Quote from: Clark on September 09, 2011, 07:37:51 PM

Quote from: zhoutong on September 09, 2011, 07:18:31 PM

Mt. Gox and TradeHill are like stock markets, which are okay for a relatively small market like Bitcoin. But what if we want to make it larger? This is how abstraction comes in.

My design approach is to take out the noise: If Bitcoin is really a currency, why should we care so much about BTCUSD's volume? Why should we even see the order book? I know these are two important components for every market, but it's not important to everyone. Here, Bitcoinica guarantees liquidity, gives people the opportunities to use margin and do short selling, and giving quotes with acceptable spreads.

The reason brokerages exist in the stock / forex markets is because the exchanges charge large fees to have a seat at the table. Since the Bitcoin exchanges are free for everyone to use, this reduces the role of a brokerage. Now, you are providing a valuable service to people by allowing short and long positions as well as the different types of orders. I think you will have success with your clients, but there is a shade of mistruth about what you do.

My position is one of a fundamental philosophical difference. I think that short selling should actually produce an effect on the market. I think that every order should touch the market. If someone sells short, you are not actually lending them the Bitcoin as happens in the stock markets. If someone gets a margin call from you, it's not because your clearing institution is asking you to settle your account before close of business.

Without touching the market, it's all just numbers in your database.

They are called derivatives. I think the young man has a great plan. My hope is HE is actually hedging, because what he really is doing is legal bookmaking...And bookies do go BUST if they dont watch it! Too much action on one side.....