Post
Topic
Board Bitcoin Discussion
Re: How to fix the exchanges - a professional view.
by
gollum
on 12/04/2013, 10:47:11 UTC
Based on my experience of 20+ years trading countless billions in the real world:

1. Sort your trading code out.

2. Invest in hardware or hosting, you're making thousands or tens of thousands per day. Buy or hire a room full of the best machines you can (I'm not a tech expert). You can never go down through 'excess trading demand' - this is amateur.

3. Create a minimum trading size, the tiny bot trades of $1 are swamping the system and add nothing.

4. Forget about circuit breakers or 'cooling off', this only works when assets are only traded on only one exchange (ie NYSE/Nasdaq) which is why you do not see gold or Forex stop trading. The market continues and your customers are left helpless.

5. Get someone to be a market-maker. You need a pool of money acting as market maker, to provide some depth of liquidity to stabilise the price when the market volumes become very illiquid or eratic. Confidence is everything in this market.

6. Prove you have some depth to your security. Right now people have millions invested in exchanges and any number of them could be complete shams designed to take coins that cannot be traced. I could setup a good looking exchange in days, collect coins and money and then disappear, it's been done before, it could be done again.

Thanks for the recent 24 hours though, I doubled my coins at no cost........

We are theorizing about developing a new decentralized p2p bitcoin exchange, or actually an exchange for any possible asset.
Could you please review this template and contribute with suggestions based on your experience in trading, or problems in the model we describe here?
My intention is to make a simplistic model of the futures exchange market that is in harmony with the bitcoin protocol.
https://github.com/p2p/bitcoin-exchange
https://bitcointalk.org/index.php?topic=172705.0