Post
Topic
Board Bitcoin Discussion
Re: What if bitcoins were used in high-frequency trading?
by
mndrix
on 06/04/2011, 22:29:29 UTC
Idea #3: What if our company could provide a "forex" marketplace for BTC/USD? This has certainly been done already (MtGox, etc.), however it seems there is still a lot of barrier to entry for many participants. How might a big player help? Would it hinder bitcoin's progress in any way?

As mentioned elsewhere, the trust a big player could lend to Bitcoin could help enormously.  I can't imagine a big player hindering Bitcoin anymore than GitHub hinders the distributed nature of Git.  Those who want centralization through a big player can have it.  Those who don't can use the natural, peer-to-peer mode.

Quote
Idea #4: Does bitcoin need a market maker in its exchange markets? Market makers usually help narrow the spread between the "bid price" and "ask price" by taking some of the risk in moments when there are no natural market participants (e.g. if you want to sell, but at this moment no one is willing to buy, you either have to lower your price to gain attention, or wait a while for more buyers to show up). My sense is that bitcoin is too young to need a market maker, and perhaps does not yet have enough volume to make the role worthwhile. What are your thoughts?

A market maker would be nice.  In my limited experience, the volumes are still too low for it to be profitable though.