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Blackbird: Bitcoin arbitrage

(github.com)
298 points vega_empire | 1 comments | 23 Dec 17 12:39 UTC | HN request time: 0s | source
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thisisit ◴[23 Dec 17 15:49 UTC] No.15994579[source]▶
For people wondering, does it work? Short answer. No.

Long answer - The biggest flaw lies in the "advantages" section:

Unlike other Bitcoin arbitrage systems, Blackbird doesn't sell but actually short sells Bitcoin on the short exchange

The problem is only Bitfinex allows short selling. So, the example is an excellent case of cherry picking.

There are other issues with their strategy too.

replies(5): >>15994619 #>>15994834 #>>15995070 #>>15995902 #>>15996124 #
1. makomk ◴[23 Dec 17 19:47 UTC] No.15995902[source]▶
Also, Bitfinex almost always has a lower price than the other exchanges so there's almost no opportunities to actually do this; the only major exception was when the trustworthiness of Bitfinex's dollar deposits themselves were in question, which is a bad time to be doing arbitrage. Plus, you're going to be paying interest on your shorts for the entire time period they're open which eats into your profits. There's also the risk of the price increasing enough that a margin call liquidates your short position before the prices converge enough that you can close your position and take a profit.