Post
Topic
Board Project Development
Topic OP
Developing a low-fee trading site
by
halvoraarud
on 20/12/2013, 13:38:39 UTC
Thought I could plant an interesting idea to you. 
I believe there is a serious market for a low-cost Bitcoin trading application.  Here is the design:

* You create a average price by pulling feeds from Mt.Gox, Bitstamp, for instance.
* Then you allow people to bet on the price development by entering into contracts.
* These contracts has, for instance, 5 min, 10 min, 15 min, 30 min, 1 hour duration.
* You pair the "gamers" against each other, one betting up and one down and distribute Bitcoins, depending on how it goes.

Example:
AVG(MtGox and Bitstamp) = 500 USD/BTC

A bet 10 BTC on price moves up in 1 hour.
B bet 7 BTC on price moves down in 1 hour.

From these two, you can make a 7 BTC large contract.  The contract should have gearing, say 3X.  So, if price is 550 after one hour, you give 10% * 3 * 7 = 2.1 BTC to person A, from B. The rest is returned.

The advantages of this is that it is possible to daytrade bitcoin prices at a VERY low fee.  Remember that Bitstamp and Mt.Gox charge 0,2 - 0,5% fee per transaction.  This is a lot of money.  No cash needs to be involved.

Thought I should give you my thought, as I'm a little to busy to implement this by my self.

best regards
HA