[ExI] Bitcoin Arbitrage Profitability? (Was Re: Bitcoin Moore's Law?)

Brent Allsop brent.allsop at canonizer.com
Sun Jul 21 15:24:17 UTC 2013

Hi Gordon,

This is very interesting, thanks for pointing this out.  I trust your 
much more educated currency trading expertise in this much more than my 
own, so would be very interested in more of your thoughts along the 
following lines.

My less educated gut feel as to why this is happening is because where 
as before, there was no 'arbitrage' trading between currencies and 
such.  In other words, Bitcoins in some currencies would get way ahead 
of other currencies, given the relationships between the currencies.  In 
other words, a very profitable situation where people can buy Bitcoin in 
one currency, sell those Bitcoins for the other currency, and the 
convert back to the original currency - making a big circular profit, 
for as long as such circular price imbalances occur.

So, what I'm thinking is now there is some significant arbitrage trading 
going on, when this happens, preventing the imbalances form happening?  
Would you agree with my assumptions?

Some of the local Bitcoiners want to start doing this kind of Arbitrage, 
and AI based trading, having given up on mining.  I wondered what your 
thoughts on the profitability of such a vencher would be.  Would you be 
interested in investing in or contributing to such any group moving in 
this direction in any way...?  And why or why not?  I'm thinking of 
getting involved and wondered if, in your opinion, this would be a good 

I'm betting that any arbitrage / AI based trading going on so far, is 
done by individuals, or very small groups at best.  I think a large 
group of well organized open source experts could way outperform any 
such small groups.  I think such a huge group  of experts managed in a 
leaderless way, using the expert consensus building system at 
Canonizer.com could not only become very profitable for the people 
involved, even if some were only lightly involved, but such could also 
bring some significant stability to the Bitcoin market.

Anyone else have any thoughts?  Anyone else interested in getting 
involved in such in any, even very small way?  Anyone else think such is 
a good idea?  Or not?...

Anyone know anyone already doing any AI / arbitrage trading in Bitcoins?

I'm planning on attending the Inside Bitcion conference in NY next 
Tuesday.  Anyone else attending?

Brent Allsop

On 7/16/2013 7:50 PM, Gordon wrote:
> Getting back to my original point, before all this mumbo jumbo about a 
> supposed Moore's Law for gold supply or demand:
> Perhaps it's only a coincidence, but since about mid-June, bitcoin has 
> traded like a genuine gold-backed currency, which is more or less what 
> it is designed simulate.
> All other things being equal, when the dollar declines in value, it 
> takes more of them to buy an ounce of gold. Bitcoin declined when the 
> dollar rallied and rallied when the dollar declined.
> Gordon
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