For most of the big 4 day 1000% rally/pump in STEEM July 8-12th, the price of STEEM on Bittrex
had been slightly higher (by about 5-10%) than on the internal market. Today, July 12th the external
premium on Bittrex spiked to 20-25% for hours at a time.

How To Arbitrage This Premium

(1) Use SD (SteemDollars) to buy STEEM on Steemit Market.

(2) Transfer STEEM to Bittrex. Sell STEEM for 5-25% more.

(3) Buy SD on Bittrex in a thin market to replenish your supply.

(4) Transfer SD to STEEMIT.

(5) Back to #1, rinse and repeat as long as use have SD.

What Could Go Wrong?

(1) This works great until you do not run out of SD (see below why BTC does not help).

(2) Can be tough to buy SD on Bittrex (10 BTC/day volume vs 1000 BTC/day for STEEM)

(3) You can have transfer delays. A normal transfer is about 3 minutes for 20 confirmations,
but occasionally transfers can get hung up for hours.

(4) The market could move against you.

(5) The Steemit Market has freezed up on me many times. Often orders just disappear.
There is no record of any trades or transfers or balances on the Steemit Market, no explorer,
no nothing. Just trust the system. The blockchain that runs it is effectively secret. One can
argue it's still in alpha... and being rolled out. But every $10,000 micro-alt has an explorer
and this runs on space age Graphene, so what is the story?

Why is Bittrex price > Steemit price?

(1) Good question.

(2) More speculative buying pressure on Bittrex.

(3) The Steemit Market price MAY be deliberately suppressed, because people who use
BTC via the "Deposit" function to buy STEEM end up paying that 5-25% premium.

(4) Apparently, a week ago the situation was reversed. Arbing the reverse situation would
pile up SD inside Steemit with only a thin market on Bittrex to sell into.

What will the future look like?

(1) As both STEEM and SD (Bittrex symbol SBD) mature and gain liquidity on Bittrex,
the premium/discount should become low single digits in percent.

(2) Listing on Polo will tighten the market further and explode volume.

(3) Allowing shorting of STEEM on Polo will make the market even more efficient.

Traders get a bad rap from airchair critics, but pro traders get paid to provide liquidity to new
markets and keep prices in line. The liquidity and tight markets pro traders create save money
for everyone in the STEEM ecosystem.

Fully automated bots and decentralized exchanges tend to be far less efficient than human
directed traders/bots.

Less successful at (a) creating liquidity and (b) creating efficient markets.

The reasons are complex, but it's a fact that as of 2016 no p2p decentralized market anywhere
has significant liquidity comparable to centralized markets.