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High Frequency Bitcoins: HFT Firms Now Accepting BTC Payment

Tyler Durden's picture





 

While Bitcoin has been relatively more stable than high-frequency-traded US equity markets in the last few weeks, the news that HFT tool provider Perseus Telecom will be accepting Bitcoin for its services. As The FT reports, move highlights high-frequency traders’ increasing interest in trading Bitcoin as global regulators indicate a growing acceptance of fast-emerging digital currencies - despite several high-profile arrests.Perseus CEO, Jock Mr Percy said the extension of high-frequency trading into virtual currencies would change the nature of the Bitcoin market over time.

 


Via The FT,


A company that develops the tools used by high-frequency traders has become the first market infrastructure provider to accept payment for services in Bitcoins.

 

...

 

Perseus Telecom, a US trading technology group, said on Thursday it would accept the controversial digital currency for its services worldwide and process transactions with GoCoin, the payment platform.

 

...

 

High-frequency traders use complex algorithms and superfast computers to trade in and out of assets in fractions of seconds. Bitcoin is of interest in part because of its electronic nature and because its high daily volatility potentially offers lucrative returns. Many superfast traders have found profitability tougher in recent years in mature and competitive markets such as equities and foreign exchange.

 

...

 

Mr Percy said the extension of high-frequency trading into virtual currencies would change the nature of the Bitcoin market over time. “At the moment, [HFT] is still a small part of the market as there are a lot of retail investors trading Bitcoin. In time the spreads will narrow.”

 


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Thu, 02/06/2014 - 23:06 | Link to Comment SafelyGraze
SafelyGraze's picture

what exactly is "liquidity" anyway

 

Thu, 02/06/2014 - 23:07 | Link to Comment Charles Nelson ...
Charles Nelson Reilly's picture

My toilet after eating cookie dough & drinking warm coke on a 90+ degree day.

Thu, 02/06/2014 - 23:08 | Link to Comment Cult_of_Reason
Thu, 02/06/2014 - 23:13 | Link to Comment fonestar
fonestar's picture

WO0oHO0OoOOo!  BITCOIN!!

http://www.youtube.com/watch?v=xBGpRLjNnzM

 

Thu, 02/06/2014 - 23:12 | Link to Comment Dr. Engali
Dr. Engali's picture

And here..... We..... Go.

http://youtu.be/xSLlZh9yelk

Fri, 02/07/2014 - 00:51 | Link to Comment erg
erg's picture

Bitcoin. It's bold, it's brash, it's counter-culture and it's accepted everywhere. Woohoo!

Thu, 02/06/2014 - 23:14 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

fonestar

Just got some today, eh, mate!

 

(Gold later)

Thu, 02/06/2014 - 23:50 | Link to Comment Debtonation
Debtonation's picture

Fonestar, I am concerned about an event that occurred several weeks ago.  A 51% attack was nearly feasable on the Bitcoin network.
http://www.heavy.com/tech/2014/01/ghash-io-51-percent-attack-bitcoin/
http://learncryptography.com/51-attack/
Ghash.io did released a press statement notifying users they had no intention of conducting an attack even if they achieved 51% control.
https://ghash.io/ghashio_press_release.pdf
However, if a 51% attack occurred, it would be worse for Bitcoin than Bernanke/Yellen was/is for the dollar.  Several alt-coins have already been destroyed by 51% attacks.  I don't know how to mine, just a Bitcoin speculator, but my understanding is this is a mining pool thing and requires deliberate malicious intent, and miner withdraw from the pool is ultamitely what prevented 51% network control.
At the moment crisis seems to have been averted, at least according to Blockchain Info now that hashing distribution is spread more evenly. Although, 4 pools still control 3/4 of the network.
https://blockchain.info/pools
Since you seem to be the expert, is this a potentially fatal flaw with Bitcoin, a single point of failure?  If someone were to hack into multiple pools to the point they could control over 51% of the network, they could attack the network. Does a new cryptocurrency or one that already exists need to be designed to take its place?  From my understanding, Litecoin uses scrypt and is less suseptible to this since ASIC miners can't dominate the network, not sure if that's true.

Fri, 02/07/2014 - 00:22 | Link to Comment wintermute
wintermute's picture

SHA-256 ASICs used by Bitcoin have many manufacturers and spread out. Yes Ghash passed 40% for a while, but Cointerra and Hashfast and others are rolling out right now and thousands more high-power ASICs will be in different hands.

Litecoin is more susceptible to a 51% attack because Scrypt ASICs are a lot more work to design and make. Only one manufacturer has announced active development. If these are produced and concentrated then 51% hashing power in one place is very possible.

But a 51% attack is losing loads of money. Ghash is making $20k every 30 mins. This would be devastated if they got to 51% and tried any nonsense, plus their big holding would lose massive capital value. The high value of the currency encourages good behavior.

Fri, 02/07/2014 - 00:28 | Link to Comment Debtonation
Debtonation's picture

I'm aware that there are a multitude of mining manufacturers.  What concerns me is the fact that they all come together in a centralized pool which makes them susceptible to hashing domination in a situation where a rogue individual could force a 51% attack.  I'll be honest, I like bitcoin, but the miners must break up into more pools to prevent such an event from even being possible.

Fri, 02/07/2014 - 00:43 | Link to Comment wintermute
wintermute's picture

I agree with you and understand the concerns. One significant point is that few mining pools are monolithic i.e. the hashing power is centrally controlled. If a pool was to worry the mining community then many of the individual miners would change pools, directing their ASICs elsewhere.

The pools to worry about are those which have their own ASIC farms, or offer hosted services where the customer can only buy or sell hashing power, not controlling the hardware.

It would be better if more effort was put into P2Pool, which is a decentralized pool and the best type.

Fri, 02/07/2014 - 06:54 | Link to Comment HyBrasilian
HyBrasilian's picture

Put the WOPR on it [He's a sneaky little shit]

Fri, 02/07/2014 - 07:53 | Link to Comment Meltdownman
Meltdownman's picture

Winter are there any good companies that are worth investing in that have excellent software used for trading bitcoins (e.g. the Next Paypal)?  The only startup that I have been able to find is WPCS and they only have one guy writing the software to funnel the transactions.  Their CEO is a bit of a goof. Their stock price might get dragged upwards if they manage to come out with some announcement or on the tail end of some other firm making it big.  I would love to see a firm to become the next Paypal.

 

Thanks ahead of time,

The Meltdownman

Fri, 02/07/2014 - 08:10 | Link to Comment TheHound73
TheHound73's picture

Coinbase and BitPay are the clear leaders in the Bitcoin payments space but they are not publicly traded.  Crypto Financial (CFIG) and Neo & Bee (NEOBEE) are interesting companies with possible bright futures.  Both are publicly traded on the UNREGULATED Havelocks Investments platform.  Monetas is a company attempting to take Bitcoin's decentralized model to the a Trading Exchanges level.

Fri, 02/07/2014 - 16:43 | Link to Comment Meltdownman
Meltdownman's picture

Thanks Hound for the insights. Very much appreciated?  You investing any in those suggestions that allow trading?

 

The Meltdownman

Fri, 02/07/2014 - 19:45 | Link to Comment TheHound73
TheHound73's picture

I have tiny positions in CFIG and NEOBEE.  CFIG price has gone down might be a good buy now, they need to release their product soon.  NEOBEE has been stable.

Fri, 02/07/2014 - 00:43 | Link to Comment Matt
Matt's picture

ASIC versus GPU is not too important. The problem is that some mining pools are better run, or have lower fees, or are otherwise more attractive, so more people choose to mine there.

Switching to an inferior pool as an act of charity to preserve the network integrity, in exchange for making less money, is an interesting conundrum.

In a free market system, a badly run business would go out of business, and superior models would rise to replace them. In Bitcoin land, people are forced to charitably use an inferior service, to avoid destroying the system. 

Fri, 02/07/2014 - 00:45 | Link to Comment wintermute
wintermute's picture

Absolutely correct.

Fri, 02/07/2014 - 03:23 | Link to Comment animalspirit
animalspirit's picture

GHash.io is mining publicly. Meaning they announce each block as they solve it. With 51% they can begin denying transactions from others. Essentially that's a denial of service attack. That's it. If they did that, miners would abandon them and that would be it for their 51%.

To perform malicious double spending thanks to 51% control, the attacker must be mining privately (not releasing blocks) and have more than what the entire Bitcoin network currently has (currently 19,100 Th/s). So if Ghash.io had 51% (let's say 10,000 Th/s), then the attacker needs to have twice that ... 20,0000 Th/s.

So Ghash.io (or any pool) doing a denial-of-service is not the 51% attack that would decimate bitcoin.

Incidentally, to get those 20,000 Th/s, an attacker would need to invest several hundred million dollars in mining hardware and pray that that purchase is delivered before the mining difficulty level rises before a billion dollars of hardware is the threshold. i.e., not gonna happen.

Fri, 02/07/2014 - 11:09 | Link to Comment fonestar
fonestar's picture

fonestar gots the crypto flowin'

Fri, 02/07/2014 - 11:46 | Link to Comment fuu
fuu's picture

It's your song baby.

Fri, 02/07/2014 - 00:05 | Link to Comment DumpsterFire
DumpsterFire's picture

Did Bob Costas get pink eye from one of those "borrowed" Russian pillows?  It sure looks like it.  I would shit on my pillow as well before handing it over to one of Putin's thugs.

Fri, 02/07/2014 - 01:23 | Link to Comment ACP
ACP's picture

I would shit on my pillow before giving it to Bob Costass.

Thu, 02/06/2014 - 23:36 | Link to Comment fonestar
fonestar's picture

what exactly is "liquidity" anyway

 

That special creamy feeling in your pants watching your net worth rise thousands of percentile with the biannual 60% correction.

Thu, 02/06/2014 - 23:40 | Link to Comment Charles Nelson ...
Charles Nelson Reilly's picture

You must have a glory hole cut into one of your Bronies!??

Fri, 02/07/2014 - 00:12 | Link to Comment BLOTTO
BLOTTO's picture

Can anyone point me to any ancient texts i.e., Bible, Quran, Torah,

Book of Enoch, Book of Ezekiel, Dead Sea Scrolls,

or perhaps writings scribed on walls, or Egyptian hieroglyphics, monoliths, anything - regarding the mention of bitcoins so i can do some research?

.

Because whatever is mentioned and valued back then - is very much valued and relevant now.

'Nothing New Under the Sun,

History is Repeating Itself'

-King Solomon

c.950 B.C.

 

Fri, 02/07/2014 - 00:33 | Link to Comment Skateboarder
Skateboarder's picture

You're not going back far enough; the Anunaki made us to mine bitcoin.

Fri, 02/07/2014 - 00:43 | Link to Comment Prisoners_dilemna
Prisoners_dilemna's picture

I don't think toilet paper was mentioned either.

Should we revert to the Ancient Way?!?     I'm kinda partial to clean hands.  :(

 

Maybe the market will select the technologies that allow us to escape having to wipe our asses with our hands... 

Are you sure you want to stick with "the old ways"?

 

Fri, 02/07/2014 - 01:02 | Link to Comment BLOTTO
BLOTTO's picture

P_d...it doesnt matter what you or I think, its what 'they' think and believe in that is important.

.

And whatever ruled us back then, is ruling us now. Nothing has changed.

BAck then...They used leaves to wipe their asses - now we use toilet paper.

They used twigs to eat - now we use a fork.

They used camels as a vehicle - now we use cars.

They used smoke signals to communicate - now we use cell phones.

etc...however, thats all trivial shit. Whats new? nothing.

We are not progressing with this new way - in fact, regressing. tell me different? Why are we not improving on this planet - it doesnt make sense.

See what skates said...

Fri, 02/07/2014 - 02:10 | Link to Comment TheHound73
TheHound73's picture

If leaves, twigs, camels and smoke signals are progressive, what's stopping you from setting down that cellphone you are typing on and going for it?

I think of Bitcoin as a "different" way to manage contracts between individuals, the first example of which is as a currency.

Fri, 02/07/2014 - 07:08 | Link to Comment HyBrasilian
HyBrasilian's picture

Should we revert to the Ancient Way?!?

 

Ancient Civilizations were able to erect massive megalithic structures [which included precise assembly of stones which weighed up to 80 tons & more]. MODERN engineers [& with the use of crude oil], still haven't figured out how it was done, or what exactly the structures, which still stand today, were for other than some sophomoric conclusions that they were kings tombs & observatories].

It is supposed that many more have yet to be unearthed [or lie at the bottom of seas in the present day and have yet to be discovered].

The first thing I'd be willing to part with in MODERN society is 'EXCEPTIONALISM' [& bitcoin, but probably MORE the cockiness of its freshly milled adopters, is a shining example of that].

IOW ~ Talk to me in 20,000 years. One thing I'm sure about is that gold will still be around, [& there will probably be some banker trying to steal it from you].

 

 

Fri, 02/07/2014 - 10:52 | Link to Comment merizobeach
merizobeach's picture

Prisoners_dilemna: "Should we revert to the Ancient Way?!?"

Indeed, you are a prisoner of misspelled (false) dilemma.  If you had traveled a bit more, you might understand the superiority of the SE Asian ass-sprayer.

A guy I know once framed it like this: "if you got shit on your hand and I handed a you a paper towel to wipe it off, would you feel that's good enough?  No, you wouldn't--you would want to wash your hand.  So why would you feel that paper is good enough to wipe shit off of your ass?"

Fri, 02/07/2014 - 11:00 | Link to Comment merizobeach
merizobeach's picture

Please enlighten me as to how you are able to short bitcoin because I am not aware of any method, and I would be truly impressed.  If you don't have a way of profiting on plummeting bitcoins, then I doubt your networth is rising today with btc touching $670.

Fri, 02/07/2014 - 00:08 | Link to Comment The Dunce
The Dunce's picture

Bitcoin rocks.  I bought some groovy stuff with the currency--including sea-monkeys.  Word to your mother.

Fri, 02/07/2014 - 08:00 | Link to Comment Bangin7GramRocks
Bangin7GramRocks's picture

Gambling Squared!

Thu, 02/06/2014 - 23:08 | Link to Comment WayBehind
WayBehind's picture

Bitcoin is still around?

I don't know, but I prefer gold ...

Thu, 02/06/2014 - 23:13 | Link to Comment Soul Glow
Soul Glow's picture

Bitcoin could continue its run.  I would give it more room than equities and bonds - more room than fiat currency at least.  Gold, at the end of the day, is more reliable than any of them.  That because it is a finite resource, and that which you hold in your hand.

Thu, 02/06/2014 - 23:13 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

A safe place: 75% physical gold, 20% CA$H (physical) and 5% BTC.

BTC for travel, fishez...

Thu, 02/06/2014 - 23:35 | Link to Comment Dr Benway
Dr Benway's picture

But why would you hold as an investment something you purportedly only use for travel or transactional purposes? LOL. It's like buying travellers cheques (remember those?) and stashing them. No point whatsoever.

Truth is, BTC is almost exclusively used for speculation, and that's the reason the price has skyrocketed. It could perform its purported transactional and "travel" purposes just as well at $50, or at $1 for that matter, but to benefit the Winklevi and the banksters it had to be ramped. So it was ramped.

Thu, 02/06/2014 - 23:35 | Link to Comment BLOTTO
BLOTTO's picture

Anything of value you have to work hard for.

 

 

Thu, 02/06/2014 - 23:39 | Link to Comment adr
adr's picture

Try walking into a Manhattan restaurant and saying that.

Thu, 02/06/2014 - 23:45 | Link to Comment TheHound73
TheHound73's picture

 "It could perform its purported transactional and "travel" purposes just as well at $50, or at $1 for that matter"

Quick question: at a value of $1 per unit and 12 million units in existence, how much economic activity can be taking place at any given time assuming ALL units are in constant motion?

Note: the vast majority of bitcoins do not move on any particular day.  Most of mine sit offline.

Thu, 02/06/2014 - 23:51 | Link to Comment Dr Benway
Dr Benway's picture

That would depend on BTC's velocity, which from what I've heard is extremely high.

Fri, 02/07/2014 - 00:00 | Link to Comment Godisanhftbot
Godisanhftbot's picture

Like the velocity of a very upset stomach?

Fri, 02/07/2014 - 00:06 | Link to Comment TheHound73
TheHound73's picture

Negative.  It is very low.

Interestingly, yesterday and today is the highest number of "Days Destroyed", roughly analagous to velocity.  More specifically, large amounts of very old coins are on the move today.  The main exchange, Bitstamp, has dropped $65 to $740, or about 9%.

Fri, 02/07/2014 - 00:20 | Link to Comment Dr Benway
Dr Benway's picture

I don't consider "days destroyed" to be analogous to velocity.

 

What I mean by velocity, is that a large number of BTC relative to the total number of BTC in existence can be transacted in any given time period.

Fri, 02/07/2014 - 00:42 | Link to Comment TheHound73
TheHound73's picture

Ok, this chart shows that 800k coins in total moved yesterday, compared with 12 million coins total yields a 24-hr velocity of 0.066

Technical point: the 800k figure includes change given back to the sender.  Given $800/coin a total of $640 million of activity might have taken place with the 6.6% of bitcoins that moved yesterday.

Fri, 02/07/2014 - 01:06 | Link to Comment Dr Benway
Dr Benway's picture

Which is exactly my point.

Fri, 02/07/2014 - 02:46 | Link to Comment RideTheWalrus
RideTheWalrus's picture

Can you find out where they moved and in what context? 
Is it 800k coins that have facilitated finacial transactions in exchange for goods or services OR is it more like 5 mining consortiums shifting coins around their various wallets to give the illusion there's a vibrant market out there?

 

 

Fri, 02/07/2014 - 02:58 | Link to Comment TheHound73
TheHound73's picture

Not by using just the blockchain.  Destination accounts can be created without permission by anybody anywhere anytime for free.

Fri, 02/07/2014 - 03:04 | Link to Comment RideTheWalrus
RideTheWalrus's picture

Hmmm, so it's possible there's a plunge protection team shifting coins back and forth to defend the price the mega-miners need to make their investments worthwhile and that could be why after ramping very quickly to $800-$900 range as those miners came online, they've gone more or less sideways (if you bought in that range).

There was a little bump to challange gold after that initial ramp but that fell short and rested back at the 'miners range'. 

The problem i'm seeing is the fresh blood is going into the cheaper alt-coins for speculating and messing around and the miners are defending their ramped price rather than letting it drop.

The potato is getting hot.

 

Fri, 02/07/2014 - 03:27 | Link to Comment Dr Benway
Dr Benway's picture

Most of it is speculative trading, with but a fraction of the $640m associated with the actual purchase of goods or services.

Doesn't even have to be a cartel creating fake transactions, there are enough gamblers and greater fools out there.

Thu, 02/06/2014 - 23:57 | Link to Comment Swarmee
Swarmee's picture

I know the PM markets have trained people otherwise in recent years, but believe it or not price usually increases with demand.
BTC hit the public consciousness big time in 2013, demand was up and rate of issuance remained at a lower pace (ie NOT 85 billion/month) thus price went up.

Still risky, still volatile. if you can mine it or altcoins cheaply then it's a low risk for potentially high reward. Treat it as a penny stock, not gold, and it makes more sense. People who preach all or nothing with respect to BTC are either gamblers or risk-averse, either is ok but don't tell the whole story.

Fri, 02/07/2014 - 00:21 | Link to Comment Dr Benway
Dr Benway's picture

In classic microeconomics demand is actually expected to fall when price rises and vice versa, i.e. negatively correlated. Only in speculative bubble markets do higher prices lead to even higher demand.

The higher demand for phyzz gold after the price fell was thus perfectly consistent with microeconomic theory, whereas the behaviour of stock/property/BTC bubbles is not.

I agree fully with you, however, that you can treat BTC like any other manipulated penny stock and trade on it. Some will do so successfully. If you choose to try, best of luck to you.

Fri, 02/07/2014 - 01:04 | Link to Comment TheHound73
TheHound73's picture

In a saturated market that makes sense. However Bitcoin started 5 years ago with a handfull of people and now there are perhaps 5 million users. How many users will there be next year?  If the supply is reasonably fixed and the current users do not become poorer, the price should increase with increasing users.

Fri, 02/07/2014 - 01:14 | Link to Comment Dr Benway
Dr Benway's picture

You conflate 'users' with 'speculators'. Increasing speculation could drive BTC upward, not increased use. As I pointed out above, BTC could perform all its purported transactional purposes while at a lower price. And its rise to date have had nothing whatsoever with increased 'use'.

Fri, 02/07/2014 - 01:37 | Link to Comment TheHound73
TheHound73's picture

With 93% of bitcoins being hoarded from day to day, it would appear that the primary use is store of value rather than medium of exchange.

Fri, 02/07/2014 - 02:00 | Link to Comment Dr Benway
Dr Benway's picture

If this is your conclusion, when hearing that 7% of all BTC is traded every day, $640m in value flipped while few actual tangible things are bought, then it seems no data set imaginable would indicate to you that the main use of BTC is speculation.

I am seriously confounded how you can reach such a conclusion?

Fri, 02/07/2014 - 02:47 | Link to Comment TheHound73
TheHound73's picture

7% of BTC was transacted with in the past 24 hours .  We don't know if that was for goods/services, swapping between personal wallet addresses, used for online gambling, being sent to/from a trading exchange, or whatever.  We just know the amount of coins used in Transactions on the network.  We can also see the trading volume on the exchanges yesterday: Bitstamp 30k, Mt.Gox 21k... More than 10 times less than transaction volume and about 0.5% of all bitcoins in existence.

Fri, 02/07/2014 - 02:57 | Link to Comment Dr Benway
Dr Benway's picture

Dude I understand what the metrics mean. But I doubt you do.

Fri, 02/07/2014 - 01:19 | Link to Comment Swarmee
Swarmee's picture

Note that I said price increases with demand, not that demand increases with price, although the latter can and does happen because humans are irrational. The amount of transactions competed decreases as the price goes higher as fewer participants can afford it, but that does not necessarily mean the demand decreased, only viable participants.

Thu, 02/06/2014 - 23:33 | Link to Comment TheHound73
TheHound73's picture

Bitcoin goes to Council of Foreign Relations. Feb 6, 2014

Paging satoshi911/101 in 3, 2, 1...

Thu, 02/06/2014 - 23:07 | Link to Comment Dr. Engali
Dr. Engali's picture

Fonestar in 3... 2...... 1

Thu, 02/06/2014 - 23:18 | Link to Comment fonestar
fonestar's picture

fonestar is like a bad VD that never leaves.

Thu, 02/06/2014 - 23:32 | Link to Comment NoDebt
NoDebt's picture

Thar she blows!

Crabs, the Clap.... no biggie as far as VD goes.  You're more like AIDS.

 

Thu, 02/06/2014 - 23:19 | Link to Comment fonestar
fonestar's picture

.

Fri, 02/07/2014 - 02:02 | Link to Comment jomama
jomama's picture

Ezra Pound is spinning in his grave.

Fri, 02/07/2014 - 02:22 | Link to Comment fonestar
fonestar's picture

Pound would be proud of those who remember his name while battling filthy usura!

Fri, 02/07/2014 - 02:24 | Link to Comment tip e. canoe
Thu, 02/06/2014 - 23:11 | Link to Comment Soul Glow
Soul Glow's picture

Note to Bitcoin bulls - this is not good news.

The last thing you should want to happen is for HFT to handle bitcoins.  

Take it from a gold bull.

Thu, 02/06/2014 - 23:19 | Link to Comment Advoc8tr
Advoc8tr's picture

My thoughts exactly. 

Thu, 02/06/2014 - 23:21 | Link to Comment fonestar
fonestar's picture

Bitcoin is like a Hollywood attention whore that needs the press to hate to love the attention (to pretend to hate it).  Steal a pair of shoes after making millions on the screen.  Any news is good news.

Thu, 02/06/2014 - 23:32 | Link to Comment TheHound73
TheHound73's picture

Lol, the company accepts bitcoin for payment of services. They may or may not build an HFT bitcoin platform in the future.  None of the current BTC exchanges could handle HFT any better than the trading bots that are already running on there.

Fri, 02/07/2014 - 00:59 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

There are no or should be no bitcoin bulls or bears.  Bitcoin is a methodology of portability out of a country.  No other method can achieve the same thing. 

When capital controls are in place, people are searched at the airport.  Cash will be found and grabbed.  Gold will be xrayed and grabbed. 

Nothing but bitcoin can get past that.

Fri, 02/07/2014 - 11:17 | Link to Comment Matt
Matt's picture

The problem is when  you go to cash out your 6+ figures in dollars through an exchange and bank that are both required to comply with KYC and AML laws.

Unless you have extrordinary patience and can sell you coins in coffee shops for several years.

Thu, 02/06/2014 - 23:14 | Link to Comment JailBanksters
JailBanksters's picture

So what's the best way to kill a Commodity besides give it to Goldman Sachs or JP Morgan to front run?

Thu, 02/06/2014 - 23:20 | Link to Comment Advoc8tr
Advoc8tr's picture

I'll take "introduce HFT algo trading" for 50 thanks Eddie.

Thu, 02/06/2014 - 23:15 | Link to Comment infinity8
infinity8's picture

"Perseus CEO, Jock Mr Percy" -?!?! Jock McPercy? Mr. Jock Percy? Just Perseus Jock? Where am I and what year is it?

Thu, 02/06/2014 - 23:15 | Link to Comment nmewn
nmewn's picture

"High-frequency traders use complex algorithms and superfast computers to trade in and out of assets in fractions of seconds. Bitcoin is of interest in part because of its electronic nature and because its high daily volatility potentially offers lucrative returns."

But...I repeat myself.

Fri, 02/07/2014 - 03:54 | Link to Comment Fíréan
Fíréan's picture

deletd as duplicated

Fri, 02/07/2014 - 03:53 | Link to Comment Fíréan
Fíréan's picture

and the potential to create a "bubble".

The  FED and the IMF have expressed both an interest and the desirability of cashless society.

 

( relocted my comment as was in reply to nmewn here)

Thu, 02/06/2014 - 23:16 | Link to Comment Tinky
Tinky's picture

Phantom currency fueling phantom trading? A match made in heaven! 

Thu, 02/06/2014 - 23:21 | Link to Comment fonestar
fonestar's picture

It's going to be great!

Thu, 02/06/2014 - 23:41 | Link to Comment Cabreado
Cabreado's picture

The longer this game goes on, the more disappointed the Bitcoiners will be.

The game?
It is neglect of root problems.
The fundamentals have nothing to do with "currency."

The trajectory, given problems ignored, is Bitcoin meeting its match in Control, just when you were celebrating the hardest, if even just in your mind and on your spreadsheet.

Thu, 02/06/2014 - 23:45 | Link to Comment Grosvenor Pkwy
Grosvenor Pkwy's picture

The days of easy speculative profits in Bitcoin trading and Bitcoin mining are over, probably forever. Now you are competing with the pros. And the pros have better computing equipment, better software algorithms, and more capital than you do. Good luck.

As a simple example, compare the mining rigs of amateurs and pros. The amateurs have either small rigs that cannot return a reasonable profit, or else nightmarish monsters with horrible physical designs, real firestarters with bad cooling and a rat's nest of cables. The pros have proper electrical and physical design to handle cabling and heat transfer correctly. In fact, the amateurs don't even seem to understand the need for proper physical design of electronic equipment using standard methods of rack mounting, cabling, and cooling systems, that has been developed for electronic installations over many years of experience in the computing, telecom, and military industries.

Thu, 02/06/2014 - 23:50 | Link to Comment TheHound73
TheHound73's picture

 "compare the mining rigs of amateurs and pros."

Ah, I guess amateurs and pros alike should just give up and admit defeat by the Central Banks.

 

Fri, 02/07/2014 - 00:07 | Link to Comment Grosvenor Pkwy
Grosvenor Pkwy's picture

I couldn't care less about your politics. If you see this as some sort of war against the financial establishment, you are welcome to risk your money on it, but don't encourage others to do so by promising phantom profits on highly speculative schemes.

The pros have taken over. The amateurs should give up. And if you don't know which category you fall into, you're amateur.

Fri, 02/07/2014 - 00:08 | Link to Comment Swarmee
Swarmee's picture

Some of us amateurs hold engineering degrees and are doing just fine, thank you. But mostly I agree, ASICs changed the bitcoin game, but scrypt still offers opportunity for now. BTC/altcoin arbitrage can be leveraged but that window will also close relatively soon with scrypt ASIC design.

Unfortunately since BTC supports micro fractional transactions natively I fear the introduction of HFT traders will result in little change in BTC price but a gradual transferral of market share to HFT traders one satoshi at a time. The only good news there is that acquiring all the BTC in existence means nothing if they crash the market in the process, it may bring price stability at the expense of human traders. Or not. Interesting times.

Fri, 02/07/2014 - 00:55 | Link to Comment Matt
Matt's picture

I think the blame on ASIC mining is misplaced. The high price and profitability of Bitcoin is what brought about the changes, and the competition for ASIC equipment, and the huge mining operations.

If there were no scrypt ASICs being developed or were impractical, at a high enough value, I suspect there would still be a giant mining operation in Iceland running banks of video cards, simply because at a large enough scale and with enough advantages, someone would do it.

This dream that someone paying $0.50 per Kwh for electricity living on a hot tropical island is supposed to be able to earn a living the same as a person living in a frigid wasteland with inexpensive renewable energy and cooling is ridiculous.

Fri, 02/07/2014 - 01:34 | Link to Comment Swarmee
Swarmee's picture

Pretty sure the dream/promise was that it was distributed, not that everyone had an equal shot at performance and efficiency. Why stop at electricity costs, how about pointing out many people worldwide don't even have access to that kind of infrastructure or the money to buy even a CPU, let alone GPU or ASIC? I recognize that over time there is a high likelihood that mining power will concentrate in the hands of the rich, early adopters, and most efficient locales. We end up trading one set of concentrated financial institutions for another as mining power aggregates. However at least many people were and are given a chance to take part in that right now, the established financial order gives no such opportunity. Eventually the same will likely be true of BTC, but no one said you were guaranteed profits in a gold rush, only that the opportunity was there. And as others have noted it's very possible the digital shovel sellers will be the ones who ultimately profit the most.

Fri, 02/07/2014 - 11:20 | Link to Comment Matt
Matt's picture

This is not unlike gold, where once thousands of independents could pan for gold and make a solid living, and now it is mainly a large corporate business.

I suspect people like the idea of decentralization, but in reality prefer the convenience of centralized services over their ideology.

Fri, 02/07/2014 - 08:27 | Link to Comment GrinandBearit
GrinandBearit's picture

"The days of easy speculative profits in Bitcoin trading and Bitcoin mining are over, probably forever. Now you are competing with the pros. And the pros have better computing equipment, better software algorithms, and more capital than you do. Good luck."

 100% truth here and very well stated.

Thu, 02/06/2014 - 23:45 | Link to Comment LongMarch
LongMarch's picture

So how do you HFT a currency that takes 10mins to confirm the trade?

Fri, 02/07/2014 - 00:11 | Link to Comment TheHound73
TheHound73's picture

Ah, that would be the "take delivery" part.  You can trade back and forth between fiat/BTC on an exchange as fast as the exchange software can keep up.

Thu, 02/06/2014 - 23:56 | Link to Comment Godisanhftbot
Godisanhftbot's picture

“The monitoring of the use of virtual currencies shows an increasing interest in them, including for the purpose of money laundering, profit obtained through illegal means,” ITAR-TASS quoted the Prosecutor General’s Office as saying.

 

Russia declares war on Bitcon and everything that smells like Bitcon.

 

 

Thu, 02/06/2014 - 23:58 | Link to Comment Godisanhftbot
Godisanhftbot's picture

 Every new bitcoin purchase should come with a kit, consisting of a suppository, a rubber glove, and a video explaining self fisting.

Fri, 02/07/2014 - 00:20 | Link to Comment TheHound73
TheHound73's picture

And a card with the Suicide Hotline phone number: 1-800-273-TALK

Fri, 02/07/2014 - 06:05 | Link to Comment SAT 800
SAT 800's picture

LOL. both of you guys crack me up. It's a video game for computer nerds; one of the few things they actually understand; let them have their fun; for awhile.

Fri, 02/07/2014 - 01:00 | Link to Comment DeusHedge
DeusHedge's picture

Being a part of the "next generation" (of headbangers) I don't know a whole lot. I do, however, know that this has regulatory agency written all the fuck over it.

Fri, 02/07/2014 - 01:16 | Link to Comment q99x2
q99x2's picture

BitDust: Last:$759.90

Fri, 02/07/2014 - 09:28 | Link to Comment TheHound73
TheHound73's picture

Bitstamp Last: $690

Bitcoin just entered a bear market.

The oldest Bitcoin exchange, Mt.Gox might be in it's death throes...

Bitcoin price plunges as major exchange halts withdrawals [CNN]

Fri, 02/07/2014 - 01:58 | Link to Comment jomama
jomama's picture

PAGING FALESTAR

Fri, 02/07/2014 - 02:25 | Link to Comment Alternative
Alternative's picture

Luckily, my gold maintains its solid value. 

Fri, 02/07/2014 - 04:03 | Link to Comment frenzic
frenzic's picture

Localbitcoins -33% in 24h.

Fri, 02/07/2014 - 04:51 | Link to Comment Philippines
Philippines's picture

So.. because GoCoin also accepts litecoin payments along with bitcoin, does that mean Perseus Telecom is accepting litecoin, or just bitcoin?

Either way, as more corporations adopt bitcoin as a form of payment, it will quickly turn into a de facto currency 

Fri, 02/07/2014 - 05:34 | Link to Comment frenzic
frenzic's picture

You mean it will quickly turn into another gift card the world doesn't need and most don't want.

Fri, 02/07/2014 - 11:24 | Link to Comment Matt
Matt's picture

The good news is, you are free to choose; no one is holding a gun to your head.

Fri, 02/07/2014 - 06:06 | Link to Comment SAT 800
SAT 800's picture

At last someone has created the perfect subject for an endless blog flamewar; an imaginary money, that either will or will not save the princess in the castle and various other fantasies shared by all computer freaks.

Fri, 02/07/2014 - 07:55 | Link to Comment nink
nink's picture

1). ASICs are not at edge of Moores law yet so much faster mining rigs are still possible. Edge today is 14nm and only IBM and Intel can do 14nm. Global Foundaries and TSMC are still in the 28 to 20nm range
2). The only one who would break 51% rule is someone who wanted to break bitcoin and this would not be an investor in bitcoin but perhaps it would be a country or COMPANY who's market is negatively impacted by bitcoin.
3). Today bitcoin is a store of wealth designed for handling large transactions securely. It is not a micro transaction currency as it can only perform 7 transactions per second and that transaction can take over an hour to receive an acceptable number of confirmations. Yes we can change the rules to get to 2000+ transactions per second on par with visa but any faster would break the security or force it into a centralized model.

Fri, 02/07/2014 - 08:08 | Link to Comment madtechnician
madtechnician's picture

My understanding of the protocol is that it can scale up to VISA / MasterCard speeds. Individual transactions are broadcast across the entire network and within a few seconds the payment is shown in the recipeients wallet. Miner block verifications are required - but for a low value transaction then only a broadcast will do , then according to the amount transacted on a sliding scale of value , so if you were transacting a few million dollars then yes you would want 6 confirmations.

Fri, 02/07/2014 - 08:16 | Link to Comment nink
nink's picture

Sorry the fee system to verify your transaction would ensure a low value transaction is never confirmed if we get beyond 7tp in current 1MB block size (you process the transaction with the highest fee first)    The flaw in your logic is 1 Million $1 transactions unconfirmed equals 1 * $1,000,000 transactions confirmed. 

Fri, 02/07/2014 - 09:17 | Link to Comment madtechnician
madtechnician's picture

Isn't the 1MB limit a temporary arbitrary limit which can be increased with simple revison updates of bitcoin-qt ?

Fri, 02/07/2014 - 08:24 | Link to Comment GrinandBearit
GrinandBearit's picture

Another bitcon ad - Please...

Buttcoin was created by the TPTB.  If it wasn't, it would've been gone a LONG time ago.  You morons who cannot see/understand this are totally asleep.

 

Fri, 02/07/2014 - 08:38 | Link to Comment nink
nink's picture

I am not a conspiracy theorist but if you look at the version of SHA256 that was used it was the only one the NSA did not have a back door in.   Remember when we all thought 128 bit encryption was secure and now you can ceack it with your kids gaming PC's video card.

Fri, 02/07/2014 - 09:07 | Link to Comment Sufiy
Sufiy's picture


Bitcoin Plunges As Exchange Mt. Gox Pauses All Withdrawals Due To Technical Issues

 Bitcoin Bubble is getting into the new stage of its development and we will see very soon what kind of technical issues are really holding the withdrawals from Mt. Gox. You can easily find a lot of allegations about the very sloppy service at least concerning withdrawals from this exchange on YouTube.

 

http://sufiy.blogspot.co.uk/2014/02/bitcoin-plunges-as-exchange-mt-gox.h...

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