Bitcoin
Good explanation: http://www.imponderablethings.com/2013/07/how-bitcoin-works-under-hood.html
Places to buy and sell
So I've been holding onto a big chunk of bitcoin for a while, and it's way underwater. I'd like to try and recoup some of that loss. The average price has been pretty stable for a while, but there's still a decent amount of flux. Also, I incur a fee for every transaction, 1% + $0.15.
What I'm thinking is to build some simulation models of what the market might do. It will probably stay pretty steady, it may continue to flux and slowly drop or slowly go up and I'd bet at some point in the next few years there will be another bubble. I'm not going to take a crash into account because there's nothing I can do for that.
I can find a price and amount so that if I sell that amount at that price, I will be able to use that money to buy more coins later, even taking into account the fees. This can be a recursive process though. Say the price is high enough that there's a 90% chance I'll be able to sell at a profit. But it never gets that low. But a few weeks later the price climbs even higher, so that there is now a 90% chance I'll be able to take the current funds and buy at a profit. The only catch is that we need to space this out so that if it goes on forever, I'll come out ahead after selling all my coins.
It also might be better to stage things. Have one strategy for 1/3 of the coins (assume roughly stable over any 100 day period) another strategy for another (1/3); fixed price to lock in profit, and just plan on holding onto the final 1/3.
Have the stochastic program test different strategies and fine tune them.