Arbitrage - What it is and how it works
Arbitrage refers to the process of instantly trading one or more pairs of currencies or odds for a nigh risk-free profit.
Usually, this involves two exchanges (this is then called a two-legged arbitrage); although more are, of course, possible.
There are several steps when executing an arbitrage:
Find a suitable ...
Is there space for me on your team?
I have spent most of this year trying to answer the same question, starting with the recognition that I could solve all the technical aspects (web programming, Bitcoin handling, trading engine, server security, etc.).
Technically, you need a website and a trading engine that matches buyers and sellers. Whilst there are ...
A large investor might be trying to move the market.
Sell walls create an impression of a strong supply. This makes some people, unwilling to wait for the wall to break down, pitch their sales offers below the wall. By moving the wall closer to the current bid again, a large investor might be able to move the market to a small extent and then buy at a lower ...
Although you can find a more comprehensive list here on the Bitcoin Wiki, some of the most popular exchanges in the community are:
Coinbase - https://coinbase.com
Bitstamp - https://www.bitstamp.net
You can exchange your bitcoins for US dollars on these websites and have them funded to your bank account.
It seems that you have what many people would call physical bitcoins. There are several kinds, but I am not aware of any from before 2011 that actually take the shape of a coin. The probably best known type is made by Casascius. Is there any additional information you could provide? Maybe a photo?
Anyways, if this is what you have, then be aware that none ...
I use this type of trading to accumulate buys at a cheaper price. Ex: if I spend 2 hours buying small amounts of coins so nobody notices the large buys, then I put up a large sell wall ($30k-$45k) to encourage sells. After that pushes down the market from panic sellers trying to under sell my wall, I instantly buy those sells up and remove my wall and then ...
Note: This is a US-centric answer. Other countries may differ. I'll add other countries as people leave comments.
There is an arbitrary limit of $1,000 per person per day that triggers the necessity to register as a money service business. Stay under that FinCEN is unlikely to care about you, although you still may legally need to register for smaller ...
Coming from a financial programming side (C++/Network/Trading experience), I would politely suggest that having a web team is not quite enough to make an exchange.
Granted, your average Bitcoin exchange may not need the HFT credentials of your average dark pool or big name exchange. But you're still dealing with a system that needs high uptime, high ...
Essentially, you have to factor in 3 fees in a purchase:
1. Deposit fee (if applicable)
This is usually a fee for wire transfers, and from my experience is only relevant if you deposit cash across economic zones, albeit this is slowly reducing to 'anywhere to asia', or outside of the SEPA zone.
Kraken charges 5€ per wire transfer, SEPA transfers are free ...
It's a short list.
Liberty Reserve (though they did freeze some customer funds recently until they became verified)
Bank Wire (though see comment below)
Here's the payment methods hardness list:
The factors that matter for any cash-out decision are:
Where are you located (country)?
How much are you looking to trade?
What type of cash are you looking to receive?
How soon do you need access to the proceeds?
Is privacy important?
In the U.S., Coinbase might be the simplest -- you can sell up to 100 BTC per day, with a fee of 1% and then from there ...
If you use a payment processor such as BitPay or WalletBit, they will take care of the conversion to fiat for you (for a fee, of course).
You could also use e-commerce software and manage the exchange to fiat yourself. That's what CoinDL, for instance, does using a Bitcoin module for OpenCart e-commerce software.
There might also be a number of goods and ...
The usual procedure would be to deposit the bitcoins into a bitcoin exchange, sell them there, and withdraw the cash to your bank account. You will have to identify yourself to the exchange, and the exchange must be able to send money to your bank.
A fee is charged over the filled portion. Either the whole order or partial.
If an order was cancelled before a trade took place (0% filled), no fee is charged.
If an order was cancelled after a portion was already filled, the remaining part is cancelled and no fee is charged over the remaining.
Interesting points Paper, here some of my thoughts...
As you said, on the underground (i.e. TOR) there are forums where thieves are selling dirty coins, with a favorable exchange rate (1 clean coin for 2 dirty coins for example). But to avoid scam I suppose they will use some kind of anonymous escrow service to perform the exchange, to guarantee that both ...
LTC/BTC and BTC/LTC are both ratios of purchasing one currency with another.
For example, with LTC/BTC, the price quoted is for 1 LTC (overlying) in BTC (underlying). If the price is 0.025, that is how many bitcoins are needed to purchase 1 LTC. At this price, 2 LTC would cost 0.05 BTC.
The opposite would be equivielnt to 1/x, using the example above the ...
To engage in trading on an exchange, you have to make a deposit of either fiat or Bitcoin. As the balances are then managed by the exchange until paid out, there is no counterparty risk to your trading partner: You can only submit buy and sell orders that are funded. Once your order is matched, the exchange can atomically update the balances of the two users ...
How are fees charged?
They are charged in the currency fee set during a trade.
Due to a discreet nature of trade matching process, it's rather tricky to give a definite answer on how each individual fee is applied. However, a good rule of thumb is to choose a fee currency when placing an order, as this is the one in which fee will be subtracted.
Are the ...
http://www.dancingbots.com  is visualizing the chronological sequence of limit orders on popular exchanges. You can see how those walls are repositioned if the price moves.
Those big positions are an exception. More often those walls consists out of multiple positions spread over a price range. They show up as parallel horizontal lines. If you look at a ...
From the top of my head:
User account management
Fulfillment of legalities (all depending on local law): Know-Your-Customer, Anti-Money-Laundering, license to exchange currencies, banking licenses, money transmission license
Banking partnership/account in order to process Deposits and Withdrawals in at least one currency other than Bitcoin
If there are Bitcoin ATMs in your country it should be as simple as goint to the ATM ask for a refound and transfer the Bitcoins to where the ATM asks for. After that it should give you the money (whitout the processing charges).
There's several anti-DOS measures that counter this:
transaction fees get expensive with large numbers of outputs
many rapid transactions with no fees will be rejected
small amounts (less than 0.000045) in an output are called dust, and are rejected
It essentially becomes prohibitively expensive to try to spam.
There used to be a service by coinvoice.com that did exactly what you're asking. Unfortunately, they're no longer operating. I've heard bitpagos.com does that for Latin America. Otherwise, you're looking at setting up something with coinbase or bitpay to transfer fiat right away for bitcoins.
Best of luck with your business!
So you want to limit your bot strictly to gdax? There are some libs providing abstraction layers from a specific exchange. One example is
This becomes very helpful once you want to make trades on more than 1 exchange.
Essentially you want to start a cryptocurrency exchange? If that is true, you need liquidity for people to be able to buy these coins. There are two ways of going about it:
Use a broker/third party exchange, such as Kraken.com or any other in your region and have your orderbook go through their's. You would have to price it so you are profitable however.