Most aquarium fish are carnivores, though their prey is usually small crustaceans and insects. Such fish are easily maintained on live or frozen substitutes such as mosquito larvae, bloodworms, brine shrimps, daphnia, and so on. Many will also take flake foods and pellets, which are often more convenient and are certainly inexpensive and nutritious.
However, some aquarium fish are piscivores, carnivores that will catch and eat other fishes. These can be broadly be divided into three groups:
1. Species that are opportunistic piscivores, that is, only eat smaller fish if the opportunity presents itself; otherwise, they have evolved to feed primarily on other prey items. Angelfish fall into this category; while they have evolved to eat mosquito larvae, they will certainly eat very small fish such as neons and livebearer fry, given the chance. Other opportunistic piscivores include archerfish, small catfish such as Pimelodus pictus, and most of the larger tetras and barbs.
2. Species that are facultitive piscivores, that is, while they have evolved to catch and eat small fish, they also eat a variety of other small animals as well. They are therefore easily adapted to alternative diets in aquaria. Ctenopoma, bichirs, needlefish, oscars, gars, and most of the predatory catfish and pufferfish fit into this category. In the wild they eat a wide variety of prey items besides fishes, and in aquaria readily take things like prawns, earthworms, bloodworms, mussels, and other meaty foods. Many will also take frozen whitebait and lancefish as well.
3. Species that are obligate predators, that is, they have evolved to feed more or less exclusively on smaller fish and are difficult or impossible to adapt to an alternative diet. Species in this category include leaffish, needlefish, pike livebearers, prehistoric monster fish, and freshwater stonefish.
The ADVANTAGES of feeding live fish
The prime advantage (from a practical point of view) is that feeding live fish to a piscivorous fish simplifies the maintenance of otherwise difficult species. Weaning an obligate piscivore onto dead foods is time consuming and to some extent depends on starving the fish in question. If that fish is newly imported, it might not have eaten a proper meal in weeks, in which case further starving it may weaken the fish, even kill it.
A problem with the most reliable alternative live foods, things like earthworms and river shrimp, is that obtaining them can be difficult and supplies often seasonal. By contrast, most aquarium shops routinely hold stocks of small fishes like goldfish and guppies, and given piscivores often only need to eat every few days, buying cheap fish is not very expensive.
Some aquarists also believe that live fish offer the best diet for piscivorous fish. This is not necessarily true if only one type of fish is used (see Best Practise below) but in theory at least, a live fish diet should be a reasonable match for what a piscivorous fish eats in the wild. Using a substitute that a species would not encounter in the wild (like brine shrimps or squid) might not provide the full balance of nutrients that it needs.
Finally, a few aquarists also hold that live fish provide piscivorous fish with stimulation otherwise lacking in the aquarium.
The DISADVANTAGES of feeding live fish
The main disadvantage of using live fish as food is the risk of introducing parasites and bacteria into the aquarium. Cheap, mass produced fish, especially goldfish, are maintained in squalid conditions. Mortality, even when these fish are kept as pets, is high. While one goldfish might only pose a small risk to a predator, the risk is cumulative over time. So if you feed a predatory fish a goldfish once every two or three days, even after only a few months the chance of infecting your pet fish with something nasty is virtually a certainty.
A second disadvantage is nutritional imbalance. Goldfish in particular are fatty and are not a healthy staple diet for most piscivorous fish. In the wild, piscivorous fishes will take a wide range of species, some herbivorous, others smaller predators. This means that the piscivorous fish will be able to obtain a correspondingly wide range of nutrients. Simply feeding one species of feeder fish is both unnatural and very likely unhealthy. This problem can, to a degree, be mitigated by "gut loading" feeder fish (see Best Practise, below). By contrast, flake and pellet foods have been carefully formulated to provide a perfect diet for fish. While it might seem monotonous to us, these prepared foods are actually the best all-round diet for most fish.
A third disadvantage is that some feeder fish (notably goldfish and rosy-red minnows) contain large amounts of the enzyme thiaminase. This breaks down thiamin (vitamin B1) and over time this will lead to serious health problems.
The ETHICS of feeding live fish
Use of feeder fish divides the aquarium hobby sharply. The majority of aquarists disapprove of the practise, and most fishkeeping books and magazines recommend against it. Essentially, the argument boils down to whether or not it is cruel. On the one hand, the advocates of feeder fish usage maintain that the prey fish is killed quickly, and that killing a small fish is no different from killing an earthworm, river shrimp, or any other small animal. Since most aquarium fish foods are based at least in part on animal protein (often fishmeal) even flake food has, at some point, involved the death of fish.
On the other hand, opponents hold that it is largely unnecessary, and that we cannot know if a prey fish swallowed by a larger fish dies slowly or quickly. Moreover, in many instaces death clearly does not come quickly, where the prey fish is dismembered by one or more predatory fish. Irrespective of how quickly the fish is killed, simply being dumped into a strange aquarium and then pursued by a predatory fish must be intensely stressful.
Another argument is that feeding live fish to a predator fish is simply doing what happens in Nature, so questions of cruelty are irrelevant. Opponents point out that "the wild" is a big place, and prey fish usually manage to escape predators by swimming away to safety. Under natural circumstances, predatory fish only very rarely make a kill, and often have to go days or weeks without food. Therefore, simply dumping a couple of goldfish into a small aquarium doesn't in any way mimic Nature.
A third argument concerns the degree to which fish feel pain. For many years it has been assumed fish do not feel pain. This is because they lack the same type of pain receptors that we (and other higher vertebrates) have. In recent years, however, the evidence has begun to swing the argument in the other direction, with scientists now believing that fish do feel pain. Fish will, for example, avoid using injured parts of their body, in just the same way as we won't put our weight on a twisted ankle.
Ultimately, the ethical arguments come down to a simple fact: Some people enjoy watching their predatory fish exhibiting their predatory behaviours. Others do not. Very few predatory species cannot, eventually, be adapted to alternative foods, and those species are rare in the hobby. The vast majority of predatory fishes kept by aquarists (things like oscars and catfish) don't need live feeder fish, but will eat them if you provide them. The choice is yours.
Best Practise
If you do want to use live feeder fish, then the first thing to do is find a way to avoid introducing parasites. Probably the best approach is to use livebearers that you can breed yourself, such as mollies and guppies. While some people have also used cichlid fry as feeders, the spiny fins on these fish are problematic for many predators not especially adapted to deal with them. Livebearers, by contrast, are small and soft, and won't choke your prize predator.
Goldfish and rosy red minnows can be easy to breed, but they suffer from being high in the chemical thiaminase. They must not be used as the staple diet, because over time they will prevent the predatory fish from having enough vitamin B1, which will cause serious health problems. The muscles, bones, and nerves appear to be most seriously affected.
Using cheap fish from your local pet shop is a poor alternative; by any objective standard the risks are high. Quarantining and treating feeder fish with anti-parasite and anti-bacteria drugs may be an option, but if you aren't prepared to do this, you would be wise to pass over this source of feeder fish.
The other key advantage of raising your own feeder fish is that you can "gut load" them. Predatory animals, even strict carnivores like cats, depend upon the gut contents (usually plant matter) of the prey animals they eat to obtain certain nutrients lacking in meat. This is why cats eat the guts and liver of mice and birds they catch, yet ignore the bits that seem nicer to us, like the wing muscles. Likewise, predatory fish will benefit from being fed feeder fish that have themselves been fed properly. Make sure that the feeder fish have been fed vitamin-ennriched food before they are offered to the predatory fish. Vegetarian and algae-based foods are generally considered the most useful. The feeder fish should be "fattened up" for anything up to a month before being used.
When using feeder fish, only add as many as will be eaten within a few minutes. Ideally, feed just one, and only add another if the predatory fish is still obviously hungry. What you want to avoid is having a bunch of terrified, battered fish swimming about the tank. If nothing else, they will be placing an additional strain on the filter as well as using up oxygen.
Finally, treat the feeders with respect. Use feeder fish of suitable size that they will be killed quickly. Don't contrive cruel situations where the prey animal dies by inches. If you are going to use feeder fish, at least do so intelligently and for the good of the fish you are keeping, not merely for the fun of watching one animal kill another.