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A comment on Bridgewalker: an exchange rate adjusted Bitcoin wallet.

Re:Bridgewalker: an exchange rate adjusted Bitcoin wallet by gibybo on Saturday June 08, 2013 @11:26AM (#5845133)
If I was operating this service, I would just sell the Bitcoins as they were deposited to me. When people wanted to withdraw, I would buy them back at the current market rate. Of course I would do this in bulk and have a small reserve pool of Bitcoins to reduce my fees and improve liquidity, but that's not very significant.

As long as I can buy/sell for cheaper than I am charging my customers (which I can if I'm using MtGox at 0.5% and charging 0.75%), this is profitable with no risk to either me or my customers. There is no need for this to be a scam or a gamble by the operator (although it doesn't exclude the possibility, obviously).

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Re:Bridgewalker: an exchange rate adjusted Bitcoin wallet by jav on Saturday June 08, 2013 @11:57AM (#5845244)
That's exactly how I operate Bridgewalker (I'm the founder). Everything is fully hedged, I'm not taking a gamble on the exchange rate.
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Re:Bridgewalker: an exchange rate adjusted Bitcoin wallet by dlitz on Saturday June 08, 2013 @12:45PM (#5845415)
So, you're basically an exchange, right? Are you operating in the US, and if so, do you have the appropriate MSB license? It seems like the US government is starting to crack down on Bitcoin exchanges that operate without a license, so what are you doing to assure your customers that you're not just going to get shut down?
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Re:Bridgewalker: an exchange rate adjusted Bitcoin wallet by rglullis on Saturday June 08, 2013 @02:27PM (#5845747)
He is not an exchange, but a bank.
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Re:Bridgewalker: an exchange rate adjusted Bitcoin wallet by Hansi on Saturday June 08, 2013 @06:45PM (#5846623)
Market maker is a better definition: https://en.wikipedia.org/wiki/Market_maker
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Re:Bridgewalker: an exchange rate adjusted Bitcoin wallet by rscale on Saturday June 08, 2013 @11:56AM (#5845243)
Exactly. Even at the lowest transaction volumes MtGox charges 0.6%, so the operator can capture 15bps in each direction.

That said, customers still face risk that the operator could use the deposits for expenses, or for dividends. I'm reminded of Full Tilt Poker, where customers were told their funds were in segregated accounts, but the funds had actually been given to the directors.

The issue was undetectable until outflows outpaced inflows and the music stopped.

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