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Blackbird: Bitcoin arbitrage

(github.com)
298 points vega_empire | 3 comments | 23 Dec 17 12:39 UTC | HN request time: 0.613s | source
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scoot ◴[23 Dec 17 17:46 UTC] No.15995263[source]▶
Two words: "counterparty risk".
replies(1): >>15996074 #
1. bkruse ◴[23 Dec 17 20:20 UTC] No.15996074[source]▶
I'm surprised this comment isn't #1!
replies(1): >>15996126 #
2. scoot ◴[23 Dec 17 20:32 UTC] No.15996126[source]▶
I probably should have added an explanation for those unfamiliar with the term, but then it wouldn't have been two words! :)

Essentially conterparty risk is the risk that the other party to a contract, in this case the broker, defaults.

Bacause automated arbitrage trading requires you to hold your funds with the broker, rather than transferring them to your own (preferably cold) wallet, you are exposed to the risk that the broker goes out of business without returning your funds, or otherwise fails to live up to its side of the bargain.

With crypto-currency exchanges, that risk over the long term might be assessed to outweigh the possible rewards from arbitrage trading.

replies(1): >>15996653 #
3. ericjang ◴[23 Dec 17 22:38 UTC] No.15996653[source]▶
This. I wrote a crypto arb bot in 2014 and decided to stop working on it / open-source it for the same reason after a couple exchanges that I had cryptos in mysteriously vanished.