Quote from: nezarkadhem on February 13, 2014, 10:00:29 AM

Quote from: usabitcoinbuyer on February 13, 2014, 04:29:41 AM

Quote from: nezarkadhem on February 11, 2014, 04:42:18 PM

Quote from: Automatic on February 10, 2014, 09:58:59 PM

Quote from: nezarkadhem on February 10, 2014, 09:51:12 PM

Stop getting excited about the $102. It's not a big deal. It's just ONE successful buy order.

Here is exactly what happened:

1. MTGOX member 1 wants to sell Bitcoin.
2. MTGOX member 1 states his selling price. In this case, he inputs: $102
3. MTGOX member 2 wants to buy Bitcoin.
4. MTGOX member 2 selects: immediate buy

... MTGOX searches for cheapest buy offer.

5. MTGOX member 2 finds member 1's buy offer.
6. Transaction complete.

He could have sold 0.0002 bitcoin for all we know for $102 - and it would have still showed up Bitcoinwisdom.

Last I checked for bitcoin wisdom to actually show the drop on the chart (and not the 'last offer'), ALL buy orders up to that value have to be removed.

Care to explain what your "ALL" statement means? You realize that an exchange means "exchange". It means I offer to sell a product for x, a buyer agrees to buy for x, and the exchange completes the transaction for a commission. There is no such thing as ALL. If there were 100 bitcoins for $102, then yes, all buy orders up to 100 bitcoins would have gotten it for that price. But that didn't happen.

What Automatic meant was that in order for a buy order at $102 to be filled, *all* orders to buy *higher than $102* have to have been filled first. This is a fundamental aspect of how any real exchange works. So, your original description is incorrect. What would actually happen is:

0. Assume the current highest bid is someone wants to buy at 10@$600
1. member 1 wants to sell Bitcoin
2. member 1 states his selling price. In this case, he inputs: 1@$102 This means 102 is the lowest he's willing to accept. Obviously he'll take more if possible.
3. The highest bid is 10@600, and so member 1 will sell 1@$600. The best bid is now 9@$600.

If you don't believe me, go try it. Put in an order to sell 0.01 BTC at $1. You will get whatever price is shown as the best bid in the book (or close to it, if it changed during the moments you entered your order)

Now assume that the lowest offer to sell is at $700.

4. If member 2 wants to buy immediately "at market", he'll most likely buy at $700, because that was the lowest offer in the book. It's possible if both orders showed up at the same instant that member 1 and member 2 might wind up meeting in the middle somewhere like $650, but I doubt any of the BTC exchanges would implement such an algorithm. In no case should member 2 be able to buy for less than $600, because the guy who wanted to buy at $600 was there first, and gets priority.

What happens in a flash crash is something like this:
Suppose the book has buy orders for 10@100, 10@200, 10@300, 10@400, 10@500, and 10@600.
If member 1 tried to sell 55@$102, then he'd get 10 sold at $600, 10@500, ... 10@200. That's 50. The next 5 can't be sold for anything better than 102, so it becomes the best offer 5@102. It will get filled when the next buyer willing to pay that shows up.

Yes you are right. I made a mistake assuming that if a buy order was placed for $102, and a sell order was also placed for the EXACT price, they'll get matched. But your flash crash makes sense. It means that all the buy orders were fulfilled. All the way down to 102. Insane.

Daaaaaamn.. scary to think someone so clueless how an exchange works is in the bitcoin game.