Quote from: darkmethod on February 26, 2013, 12:05:26 AM

Quote from: gILisH on February 25, 2013, 05:26:14 PM

One thing important to mention.
Arbitrage doesn't work in Bitcoin.
E.g - 1 btc = 30 USD = 28.6 EURO
If the USD falls down by 50% - then the Bitcoin won't be valued at 60 USD, yet it will still be valued at 28.6 EURO.
Which means If you sell you Bitcoins for EUROS (which had no change ) and then buy with it USD - you just doubled the your money ( on USD value , of course ).

The reason is that there is no central authority to eliminate the arbitrage difference that is created.
No reason to panic. People aren't stupid - they wont sell it for less than 60 USD.... but only the sellers/buyers will be responsible for doing so.

This isn't 100% clear to me. Are you suggesting that arbitrage is not possible with Bitcoin because of the relative value it has at the moment of purchase? I'm extremely interested in arbitrage with Bitcoin and am looking for further clarification on this, I don't mean to put you on the spot. Thanks!

Sorry, my bad. I've been using the terminology wrong.
I meant that Arbitrage Management does not exist.
Arbitrage is the practice of taking advantage of a price difference between two or more markets.
So of course in Bitcoin markets the arbitrage is significantly more lucrative than in Fiat markets.
I was merely saying that in case the difference between Bitcoin markets goes wild - there is no authority to fix it/manage it/secure clients from it - only the sellers/buyers will determine how long till the difference fades away.
That time - From when the difference in price starts until the it fades away by buying/selling - that's where you want to be.