Insane BTC to XAU exchange rate on RippleTrade

Trade experiences with Ripple users and gateways
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Re: Insane BTC to XAU exchange rate on RippleTrade

Postby stephenrs » Wed Aug 13, 2014 8:39 pm

yvv wrote:Man, you really need to go through "Ripple for Users" section on ripple wiki before trying to trade any assets.


I've already been through that section in the wiki (among others), but it doesn't really help me, because it's a bit too high level. I already understand the conceptual/financial aspects of a marketplace (I'm a fairly active stock/option/forex/ETF/PM trader), and I understand the major concepts underpinning the technology, including the notion of a gateway (I have a software engineering background, and am presently a startup CTO).

So, what I'm looking for is more specific practical insight/guidance regarding the mechanics of how this particular marketplace works at this early point of evolution, and which tools/apps/sites/gateways/exchanges I should be paying attention to - and I don't need cartoons or simplistic use cases. Also, obviously there are gaps in my understanding, so I'm hoping for some help filling them in (again, that wiki page doesn't do anything for me at my current level of understanding).

For example, the current book listed on the RippleTrade site for XRP to XAU trades shows a grand total of about 10 offers and 5 asks, with an astronomical spread (and there isn't a book for BTC/XAU), so evidently I'm either looking in the wrong place, or what I'm seeing is really the entire universe of activity for this particular currency pair(?)...and putting an order in there and twiddling my thumbs for an indefinite amount of time isn't quite what I was hoping for.

Or maybe I need to add a USD issuer to my account to see real action around gold(?) - but this wouldn't really suit my purposes, since I'm looking to go BTC->XAU.

Hopefully it's obvious that I'm actively gobbling up as much info about this as I can find across the net, and I find it exciting - but it seemed like a good idea to complement my research by asking some experts to help me get a more concrete and practical handle on this. So, any specific information anyone can provide would be much appreciated.
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Re: Insane BTC to XAU exchange rate on RippleTrade

Postby yvv » Wed Aug 13, 2014 9:54 pm

When you talk about asset in ripple such as BTC or XAU you always need to specify the issuer. All assets, except XRP, exist as IOUs in ripple (I Owe You). IOU from one issuer may be more liquid than IOU from other issuer for same currency, so it is really important, who is the issuer.

At the moment, XAU.GBI has no orders in the trade book even for liquid BTC such as Bitstamp or SnapSwap. It has only few orders for XRP at ridiculous price. That is why "Convert" algorithm went through BCT -> XRP -> XAU.GBI for you. Rippling like this is the main feature of ripple. You probably consumed all of XAU.GBI liquidity at the moment.
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Re: Insane BTC to XAU exchange rate on RippleTrade

Postby stephenrs » Wed Aug 13, 2014 10:12 pm

In case anyone else ends up here looking for similar detail, the most useful documentation I've found so far is in the wiki titled "Market Making Primer" (https://ripple.com/ripple-mm.pdf).

Although directed at market makers, it provides more generally applicable information about things like the pathfinding algorithm (which has piqued my curiosity), and the role of XRP in the network, as well as a solid discussion of how money works in a historical banking context for folks looking for a better frame of reference - things that are helpful for understanding not just how to be a market maker, but how to participate effectively.

Still digging and looking for help getting deeper though...
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Re: Insane BTC to XAU exchange rate on RippleTrade

Postby stephenrs » Wed Aug 13, 2014 11:10 pm

yvv wrote:When you talk about asset in ripple such as BTC or XAU you always need to specify the issuer. All assets, except XRP, exist as IOUs in ripple (I Owe You). IOU from one issuer may be more liquid than IOU from other issuer for same currency, so it is really important, who is the issuer.

At the moment, XAU.GBI has no orders in the trade book even for liquid BTC such as Bitstamp or SnapSwap. It has only few orders for XRP at ridiculous price. That is why "Convert" algorithm went through BCT -> XRP -> XAU.GBI for you. Rippling like this is the main feature of ripple. You probably consumed all of XAU.GBI liquidity at the moment.


Thanks for that, it does shed some light, and I realized drilling more into my RippleTrade account that my BTC issuer is snapswap.vc (which I assume got set up automatically when I funded my BTC balance from another wallet). Also, ripplecharts has been pretty useful for understanding the transaction flow, so things are getting more concrete for me.

It doesn't look like I consumed all of the BTC->XRP->XAU liquidity though, since there are still some wacky offers in the XRP/XAU book (and plenty in the BTC/XRP book). It makes me wonder what the crazy offers are all about though...i wonder if folks are just testing things out, or wishful thinking, or if they're just creating a presence/endpoint to provide some liquidity for the Convert feature (even if folks are going to get hosed by using it).

In any case, I put a tiny order in the XRP->XAU book (at a price that makes sense, if I've done my math correctly), so we'll see what happens...
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Re: Insane BTC to XAU exchange rate on RippleTrade

Postby shekenahglory » Thu Aug 14, 2014 12:47 am

stephenrs wrote:Yes, GBI XAU is what I'm interested in, but how can I access "the market on USD.bitstamp to GBI XAU"? Do I need a Bitstamp account? Is there another marketplace/exchange (other than RippleTrade) that I should turn my attention to?


it looks like the order book has some more reasonable orders at the moment, maybe one is yours though. To get to the USD.bitstamp / XAU.GBI market, you need to enter "XAU (-0.5%pa)/USD" into the drop down at the top left - after that your base currency next to the drop down should say "XAU (-0.5%pa) rrh7rf1gV2pXAoqA8oYbpHd8TKv5ZQeo67", and the counter currency "USD ???" - you need to click change issuer, and put in bitstamps issuing address (rvYAfWj5gh67oV6fW32ZzP3Aw4Eubs59B or ~bitstamp)....click confirm and the order book should switch to USD.bitstamp / XAU.GBI

sorry that its not as straightforward as it could be....its a little easier now that the issuing addresses have their ripple names associated with their cold wallets (thats what ~bitstamp is, a ripple name), if the issuer you are interested in doesn't have a ripple name, its best to save it into your contacts.

We are about to start working on a complete redesign of the trading page, and 2FA is just about to enter the final testing phase!
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Re: Insane BTC to XAU exchange rate on RippleTrade

Postby yvv » Thu Aug 14, 2014 1:24 am

I don't see any orders for XAU.~GBI/USD.~bitstamp pair. What am I doing wrong? Do I have a different rippletrade client?

Edit: never mind, just used the wrong address. OMG, I became bad at copypasting :cry:
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Re: Insane BTC to XAU exchange rate on RippleTrade

Postby stephenrs » Thu Aug 14, 2014 2:03 am

shekenahglory wrote:
stephenrs wrote:Yes, GBI XAU is what I'm interested in, but how can I access "the market on USD.bitstamp to GBI XAU"? Do I need a Bitstamp account? Is there another marketplace/exchange (other than RippleTrade) that I should turn my attention to?


it looks like the order book has some more reasonable orders at the moment, maybe one is yours though. To get to the USD.bitstamp / XAU.GBI market, you need to enter "XAU (-0.5%pa)/USD" into the drop down at the top left - after that your base currency next to the drop down should say "XAU (-0.5%pa) rrh7rf1gV2pXAoqA8oYbpHd8TKv5ZQeo67", and the counter currency "USD ???" - you need to click change issuer, and put in bitstamps issuing address (rvYAfWj5gh67oV6fW32ZzP3Aw4Eubs59B or ~bitstamp)....click confirm and the order book should switch to USD.bitstamp / XAU.GBI

sorry that its not as straightforward as it could be....its a little easier now that the issuing addresses have their ripple names associated with their cold wallets (thats what ~bitstamp is, a ripple name), if the issuer you are interested in doesn't have a ripple name, its best to save it into your contacts.

We are about to start working on a complete redesign of the trading page, and 2FA is just about to enter the final testing phase!


This is great info, thanks, worked like a charm. I also see that there's a new article on your support site that lists a bunch of gateways along with which currencies they support - very useful, I'm getting the hang of this.

Also, no need to apologize, these are still the early days...and I know how it goes with web app dev iterations. It can only get better from here, and I'm sure you guys don't need to hear anybody remind you that the UX needs to be a bit more fluid to achieve wide adoption ;)
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Re: Insane BTC to XAU exchange rate on RippleTrade

Postby stephenrs » Fri Aug 15, 2014 8:28 pm

Just to summarize this thread for anyone else who ends up here looking for help.

The title of this thread actually should have been: "How does the Convert feature on RippleTrade work?", because that actually turned out to be the core of what I didn't understand, although I picked up some new info along the way.

The short answer here is that Convert does nothing of the sort. What it actually does is analogous to entering a market order on an exchange. It's equivalent to saying "get me X amount of currency C1, and I don't care how much it costs in currency C2". And entering a market order in an illiquid market is almost always a very bad idea.

Similarly, using the Trade feature is analogous to entering a limit order on an exchange. It's like saying "get me X amount of currency C1, and I don't want to pay more than price P" - which is obviously a much smarter way to go, especially in illiquid markets.

So, I think the talk here of gateways and pathfinding algorithms is far less important than these fundamental trading concepts which have been weirdly disguised (although I'm happy to have enriched my understanding of the implementation details), and because of this reality IMHO, something needs to be done with this particular user experience on RippleTrade - sooner rather than later.

There needs to be a big warning message or tooltip somewhere on that Convert page, letting people know that it's not at all an innocuous conversion, but a *hugely* risky thing to do. In fact, a friend who's also getting up to speed with this stuff called me this morning trying to understand how he lost so much money on a BTC/XRP "conversion". Unfortunately, he didn't test it out first with a negligible amount of money the way that I did.

I'm guessing he's not the first, and won't be the last person who is hurt by this immensely misleading "feature" - and it's exactly the kind of thing that new users need to get scared away from this. I hope the Ripple Labs people are listening.

In any case, thanks again for the replies. I get it now, and am happily trading away...and pretending that the Convert option isn't even there.
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Re: Insane BTC to XAU exchange rate on RippleTrade

Postby yvv » Fri Aug 15, 2014 9:44 pm

stephenrs wrote:
The short answer here is that Convert does nothing of the sort. What it actually does is analogous to entering a market order on an exchange. It's equivalent to saying "get me X amount of currency C1, and I don't care how much it costs in currency C2". And entering a market order in an illiquid market is almost always a very bad idea.



No, it is equivalent to saying "I have currency C1 and want to get X amount of currency C2, show me the best exchange rate available at the moment". This is what Convert does, it finds the cheapest for you combination of trades, taking into account gateway fees. You can do this manually by browsing trade books, but you won't be able to find a better deal. And if this exchange rate does not suit your expectations, you should not do the exchange.
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Re: Insane BTC to XAU exchange rate on RippleTrade

Postby stephenrs » Fri Aug 15, 2014 11:41 pm

yvv wrote:No, it is equivalent to saying "I have currency C1 and want to get X amount of currency C2, show me the best exchange rate available at the moment". This is what Convert does, it finds the cheapest for you combination of trades, taking into account gateway fees. You can do this manually by browsing trade books, but you won't be able to find a better deal. And if this exchange rate does not suit your expectations, you should not do the exchange.


Obviously I know what it does, but my point is that if this community wants people to adopt this network and this new age of commerce, it's obviously going to have to take some steps to make sure that new users don't get burned by things like something called "Convert" that doesn't do what intuition and life experience tells you it's supposed to do. A little tool tip saying "This is like placing a market order" would go a long way, for example - because that's what it is - even if it shows the faded grey text conversion rate to you. All I'm saying is that it's in everyone's interest to make this more clear.

My friend who got screwed by this terrible nomenclature is an IT expert and veteran trader, so I feel bad for the more main stream "suckers" who have and will get burned by this. Obviously you're free to disagree with me, or even debate a point that is beside the point, but the fact that the way that Convert works is documented nowhere except on this forum thread, is clearly a problem for adoption and overall usability of the app.

Otherwise, maybe this should only be for people who know off the top of their head what the conversion rate from 249,000.03438982439879 to 0.00005459798274 should be, or for folks that have laptops running rippled in their bedrooms...

I'm off to my Charles Schwab account to enter an after hours Convert order...wtf.
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