
Show HN: I built a live Bitcoin price aggregator with multiple indexes - timothyjcoulter
http://live.bitcoinindex.es/
======
gibybo
So, assume I already have Bitcoins on Coinbase and have a verified account to
sell them easily. Theoretically, my plan for free money would look like this:

\- Say I have 11 BTC on Coinbase.

Wire $10k to OKPAY ($25 bank fee, 0% OKPAY commission)

Send OKPAY money to BTC-E, $200 fee (2%).

\- Now I have $9,775 on BTC-E.

Within ~1 second of each other, I enter a market order to buy 10.754 BTC on
BTC-e for $9,775, and sell 10.754 BTC on Coinbase for $10,488.21 (after their
1% fee).

These are the real market rates at the time of this post (accounting for book
depth). I make $488 with no risk other than holding the Bitcoin for awhile,
which anyone holding Bitcoin does anyway.

Before I attempt to do this and find out the hard way why it ends up costing
me money in the process, could someone please kindly point out the flaw in my
plan?

~~~
fchollet
Correct, expect arbitrage is risky in illiquid markets. Here your BTC will
take a while to get into your wallet after buying them on Coinbase or BTC-e
(about 10 days on Coinbase). Your wire transfers will also take a few days to
clear. During these wait periods the prices of BTC will be subject to wide
swings.

And at last, your arbitrage profit will get severely eaten by the fees of the
banks and BTC exchange platforms.

It's never easy to make a profit in an arbitrage scheme (unless you have a
crushing competitive advantage such as transaction speed): if it were easy,
enough people would use the scheme, bringing the price differences back to a
range were turning a profit would be difficult again... so if there are
significant price differences between exchanges, it's a signal of arbitrage
difficulty.

~~~
gibybo
I already have the Bitcoin in Coinbase though, I don't have to wait for
anything. It's true that the wire transfer will take time, but the value of
the dollar isn't going to change much in that time. If my only risk is the
Bitcoin fluctuating in that time, it seems like free money for anyone who is
already holding Bitcoin and would already be subject to that risk.

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shazow
I'd love to see this, but also including exchanges across different currencies
(e.g. CNY) and normalized.

Kind of like [http://bitcoinaverage.com/](http://bitcoinaverage.com/) does,
but with a nice chart like [http://bitcoinindex.es/](http://bitcoinindex.es/).

I suspect the visualized data will be much more interesting, since different
local economies behave differently. For example, when BTC was "crashing"
yesterday to $850 USD, Chinese trades were still holding well about $1000 USD.
Eventually the arbitrage opportunity becomes too big and the gap is closed.
Watching this is fascinating.

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minimax
Now that I have a huge stash of bit coins I was thinking of making a
service/startup where you could lend out your bit coins to people who would
agree to pay you back a slightly higher number of coins in the future. Kind of
like a bank but not corrupt and full of banksters like the federal reserve and
JP Morgan. Once I have traction I can IPO but instead of sell my shares for
cash I would sell them in bit coins.

I think it would have some kind of restful API.

~~~
edwardy20
Why would anyone want to borrow money in a deflationary currency (Bitcoins)
rather than an inflationary one (dollars)?

~~~
minimax
You want to borrow bit coins so that you can improve your business and then
pay back the coins with increased profits due to the improvements. Isn't that
obvious? I'm not interested in dollars because I don't think they are
particularly useful. I convert all my dollars to bit coins whenever I can.
Look at the price of bit coin in dollar terms and you'll see everyone else is
doing the same thing.

Do you think the API for borrowing a deflationary currency should have a
different API than an inflationary one?

~~~
Jtsummers
Your conversion makes sense (USD -> BTC) so long as both mantain the current
trend (BTC increasing in value wrt USD). Why? It's like investing in a stock
or commodity that's increasing. I invested extra cash in a few stocks,
including TSLA, while it was on the rise. This gave me a better ROI than
holding USD or investing it in a CD or other low interest rate account.

But as a borrower, deflation blows. If I borrow 100 BTC and the terms of the
loan are that I have to pay back 100 BTC + 10 BTC as interest, but the value
of BTC has increased by another 10% I'm really paying 21% interest on the
loan.

But as a borrower, inflation rocks. If I borrow 100 USD and the terms of the
loan are that I have to pay back 100 USD + 10 USD as interest, but the value
of USD has decreased by 10% I'm really paying 0% interest on the loan
(actually, I might be able to beat inflation and come out ahead).

This goes back to what I mentioned in another thread [1] about buying and
selling in either type of currency.

Let me hand wave some things, we'll assume that the real value of an item or
ROI is static, and only the nominal value is changing with inflation or
deflation.

Inflation: I borrow money to buy an item. I pay interest on the loan, and gain
the benefit of having the item today rather than a year later when I would
have saved up the cash. Over that year I pay off the loan, but with inflation
I may get a discount of sorts on the item. If inflation is 10%, the nominal
value is 10% higher the next year. If the interest payment is less than 10%
I've saved money. If it's more than 10%, hopefully there was a profit in
having the item now rather than later or I lost money.

Deflation: I borrow money to buy an item. I pay interest on the loan, and gain
the benefit of having the item today rather than a year later when I would
have saved up the cash. Over that year I pay off the loan, but with deflation
I have an added cost. If deflation is 10%, the nominal value is 10% lower the
next year. If the interest payment is negative ~10%, I've saved money. If it's
higher, then hopefully there was a profit in having the item now rather than
later or I lost money.

In fact, that matrix is essentially the same. Borrowers win in inflation (or
might), while lenders might lose (but it beats leaving the cash under the
mattress where it will lose value). Borrowers lose in deflation in most
circumstances, while lenders win as long as borrowers don't default too often.
Lenders under deflation have to be confident that the expected ROI of their
loans will beat the deflation rate, or they might as well leave the cash
alone. Lenders under inflation are virtually guaranteed that reasonable loan
practices (subprime mortgages being an example of _unreasonable_ loan
practices) will be better than sitting on the cash if the economy is otherwise
stable.

[1]
[https://news.ycombinator.com/item?id=6811101](https://news.ycombinator.com/item?id=6811101)

~~~
Jtsummers
I realized after reading other posts that I did, in fact, hear a _whoosh_
earlier.

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alanbyrne
Firstly, that's very cool. Well done!

Secondly, I know hardly anything about bitcoins - but here all I see is an
arbitrage opportunity. Buy bitcoins from BTC-e and sell them on MTGox, which
seems to be consistently around 150 (I assume USD) different.

Am I missing something here?

~~~
throwaway0094
It is impossible to withdraw USD from MtGox.

~~~
jawr
Excuse my ignorance, but can you elaborate?

~~~
TallboyOne
People have said they're nearly insolvent. They're also being sued I think.
So, withdrawing USD from Mt. Gox you're screwed... I waited 3 months and gave,
up, converted my dollars into bitcoin and sold it elsewhere.

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Heliosmaster
Sorry to break it out, but the plural of index is indices :(

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timothyjcoulter
The server had a blip making me lose about an hour of data, but I was really
excited to show it to you.

~~~
odonnellryan
This is pretty cool!

What do you use for a stack?

~~~
timothyjcoulter
Super small. Node JS/express and flat files for history.

~~~
aabraham
I want all time history! But on serious note, if you could dynamically add
other "indexes" as well as show other currencies besides USD, that'd also be
good. But I'm assuming this is a side project you're just messing with?

~~~
timothyjcoulter
Master plan: Add many other indexes. Let you choose the one you want. Let you
embed it wherever you want. And more.

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adrianwaj
That's great. I put up a simple autorefresh page at:
[http://btcpricenow.com](http://btcpricenow.com) \- still gathering my
thoughts on Litecoin. [http://bitcoinwisdom.com/](http://bitcoinwisdom.com/)
seems to be best for realtime charting.

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dan1234
It'd be great if you could include an overall average of the exchanges and
also convert USD into other currencies.

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jackgavigan
V.nice. There's a plethora of applications for good dynamic graphing. I'd
suggest adding a time axis.

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patrickmay
Do you have any data on volume of trades you could add? I'm curious as to how
liquid the market is.

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M4v3R
This is awesome. Where can I donate?

~~~
timothyjcoulter
Donate here! 1FXxhiSRtEcJ9s6YteTyvV2uk2bvJqR9vC

~~~
M4v3R
Thanks, grab a couple of good beers :).

~~~
timothyjcoulter
Thanks!

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resu
Looks good! X and Y axes with price/time ticks would be really useful...

~~~
timothyjcoulter
Thanks! To get Y value at least, hover over a series and it'll give you the
price at that point.

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jstalin
Just an FYI - for some reason the HTTPS Everywhere plugin kills your site.

~~~
timothyjcoulter
Thanks for letting me know! We don't support https (yet) so that could be why.

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aiaf
Shows a blank page for me or a "Whoops, something went wrong!".

~~~
timothyjcoulter
Yep. You guys are hugging it to death. :)

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btbuildem
Looks good. Perhaps add BTCChina, and label the horizontal axis?

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TallboyOne
Are you working on re-upping it? I would like to see.

~~~
timothyjcoulter
You mean a server issue? If re-upping means re-selling the data, send me your
ideas. :)

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johlindenbaum
Looks nice, would like to see cavirtex exchange.

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rafeed
Nice, is this on github or similar?

