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$5.3 trillion turnover every day across 192 currencies, with over 40% global trading involving European currencies
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for banks, financial institutions and most businesses, trading stops every weekend from 20:15 GMT on Sunday until 22:00 GMT Friday
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extreme market concentration: the top 4 institutions (Deutsche Bank, Barclays Capital, UBS & Citi) account for around 46% of all foreign exchange transactions. Throw in JPMorgan, HSBC, RBS, Credit Suisse, Goldman Sachs and Morgan Stanley (so, just 10 closely networked institutions) and you have 77% of all currency trading.
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large spreads between buy and sell prices across currency pairs. Almost all businesses and financial institutions, exchanging into another currency then back, will lose at least 1% of value. For consumers, losses are more often in the 4-10% range.
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minimal support for automation of cashflow management and balance sheet operations
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central banks, behind closed doors, decide to make extremely large trades on exchange reserves
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with forex trading closed over weekends, exchange rates are magically frozen for 50 hours. This is a massive inconvenience to business, since normal transaction processes and cashflow management tools stop working. This is incompatible with the 24-7 online economy. Intermediaries that do continue trading currencies over weekends have less competition and are assuming additional trading risk, and so typically charge business & consumers with even wider spreads between buy and sell price.
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extreme market concentration within intransparent institutions has facilitated price fixing activity and currency manipulation, harming productive businesses for the profit of larger banks
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wide buy-sell price spreads act as a tariff, creating barriers to trade across currency areas, weakening competition
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wide buy-sell price spreads act as a multi-billion transfer of wealth from the average consumer and from other productive businesses, towards a small privileged elite
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no automation - millions of human-hours (thousands of lifetimes) are wasted. These aren’t grunt hours either - the professionals involved in currency trading are highly numerate and articulate - the opportunity cost here is all the innovation and new solutions to real world problems we might see if these intelligent people could spend time on worthwhile endeavours
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intransparent central bank interventions cause unexpected outcomes, damaging efficiency of resource allocation across the tradable economy. Central bank interventions by humans are also highly susceptible to corruption
Mainstream reform efforts (e.g. SEPA, MoneyGram, extending trading window length for indices) do not materially tackle these key failings. This surely provides adequate motivation for a few months of hacker collaboration (plus years of marketing and lobbying to ensure that the solution scales). We want transparent, efficient, distributed, 24/7, automated forex trading, in which any business can enter as counterparty, in which there is no spread in buying and selling price (no "tariffs"; no fragmentation) and in which there is full support for third parties to automate (e.g. in cashflow management, trading or accounting - freeing thousands of intelligent people to do greater things).
First, explore the key concepts involved in solving forex. Then look at a preliminary approach to technical implementation. Finally, a few thoughts to profitability, marketing and successful scaling.