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posted by Dopefish on Thursday March 13 2014, @11:24AM   Printer-friendly
from the and-the-plot-thickens dept.

Fluffeh writes "On Wednesday morning, Perseus Telecom and Atlas jointly launched their new high-speed trading platform for Bitcoin and likely other cryptocurrencies in the future. Perseus is a firm that specializes in high-speed financial data networks, while Atlas is a relative newcomer to the Wall Street scene since starting in 2013.

Perseus has created a division called the Digital Currency Initiative (DCI) to establish standards to support the Bitcoin trading community. The DCI provides access to the Perseus worldwide network with connection to exchanges, risk technology providers and other market participants. Bitcoin trading is now gearing up to the high precision trading standards executed each day by leading market makers, hedge funds and investment banks and by its nature is fully electronic and fast.

Bitcoin industry watchers say that this marks a notable turning point in the digital currency's evolution."

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  • (Score: 5, Insightful) by eapache on Thursday March 13 2014, @11:54AM

    by eapache (3822) on Thursday March 13 2014, @11:54AM (#15808)

    How can bitcoin trading be high-speed? One of the whole points of the algorithm is that each transaction takes a certain, effectively fixed amount of time to go through in any meaningful sense.

    • (Score: 5, Informative) by Titanium on Thursday March 13 2014, @12:00PM

      by Titanium (1840) on Thursday March 13 2014, @12:00PM (#15810)

      The same way currencies can be exchanges at high speed. It is all just numbers in a database, no physical goods or actual Bitcoin ownership changes after a trade. It is similar to casino chips.

      • (Score: 2) by davester666 on Thursday March 13 2014, @06:31PM

        by davester666 (155) on Thursday March 13 2014, @06:31PM (#16027)

        yes, it's just a really fast ongoing game of Monty

    • (Score: 5, Informative) by FuckBeta on Thursday March 13 2014, @12:01PM

      by FuckBeta (1504) on Thursday March 13 2014, @12:01PM (#15811) Homepage

      Algorithm irrelevant.

      One can create futures contracts on a product which settle later. So a derivative which calls for settlement of 100 BTC at a future date can be traded several times per second without affecting the blockchain. Only when there is settlement in BTC will the algorithm become relevant.

      --
      Quit Slashdot...because Fuck Beta!
      • (Score: 0) by Anonymous Coward on Thursday March 13 2014, @12:44PM

        by Anonymous Coward on Thursday March 13 2014, @12:44PM (#15828)

        One can create futures contracts on a product which settle later. So a derivative which calls for settlement of 100 BTC at a future date can be traded several times per second without affecting the blockchain.

        Ha... Wall Street is going to be in for a surprise when they realize there's going to be only 21 millions of them.

        • (Score: 1) by similar_name on Thursday March 13 2014, @04:29PM

          by similar_name (71) on Thursday March 13 2014, @04:29PM (#15952)
          That's why they invented the idea of fractional reserves. They'll probably create a market that really has $10 million in bitcoin but somehow trades $1 billion.
      • (Score: 2) by lubricus on Thursday March 13 2014, @11:31PM

        by lubricus (232) on Thursday March 13 2014, @11:31PM (#16124)

        (Snark directed at banks not parent)

        Great, because opaque OTC derivatives trading really increased the robustness of the financial system in 2008.

        This exchange seems like the stupidest idea ever for so many reasons.

        For example, what happens on the end of a heavy trading day when the exchange has to settle a huge pile of bitcoins but the bitcoin market does not have the volume to handle it? If you thought malleability was a problem, you haven't seen anything yet.

        Mismatched timing scale of trades vs time to update the blockchain, Lack of a central exchange (how will this exchange communicate pricing with others?).

        I short, how can anyone think it's a good idea to set up an OTC high frequency exchange for a commodity which is traded at low volumes, is long term deflationary, and had a fundamentally limited transaction rate. Again, this seems like bad news for everybody and everything, including Bitcoin.

        --
        ... sorry about the typos
        • (Score: 2) by FuckBeta on Friday March 14 2014, @08:59AM

          by FuckBeta (1504) on Friday March 14 2014, @08:59AM (#16235) Homepage

          Regardless of the merits, this is principally a marketing approach for Johnny-come-lately "investors".
          Once there is a "legitimate" exchange, then we'll get the bitcoin ETFs, managed funds, etc which charge annual management fees simply to buy the front month futures contract. (This already happens in agriculture, example: http://etfdb.com/etf/DBA/ [etfdb.com])

          As usual, the herd is late, and just as we are now getting unsophisticated parties into so called "HFT" (despite the barriers to entry now being enormous and profits down as the sector matures and consolidates) we now have retail chasing "this bitcoin thing".

          With all the talk the last five years about "market volatility", suckers can now "invest" in it via a VIX ETF. Which the operator has no duty to hedge in futures as its simply a standard note. The VIX in 20 years is going to be approximately the same as the VIX now. Of course, annual management fees apply. (http://etfdb.com/etf/VXX/)

          --
          Quit Slashdot...because Fuck Beta!
    • (Score: 3, Informative) by Beukenbosje on Thursday March 13 2014, @12:23PM

      by Beukenbosje (697) on Thursday March 13 2014, @12:23PM (#15817)

      Trading money is all virtual. You deposit something of value ($$, €€ or BTC) with a tradingfirm and they hold it in escrow while it changes hands. Every time it changes hands a free is distracted for using the broker platform. So there are no bitcoin (or $/€) transactions whatsoever, until you withdraw your money in whatever currency. If that's bitcoin, you get it in the wallet you specify. If it's fiat currency (government supported), you get it wired to your bank account.

      • (Score: 1) by Beukenbosje on Thursday March 13 2014, @02:14PM

        by Beukenbosje (697) on Thursday March 13 2014, @02:14PM (#15872)

        %s/gibberish/Euro sign/g

    • (Score: 1) by NezSez on Thursday March 13 2014, @07:06PM

      by NezSez (961) on Thursday March 13 2014, @07:06PM (#16042) Journal

      They are trading already mined bitcoins, not trading the creation of bitcoins.
      High speed trading isn't trading the physical making of currency (paper bills or metal coins etc) but those which are represented as having been already created in the past and have current value which fluctuates quickly based on market conditions and reactions in the present.

      Then again, I could be wrong I'm not a quant, and the Eco ppl are subtle and sneaky!

      --
      No Sig to see here, move along, move along...
  • (Score: 5, Interesting) by bradley13 on Thursday March 13 2014, @12:21PM

    by bradley13 (3053) on Thursday March 13 2014, @12:21PM (#15814) Homepage Journal

    Here in Switzerland, just a couple of days ago, there was a special about speculative trading. It turns out - surprise, surprise - that some 90% of the individuals who engage in it, lose money. Why do they continue? Because they get the same kick (and - in the worst cases - the same addiction) as they would by gambling. Hence, the government is considering placing businesses that offer short-term trading under the same regulations that apply to casinos.

    This obviously doesn't address the problems of institutional trading. Nonetheless, it might put a damper on stupidity. Whoever wants to speculate, could still do so, but it would be undeniably obvious that they are just gambling, same as playing roulette in Vegas.

    It'll be interesting to see if this actually happens - and even more interesting to see if other countries pick it up.

    --
    Everyone is somebody else's weirdo.
    • (Score: 5, Interesting) by Dunbal on Thursday March 13 2014, @12:30PM

      by Dunbal (3515) on Thursday March 13 2014, @12:30PM (#15822)

      They continue because all of them believe that they will be in the 10% that ends up with the money of the other 90%. A handful of people have become fabulously wealthy from bitcoin. The rest of the fools however are just holding on hoping to see their money again one day.

      • (Score: 4, Insightful) by Sir Garlon on Thursday March 13 2014, @12:52PM

        by Sir Garlon (1264) on Thursday March 13 2014, @12:52PM (#15831)

        I don't use Bitcoin myself, but not everyone who does is a speculator. Some people are actually using them as currency instead of cash and credit cards.

        --
        [Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
        • (Score: 4, Insightful) by Dunbal on Thursday March 13 2014, @03:58PM

          by Dunbal (3515) on Thursday March 13 2014, @03:58PM (#15929)

          And how are they using them as currency when its "value" fluctuates so much? If I had something to sell, I'd think long and hard before accepting bitcoin since if I waited an hour I could face a potential loss of 20%, or potential lost profits of 20%. How do you set the price when the price is moving more than your profit margin every minute? I think the actually "currency" part of bitcoin hasn't been used for a long time. Less so now that Silk road is gone.

          • (Score: 3, Informative) by Sir Garlon on Thursday March 13 2014, @04:06PM

            by Sir Garlon (1264) on Thursday March 13 2014, @04:06PM (#15940)

            If I had something to sell, I'd think long and hard before accepting bitcoin since if I waited an hour I could face a potential loss of 20%, or potential lost profits of 20%.

            And that is why I don't use Bitcoin, myself.

            I think the actual "currency" part of bitcoin hasn't been used for a long time.

            Well, I remember the news story about overstock.com [wired.com] doing a decent volume in sales using Bitcoin, as much as I shudder to link to a story from Wired. But I think you are also partly right, in that the the hoarding and the speculation are creating challenges to using them as currency.

            --
            [Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
          • (Score: 3, Informative) by Statecraftsman on Thursday March 13 2014, @10:11PM

            by Statecraftsman (1149) on Thursday March 13 2014, @10:11PM (#16099)

            Coinbase and Bitpay, the two most popular payment processors for Bitcoin, accept bitcoin on the merchant's behalf but guarantee and deposit the requested amount of USD into the merchant's bank account. So bigger time merchants or people who have no Bitcoin ideology can just use it to get their dollars.

            Bitcoiners have an interest in their coins not being cashed out immediately so merchants to do accept some risk and keep some coin should be preferred. Merchants holding coin and using it to take care of some of their costs is the only way it becomes a currency in its own right.

            For now, it's used as a store of value, for speculation, and to buy things when the price is right or as desired.

      • (Score: 0, Troll) by tynin on Thursday March 13 2014, @01:37PM

        by tynin (2013) on Thursday March 13 2014, @01:37PM (#15846) Journal

        As a miner who got started in March of last year, I can happily say that all of my mining gear purchases have met ROI many times over. There are still opportunities to get in on the mining game today in the scrypt, and scrypt jane side of things.

        It isn't making me rich, but it has been a nice supplement to my income, and has been extremely helpful in being able to afford to pay my wife's student loans, and buying a 2012 Jetta TDI last year when the engine in my car suffered heat death.

        Though I'm not holding on to any of my bitcoins, just converting them to cash about once a month. I'll likely regret that some day, but for now it has been a very nice cushion.

        • (Score: 1, Troll) by tynin on Thursday March 13 2014, @09:27PM

          by tynin (2013) on Thursday March 13 2014, @09:27PM (#16089) Journal

          Ouch, multiple troll moderations? I guess hooray, my first troll on SN! Not quite sure why that is though... I'll keep mining and everyone else can keep hating.

    • (Score: 5, Insightful) by geb on Thursday March 13 2014, @01:06PM

      by geb (529) on Thursday March 13 2014, @01:06PM (#15837)

      The current price of any traded item is, in an efficient and informed market, supposed to represent all known factors about the item. The market is pretty good about applying that, and so anything predictable is factored into prices long in advance.

      Price shifts therefore come solely from unpredictable factors.

      Unless you have some additional knowledge that the rest of the market hasn't figured out yet, price changes are effectively random number generators.

      So, yes it is a lot like gambling.

    • (Score: 4, Funny) by khallow on Thursday March 13 2014, @02:01PM

      by khallow (3766) Subscriber Badge on Thursday March 13 2014, @02:01PM (#15863) Journal

      Here in Switzerland, just a couple of days ago, there was a special about speculative trading. It turns out - surprise, surprise - that some 90% of the individuals who engage in it, lose money.

      Why does anyone think there is a problem here? A sucker has too much money and the market efficiently takes it away from them and gives to people better able to use that money. The problem resolves itself.

      • (Score: 2) by FuckBeta on Thursday March 13 2014, @04:18PM

        by FuckBeta (1504) on Thursday March 13 2014, @04:18PM (#15947) Homepage

        This is one of the things the market is there for!

        We see a social problem however, when "sucker has too much money" includes your pension fund.

        --
        Quit Slashdot...because Fuck Beta!
        • (Score: 1) by khallow on Friday March 14 2014, @11:14PM

          by khallow (3766) Subscriber Badge on Friday March 14 2014, @11:14PM (#16680) Journal

          We see a social problem however, when "sucker has too much money" includes your pension fund.

          Put your money somewhere else. Plus, it's not really your money until the checks clear (insert European equivalent). And any gambling provisions here aren't going to catch fund managers.

      • (Score: 2) by bradley13 on Thursday March 13 2014, @06:51PM

        by bradley13 (3053) on Thursday March 13 2014, @06:51PM (#16035) Homepage Journal

        There are various problems that one might want to prevent:

        - First, individuals who become addicted may drag others down with them - like, their family.

        - Second, the same psychology happens to individual traders working for institutions, where they may take you down with them

        However, by far the most important reason is that this sort of psychology has contributed to a sort of short-term thinking that is seriously detrimental to our entire society. Where investors ought to invest for the long-term, they day-trade. Where companies ought to plan for the long-term, then focus on next-quarter's numbers. Where managers ought to work for long-term success, they try to meet the numbers for their next bonus. And on and on and on.

        Day-trading and HST are not the only factors in this mix, but they do make a serious contribution. If investors bought stocks knowing they would be holding them for the long-term, they would demand long-term planning from the companies.

        --
        Everyone is somebody else's weirdo.
        • (Score: 1) by khallow on Friday March 14 2014, @11:11PM

          by khallow (3766) Subscriber Badge on Friday March 14 2014, @11:11PM (#16678) Journal

          However, by far the most important reason is that this sort of psychology has contributed to a sort of short-term thinking that is seriously detrimental to our entire society.

          That's what the market is for. Curing that sort of delusion. Nothing says "you fucked up" like losing your money on the stock market. You can't rationalize your money back. And the markets can serve millions of delusional people at the same time, efficiently and promptly.

    • (Score: 1, Insightful) by Anonymous Coward on Thursday March 13 2014, @04:59PM

      by Anonymous Coward on Thursday March 13 2014, @04:59PM (#15981)

      Investing takes time. Hitting a jackpot takes luck.

      There are known investing methods that are known and usually yield good results (maybe not max results). The problem is they take 20-40 years to mature. People want a 2 day ROI and be a millionaire. One works the second is rare.

  • (Score: 5, Interesting) by Beukenbosje on Thursday March 13 2014, @12:33PM

    by Beukenbosje (697) on Thursday March 13 2014, @12:33PM (#15823)

    Although it's fun to brag about 'watch out, Wall street is coming', every new firm has to attract customers first. Part of the 'fun' (for professionals at least) of the current situation is the fact that the volume of BTC-trading is relatively low. So any serious broker with deep pockets can manipulate the market and use the differences on the +/- 25 exchanges to their own advantage: arbitrage.

    As I see it, faster trading, and lower thresholds for serious money will lead to three things:
    - bitcoin de facto supported by financial institutions (not government)
    - higher value of bitcoin as the demand increases
    - less volatile and dependable exchange rates

    Would be fun to see how the latter two work out though.. Most important thing missing for a stable exchange rate - and thus for the adoption - is a real economy behind it and more people accepting bitcoins as payment (keeping the bitcoins and not converting them instantly).

  • (Score: 1, Insightful) by Anonymous Coward on Thursday March 13 2014, @01:15PM

    by Anonymous Coward on Thursday March 13 2014, @01:15PM (#15839)

    I cannot possibly imagine the rulers of the world economies will ever promote more purchasing anonymity, or more wealth anonymity, such as the use of Bitcoins. They've gone a large way towards eliminating anonymous purchasing power, I don't see them ever going back in the other direction and giving people more anonymity.

    • (Score: 1) by Bill, Shooter Of Bul on Thursday March 13 2014, @06:22PM

      by Bill, Shooter Of Bul (3170) on Thursday March 13 2014, @06:22PM (#16021)

      Thats because you don't understand. This isn't giving people anonymity. It will remove any anonymity that was there, in fact.

    • (Score: 2) by EvilJim on Thursday March 13 2014, @09:57PM

      by EvilJim (2501) on Thursday March 13 2014, @09:57PM (#16096) Journal

      perhaps they're just looking to collapse the market and leave?

  • (Score: 4, Funny) by snick on Thursday March 13 2014, @01:17PM

    by snick (1408) on Thursday March 13 2014, @01:17PM (#15840)

    MtGox fails:

    Everyone know that MtGox isn't Bitcoin --- Saying that this reflects on Bitcoin is FUD!!

    1 technology player and a newbie starts a single Bitcoin project:

    Wall Street Embraces Bitcoin!!

    • (Score: 5, Insightful) by egcagrac0 on Thursday March 13 2014, @01:22PM

      by egcagrac0 (2705) on Thursday March 13 2014, @01:22PM (#15842)

      Wall Street is not so much "embracing Bitcoin" as "preparing technology to extract money from the Bitcoin economy".

      Perhaps "devouring" would be a better word.

      • (Score: 5, Informative) by Thexalon on Thursday March 13 2014, @01:49PM

        by Thexalon (636) on Thursday March 13 2014, @01:49PM (#15853)

        Otherwise known as:
        1. Wall Street makes most of its money from suckers who don't know good trades from bad ones.
        2. A lot of people who are invested in Bitcoin are suckers who don't know good trades from bad ones.
        3. Ergo, some Wall Street firms will go where the suckers are to take as much of their money as possible.

        --
        The only thing that stops a bad guy with a compiler is a good guy with a compiler.
        • (Score: 1, Informative) by Anonymous Coward on Thursday March 13 2014, @02:45PM

          by Anonymous Coward on Thursday March 13 2014, @02:45PM (#15892)

          " A lot of people who are invested in Bitcoin are suckers who don't know good trades from bad ones."

          Nope. Bitcoin traders are more rational and have a better understanding of the economy than the general public. We are techies at heart. Wall Street sees this as a threat and is trying to squash out the threat of an enpowered middle-class.

          Look at the S&P 500 from 2000 - 2010. If you would have put your retirement savings there, you would have just barely broken even after ten years. Well that is actually a LOSS of money because of inflation.

          All of my holdings (minus three months of emergency savings) have been in Bitcoin since 2012. I have seen my net value QUADRUPLE since then.

          What's really going on here is class warfare. The fiat currency elite are firmly entrenched in taking as much power away from the common people as possible. The first step was removal of the GOLD STANDARD by Republicans in the 1970s so that currency could be printed with NO REAL BACKING. The global elites see the true threat that Bitcoin poses and are doing everything in their power to prevent it. Hence the murder of Autumn Radtke and the hacking of MtGox.

          What we have on our side is numbers, and we are growing. I am a millionaire because of Bitcoin, and because I keep investing in it, I have projected that I will be worth over $42bn by the time I reach retirement age. This scares the elites and rightfully so. Expect that this is the first stage in the uprising against NWO.

          • (Score: 0) by Anonymous Coward on Thursday March 13 2014, @02:48PM

            by Anonymous Coward on Thursday March 13 2014, @02:48PM (#15897)

            Right, its a conspiracy from Wall Street.

            All of my holdings (minus three months of emergency savings) have been in Bitcoin since 2012.

            Nevermind, now I know you are either full of shit or insane. The rest of the post was libertarian rambling.

            • (Score: 1) by Jiro on Thursday March 13 2014, @03:29PM

              by Jiro (3176) on Thursday March 13 2014, @03:29PM (#15912)

              This is called "lack of diversification" and is bad whether it's Bitcoin, stocks, or gold.

              • (Score: 1, Insightful) by egcagrac0 on Thursday March 13 2014, @03:36PM

                by egcagrac0 (2705) on Thursday March 13 2014, @03:36PM (#15916)

                It's only bad if it doesn't work.

                People say "don't put all your eggs in one basket" when "don't put all your eggs in the wrong basket" is far more apt.

                • (Score: 4, Insightful) by mmcmonster on Thursday March 13 2014, @09:50PM

                  by mmcmonster (401) on Thursday March 13 2014, @09:50PM (#16094)

                  If you could tell ahead of time which basket is the wrong one (or correct one) ahead of time, you could rake in the money.

                  Diversification is because no one knows which basket is going to go bust in 5 years.

                  A sound investor will have a split of their funds into a few investments that will hedge each other in times of volatility. Google 'three fund portfolio' for a simplified model of this that works for most investors.

                  • (Score: 1) by egcagrac0 on Friday March 14 2014, @01:09PM

                    by egcagrac0 (2705) on Friday March 14 2014, @01:09PM (#16331)

                    A sound investor will have a split of their funds into a few investments that will hedge each other in times of volatility.

                    And that is what supposedly differentiates "investing" from "gambling".

          • (Score: 4, Insightful) by Thexalon on Thursday March 13 2014, @03:40PM

            by Thexalon (636) on Thursday March 13 2014, @03:40PM (#15919)

            Bitcoin traders are more rational and have a better understanding of the economy than the general public. We are techies at heart.

            Your knowledge of the C programming language is utterly useless in determining what the proper valuation of, say, Toyota stock is, based on their projected earnings, past quarterly reports, supply chain, R&D, etc. You can be perfectly rational, but that won't help you at all if the market is irrational.

            Look at the S&P 500 from 2000 - 2010.

            Because if you pick almost any other recent time period, you'll see that the S&P 500 is a good investment. For example, if you look at 2004-present, you would have had something like a 80% return over that period. If you had bought right after the financial crisis you would have raked in roughly a 250% return. If you look since 2012, you'll also see a 20% return.

            Sure, Bitcoin has a higher ROI right now due to its volatility and a design that privileges early adopters over late adopters. That's not a surprise - the price you pay is if the exchange you're using collapses like MtGox, or the currency itself stops being valuable, you'll be left with nothing. By comparison, the S&P 500 is meant to be pretty stable.

            --
            The only thing that stops a bad guy with a compiler is a good guy with a compiler.
  • (Score: 4, Funny) by wonkey_monkey on Thursday March 13 2014, @02:01PM

    by wonkey_monkey (279) on Thursday March 13 2014, @02:01PM (#15864) Homepage

    What kind of embrace would that be? C'mere you! Hurhruh! This guy, right? I love this guy. *noogie* *strangle*

    --
    systemd is Roko's Basilisk