[squashmode]

Agreed. I had run a small BTC arb program for a bit a number of years back. The exchanges were shoddy, there was a persistent bias in the arbitrage such that you ended up accumulating huge positions of BTC on one side, and lots of short cash on the other. Couple that with the difficulties of withdrawing cash from the system, fees, etc., it was not worth the risk. But this is not new.

What's pretty cool about this -- though it appears this site is not focused on it -- is the opportunity for full triangle arbitrages among the various crypto's, such that you may do, e.g., a BTC->ETH->LTC->BTC trade and wind up with more BTC than you started with.

Another point to consider; the big players have moved into this space, if you want to get into it you will need to be sure you're not at an informational disadvantage.

[olegkikin]

I created a script years ago that looked for arbitrage opportunities on BTC-E, up to 4 trades deep, and it used the order books properly. I left it running, and was surprised that it actually found some arbitrage opportunities, around once every 3-4 minutes. Unfortunately the profits were always lower than 3-4 transaction fees of 0.2% each, so my dreams of getting rich quick got crushed.

I'm was actually surprised BTC-E didn't do something like that themselves, since the they don't have to pay any transaction fees, and they also had zero lag. It's like free money.

[mhluongo]

They almost certainly did. Crypto exchanges will give market makers and arb shops deals on exchange rates.

[SilasX]

Yeah, I remember big spread between MtGox and the other exchanges. There was a reason for that.

[ghostbrainalpha]

Sorry, what was the reason?

[SilasX]

MtGox having been hacked and being insolvent and people slowly realizing this.