Today I noticed what I thought was an arbitrage opportunity on an exchange I had never been to before.
That exchange was called Tidex.com
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According to that website a coin called ARN was trading for a very low price.
That same coin was trading for 400% higher on Binance.
This seemed like a great arbitrage opportunity so I went ahead and signed up for Tidex.
It only took a couple of minutes.
I then had a friend transfer in a little Bitcoin.
He had 0.0068 BTC so we converted it to Dogecoin before we transferred it from Bittrex to Tidex.
The reason for the conversion was so that it would transfer much faster because Dogecoin is a lot faster than Bitcoin.
The cost was around 2 Dogecoin to send it from Bittrex. That's about 2 cents last time I checked.
After about 5 minutes the coins were in my Tidex account.
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I converted the coins to BTC and then tried to purchase ARN at the listed price.
I didn't realize that this exchange had very limited liquidity though.
Not very many people were using it so the listed price was different than the real price. The sell orders, of which there are very few, were much higher than they should have been. No arbitrage here it seemed at all.
I was feeling kind of frustrated so I went ahead and transferred my BTC back to Bittrex because at this point I was no longer concerned about how long it would take.
I forgot about the fees though.
When the BTC arrived in Bittrex it was. .0048. That's a loss of $30.
My friends $100 became $70 simply because of transferring BTC from one exchange to another.
It cost him 30% of his Bitcoin to do that transfer.
So how could we have avoided this extraordinary huge Bitcoin fee?
Well the answer is simple.
We could have converted back to Dogecoin and sent it over there and just paid a couple of Dogecoin.
We could have converted to reddcoin and sent it over.
We could have converted to any very small coin that has a very fast speed and a very low transaction cost.
There are quite a few like that.
Transferring Bitcoin cost quite a bit.
If you transfer a smaller altcoin you will get by with paying much less of a fee than if you transfer Bitcoin.
In this particular case we lost $30 from a $100 investment.
Since I literally made $30 during my shift at lunch today that is a huge amount of money to me.
I hope this helps you out.
