04-14-2013, 09:17 AM
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Confirmed User
Industry Role:
Join Date: Nov 2002
Posts: 2,637
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Quote:
Originally Posted by AdultPornMasta
And governments would do that just how?
Seriously, I am looking for your input on this matter.
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Charging Bitcoin exchange owners with money laundering most likely 
This was posted on Reddit explaining the lag on Mt.Gox
Quote:
I'm not perfect on the details, but what I've picked up from lots of lurking is that:
? MTGOX's trade matching algorithm is slow in that when a (non-market) bid comes, it has to cycle through all of the asks to see if one matches. And vice versa for the asks. This means that the more bids and asks there are, the slower things are.
? When things lag out too much, people panic and sell because they don't have faith in MtGox, which causes the price to drop.
? In this way, there's an incentive for manipulators to create lag: let the price pick up a bit, sell all their coins, place buy orders at a lower price, then lag gox to all hell so that everyone else sells and the price drops and they get cheap coins.
? Placing lots of tiny orders helps skew the 'last' price creating a ladder to lower prices - instead of one big trade causing a momentary dip and then possibly surging right back, the fact that there's lag means a bunch of people will sell at MARKET (e.g. last) price. So if you create a ladder of tiny transactions from 100.1, 100, 99.5, 99, 98.5, and so on, if people blindly hit sell during the lag you've created, they follow your price path downwards, which sustains support for these lowered prices while lag persists.
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