Post
Topic
Board Trading Discussion
Re: Building a great Bitcoin exchange, part I: transaction fees
by
rta
on 11/04/2013, 22:53:16 UTC
Perhaps it's a good thing to incentivize the liquidity providers.

I would say it most certainly is a good thing. Liquidity and (narrow) spreads are very important to users (not up there with trust, but still pretty important). At the ideal(ized) exchange, users wouldn't need to worry about these things, and even big orders wouldn't cause the market to swing. From what I can tell Bitfloor usually have a very narrow spread, but volume/liquidity is somewhat lacking.

Also, I think you should welcome professional traders and bots, as that is probably the fastest and best way to achieve high volume and liquidity on the exchange. Sure, that will require you to provision extra network/computing capacity and a good API, but I'm pretty sure that cost is easily outweighed by the "services" they provide to regular users.

Good luck with your project. In order for Bitcoin to survive its own popularity, more and better exchanges are needed. Not to mention the irony of the Bitcoin world having all but a single centralized exchange...