You're Stupid (Bitcon Believers) in [Market-Ticker]

You're Stupid (Bitcon Believers)

C'mon guys, take a gander at this and tell me what it means.

You want to know why I know this "phenomenon" is a scam?

The answer is found right there in that chart.  Ignore MtGox as it's offline.

Look at the others.  What do you notice among those with recent quotes?  (That is, everything down to CampBX. roughly.)

One of the things I used to do is write code for people that did arbitrage between exchanges.  These are risk-free profit opportunities, provided you can identify price disparities and execute the trades knowing they'll clear and are good.

There's a reason that only a tiny fraction of a cent different exists in the price of a Euro or a Yen between New York and London, for example.  You see, if there ever is a difference -- any difference -- someone comes in and buys in one place and sells in the other at the same time, pocketing that difference.  It's free money, if you're fast enough, and it forces the two prices together.

So why hasn't it happened here?

There are thousands if not tens of thousands of institutions and individuals with enough resource in the form of computing and communications power to do it.  There's only one reason not to pick up the free money -- you don't think you're going to get paid -- that is, the trade won't be any good either initially or you'll never get your cash back out.

So long as this sort of spread exists -- nearly 1% between contemporary "exchanges" and even more as soon as you move a bit further off on time (and no, those others didn't move anywhere near that much on price during that time) there is no market and there is no actual exchange because nobody with real money believes they'll get paid.

If they did they'd arb these exchanges instantly and the quotes would immediately converge to within a fraction of a cent or the exchange(s) on the wrong end (that aren't actually acting as exchanges!) would be driven to instant bankruptcy.

There can be a legitimate difference in the price of Brent and Light Sweet crude, for example, because it costs money to deliver it from one place to another and there's a quality difference.  Neither of these apply to Bitcoin.

Get back to me about this being something other than an all-on scam when someone with some money believes that they'll get paid.  You'll know when that happens because the spread between these so-called "exchanges" will instantly disappear in a puff of smoke as the arb guys come in and immediately force the different exchanges to converge.