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Posted on 2/25/14 at 12:42 pm to TH03
quote:Could it be that Coinbase isn't a real 'exchange' because it doesn't set prices according to buy/sell orders but uses some formula weighting the other real exchanges plus any bias based on its long or short btc position?
I don't know why some random index site doesn't include coinbase
Posted on 2/25/14 at 12:44 pm to LSURussian
quote:
but in Russians mind it's an ulterior motive and something drastic.
quote:
Could it be that Coinbase isn't a real 'exchange' because it doesn't set prices according to buy/sell orders but uses some formula weighting the other real exchanges plus any bias based on its long or short btc position?
lol
Posted on 2/25/14 at 12:44 pm to LSURussian
Why don't you email them and ask them why they don't include Coinbase instead of speculating in pure hyperbole?
Posted on 2/25/14 at 12:47 pm to stout
quote:Don't go paranoid on us, K.
but in Russians mind it's an ulterior motive and something drastic.
It's not ulterior. I explained above what I think what might be the reason.
Unlike the other exchanges, Coinbase doesn't display an order book for buy and sell orders. There has to be a reason for that.
I believe it's because they don't set their price from an order book but from some formula using real btc exchanges plus some pricing bias based on their own btc position.
There's nothing wrong or illegal with them doing that. But it could lead to a distortion in their price versus the "real" market price of btc.
Posted on 2/25/14 at 12:48 pm to TH03
quote:Brilliant reply! One of your most intelligent replies ever!
Could it be that Coinbase isn't a real 'exchange' because it doesn't set prices according to buy/sell orders but uses some formula weighting the other real exchanges plus any bias based on its long or short btc position?
lol
This post was edited on 2/25/14 at 12:49 pm
Posted on 2/25/14 at 12:49 pm to LSURussian
quote:
Brilliant reply! One of you most intelligent replies ever!
lol
Posted on 2/25/14 at 12:50 pm to LSURussian
Yea but even if so the distortion is currently about 5% of BTCs value vs the other exchanges. Not a huge deal. If it were more than that then it would be a major concern.
Posted on 2/25/14 at 1:03 pm to stout
quote:5% of $500 is not exactly insignificant when it comes to a currency exchange operation.
Yea but even if so the distortion is currently about 5% of BTCs value vs the other exchanges.
Compare that to "real" currency exchange pricing, such as for the dollar/euro, where you have to go out 3 decimal places (0.000-0.001) just for the difference in the bid/ask price.
I've just spent more time on the Coinbase website than I have previously cumulatively and there are some interesting facts about them. One is they have had only $31 million in start up capital which has been provided by various speculators and venture capital funds.
I'm betting their usable capital available to absorb exchange risk (for their guaranteeing of btc exchange values for the "24,000 merchants" they claim to service) is less than $5 million. That's not very much considering the amount of volatility associated with btc prices.
This post was edited on 2/25/14 at 1:04 pm
Posted on 2/25/14 at 1:04 pm to TH03
Coinbase is more like a bank it seems. They have value added services and make it easier for the less technical type user. The "downside" is that you do not control the private key, they do. They are also not an exchange like others. They are pretty much just a middleman.
Posted on 2/25/14 at 2:19 pm to OnTheBrink
quote:
On a side note, I wish more of the bitcoin faithful would reveal their true intentions in these threads, as I suspect many of them are only in it for profit, and could give a shite about the cryptology of it all. One thing I always enjoyed about Wiki, he believed in the science behind it all.
:kige:
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