imo, a great job of exposing and explaining. It's genius for the guy selling them, insanity for the guy buying them. Sounds like a lot of financial products! Also agree inre: the merger arb effects. I joked to my friend that is running a largeish crypto trading outfit that instead of trying to fuck around with algorithmic trading, becoming an event driven guy makes a lot more sense. Latest action indicates I may not have been joking.


Revolution to the mean

pj


Total Posts: 3353
Joined: Jun 2004
 
Posted: 2017-11-13 11:01
Well,
1) intense circle jerk and punting of the bitcoin.
2) No valuable info. If you do not know about the stuff
before, you will be no smarter after. I will make an exception to "the fly in the amber" analogy
which is slightly wrong and most probably appropriated.
3) Not answering any interesting issue even when it was
raised. For example about those "dumb hippies" asking what value does bitcoin store.

Later it degenerates to quantum thoughts.
Have any of those "polymaths" ever heard of Bayesian inference?

Waste of time.

The older I grow, the more I distrust the familiar doctrine that age brings wisdom Henry L. Mencken

JTDerp


Total Posts: 44
Joined: Nov 2013
 
Posted: 2017-11-13 18:53
@rowdyroddypiper: thank you very much. The only motive I had for looking into IOTA & Ripple was a brief search for 'altcoins' that **claimed** to have some fundamental utility to them. Like mentioned, I know next to nothing about the markets for coins, only a little about the concept of Blockchain. I know that pump-&-dump penny stock schemes in the U.S. are/were oftentimes traced back to a myriad of foreign shell companies, and given the talk of a lot of these ICOs & altcoins originating from Asia, right or wrong, I proceed from that prejudice.

The clouded mind seeks; the emptied mind finds.
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