Basics of crypto arbitrage. Intro

A dialogue with an India-originated gas station manager at 3am:

You are from India, right? You have a family there? And you have an Indian bank account, supposedly?
Yeah, I have accounts in like 5 different banks.
Perfect! Which bank has the best rupee-to-dollar exchange rate?
This one… the rate is about 78 rupees per dollar today.
And India is connected to SWIFT, right? Like you can send a SWIFT, a wire transfer, to a different country?
Yes, that’s how I send money to my family back there.
OK, take your money in your Indian bank and send a SWIFT to this exchange, called Kraken. You register there, verify all the information using your Indian passport. Then, you buy crypto. Not Bitcoin because it's too volatile; if your transaction takes let's say an hour, the Bitcoin can jump and up down which becomes unpredictable. Buy USDT which is a stablecoin. Have you heard of stablecoins?
A stablecoin - the third guy jumps into the conversation - is a crypto equivalent of one US dollar. It’s connected to its price, so it doesn’t go up and down, it stays the same…
Yup, so if you buy USDT - it will keep its value; you are not gonna lose 10% in that one hour. So, after you send a SWIFT from India to Kraken and buy USDT, you gonna transfer that crypto to Binance, which is the world's most liquid P2P exchange. You sell that crypto through P2P at 82 rupees per USDT straight to your personal bank account in India. And that’s how you make - counting on a calculator - 5-6% off each transaction. And depending on how long the SWIFT goes from India, you can make plus five percent every 2 to 5 days. You send one transaction a week, that’s 4 transaction a month which equals to plus 20% each month…

That’s one example of introducing someone to crypto arbitrage. And yes, I've challenged that gas station manager to dig into it, without him having prior experience in crypto or, more importantly, personal guidance from a mentor. But as the proverb says, the one who walks will go through. And it applies to everyone including me, and here is why.

Arbitrage on a specific pair exists for a very short time. Can be a couple of months, can be weeks, days or even minutes. So if you want to make money on arbitrage, you have to move fast, you have adopt to new regulations, from the banks and exchanges expanding their AML and compliance policies to national economies strengthening or collapsing affecting the currency exchange rate.