Quote from: bkava on August 19, 2013, 12:06:51 PM

2.5% is the MtGox currency exchange fee for transactions that are coming from another currency is that right?

Question:
If all transactions are in one pool and I will pay 2.5% for a transaction with a seller in any other currency, what happens if I buy bitcoins from a seller using my currency, but which is not from the dominant currency. For example if I am based in GBP and I buy 1 BTC for 60GBP from another user will this incur a 2.5% currency exchange free from the dominant currency? I.e. does seller actually list in USD (dominant currency) and thereby pay 2.5% and then I buy in GBP and pay 2.5% to do so?

How does one see when the 2.5% is charged to a transaction?

As a UK user is it stupid for me to keep GBP on MtGox? Is it better to just eat the currency exchange fee on entry and exit as is done at Bitstamp?

Many people have difficulties grasping this..

The difference is rarely 2.5%. Here is a current picture of the best bid and best ask in various currencies (just a small selection), and their ratio to the best bid and ask in USD:

Code:

Tickers and ratio to USD:
EUR: 88.24500 0.9909 88.95000 0.9955
GBP: 74.25805 0.9773 75.00000 0.9837
AUD: 127.32911 0.9833 129.99000 1.0005
JPY: 11316.46600 0.9773 11704.00000 1.0073
PLN: 372.00000 0.9880 377.00000 0.9979
NOK: 687.66483 0.9773 711.89899 1.0083

As you'll see from this very few of the currencies have a 2.5% (0.975 or 1.025) ratio to USD. Some currencies here has a ratio of 0.9773 on the bid side. This is due to a bid in another currency (not displayed here) which is a 0.23% above the best USD bid. It shows up at 0.9773 ratio to USD on all other currencies, including USD. If someone sell in one of those currencies, it will be a mixed currency trade against that currency, not USD, which means the trade will happen at a price better than 2.5% below best USD bid. Best ask are close to 1 for all currencies due to an ask in one currency (possibly GBP here, haven't checked) which is far below the best ask in USD. This will show up fairly close to the best ask in USD as well. The round numbers (129.99000 AUD, 11704.00000 JPY) indicates that the ask was placed in this currency. If it is converted from a different currency, it is unlikely to be this round. As you see you will usually trade against an order in the same currency. Mixed currency trades are actually not very common. Mixed currency against USD is even less common, since many use this as a metric of how the price should be, and bid or ask a little bit better in their own currency to pick up such trades.

There is no fee for anyone. If someone buy the GBP ask at 75 using another currency, e.g. JPY, she will pay whatever her bid is in JPY. The buyer gets her BTC at what she bid in JPY, and the seller will receive 75 GBP for each BTC she bought. MtGox will do the currency conversion internally (at 2.5% comission). This happens behind the scenes.