Bitcoin Arbitrage service

[tomq04]

I didn't think this fit in the bitcoin discussion thread (found here: https://forum.mrmoneymustache.com/welcome-to-the-forum/bitcoin-an-interesting-case-of-a-classic-bubble/?topicseen) so here goes:

https://bitcoin-trader.biz/index.php

This is a relatively new service (Nov 1 from what I can tell) that runs 2 operations,
1- Mining
2- Arbitrage trading.

Once an account is created you can fund it via several options (bank wire, bitcoin, btc-e + a few others I'm not familiar with)

Once funded you can purchase "shares" ($20/share) of either operation and track the daily results.  One "problem" being is that a purchase requires a 120 day "lock in" of coin.  After 120 days the shares are released and your wallet is credit with your share purchase + earnings.

For the past 3 months they have been making ~1%/day via trading and have built in stops to keep from losing (or gaining) more than 3% in a 24 hour period.  In the last 3 months they have had 3 down days, and the rest up, averaging roughly 1%.  They do note that these are not compounding returns, but after 120 days, that would be roughly 80% return (5 days/week * 120 days; they only work M-F).

The mining shares act the same ($100/share), but with a lower daily "steady" rate, also ~1% (remember the trading shares could potentially be higher than 1%).

With all of this stuff there are referral bonus so i'll toss mine up here, and follow up in the coming days/weeks as I see what happens.  I threw $80 at it just to see what happens over the next 120 days.  It doesn't totally pass the smell test, but it certainly is curious.

The benefit I see is that you are not holding on to bitcoins them self, so the weekly volatility doesn't affect you.

https://bitcoin-trader.biz/?ref=tomq04

If you need bitcoin, coinbase seems to be tthe main player that is based in the US, and has been completely reputable as far as I can tell.  At the very least, they are trying to play by all the rules.

https://coinbase.com/?r=52d9769d4ad53e3cef000031&utm_campaign=user-referral&src=referral-link

[tomq04]

I'll give an update on this ponzi scheme:

I threw in $80, and have made a daily profit of ~1.2% (back of the envelope), results are posted daily here:
https://bitcoin-trader.biz/results.php

My co-worker and I have had 0 problems with cashing out and the money is deposited to whatever bitcoin wallet you wish, I've put it back into Coinbase so I can cash it out on demand.

There are a few caveats that make us nervous, in the TOS they mention that any website problems that happen they will not be liable, essentially they could just go dark and keep the money.  Also since the money is "locked" in for 120 days, when you will have your principal returned, they could post a series of losses (creating a negative balance on your account) and when the money is due to you they would "pay off" those losses and you would get nothing.

Besides those glaring flaws, everything they are doing makes sense and the outrageous returns seem very plausible when watching the various BTC markets on a daily basis, there simply is a lot of arbitrage opportunities to be had, and based on their daily payout schedule I seem to think there is at least a decent chance these guys are "mostly" legit.

I'm not putting any more money in until I get my initial $80 principal out ($20 so far has come out), but it's been fun to watch.

[arebelspy]

I'll give an update on this ponzi scheme:

I threw in $80, and have made a daily profit of ~1.2% (back of the envelope), results are posted daily here:
https://bitcoin-trader.biz/results.php

My co-worker and I have had 0 problems with cashing out and the money is deposited to whatever bitcoin wallet you wish, I've put it back into Coinbase so I can cash it out on demand.

There are a few caveats that make us nervous, in the TOS they mention that any website problems that happen they will not be liable, essentially they could just go dark and keep the money.  Also since the money is "locked" in for 120 days, when you will have your principal returned, they could post a series of losses (creating a negative balance on your account) and when the money is due to you they would "pay off" those losses and you would get nothing.

Besides those glaring flaws, everything they are doing makes sense and the outrageous returns seem very plausible when watching the various BTC markets on a daily basis, there simply is a lot of arbitrage opportunities to be had, and based on their daily payout schedule I seem to think there is at least a decent chance these guys are "mostly" legit.

I'm not putting any more money in until I get my initial $80 principal out ($20 so far has come out), but it's been fun to watch.

Jesus.  They're blatantly saying up from they'll scam you and you have no recourse.  At least the other ones pretneded to be real before going dark and keeping everyone's money.

You may get your 80 (probably will).  You may get a few thousand.  But wait until the service gets big (if it does).  Then .. whoops.  Website hacked (from the inside).  Not our fault.  Have a nice life.

[Spork]

I'll give an update on this ponzi scheme:

I threw in $80, and have made a daily profit of ~1.2% (back of the envelope), results are posted daily here:
https://bitcoin-trader.biz/results.php

My co-worker and I have had 0 problems with cashing out and the money is deposited to whatever bitcoin wallet you wish, I've put it back into Coinbase so I can cash it out on demand.

There are a few caveats that make us nervous, in the TOS they mention that any website problems that happen they will not be liable, essentially they could just go dark and keep the money.  Also since the money is "locked" in for 120 days, when you will have your principal returned, they could post a series of losses (creating a negative balance on your account) and when the money is due to you they would "pay off" those losses and you would get nothing.

Besides those glaring flaws, everything they are doing makes sense and the outrageous returns seem very plausible when watching the various BTC markets on a daily basis, there simply is a lot of arbitrage opportunities to be had, and based on their daily payout schedule I seem to think there is at least a decent chance these guys are "mostly" legit.

I'm not putting any more money in until I get my initial $80 principal out ($20 so far has come out), but it's been fun to watch.

Jesus.  They're blatantly saying up from they'll scam you and you have no recourse.  At least the other ones pretneded to be real before going dark and keeping everyone's money.

You may get your 80 (probably will).  You may get a few thousand.  But wait until the service gets big (if it does).  Then .. whoops.  Website hacked (from the inside).  Not our fault.  Have a nice life.

Yeah.  The entire BTC concept smells of this (but this one maybe more than others).  This is almost like the exchanges that just shut down overnight.  "Oh, did you have money in play?  Sorry.  We lost that."

I like the concept of a cash that is untied from governmental meddling.  I'm not convinced we're there yet.


[Mod Edit: Quote tags fixed.]

[MrCash]

Yeah.  The entire BTC concept smells of this (but this one maybe more than others).  This is almost like the exchanges that just shut down overnight.  "Oh, did you have money in play?  Sorry.  We lost that."

I like the concept of a cash that is untied from governmental meddling.  I'm not convinced we're there yet.

[Mod Edit: Quote tags fixed.]

I personally love Bitcoin and I believe it a massively revolutionary new technology.  I own several myself, but I keep them in my own secure wallet.  I don't engage in Bitcoin trading or deal with any of these mining or arbitrage services.

[tomq04]

  This is almost like the exchanges that just shut down overnight.  "Oh, did you have money in play?  Sorry.  We lost that."
[Mod Edit: Quote tags fixed.]

I think there is a little more to this particular story than how you summarized it here.  Mt. Gox needed to go, and has been a mess from the beginning, venture capital is flowing like crazy to the big players and as I would expect, it is regulating itself.

The shitty ones go, and people trying to legitimize BTC are coming in, and the VC money is going to those guys.

[MrCash]

  This is almost like the exchanges that just shut down overnight.  "Oh, did you have money in play?  Sorry.  We lost that."
[Mod Edit: Quote tags fixed.]

I think there is a little more to this particular story than how you summarized it here.  Mt. Gox needed to go, and has been a mess from the beginning, venture capital is flowing like crazy to the big players and as I would expect, it is regulating itself.

The shitty ones go, and people trying to legitimize BTC are coming in, and the VC money is going to those guys.

Yeah, it's really unfortunate that so many people lost money in the Mt. Gox fiasco, but it's good for the system a whole that they are out of the picture.

[Spork]

  This is almost like the exchanges that just shut down overnight.  "Oh, did you have money in play?  Sorry.  We lost that."
[Mod Edit: Quote tags fixed.]

I think there is a little more to this particular story than how you summarized it here.  Mt. Gox needed to go, and has been a mess from the beginning, venture capital is flowing like crazy to the big players and as I would expect, it is regulating itself.

The shitty ones go, and people trying to legitimize BTC are coming in, and the VC money is going to those guys.

Yeah, it's really unfortunate that so many people lost money in the Mt. Gox fiasco, but it's good for the system a whole that they are out of the picture.

It's not just Mt. Gox.  This story puts it at 45% of exchanges that have shut down... and that story came out before Flexcoin shut down.

[MrCash]

  This is almost like the exchanges that just shut down overnight.  "Oh, did you have money in play?  Sorry.  We lost that."
[Mod Edit: Quote tags fixed.]

I think there is a little more to this particular story than how you summarized it here.  Mt. Gox needed to go, and has been a mess from the beginning, venture capital is flowing like crazy to the big players and as I would expect, it is regulating itself.

The shitty ones go, and people trying to legitimize BTC are coming in, and the VC money is going to those guys.

Yeah, it's really unfortunate that so many people lost money in the Mt. Gox fiasco, but it's good for the system a whole that they are out of the picture.

It's not just Mt. Gox.  This story puts it at 45% of exchanges that have shut down... and that story came out before Flexcoin shut down.

Right, but I'm just referencing the sheer volume of users and activity at Mt. Gox.  All of the bad exchanges need to be weeded out, but when a bad exchange is also the largest exchange, then that poses the most significant problem to the system as a whole.

[tomq04]

  This is almost like the exchanges that just shut down overnight.  "Oh, did you have money in play?  Sorry.  We lost that."
[Mod Edit: Quote tags fixed.]

I think there is a little more to this particular story than how you summarized it here.  Mt. Gox needed to go, and has been a mess from the beginning, venture capital is flowing like crazy to the big players and as I would expect, it is regulating itself.

The shitty ones go, and people trying to legitimize BTC are coming in, and the VC money is going to those guys.

Yeah, it's really unfortunate that so many people lost money in the Mt. Gox fiasco, but it's good for the system a whole that they are out of the picture.

It's not just Mt. Gox.  This story puts it at 45% of exchanges that have shut down... and that story came out before Flexcoin shut down.

Right, but I'm just referencing the sheer volume of users and activity at Mt. Gox.  All of the bad exchanges need to be weeded out, but when a bad exchange is also the largest exchange, then that poses the most significant problem to the system as a whole.

I suppose I can agree to that, In reality until we hit a crypto 2.0 stage where the bug have been weeded out, there will be problems.  Of course it takes these growing pains to get to 2.0, I just like observing and dabbling to help "do my part"

[arebelspy]

  This is almost like the exchanges that just shut down overnight.  "Oh, did you have money in play?  Sorry.  We lost that."
[Mod Edit: Quote tags fixed.]

I think there is a little more to this particular story than how you summarized it here.  Mt. Gox needed to go, and has been a mess from the beginning, venture capital is flowing like crazy to the big players and as I would expect, it is regulating itself.

The shitty ones go, and people trying to legitimize BTC are coming in, and the VC money is going to those guys.

It's not just Mt. Gox, it's happened multiple times.  Exchange shuts down, keeps everyone's money.

Here's one from 3 days ago, even more recent than Mt. Gox: http://www.theregister.co.uk/2014/03/04/bitcoin_bank_flexcoin_shuts_down_after_hackers_strike/

The funny part is the service in the OP specifically has a clause that more or less says "we may shut down at any time and keep your money" and yet people will still "invest" with them, I'm sure.

A fool and his money, and all that...

(Note: this is not a commentary on the idea of digital currency itself, or even BitCoin, but on the many shady exchanges and the way things are done now.)

[MrCash]

I suppose I can agree to that, In reality until we hit a crypto 2.0 stage where the bug have been weeded out, there will be problems.  Of course it takes these growing pains to get to 2.0, I just like observing and dabbling to help "do my part"

Yeah, definitely.  It will take all kinds in order to get Bitcoin (and cryptos in general) to maturity.  I consider my main contribution to be spreading the word about it and correcting misinformation.

[Spork]

Right, but I'm just referencing the sheer volume of users and activity at Mt. Gox.  All of the bad exchanges need to be weeded out, but when a bad exchange is also the largest exchange, then that poses the most significant problem to the system as a whole.

So was it really a bad exchange in comparison to the others?  Or it was just extremely noticeable as a bad exchange due to its market share?  I had always assumed the latter, but I don't have enough info to really have made that judgment call. 

I figure I'd believe it as a viable currency when actual real banks start doing so.  When I can walk into my local credit union or some Megabank and change money, I'll believe it is viable.

[MrCash]

Right, but I'm just referencing the sheer volume of users and activity at Mt. Gox.  All of the bad exchanges need to be weeded out, but when a bad exchange is also the largest exchange, then that poses the most significant problem to the system as a whole.

So was it really a bad exchange in comparison to the others?  Or it was just extremely noticeable as a bad exchange due to its market share?  I had always assumed the latter, but I don't have enough info to really have made that judgment call. 

I figure I'd believe it as a viable currency when actual real banks start doing so.  When I can walk into my local credit union or some Megabank and change money, I'll believe it is viable.

Yeah, it had a lot of problems.  There were frequent periods where people could not withdraw their money and several times where their infrastructure could not handle the volume of traffic.  The coding for the exchange was done by one person who had no professional financial software experience and would not let anyone help with software design.  He also insisted on coding everything in PHP in order to try to legitimize the language's use and frequently took shortcuts in development.  And now it seems that they either lost control of their bitcoin reserves, they were stolen or they stole them.

[Cassie]

Mr Cash, we also keep ours in a secure wallet. Also the computer used to access it is new & has never been on internet. It strictly is for our bitcoin $.  I don't think you can be too careful.

[arebelspy]

Mr Cash, we also keep ours in a secure wallet. Also the computer used to access it is new & has never been on internet. It strictly is for our bitcoin $.  I don't think you can be too careful.

I would consider splitting it between multiple wallets.  And I'd have it on flash drives, and open it in VMs.  A whole separate computer sounds like an expensive solution to the problem.  But to each his/her own.

[MrCash]

Mr Cash, we also keep ours in a secure wallet. Also the computer used to access it is new & has never been on internet. It strictly is for our bitcoin $.  I don't think you can be too careful.

Yeah, I need to spend a little more time addressing security.  Once all of the wedding stuff is over, I'll be taking a closer look at everything.  But for now, the computer that holds the BTC remains off.

Mr Cash, we also keep ours in a secure wallet. Also the computer used to access it is new & has never been on internet. It strictly is for our bitcoin $.  I don't think you can be too careful.

I would consider splitting it between multiple wallets.  And I'd have it on flash drives, and open it in VMs.  A whole separate computer sounds like an expensive solution to the problem.  But to each his/her own.

Yeah, I will be making several different paper wallets and a few flash drive backups.

[Cassie]

My son who is doing it all is paranoid. He even has a lockbox with passwords, etc in case he is dead, in a coma, etc.  He tried to tell someone we knew to get theirs out of Mt. Gox but they did not and lost what they had.  Since we are steadily making more everyday by mining he wants to take every precaution.

[Spork]

I don't think that is the least bit paranoid.  That's just a reasonable way to handle things. 

[MrCash]

My son who is doing it all is paranoid. He even has a lockbox with passwords, etc in case he is dead, in a coma, etc.  He tried to tell someone we knew to get theirs out of Mt. Gox but they did not and lost what they had.  Since we are steadily making more everyday by mining he wants to take every precaution.

What are you mining with?

[Cassie]

I actually am very proud of him because he is managing 7 people's mining plus his own and takes it very seriously which is great for us.  None of us have to worry about the details because he does:))

[Cassie]

I do not know since he handles everything. I do know we all own 7 older computers that each have 4 cards working. We all are now investing in newer machines that are twice as fast and do not use nearly as much electricity as the ones we have now.  Of course everyone involved splits the cost of the electricity.

[MrCash]

I do not know since he handles everything. I do know we all own 7 older computers that each have 4 cards working. We all are now investing in newer machines that are twice as fast and do not use nearly as much electricity as the ones we have now.  Of course everyone involved splits the cost of the electricity.

Nice!  I mined for a while, but it ended after the GPUs burned out and got tired of all the heat and noise (living in a small apartment).  I did pretty well, but I would have made a lot more if I had just bought BTC with all the money I used for mining equipment.

[Cassie]

We have a small dirt basement (partial) and in the winter the extra heat has cut down our heating bills alot and in the summer my hubby makes a wind tunnel so to speak that funnels the heat up & out the chimney. We can not hear them at all.  We are all doing well even with the high electricity cost. The 7 of us are pooling our earnings to buy all the new equipment so no out of pocket expense. We just made our initial investment a year ago and then keep rolling over the profits.  No one invested more then they could afford to lose. It will be interesting to see when each of us thinks it is worth enough to cash out.

[MrCash]

We have a small dirt basement (partial) and in the winter the extra heat has cut down our heating bills alot and in the summer my hubby makes a wind tunnel so to speak that funnels the heat up & out the chimney. We can not hear them at all.  We are all doing well even with the high electricity cost. The 7 of us are pooling our earnings to buy all the new equipment so no out of pocket expense. We just made our initial investment a year ago and then keep rolling over the profits.  No one invested more then they could afford to lose. It will be interesting to see when each of us thinks it is worth enough to cash out.

I'm on the 10 year plan myself.  No matter what happens, I'm holding for 10 years.

[Cassie]

Is there a specific reason you are holding for 10 years?

[tomq04]

I consider my main contribution to be spreading the word about it and correcting misinformation.

I have been doing this as well!

[arebelspy]

I consider my main contribution to be spreading the word about it and correcting misinformation.

I have been doing this as well!

Me too!  And I.P. Daily!

[tomq04]

Me too!  And I.P. Daily!

Daily?  Wasn't his great work "The Yellow River"?  Great book.