Bitcoin Price Manipulation

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
User avatar
Ged
Posts: 3535
Joined: Mon May 13, 2013 1:48 pm
Location: Roke

Bitcoin Price Manipulation

Post by Ged » Wed Jun 13, 2018 7:26 am

An article in the NY Times: https://www.nytimes.com/2018/06/13/tech ... ation.html

and a DOJ probe:

https://www.bloomberg.com/news/articles ... inal-probe

Suggest that there is significant price manipulation in these markets.

Valuethinker
Posts: 34905
Joined: Fri May 11, 2007 11:07 am

Re: Bitcoin Price Manipulation

Post by Valuethinker » Wed Jun 13, 2018 8:02 am

Ged wrote:
Wed Jun 13, 2018 7:26 am
An article in the NY Times: https://www.nytimes.com/2018/06/13/tech ... ation.html

and a DOJ probe:

https://www.bloomberg.com/news/articles ... inal-probe

Suggest that there is significant price manipulation in these markets.
It's not like we were not warned. Endlessly. About the risks, and the obscure nature of the market (that was part of the attraction, it seemed).

You can measure the "fadness" of things by which threads (often by new posters) appear on Bogleheads and how much attention they attract. Usually the recent positive price momentum assets.

So we got a lot of threads about REITs. About gold. Commodities. About 100% equity portfolios. About hyperinflation.

Crypto was almost the perfect example of that. The "5% diversification into crypto" recommendations.

It's kind of a muted echo chamber of the internet-- particularly the ones re inflation & associated monetary policy. For reasons that had very little to do with what was going on in the economy and financial markets*, but lots to do with politics, hyperinflation was a "thing" about 8 years ago. When someone says "fiat money" or "fractional reserve banking" grab the sides of your seat because you are about to get hit by the tidal wave ...

People here tend to be well informed, and to have long track records of investing through market cycles-- this tends to dampen down changes in portfolio strategy and perspective. But there's always a new wave that follows the zeigeist (and can even spell it ;-)) onto the next hot trend.

I am wondering if we have hit "Peak Tesla" given the length of that thread (about buying the car rather than owning the stock)? Didn't someone start the longest thread (US market crash) when the S&P was about 60% of its current level?

I predict if Bitcoin goes back up to $20k we shall see a lot more threads about it.

Right now? Not so much.

*To be fair, some very big hedge fund managers (Paulson, Odey) who should have known better bet big on a resurgence of inflation, and lost their clients a lot of money. So it's not just the product of insufficient information or experience -- there was willful blindness going on out there.

jdilla1107
Posts: 588
Joined: Sun Jun 24, 2012 8:31 pm

Re: Bitcoin Price Manipulation

Post by jdilla1107 » Wed Jun 13, 2018 7:08 pm

I am so confused by this. How is manipulating bitcoin a crime? When did it become a regulated security? If someone were to manipulate the beanie baby market on ebay is that also a crime? Is bitcoin now regulated by the US government?

I understand that bitcoin is now traded on the CME which is regulated by the CFTC. But, the manipulation is happening on "exchanges" completely outside of US regulation. Very strange.

tmcc
Posts: 123
Joined: Tue Feb 06, 2018 6:38 pm

Re: Bitcoin Price Manipulation

Post by tmcc » Wed Jun 13, 2018 7:41 pm

If you are manipulating the futures contract, that is a different story.

If you're in the "cash" cryptos, they are an over the counter currency (or whatever it is) and are not regulated. Same goes for fx. Take a look at bid ask spreads on major fx pairs on central bank days and tell me there is no manipulation.. i believe the term is "stop hunting" :)

User avatar
Pajamas
Posts: 5409
Joined: Sun Jun 03, 2012 6:32 pm

Re: Bitcoin Price Manipulation

Post by Pajamas » Wed Jun 13, 2018 7:45 pm

jdilla1107 wrote:
Wed Jun 13, 2018 7:08 pm
I am so confused by this. How is manipulating bitcoin a crime? When did it become a regulated security? If someone were to manipulate the beanie baby market on ebay is that also a crime? Is bitcoin now regulated by the US government?

I understand that bitcoin is now traded on the CME which is regulated by the CFTC. But, the manipulation is happening on "exchanges" completely outside of US regulation. Very strange.
Cryptocurrencies are a commodity according to the U.S. Commodities Futures Trading Commission. There is no direct regulation but lots of ways people can run afoul of existing regulations.

https://www.cftc.gov/sites/default/file ... ency01.pdf

A big one is taxation of capital gains on cryptocurrency transactions.

User avatar
nisiprius
Advisory Board
Posts: 35890
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Bitcoin Price Manipulation

Post by nisiprius » Wed Jun 13, 2018 8:50 pm

jdilla1107 wrote:
Wed Jun 13, 2018 7:08 pm
...How is manipulating bitcoin a crime?...
I think fraud is a crime.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

desafinado
Posts: 76
Joined: Wed Dec 28, 2016 3:14 am

Re: Bitcoin Price Manipulation

Post by desafinado » Wed Jun 13, 2018 9:10 pm

I agree with this take.
Matt Levine wrote: I will say, though, that of these two explanations—

1. Bitcoin’s rapid and sustained rise is due to the fact that it satisfies a real economic need in an elegant way, and people have responded to that; or

2. Bitcoin’s rapid and sustained rise is due to a magical fountain of fake dollars that everyone just decided to treat as real dollars, and that can be used to manipulate its price any time it’s in danger of falling—

the second is possibly more impressive. Like, creating billions of dollars’ worth of value by building a useful thing is relatively straightforward. Creating billions of dollars’ worth of value with a ridiculous perpetual-motion fake-dollar-printing machine is a real innovation.

Captain Haddock
Posts: 14
Joined: Fri Jun 01, 2018 5:02 am

Re: Bitcoin Price Manipulation

Post by Captain Haddock » Thu Jun 14, 2018 12:19 am

There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning.

Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.

minimalistmarc
Posts: 230
Joined: Fri Jul 24, 2015 4:38 pm

Re: Bitcoin Price Manipulation

Post by minimalistmarc » Thu Jun 14, 2018 1:11 am

99.99% of the world population don’t care about cryptos or ever want to use them.

I still don’t understand the point.

Seems like a millennial tech fad to me, but that’s just my uneducated opinion

jalbert
Posts: 3077
Joined: Fri Apr 10, 2015 12:29 am

Re: Bitcoin Price Manipulation

Post by jalbert » Thu Jun 14, 2018 2:51 am

The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.
But nothing prevents having 21 million (or however many) separate cryptocurrencies.
Risk is not a guarantor of return.

User avatar
queso
Posts: 515
Joined: Thu Jan 07, 2016 3:52 pm

Re: Bitcoin Price Manipulation

Post by queso » Thu Jun 14, 2018 9:20 am

Wow, long time no crypto thread, eh? I was wondering what happened to all our raging crypto bulls. Oh yeah, it has been tanking for the last month or two. Now I remember. :happy

barnaclebob
Posts: 2708
Joined: Thu Aug 09, 2012 10:54 am

Re: Bitcoin Price Manipulation

Post by barnaclebob » Thu Jun 14, 2018 9:33 am

Captain Haddock wrote:
Thu Jun 14, 2018 12:19 am
There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning.

Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.
Do you think the environmental aspects of the mining and transaction processing would eventually become too great for the world to tolerate? Maybe in the future instead of electric heaters people will just have mining rigs and heat their house with the waste heat...
Last edited by barnaclebob on Thu Jun 14, 2018 9:38 am, edited 1 time in total.

User avatar
nisiprius
Advisory Board
Posts: 35890
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Bitcoin Price Manipulation

Post by nisiprius » Thu Jun 14, 2018 9:33 am

Captain Haddock wrote:
Thu Jun 14, 2018 12:19 am
There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning.

Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.
Not everything scarce becomes valuable. Every household in the world needs plates, but not all collectible plates become valuable--not even if issued in a numbered limited edition.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

alfaspider
Posts: 1333
Joined: Wed Sep 09, 2015 4:44 pm

Re: Bitcoin Price Manipulation

Post by alfaspider » Thu Jun 14, 2018 9:37 am

Captain Haddock wrote:
Thu Jun 14, 2018 12:19 am
There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning.

Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.
Can I interest you in purchasing my nealric coin? There is only one in the world, and I can guarantee I will never make another one. Since there is only one in the world and will ever be any others, the ICO will be conservatively priced at $10 million. I expect this ICO will be oversubscribed, so act now!

GodelianKnot
Posts: 58
Joined: Tue Mar 11, 2014 11:32 am

Re: Bitcoin Price Manipulation

Post by GodelianKnot » Thu Jun 14, 2018 9:47 am

barnaclebob wrote:
Thu Jun 14, 2018 9:33 am
Do you think the environmental aspects of the mining and transaction processing would eventually become too great for the world to tolerate? Maybe in the future instead of electric heaters people will just have mining rigs and heat their house with the waste heat...
There are ways (eg Proof of Stake) to reduce the energy requirements of cryptos. If necessary, these will win out.

Alternatively, solar is quickly becoming cheaper than other forms of energy, especially for an application where you don't need to transport the energy or guarantee its consistent availability. Solar farms running crypto mining servers aren't likely to have much environmental impact.

This is not likely to be a limiting factor for cryptoassets in the long term.

barnaclebob
Posts: 2708
Joined: Thu Aug 09, 2012 10:54 am

Re: Bitcoin Price Manipulation

Post by barnaclebob » Thu Jun 14, 2018 11:15 am

GodelianKnot wrote:
Thu Jun 14, 2018 9:47 am
barnaclebob wrote:
Thu Jun 14, 2018 9:33 am
Do you think the environmental aspects of the mining and transaction processing would eventually become too great for the world to tolerate? Maybe in the future instead of electric heaters people will just have mining rigs and heat their house with the waste heat...
There are ways (eg Proof of Stake) to reduce the energy requirements of cryptos. If necessary, these will win out.

Alternatively, solar is quickly becoming cheaper than other forms of energy, especially for an application where you don't need to transport the energy or guarantee its consistent availability. Solar farms running crypto mining servers aren't likely to have much environmental impact.

This is not likely to be a limiting factor for cryptoassets in the long term.
Ah yes solar...i remember that's the other thing that the forum (thecontrarianinvestor.com?) where the GTAT fiasco unfolded was very bullish on...

Valuethinker
Posts: 34905
Joined: Fri May 11, 2007 11:07 am

Re: Bitcoin Price Manipulation

Post by Valuethinker » Thu Jun 14, 2018 11:24 am

barnaclebob wrote:
Thu Jun 14, 2018 11:15 am
GodelianKnot wrote:
Thu Jun 14, 2018 9:47 am
barnaclebob wrote:
Thu Jun 14, 2018 9:33 am
Do you think the environmental aspects of the mining and transaction processing would eventually become too great for the world to tolerate? Maybe in the future instead of electric heaters people will just have mining rigs and heat their house with the waste heat...
There are ways (eg Proof of Stake) to reduce the energy requirements of cryptos. If necessary, these will win out.

Alternatively, solar is quickly becoming cheaper than other forms of energy, especially for an application where you don't need to transport the energy or guarantee its consistent availability. Solar farms running crypto mining servers aren't likely to have much environmental impact.

This is not likely to be a limiting factor for cryptoassets in the long term.
Ah yes solar...i remember that's the other thing that the forum (thecontrarianinvestor.com?) where the GTAT fiasco unfolded was very bullish on...
Canadian grow-ops use solar, so why not bitcoin miners? ;-)

Given that solar is not dispatchable, one would have to understand that the computation could tolerate say 12 hours a day (or a rainy day) when they were not mining. Otherwise the power on the scale we are talking about, the backup could get really expensive.

(Trailer for Rogue One: A Star Wars Story; Administrator Craddock to Darth Vader re the Death Star "The Power we are dealing with...").

sfnerd
Posts: 107
Joined: Tue Apr 08, 2014 1:16 am

Re: Bitcoin Price Manipulation

Post by sfnerd » Thu Jun 14, 2018 11:46 am

Captain Haddock wrote:
Thu Jun 14, 2018 12:19 am
There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning.

Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.
It wasn't really designed as an efficient payment method. Anyone who has worked in digital payments realizes this, as it's entirely impossible to scale the technology effectively. Bitcoin won't play that role. Some other digital / cryptography-based currency? Possibly... but don't hold your breath.

User avatar
HomerJ
Posts: 11206
Joined: Fri Jun 06, 2008 12:50 pm

Re: Bitcoin Price Manipulation

Post by HomerJ » Thu Jun 14, 2018 12:31 pm

Captain Haddock wrote:
Thu Jun 14, 2018 12:19 am
There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning.

Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.
Why would every household in the world need to have a bit of Bitcoin? What market are you talking about? Why would every household in the world NEED a way to buy stuff using crypto-currency?
The J stands for Jay

fatlever
Posts: 134
Joined: Sat Apr 16, 2011 8:37 am

Re: Bitcoin Price Manipulation

Post by fatlever » Thu Jun 14, 2018 5:20 pm

desafinado wrote:
Wed Jun 13, 2018 9:10 pm
I agree with this take.
Matt Levine wrote: I will say, though, that of these two explanations—

1. Bitcoin’s rapid and sustained rise is due to the fact that it satisfies a real economic need in an elegant way, and people have responded to that; or

2. Bitcoin’s rapid and sustained rise is due to a magical fountain of fake dollars that everyone just decided to treat as real dollars, and that can be used to manipulate its price any time it’s in danger of falling—

the second is possibly more impressive. Like, creating billions of dollars’ worth of value by building a useful thing is relatively straightforward. Creating billions of dollars’ worth of value with a ridiculous perpetual-motion fake-dollar-printing machine is a real innovation.
Interesting that the Swiss just had a national referendum that would completely eliminate fractional reserve banking from all banks except the central bank. 33% participated and the proposal was soundly defeated by 75% with bankers lobbying the population that this untested system would be a danger to the current stable monetary system.

Just the fact that there was a referendum and 25% voted for the initiative shows that even outside of crypto there is dissatisfaction of monetary system creating money out of thin air backed by nothing.

https://www.ft.com/content/686e0342-6c9 ... b934ff5ffa

Nate79
Posts: 2573
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Bitcoin Price Manipulation

Post by Nate79 » Thu Jun 14, 2018 5:53 pm

Interesting quote from the original NY times article posted by the OP:
A paper published last year by a team of Israeli and American researchers said much of Bitcoin’s big price increase in 2013 was caused by a campaign of price manipulation at what was then the biggest exchange, Mt. Gox.
Here is the actual research paper for the latest claims of price manipulation:

https://papers.ssrn.com/sol3/papers.cfm ... id=3195066
Abstract
This paper investigates whether Tether, a digital currency pegged to U.S. dollars, influences Bitcoin and other cryptocurrency prices during the recent boom. Using algorithms to analyze the blockchain data, we find that purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices. Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies. The flow clusters below round prices, induces asymmetric autocorrelations in Bitcoin, and suggests incomplete Tether backing before month-ends. These patterns cannot be explained by investor demand proxies but are most consistent with the supply-based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices.
The same researchers were also investigating VIX manipulation:

http://money.cnn.com/2018/06/13/investi ... index.html
Griffin and Shams have also recently found that the VIX, Wall Street's volatility index, was being manipulated.

A lawsuit filed in March cited their research to claim traders manipulated the value of VIX options and futures by making bets on the S&P 500 before VIX settlement auctions.

youngpleb
Posts: 172
Joined: Mon Oct 16, 2017 7:06 pm
Location: VA, USA

Re: Bitcoin Price Manipulation

Post by youngpleb » Thu Jun 14, 2018 7:28 pm

Cryptocurrencies are a pretty funny joke to me. It's hilarious to watch the markets absolutely soar/tank on the stupidest thing yet not move at all when semi-important things actually happen. Like most coins were down 20% over the past week and then today everything is up 7-10%. I tossed some money in just so I can play along and profit if anything actually does happen, but it's more a game to me at this point. Plus it keeps my mind off of the stock market :sharebeer
27. Always learning.

columbia
Posts: 675
Joined: Tue Aug 27, 2013 5:30 am

Re: Bitcoin Price Manipulation

Post by columbia » Thu Jun 14, 2018 8:34 pm

Just the fact that there was a referendum and 25% voted for the initiative shows that even outside of crypto there is dissatisfaction of monetary system creating money out of thin air backed by nothing.
My dollars are backed by the full faith and credit of the US government; “backed by nothing” certainly applies to crypto currencies, however.

jalbert
Posts: 3077
Joined: Fri Apr 10, 2015 12:29 am

Re: Bitcoin Price Manipulation

Post by jalbert » Thu Jun 14, 2018 9:58 pm

Just the fact that there was a referendum and 25% voted for the initiative shows that even outside of crypto there is dissatisfaction of monetary system creating money out of thin air backed by nothing.
Except the Swiss were not voting on whether their central bank can create money out of thin air. They were voting on whether their banks should be allowed to use leverage on top of their deposits to support a higher volume of lending than could otherwise be supported.
Risk is not a guarantor of return.

supaflix
Posts: 51
Joined: Mon Dec 23, 2013 10:53 pm

Re: Bitcoin Price Manipulation

Post by supaflix » Fri Jun 15, 2018 11:05 pm

barnaclebob wrote:
Thu Jun 14, 2018 9:33 am
Captain Haddock wrote:
Thu Jun 14, 2018 12:19 am
There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning.

Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.
Do you think the environmental aspects of the mining and transaction processing would eventually become too great for the world to tolerate? Maybe in the future instead of electric heaters people will just have mining rigs and heat their house with the waste heat...
The cost/inefficiency of many legacy systems (banking industry, rent-seeking industry, gold mining) etc far outweigh the cost/inefficiency of bitcoin mining.

Nate79
Posts: 2573
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Bitcoin Price Manipulation

Post by Nate79 » Fri Jun 15, 2018 11:29 pm

queso wrote:
Thu Jun 14, 2018 9:20 am
Wow, long time no crypto thread, eh? I was wondering what happened to all our raging crypto bulls. Oh yeah, it has been tanking for the last month or two. Now I remember. :happy
They were playing computer games in their parents basement waiting for a bitcoin thread to pop up.

supaflix
Posts: 51
Joined: Mon Dec 23, 2013 10:53 pm

Re: Bitcoin Price Manipulation

Post by supaflix » Fri Jun 15, 2018 11:51 pm

HomerJ wrote:
Thu Jun 14, 2018 12:31 pm
Captain Haddock wrote:
Thu Jun 14, 2018 12:19 am
There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning.

Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.
Why would every household in the world need to have a bit of Bitcoin? What market are you talking about? Why would every household in the world NEED a way to buy stuff using crypto-currency?
Bitcoin is many things, but I think right now the simplest to understand is a hedge against loose global monetary policy. If there is even a 1% chance the bitcoin experiment succeeds, then 1 bitcoin will be worth millions of dollars. The end game of the bitcoin network is to be a security protocol layer upon which a global digital finance/marketplace can be built on and the users of this network store their value with bitcoin and interact on this network with bitcoin. "The internet of money." Currently, they have a very secure, simple base layer protocol to build upon and are developing layer 2 software to scale transactions and perform complex code/development. It is possible they will not be able to scale bitcoin and if so bitcoin will likely perish.

In this 1% scenario of bitcoin experiment success, why would you want to hold a govt money that will inflate 2-10% annually when you can hold money that will never inflate? Just because loose global monetary policy works today, doesn't mean it will always work. If bitcoin succeeds, it will likely severely devalue alternative forms of money as bitcoin is harder than other forms of money. If you don't have a small exposure to it you are leaving yourself open to this risk.

Bitcoin is hard money with a current inflation rate that is around 4.3%. This inflation rate has a set schedule and will eventually approach zero as the supply of bitcoin is halved every 4 years. This 'halving' cycle has led to boom and bust cycles in bitcoin's short lifespan. Dec 2017 was certainly a boom cycle where speculation outstripped utility and now bitcoin is feeling the pain of coming back to reality. What surprises most people is this boom/bust cycle has happened before 2017 for bitcoin and will likely happen again in the future. 2017 wasn't even bitcoins biggest bubble. The next halving event is ~May 2020. There are currently about 17 million bitcoin in existence and there is a hard cap on 21 million bitcoin ever. If bitcoin mining firms increasing their mining rate, the supply of bitcoin does not increase. Instead, the mining difficulty increases. There is no central authority that can set the interest rate, inflation rate, or print QE infinity on a whim. It was designed as a way to store value without the need for a trusted third party. Many of these traits may not seem important to you as a US citizen, but they definitely are important to others that aren't as lucky as you are to live in a stable country with a somewhat trusted govt.

Bitcoin is not dead. Bitcoin has market cycles like any other asset and I personally believe is nearing the end of its bear market. The next bubble will be even bigger probably approaching 100k and will likely pop around May 2020 when the hysteria about the halving event has reached peak speculation.

https://medium.com/@vijayboyapati/the-b ... ecc8bdecc1

User avatar
StormShadow
Posts: 559
Joined: Thu Feb 09, 2012 6:20 pm

Re: Bitcoin Price Manipulation

Post by StormShadow » Sat Jun 16, 2018 1:15 am

supaflix wrote:
Fri Jun 15, 2018 11:51 pm
Bitcoin is many things...
And one of those things is a bubble.

That's all I need to know about bitcoin. No thanks.

david1082b
Posts: 279
Joined: Fri Jun 09, 2017 12:35 pm

Re: Bitcoin Price Manipulation

Post by david1082b » Sat Jun 16, 2018 1:27 am

supaflix wrote:
Fri Jun 15, 2018 11:51 pm
If you don't have a small exposure to it you are leaving yourself open to this risk.

Same can be said about any number of cryptocurrencies that are not bitcoin. There is no limit to the number of currencies that can be made. So do we need a small exposure in each of them "just in case"? There are new ICOs all the time.

hilink73
Posts: 264
Joined: Tue Sep 20, 2016 3:29 pm

Re: Bitcoin Price Manipulation

Post by hilink73 » Sat Jun 16, 2018 2:21 am

StormShadow wrote:
Sat Jun 16, 2018 1:15 am
supaflix wrote:
Fri Jun 15, 2018 11:51 pm
Bitcoin is many things...
And one of those things is a bubble.

That's all I need to know about bitcoin. No thanks.
Sounds like a post from Dec 2017.
We had the bubble talk a few times here.

If you haven't got the memo: the bubble popped already and everybody was happy to be right.

Now you say it's a bubble, leaving me confused.

supaflix
Posts: 51
Joined: Mon Dec 23, 2013 10:53 pm

Re: Bitcoin Price Manipulation

Post by supaflix » Sun Jun 17, 2018 7:12 pm

StormShadow wrote:
Sat Jun 16, 2018 1:15 am
supaflix wrote:
Fri Jun 15, 2018 11:51 pm
Bitcoin is many things...
And one of those things is a bubble.

That's all I need to know about bitcoin. No thanks.
What is your definition of bubble? If you avoided things that were ever bubbles you would not invest in any tech stocks.

If something is a bubble, will it always be a bubble? What happens after a bubble pops. Does the asset die or does a new market cycle begin? In the case of dutch tulips or beanie babies, I believe the asset has died. In the case of the internet bubble, I believe a new market cycle began. Which one will bitcoin be?

If bitcoin was dead, we would not see Goldman Sachs starting trading desks..we would not have Van Ecks re-applying for a bitcoin ETF. We would not have so many companies racing to complete the hurdles of regulation(and there are many hurdles as bitcoin required new infrastructure as it cannot fit into any current 'box') so that big institutions will have all the checkboxes completed before they can legally hold this asset. Currently, the biggest and probably last hurdle is custodianship.

User avatar
nisiprius
Advisory Board
Posts: 35890
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Bitcoin Price Manipulation

Post by nisiprius » Sun Jun 17, 2018 8:09 pm

supaflix wrote:
Fri Jun 15, 2018 11:51 pm
...Bitcoin is hard money...
Please tell me your definition of "hard money" and cite a source for that definition. Brushing aside the unrelated term "hard money lending," I will assume that by "hard money" you mean the same thing "hard currency." Some definitions of "hard currency" include:

Oxford English Dictionary: "Currency that is not likely to depreciate suddenly or to fluctuate greatly in value."

Merriam-Webster: "money that comes from a country with a strong government and economy and that is not likely to lose its value."

Financial Times: "A freely tradable currency that inspires confidence because of the stable economy that generates it."

Do you honestly feel that Bitcoin meets any of these definitions?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

supaflix
Posts: 51
Joined: Mon Dec 23, 2013 10:53 pm

Re: Bitcoin Price Manipulation

Post by supaflix » Sun Jun 17, 2018 8:54 pm

nisiprius wrote:
Sun Jun 17, 2018 8:09 pm
supaflix wrote:
Fri Jun 15, 2018 11:51 pm
...Bitcoin is hard money...
Please tell me your definition of "hard money" and cite a source for that definition. Brushing aside the unrelated term "hard money lending," I will assume that by "hard money" you mean the same thing "hard currency." Some definitions of "hard currency" include:

Oxford English Dictionary: "Currency that is not likely to depreciate suddenly or to fluctuate greatly in value."

Merriam-Webster: "money that comes from a country with a strong government and economy and that is not likely to lose its value."

Financial Times: "A freely tradable currency that inspires confidence because of the stable economy that generates it."

Do you honestly feel that Bitcoin meets any of these definitions?
Soft money: A currency with a value relatively easy to move. Example would be central bank policy of changing interest rates and inflation targets. Generally in human history, pro-inflation bias to support govt spending especially to finance war.

Hard money: A currency with a value that is difficult to change. I won't cite a source because I agree with your sources.

I agree with you that bitcoin today has been highly volatile and certainly does not meet that definition *today* but as long as the network survives(HUGE IF) and the 1% scenario plays out it will approach that definition better than any other money in human history. I should have said 'if the experiment succeeds, it will be hard money.'

Again, bitcoin inflation today is higher than the US dollar at 4-5%. The difference is that the bitcoin inflation rate is clearly defined for all participants and all participants can know with near certainty what the inflation rate will be in 5, 10, 100 years etc The inflation rate approaches zero over time with 50% decreases q4 years.

In the 1% scenario of the successful experiment, bitcoin continues its current adoption rate, and the network survives then it makes perfectly logical sense that people will choose noninflationary currency rather than inflationary currency. If successful, bitcoin will be the hardest of money and will absorb value from soft money as people realize this. Eventually, it would become the global money/store of value and there would be minimal volatility.

There are other factors going on that effect volatility such as an inefficient bitcoin market(unequal information/difficult to understand bitcoin), extreme risk of experiment failure and total loss of investment), price discovery, and market manipulation(both up and down) but these are unrelated to hard vs. soft money.

User avatar
StormShadow
Posts: 559
Joined: Thu Feb 09, 2012 6:20 pm

Re: Bitcoin Price Manipulation

Post by StormShadow » Sun Jun 17, 2018 10:43 pm

hilink73 wrote:
Sat Jun 16, 2018 2:21 am
Sounds like a post from Dec 2017.
We had the bubble talk a few times here.

If you haven't got the memo: the bubble popped already and everybody was happy to be right.

Now you say it's a bubble, leaving me confused.
It's STILL a bubble. Bubbles can have more than one peak, you know.

Image
Image
supaflix wrote:
Sun Jun 17, 2018 7:12 pm
If bitcoin was dead, we would not see Goldman Sachs starting trading desks..
Sure you would. They're the same geniuses that bet on subprime mortgages. They're willing to play as long as they think there are suckers out there willing to take it off their hands.

I think people buying bitcoin now are playing Russian Roulette with their money.

Valuethinker
Posts: 34905
Joined: Fri May 11, 2007 11:07 am

Re: Bitcoin Price Manipulation

Post by Valuethinker » Mon Jun 18, 2018 3:00 am

supaflix wrote:
Fri Jun 15, 2018 11:51 pm
HomerJ wrote:
Thu Jun 14, 2018 12:31 pm
Captain Haddock wrote:
Thu Jun 14, 2018 12:19 am
There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning.

Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.
Why would every household in the world need to have a bit of Bitcoin? What market are you talking about? Why would every household in the world NEED a way to buy stuff using crypto-currency?
Bitcoin is many things, but I think right now the simplest to understand is a hedge against loose global monetary policy. If there is even a 1% chance the bitcoin experiment succeeds, then 1 bitcoin will be worth millions of dollars. The end game of the bitcoin network is to be a security protocol layer upon which a global digital finance/marketplace can be built on and the users of this network store their value with bitcoin and interact on this network with bitcoin. "The internet of money." Currently, they have a very secure, simple base layer protocol to build upon and are developing layer 2 software to scale transactions and perform complex code/development. It is possible they will not be able to scale bitcoin and if so bitcoin will likely perish.

In this 1% scenario of bitcoin experiment success, why would you want to hold a govt money that will inflate 2-10% annually when you can hold money that will never inflate? Just because loose global monetary policy works today, doesn't mean it will always work. If bitcoin succeeds, it will likely severely devalue alternative forms of money as bitcoin is harder than other forms of money. If you don't have a small exposure to it you are leaving yourself open to this risk.

Bitcoin is hard money with a current inflation rate that is around 4.3%. This inflation rate has a set schedule and will eventually approach zero as the supply of bitcoin is halved every 4 years. This 'halving' cycle has led to boom and bust cycles in bitcoin's short lifespan. Dec 2017 was certainly a boom cycle where speculation outstripped utility and now bitcoin is feeling the pain of coming back to reality. What surprises most people is this boom/bust cycle has happened before 2017 for bitcoin and will likely happen again in the future. 2017 wasn't even bitcoins biggest bubble. The next halving event is ~May 2020. There are currently about 17 million bitcoin in existence and there is a hard cap on 21 million bitcoin ever. If bitcoin mining firms increasing their mining rate, the supply of bitcoin does not increase. Instead, the mining difficulty increases. There is no central authority that can set the interest rate, inflation rate, or print QE infinity on a whim. It was designed as a way to store value without the need for a trusted third party. Many of these traits may not seem important to you as a US citizen, but they definitely are important to others that aren't as lucky as you are to live in a stable country with a somewhat trusted govt.

Bitcoin is not dead. Bitcoin has market cycles like any other asset and I personally believe is nearing the end of its bear market. The next bubble will be even bigger probably approaching 100k and will likely pop around May 2020 when the hysteria about the halving event has reached peak speculation.

https://medium.com/@vijayboyapati/the-b ... ecc8bdecc1
It might serve as a store of value but it is currently too volatile for this. It's basically an argument that it's a form of digital gold. The problem then is that gold is relatively low cost to store and transport as a commodity. Mining costs of gold are rising so there is that same scarcity argument, but there's enough gold to provide liquidity for a long time to come.

Bitcoin as a transaction mechanism? Transaction costs appear to be increasing, not decreasing? It is getting less useful not more?

At the moment it seems to be basically an arbitrage on different electric power rates-- the cost to mine a new one. Electricity is not a single law-of-one-price market, due to its physical nature (oil by contrast is: because it's high enough value that you can stick it in a tanker and send it anywhere in the world). There are similarities then to aluminium, which has so much electricity cost (in the primary form) in its final sales value that it can be seen as a way of countries trading electricity (partly).

Hard to see it serving as money, then.

hilink73
Posts: 264
Joined: Tue Sep 20, 2016 3:29 pm

Re: Bitcoin Price Manipulation

Post by hilink73 » Mon Jun 18, 2018 12:16 pm

StormShadow wrote:
Sun Jun 17, 2018 10:43 pm
hilink73 wrote:
Sat Jun 16, 2018 2:21 am
Sounds like a post from Dec 2017.
We had the bubble talk a few times here.

If you haven't got the memo: the bubble popped already and everybody was happy to be right.

Now you say it's a bubble, leaving me confused.
It's STILL a bubble. Bubbles can have more than one peak, you know.
Ahh, now I can see much clearer, thank you.

So, what are we gonna do? Wait for the next peak I guess and listen to the bubble whiners all along the way.

hilink73
Posts: 264
Joined: Tue Sep 20, 2016 3:29 pm

Re: Bitcoin Price Manipulation

Post by hilink73 » Mon Jun 18, 2018 12:21 pm

Valuethinker wrote:
Mon Jun 18, 2018 3:00 am
supaflix wrote:
Fri Jun 15, 2018 11:51 pm
HomerJ wrote:
Thu Jun 14, 2018 12:31 pm
Captain Haddock wrote:
Thu Jun 14, 2018 12:19 am
There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning.

Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever.
Why would every household in the world need to have a bit of Bitcoin? What market are you talking about? Why would every household in the world NEED a way to buy stuff using crypto-currency?
Bitcoin is many things, but I think right now the simplest to understand is a hedge against loose global monetary policy. If there is even a 1% chance the bitcoin experiment succeeds, then 1 bitcoin will be worth millions of dollars. The end game of the bitcoin network is to be a security protocol layer upon which a global digital finance/marketplace can be built on and the users of this network store their value with bitcoin and interact on this network with bitcoin. "The internet of money." Currently, they have a very secure, simple base layer protocol to build upon and are developing layer 2 software to scale transactions and perform complex code/development. It is possible they will not be able to scale bitcoin and if so bitcoin will likely perish.

In this 1% scenario of bitcoin experiment success, why would you want to hold a govt money that will inflate 2-10% annually when you can hold money that will never inflate? Just because loose global monetary policy works today, doesn't mean it will always work. If bitcoin succeeds, it will likely severely devalue alternative forms of money as bitcoin is harder than other forms of money. If you don't have a small exposure to it you are leaving yourself open to this risk.

Bitcoin is hard money with a current inflation rate that is around 4.3%. This inflation rate has a set schedule and will eventually approach zero as the supply of bitcoin is halved every 4 years. This 'halving' cycle has led to boom and bust cycles in bitcoin's short lifespan. Dec 2017 was certainly a boom cycle where speculation outstripped utility and now bitcoin is feeling the pain of coming back to reality. What surprises most people is this boom/bust cycle has happened before 2017 for bitcoin and will likely happen again in the future. 2017 wasn't even bitcoins biggest bubble. The next halving event is ~May 2020. There are currently about 17 million bitcoin in existence and there is a hard cap on 21 million bitcoin ever. If bitcoin mining firms increasing their mining rate, the supply of bitcoin does not increase. Instead, the mining difficulty increases. There is no central authority that can set the interest rate, inflation rate, or print QE infinity on a whim. It was designed as a way to store value without the need for a trusted third party. Many of these traits may not seem important to you as a US citizen, but they definitely are important to others that aren't as lucky as you are to live in a stable country with a somewhat trusted govt.

Bitcoin is not dead. Bitcoin has market cycles like any other asset and I personally believe is nearing the end of its bear market. The next bubble will be even bigger probably approaching 100k and will likely pop around May 2020 when the hysteria about the halving event has reached peak speculation.

https://medium.com/@vijayboyapati/the-b ... ecc8bdecc1
It might serve as a store of value but it is currently too volatile for this. It's basically an argument that it's a form of digital gold. The problem then is that gold is relatively low cost to store and transport as a commodity. Mining costs of gold are rising so there is that same scarcity argument, but there's enough gold to provide liquidity for a long time to come.

Bitcoin as a transaction mechanism? Transaction costs appear to be increasing, not decreasing? It is getting less useful not more?

At the moment it seems to be basically an arbitrage on different electric power rates-- the cost to mine a new one. Electricity is not a single law-of-one-price market, due to its physical nature (oil by contrast is: because it's high enough value that you can stick it in a tanker and send it anywhere in the world). There are similarities then to aluminium, which has so much electricity cost (in the primary form) in its final sales value that it can be seen as a way of countries trading electricity (partly).
Fortunately, there are other decentralised blockchains technolgies (namely Ethereum) in the works, which (will) solve all these problems (and more).
Bitcoin was truely the first and probably will stay with us for some time.

Valuethinker wrote:
Mon Jun 18, 2018 3:00 am
Hard to see it serving as money, then.
Yes, I'd think so, too.

User avatar
HomerJ
Posts: 11206
Joined: Fri Jun 06, 2008 12:50 pm

Re: Bitcoin Price Manipulation

Post by HomerJ » Mon Jun 18, 2018 12:41 pm

supaflix wrote:
Sun Jun 17, 2018 8:54 pm
I agree with you that bitcoin today has been highly volatile and certainly does not meet that definition *today* but as long as the network survives(HUGE IF) and the 1% scenario plays out it will approach that definition better than any other money in human history. I should have said 'if the experiment succeeds, it will be hard money.'
If you're just going to make up numbers, you should use 3% instead of 1%. In my opinion, Bitcoin's chances of going mainstream are far lower than 1%.

A crytpo-currency may indeed become successful someday, but there's no fundamental rule that says it will be Bitcoin.
The J stands for Jay

User avatar
HomerJ
Posts: 11206
Joined: Fri Jun 06, 2008 12:50 pm

Re: Bitcoin Price Manipulation

Post by HomerJ » Mon Jun 18, 2018 12:45 pm

StormShadow wrote:
Sun Jun 17, 2018 10:43 pm
supaflix wrote:
Sun Jun 17, 2018 7:12 pm
If bitcoin was dead, we would not see Goldman Sachs starting trading desks..
Sure you would. They're the same geniuses that bet on subprime mortgages. They're willing to play as long as they think there are suckers out there willing to take it off their hands.
This.

If Goldman Sachs was buying and hoarding bitcoins, you might have a point.

But trading it? Sure, no risk for them, skim off the top with every purchase and sale between other people.

They're actually planning more on trading bitcoin futures, rather than bitcoins themselves.
The J stands for Jay

Nate79
Posts: 2573
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Bitcoin Price Manipulation

Post by Nate79 » Mon Jun 18, 2018 1:20 pm

HomerJ wrote:
Mon Jun 18, 2018 12:41 pm
supaflix wrote:
Sun Jun 17, 2018 8:54 pm
I agree with you that bitcoin today has been highly volatile and certainly does not meet that definition *today* but as long as the network survives(HUGE IF) and the 1% scenario plays out it will approach that definition better than any other money in human history. I should have said 'if the experiment succeeds, it will be hard money.'
If you're just going to make up numbers, you should use 3% instead of 1%. In my opinion, Bitcoin's chances of going mainstream are far lower than 1%.

A crytpo-currency may indeed become successful someday, but there's no fundamental rule that says it will be Bitcoin.
My opinion is that Bitcoin or other cryptos may reach 1% of transactions in the future but to do so it must reduce costs significantly and it must be stable. At that point people will be using it and not investing in it. Why would anyone want to invest in a CURRENCY - a store of value that probably loses to inflation? Why would anyone who is not speculating want their paycheck or their payments to be in a currency that may fluctuate widely (up or down)? Once it is stable it would be a horrible investment, no different than cash or gold. 99% of the talk about crypto these days is because everyone wants to get rich off of it. Take that away (stable price) and it will be about as exciting as credit card transaction process.

User avatar
nisiprius
Advisory Board
Posts: 35890
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Bitcoin Price Manipulation

Post by nisiprius » Mon Jun 18, 2018 1:29 pm

hilink73 wrote:
Mon Jun 18, 2018 12:21 pm
...Fortunately, there are other decentralised blockchains technolgies (namely Ethereum) in the works, which (will) solve all these problems (and more)...
1) Some of the problems with Bitcoin were designed in and anticipated, not discovered. The big surprise is that the Bitcoin community elected not to solve them (e.g. by increasing the block size).

2) Sure, all the problems are said to be easily solvable in the future. But they haven't been solved. Ethereum has been with us for about two years now and has shown many of the same problems as Bitcoin. Very notably, the lost of $300 million worth of Ethereum through a programming bug... and, once again, has consciously, collectively decided not to solve this particular problem. Ethereum users are losing money and devs don't know quite what to do.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Maverick3320
Posts: 438
Joined: Tue May 12, 2015 2:59 pm

Re: Bitcoin Price Manipulation

Post by Maverick3320 » Mon Jun 18, 2018 1:46 pm

fatlever wrote:
Thu Jun 14, 2018 5:20 pm
desafinado wrote:
Wed Jun 13, 2018 9:10 pm
I agree with this take.
Matt Levine wrote: I will say, though, that of these two explanations—

1. Bitcoin’s rapid and sustained rise is due to the fact that it satisfies a real economic need in an elegant way, and people have responded to that; or

2. Bitcoin’s rapid and sustained rise is due to a magical fountain of fake dollars that everyone just decided to treat as real dollars, and that can be used to manipulate its price any time it’s in danger of falling—

the second is possibly more impressive. Like, creating billions of dollars’ worth of value by building a useful thing is relatively straightforward. Creating billions of dollars’ worth of value with a ridiculous perpetual-motion fake-dollar-printing machine is a real innovation.
Interesting that the Swiss just had a national referendum that would completely eliminate fractional reserve banking from all banks except the central bank. 33% participated and the proposal was soundly defeated by 75% with bankers lobbying the population that this untested system would be a danger to the current stable monetary system.

Just the fact that there was a referendum and 25% voted for the initiative shows that even outside of crypto there is dissatisfaction of monetary system creating money out of thin air backed by nothing.

https://www.ft.com/content/686e0342-6c9 ... b934ff5ffa
It wasn't just bankers lobbying the population. It was people who were afraid of giving politicians the power to control deposits that bankers now have. If you think bankers are bad, wait until populists get a hold of the deposits.

hilink73
Posts: 264
Joined: Tue Sep 20, 2016 3:29 pm

Re: Bitcoin Price Manipulation

Post by hilink73 » Mon Jun 18, 2018 2:16 pm

nisiprius wrote:
Mon Jun 18, 2018 1:29 pm
hilink73 wrote:
Mon Jun 18, 2018 12:21 pm
...Fortunately, there are other decentralised blockchains technolgies (namely Ethereum) in the works, which (will) solve all these problems (and more)...
1) Some of the problems with Bitcoin were designed in and anticipated, not discovered. The big surprise is that the Bitcoin community elected not to solve them (e.g. by increasing the block size).
True.
Which shows how immature this community is.
Fundamentalists vs. people who just want to make it work. Or something like this.
So, one fork after another. Funny fact aside, that fork didn't hurt Bitcoin at all. :oops:
nisiprius wrote:
Mon Jun 18, 2018 1:29 pm
2) Sure, all the problems are said to be easily solvable in the future. But they haven't been solved. Ethereum has been with us for about two years now and has shown many of the same problems as Bitcoin. Very notably, the lost of $300 million worth of Ethereum through a programming bug... and, once again, has consciously, collectively decided not to solve this particular problem. Ethereum users are losing money and devs don't know quite what to do.
Well, Ethereum is under active development with a larger developer community with a published roadmap, which they are following.
Being in IT for two decades now, I haven't seen too many projects being finished in time. So not sure what those two years are about?

The parity bug is a whole different animal. Parity didn't fix their buggy software after this bug had been published.
I'm sorry for the people who used that software, but at what point is it Ethereums task to fix a third party software?
And, yes, that's a decision of the "collective". It's not centralised (like other hyped scam coins).

So, to sum it up: yes, every software has bugs. Hopefully, there won't be any too severe regarding Ethereum.
There are many companys developing software in or on or for the Ethereum eco system.
That's much more promising than "we do not improve anything" bitcoin.

And, one of the main features which is developed for Ethereum at the moment is proof of stake (PoS), which, when implemented, will replace proof of work (PoW), leading to a much lower energy consumption.


Btw. it's well known hat coindesk articles are very heavily biased against Ethereum...

supaflix
Posts: 51
Joined: Mon Dec 23, 2013 10:53 pm

Re: Bitcoin Price Manipulation

Post by supaflix » Mon Jun 18, 2018 8:13 pm

HomerJ wrote:
Mon Jun 18, 2018 12:45 pm
StormShadow wrote:
Sun Jun 17, 2018 10:43 pm
supaflix wrote:
Sun Jun 17, 2018 7:12 pm
If bitcoin was dead, we would not see Goldman Sachs starting trading desks..
Sure you would. They're the same geniuses that bet on subprime mortgages. They're willing to play as long as they think there are suckers out there willing to take it off their hands.
This.

If Goldman Sachs was buying and hoarding bitcoins, you might have a point.

But trading it? Sure, no risk for them, skim off the top with every purchase and sale between other people.

They're actually planning more on trading bitcoin futures, rather than bitcoins themselves.
So you think they would invest in infrastructure for something as transient as dutch tulips? Surely they see some value in the bitcoin network such that they are getting involved in case this actually succeeds?

What I find amusing is that nobody knows the full potential of what bitcoin may become or if it will fail/succeed, yet many people with minimal time / self education feel quite comfortable dismissing it as worthless. Bitcoin is software. Software can be upgraded. We do not know how well the developers can scale bitcoin. We do not know what upgrades will happen in 2 years. The internet did not stop with dial-up. Who thought back then we would be streaming 4K TV instantly on Netflix?

Beyond the 'digital gold' aspect, bitcoin layer 2 has the potential to be a fat protocol which means the entities built upon bitcoin will add value to bitcoin. This is similar to ethereum.

The difference between fat protocol and thin protocol(TCP/IP) is that the entities built on thin protocol will keep the majority of value to themselves(Facebook,Youtube,Twitter,etc). What if TCP/IP retained a portion of value from those entities in exchange for global access/security/transactional capacity? The potential value is not currently measurable. "the internet of money"

To claim confidence in what the final outcome will be for this revolutionary technology is foolish.

I view it as an asymmetric bet. The downside is limited - $0. The upside is unlimited.

supaflix
Posts: 51
Joined: Mon Dec 23, 2013 10:53 pm

Re: Bitcoin Price Manipulation

Post by supaflix » Mon Jun 18, 2018 8:27 pm

HomerJ wrote:
Mon Jun 18, 2018 12:41 pm
supaflix wrote:
Sun Jun 17, 2018 8:54 pm
I agree with you that bitcoin today has been highly volatile and certainly does not meet that definition *today* but as long as the network survives(HUGE IF) and the 1% scenario plays out it will approach that definition better than any other money in human history. I should have said 'if the experiment succeeds, it will be hard money.'
If you're just going to make up numbers, you should use 3% instead of 1%. In my opinion, Bitcoin's chances of going mainstream are far lower than 1%.

A crytpo-currency may indeed become successful someday, but there's no fundamental rule that says it will be Bitcoin.
Agree, if a crypto goes mainstream we do not know which one it will be. Bitcoin and ethereum have massive leads though due to billions of infrastructure investments and have both been recently given the 'go ahead' by the SEC. It will take revolutionary tech I believe for another crypto to catch up.

Bitcoin is the most secure network and I will personally side with security when it comes to trillions of dollars. Ethereum has more features but that is a double-edged sword. More features = more complex code = more attack surfaces/vulnerabilities.

99% of all cryptos are scams. It is open source software that can be copy/pasted so of course it will attract those types of people. Just because I can duplicate the Amazon.com webpage does not make me Amazon. The difference is in the infrastructure, developers, user community, degree of decentralization, and security.

gougou
Posts: 55
Joined: Thu Sep 28, 2017 7:42 pm
Location: San Francisco Bay Area

Re: Bitcoin Price Manipulation

Post by gougou » Mon Jun 18, 2018 9:09 pm

nisiprius wrote:
Mon Jun 18, 2018 1:29 pm
1) Some of the problems with Bitcoin were designed in and anticipated, not discovered. The big surprise is that the Bitcoin community elected not to solve them (e.g. by increasing the block size).
Increasing block size is just not a long term solution. Bitcoin Cash is a hard-fork that increased block-size which means it can handle maybe 20 to 30 transactions per second vs Bitcoin's 7 transactions per second. A second-layer protocol is a much better solution and it currently being implemented.

I think we will see a crypto payment company becoming very successful in near future.

Post Reply