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TL;DR: No. The argument is basically that hoarding will make Bitcoins so valuable that nobody will be willing to offer people enough to part with them. Does that pass the giggle test? Another way of stating the argument is this, "If gold is $2,000/oz today but people think it will be $5,000/oz next year, nobody will trade any gold today." Again, think about ...
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Many people already do this with bitcoin. In finance, this is called arbitrage trading, or simply arbitrage, sometimes even abbreviated arb.
The reason for the price differences are fees for transferring between the bitcoin exchanges (you have to transfer both, bitcoins and fiat currency for a complete cycle) and fees for trading bitcoins against fiat ...
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Exchanges
You can use an online exchange such as BitStamp for US dollars, as well as many others for dollars, and other currencies.
See the wiki for a full list of ways to buy bitcoins.
Brokerage Services
Brokerage services allow you to buy or sell directly from them instead of relying on a third party to offer the trade with the exchange just taking a ...
58
If you bought a bar of gold at $1200 / ounce, then the price of the gold drops to $600 / ounce, you wouldn't actually lose any money at all unless you decided to sell your gold at that time. However, if you wait until the price of gold rises to $1800 / ounce, then sell it, you will gain money. The key is an ounce of gold is still an ounce of gold, ...
40
I've writen software to arbitrage on some US exchanges.
I couldn't arbitrage without software because:
It was hard to account for all fees to understand if an opportunity is profitable.
It took a couple of minutes to evaluate opportunities (query an exchange's order book, query another exchange's order book, do an evaluation, execute a sell, execute a buy) ...
28
If you bought one bitcoin and the price goes down, you still have one bitcoin. If the price goes up...still one bitcoin.
This is just like everything else, including groceries, gasoline, gold, stock certificates, etc... Measurements of value in fiat (such as dollars) does not affect the amount something you own, only the price at which you will be able to ...
27
Basically there are five main ways of getting bitcoins:
Mining
Buying
Offering goods and services for Bitcoin
Obtaining for free through micro payment
Asking a friend who already has them to give a tiny fraction for free
Let's start with mining:
first of all I have to warn that currently there is almost impossible to mine by your own. You need to have a ...
23
What's stopping people from doing so? What's the catch?
The catch is that few people have been able to get US dollars out of Mt. Gox since June 20, 2013, when Mt. Gox imposed a "hiatus" on US dollar withdrawals. Mt. Gox has a long list of excuses for not paying their debts, which you can find on their site. Some of their excuses strain credulity. This ...
20
Setting up and operating an exchange can be quite involved.
A few tiers to start thinking about: legal, banking, tech+security, and volume.
Legal
The first question is whether you want to operate globally (e.g. Bitfinex or BitStamp) or focus on a national market (e.g. FlowBTC, meXBT). The next step is to seek legal counsel to help decide where you want ...
18
You need three components:
A user account system that allows users to register, maintain a balance, deposit and withdraw BTC and other currencies, and place buy and sell orders. You'll need to integrate this with a payment processor to support currency deposits and withdrawals.
A matching engine that looks at the current buy and sell orders and matches ...
17
I can't speak for why Google Checkout seems to have no problem, it may simply be that they are unaware of Bitcoin as of yet. Edit: A Google Checkout employee has replied that they explicitly allow virtual currencies - at least for the time being. PayPal, on the other hand explicitly bans "the sale of traveler’s checks or money orders, currency exchanges or ...
16
I am not an expert on this, but I will answer from my personal experience from the past couple of months. Here are some things I noticed:
MtGox rules the market. The price there leads and the other exchanges follow. Sometimes TradeHill moves a few decimal points on its own above or below MtGox, but it usually goes back to where it was after a few hours.
The ...
15
After studying Bitcoin Arbitrage for the past few months, I've developed an information service to answer this question.
CoinThink.com gives a complete picture of arbitrage. All asks that have a bid at a higher price (on another exchange) are tallied into a total opportunity amount, including the fees for each exchange. It also makes an estimate on the fee ...
15
Bitcoin is really a little strange because it doesn't know if it is a currency or a commodity. And this is why this question has many answers and is a popular item of discussion. If Bitcoin were just a commodity, the thing to do is to hoard it. There are lots of commodities that are almost totally hoarded. For example: emeralds or works of art.
Now if ...
15
I am developing the ccxt cryptocurrency trading library, check it out on GitHub:
https://github.com/kroitor/ccxt
It is a library for cryptocurrency trading and e-commerce with support for many bitcoin/ether/altcoin exchange markets and merchant APIs.
With it you can access market data and trade bitcoin, ether and altcoins with more than 70 (!!!) ...
14
Yes, if someone buys at a particular price, someone else must sell at that price. But they didn't place their orders at the same time. The buy/sell indicates the direction of the filled order. This is needed to make sense of the price.
Imagine an apple exchange where no trades are occurring. Then someone walks in and buys or sells an apple for $1. Do you ...
14
In 24 hour markets High and Low usually mean "highest/lowest price in last 24 hours".
Open generally refers to the price at 12:01 AM UTC of any given day and close generally refers to the price at 11:59 PM UTC of any given day.
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As the founder of bitcoin-otc, I think I'll be able to help you out here. :)
OTC uses gpg (the free software implementation of the PGP protocol) for authentication. So your first step is to register on OTC with your gpg key. The OTC wiki contains detailed instructions on this page: http://wiki.bitcoin-otc.com/wiki/GPG_authentication
The rating system is a ...
13
New offers and orders are matched respectively with the best order and offer available until they are fulfilled. If there is more than one entry at the same price, the oldest entry will be matched first. If a new entry cannot be matched completely, it will remain in the order book until the remainder is matched or it expires.
See an example below:
The ...
13
tl;dr- This is called a capital loss. You're said to realize the capital loss if you sell the Bitcoins at the lower price, such that you lost money due to having bought/sold them. However, note that this isn't legal advice and I'm unsure about what the current legal statutes are surrounding Bitcoin.
Bitcoin's a capital asset (at least conceptually; dunno ...
12
Current market depth available at
https://mtgox.com/api/0/data/getDepth.php?Currency=USD
All trades which happened in the last 24 hours available at
https://mtgox.com/code/data/getTrades.php
Retrieves 100 trades that happend after specified transaction
https://mtgox.com/code/data/getTrades.php?since="transaction tid"
A script is required to retrive ...
12
First of all, it is likely a violation of PayPal's Acceptable Use Policy as of Oct 2011:
3(h) involve currency exchanges or check cashing businesses
Given this, it's unlikely that PayPal would be amenable to helping at best, and may close your account (and freeze the funds it had for six months) at worst.
Another chief problem is the high likelihood of ...
12
Shamelessly summarized from this extensive guide on local transactions:
You want to meet in a sufficiently public location, such as a pub or mall, preferably one that has an open wifi.
If you have agreed on terms in beforehand, print out what you agreed upon and take it with you.
If you have not agreed on terms yet, be sure to check the current price of ...
11
The answer is not unique to bitcoin. It would be the same if you're dealing with (non-crypto) foreign currency, stock, a stock derivative or commodity or commodity futures.
When you buy something like the above, you are giving up your "real money" (fiat currency) to take possession of said commodity/stock/bitcoin/etc (let's call these assets in general). ...
9
Put up an ad on LocalBitcoins.com. You possibly might find a tourist arriving with bitcoins who is looking for Argentine pesos. Or perhaps you'll find a local Bitcoin miner who is simply looking to cash out some bitcoins for your pesos.
Are there any goods that you could pay for with your pesos and then have the goods shipped to a buyer who pays using ...
9
If you buy Bitcoins at one price and then sell them for a higher price, you make a profit of the difference between those two prices, less any commission that you paid. However, if the price goes down, you will be in the uncomfortable position of having to either sell them for a loss or hold and hope the price goes back up while risking higher and higher ...
9
Yes, you lose a quantity of your money, at the time you gave it away in exchange for the bitcoin you received. Subsequent changes in the exchange rate only vary the hypothetical value of what you would get if you wanted to trade back.
8
This is from my answer on Money.SE:
You can set up your computer to mine for Bitcoins, you can exchange goods and services for Bitcoins, or you can purchase Bitcoins on an exchange. Some people will trade their programming or web design services for Bitcoins; others sell goods like alpaca socks in exchange for Bitcoins. The exchanges operate similarly to ...
8
This is very similar to consumer spending here in the US. If people save their money, it's not going towards the growth of the economy.
I think a lot of people make this comparison when it doesn't necessarily hold true for Bitcoin at the moment.
My opinion is that if miners held onto their coins instead of dumping them on the exchange, it would reduce the ...
8
We don't have any official word from PayPal about why they prohibit these kinds of transactions. The usual conspiracy theory is that these types of commodities could ultimately compete with PayPal so PayPal wants to hold them back. This really doesn't make all that much sense -- PayPal is not going to decide whether Bitcoin succeeds or fails.
The likely ...
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