BITCOIN

Gold is known as an alternative to paper currencies, can be traded anywhere in the world, and has a limited supply; the same is true for bitcoin. 

 

Bitcoin is minted in quantities determined by an algorithm.  Currently there are 11 million in circulation and the pre-determined algorithm will determine additional mints until a finite supply about 21 million of them are created and no more.

 

This digital virtual currency trading under the symbol BTC or XBT,  became operational in early 2009; it was created by an unknown person using the alias Satoshi Nakamoto.  In 2011 the value of one Bitcoin rapidly rose from about $0.30 to $32, before falling back down $2; at the time of this writing, bitcoin equals roughly $300 USD.  Bitcoins have acquired a reputation for use by criminals to purchase drugs, launder money, and gamble. Since its inception, Bitcoin exchanges and transaction processors have been hacked routinely with losses totaling millions of USD.

Bitcoin uses cryptography, it does not do so to protect the privacy of individuals; all transactions are logged in a public file called the blockchain. It is possible, although difficult, to associate bitcoin transactions with real-life identities.

To use bitcoins one is assigned one or more bitcoin addresses, and wallets allow a user to complete transactions between addresses by requesting an update to the blockchain, the public transaction log instrumental to Bitcoin. Wallets come in a variety of forms: apps for mobile devices and computers, hardware devices, and paper tokens.



Link to realtime chart:  http://bitcoinwisdom.com/

DARK POOLS

Dark pools of liquidity (dark liquidity, dark pools or black pools) is trading volume or liquidity not openly available to the retail investor.  They are commonly traded with large block trades (at least 10,000 shares/block) by financial institutions with algorithms using quantitative strategies throughout the day or at scheduled times.

The main advantage in using dark pools is to avoid market impact from the transparency of a large block trade.  Dark pools are run by private brokerages (Barclays, Citi, Credit Suisse, Fidelity, Goldman Sachs, Deutsche Bank, UBS to name a few) which operate under fewer regulatory and public disclosure requirements than public exchanges.  Trading on the dark pools accounts for 32% of trades in 2012 versus 26% in 2008.