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Researchers find that one person likely drove Bitcoin from $150 to $1,000

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Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#121

Post by __blockcipher__ »

fpgaminer wrote: post #115
arcticbull wrote: post #44

Earlier quoted context omitted.

Most recently, there's the tape-painting bot Picasso: https://medium.com/@bitfinexed/meet-picasso-the-painter-on-g... If you were paying attention in the week that followed this post, the spread between GDAX and the other major US exchanges narrowed from $1000+ per coin to just about $11 right now, and trade volumes on GDAX plummeted. Maybe theres's some other reason, though there's some crazy correlation there at le…

Looks like that article was written on the 23rd of December. That's the same time period around which Coinbase abruptly released Bcash. That time period was a barrage of negative kerfuffles for them. Historically Coinbase/GDAX has enjoyed "inflated" BTC/USD prices because of their trustworthiness. Contrast with Bitfinex which does not serve US customers, has been hacked in the past, and is (last I heard) in debt from…

Serious question: Why does hackernews seem to be biased towards BTC over BCH?

In my opinion, any honest examination of the tradeoffs between block size, orphan block rate, cost to run a non-mining node (which do not contribute to network security except indirectly via serving SPV wallets), and mining fees, will show that a 1-1.7MB block size limit is just too low for current tx volumes.

The current BTC network is unusable due to the massive fees. Even worse, those who actually used the currency (sorry, I mean store of value?) get penalized for having so many UTXOs. UTXOs directly increase the size in bytes of the transaction, increasing the fees you pay.

I've paid probably an average of $30 fees over the last 2 months, with the highest fee being $100 on a $4000 transaction (fee is related to size in bytes, not dollar value transmitted, I'm giving those numbers just to show how ridiculous it is)

EDIT: Also worth mentioning that the Coinbase CEO does not like blockstream because they censored Brian Armstrong (the CEO) for supporting BIP 101. Bitcoin Core has used a lot of heavy handed and very sketchy tactics to wrest control of the ecosystem in Satoshi's absence. They view themselves as the sole guardians of "consensus".

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#122

Post by b1daly »

michaelchisari wrote: post #109
ouwen wrote: post #73

Earlier quoted context omitted.

It is a bit nerve racking seeing the distribution of coins to such few addresses: https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... I wonder if there is any collusion among the top 2000 addresses. Mind you one person can even have multiple addresses.

What's interesting is the rhetoric around cryptos as a populist movement. There's so many people on reddit that claim that trading cryptos is how they're going to get out of the 9-5 working man grind. That it's a way to end the dominance of the wealthy banking elites. And yet, the wealth inequality in cryptos, especially bitcoin, makes our current economic situation seem like child's play. If bitcoin ever does go "to…

That’s one reason Bitcoin won’t “go to the moon.” Real currency represents a claim on current production in the economy. If Bitcoin were to continue its exponential price rise, we would have a situation where the people who amassed Bitcoins early could claim wildly disproportionate amounts of the current wealth of society.

There is simply no reason wealth holders are going to turn over real wealth to folks who happened to get in early to Bitcoin.

This reflects that Bitcoin is not real currency. It’s a digital token, with artificial scarcity. Since the core protocol has remained relatively secure, it allows it to serve as a pure commodity for the purpose of market speculation.

That’s the only thing driving the increase in price. Exponential gains (in dollar price) cannot continue. Therefore, the speculative motivation will leave the market. Probably the price will fall very soon.

Once the price resets to a lower price point,speculative demand could pick up again.

I suspect that there is massive, almost indefinite amount of demand for this type of speculative gambling. So, unless government steps in, we will see this constant, churning rise and fall distributed between the population of digital tokens suitable for this purpose.

You can see that attempts by early crypto coin holders to “cash out” and lay claim to their nomitive wealth in the real world, in any significant amount, hasten the “break” in the speculative mania cycle.

I’ve called the top here for Bitcoin, I don’t think it will break $20k.

People active in Bitcoin find this hard to believe, but as an example from “meat space,” the price of Beanie Babies never climbed after its big crash. (My to the shock of these “beanie bag” holders, I presume.)

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#123

Post by mschuster91 »

agumonkey wrote: post #29
thisisit wrote: post #23

Wow, this paper's conclusion is delayed by 3 years. Willy and Markus bots are old news for anyone who has been following bitcoin closely. The source of all these allegations was this blog appearing in 2014: https://willyreport.wordpress.com/2014/05/25/the-willy-repor...

Any recent manipulations ? especially in 2017 end ?

> Any recent manipulations ? especially in 2017 end ?

Personal guess: none needed. The massive value drop right before Christmas was IMHO a combination of Christmas shopping (people cashed out their new riches to surprise their loved ones) and the end of FY2017 (tax gaming).

[disclosure: owning ~500€ in BTC, did not sell/buy during that period]

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#124

Post by hendzen »

runeks wrote: post #116
sklut wrote: post #36

Earlier quoted context omitted.

On contango: I would not call what the futures market is experiencing "massive" contango. There is a very slight premium to further dated futures ($35/btc Feb over Jan, and $5 Mar over Feb contracts on CME), but this is very normal for a commodity and logically in place for exchange/spot holding risk. I would call the average settlements over the past month of futures being listed very normal contango. And I don't th…

> You can get off what appears to be very large amounts of BTC with minimal slippage most times of the day. I wrote a script[1] that pulls down the public order books for Bitstamp, GDAX and Bitfinex, because I was interested in seeing the depth of the BTCUSD market, and right now you can offload: 258, 301 and 325 BTC on GDAX, Bitfinex and Bitstamp, respectively (total: 884 BTC), at 1% slippage for 3,544,921, 4,152,78…

Those market depth numbers are probably thinner than they seem, there is no regulation of spoofing/layering and it would be instructive to look at the cancellation rate of passive orders originally placed deep in the book when market price subsequently approaches the resting limit price.

Of course if you want to move larger amounts there are specialized OTC markets that handle large block trades, e.g. Cumberland Mining. Of course the lit exchanges are important for price discovery.

It would be interesting to compare the BTC market depth as a percentage of market value to other exchange traded assets.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#126

Post by mschuster91 »

losteric wrote: post #112
g09980 wrote: post #90

Earlier quoted context omitted.

Just people are very cautious online with signaling that they have any crypto.

That feels unlikely to me. Why would there be so many people who 1.) have enough crypto to be worried, and 2.) want to talk about crypto but didn't create a separate account prior to this negative article?

> Why would there be so many people who 1.) have enough crypto to be worried

Because it's easy to have enough crypto to be worried. For example, if I had bought 10 BTC @ 100€/BTC = 1.000€ (which, at the time, was a reasonable investment size for a crypto starter, and a droplet of water for a seasoned person with a bit of money to throw around) and held them until now, I'd have 100k€ worth of BTC.

That's more than enough motivation for a criminal for example to fleece your home while you're away (e.g. if you posted on your HN-relatable Twitter account that you're off to a conference) and look for a paper wallet. I have seen people literally stab each other over 100€ worth of marijuana, to put things into perspective...

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#127

Post by b1daly »

FabHK wrote: post #97
Fnoord wrote: post #79

Earlier quoted context omitted.

Is that rose tinted glasses / nostalgia though? Do you have a bunch of examples to support your conclusion?

Err, are you asking whether the internet was useful during/prior (and despite) the dot.com bubble? The answer is, yes, it was hugely useful. Initially for information (e-mail, ftp, finger, usenet, gopher, WWW), later for commerce. It was far more useful, and far more frequently used, even years before the dot.com bubble, than cryptocurrencies are now. If you took away cryptocurrencies right now, impact on me and almo…

The dot com bubble was also much bigger than this current cryptocoin bubble. The market cap was bigger by multiples. I would also guess that this market cap reflected vastly more actual capital flowing into the market than we see now flowing into the “digital token” markets.

The prices are so easily manipulated on unregulated exchanges, coupled with other scams, means the nominal price can be moved with a lot less capital.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#128

Post by DenisM »

beefield wrote: post #104
Kelbit wrote: post #95

Earlier quoted context omitted.

Except in a real fractional reserve system, the central bank usually sets reserve and/or capital requirements.

Well, in theory you could run fractional reserve bank by letting your deposit customers decide whether they want or not be making deposits to you at any deposit rate you are offering. This would work if you disclosed your balance sheet and your customers were smart enough to make proper capital adequacy calculations on that. In the real world, however, I am not sure if disclosing the balance sheet matters, expected o…

Tragedy of the commons? I want all of my money lent out, but I also want the bank to have a reserve in case I need it, which means none of your money lent out.

The only way out of this is for customers to bargain collectively for the proper reserve ratio.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#129

Post by fyi1183 »

hinkley wrote: post #108
qubex wrote: post #85

Earlier quoted context omitted.

That’s comfortingly close to fractional reserve banking (which unfashionably I’m a big fan of).

Fractional reserve guarantees that the max multiplier between money in motion and money at rest is never more than 10x. If I’m supreme ruler of the world and I replace all currency with Hinkley Bucks, 100 of them in total, and I put them in the bank, they loan 90 to a guy who builds a house. The builder and all their suppliers and employees put that 90 in the bank, and the bank loans 81 to a guy starting a grocery st…

The 10x thing is a common misconception generated by the fact that 10 is a nice round number that works well for this type of just-so story.

The Wikipedia article on reserve requirements has a handy table by country, from which you can see that the required ratio is actually less than 10 in most of the developed world.

In fact, several countries have no reserve requirements at all! Following your logic, those countries should be even more volatile than whatever is going on in crypto currency land. I think we can safely conclude your logic is flawed.

Mind you, I still think the whole tether business is extremely fishy. I'm just annoyed by the spread of monetary just-so stories that pretend to apply to the real world. Reserve requirements are a red herring in modern monetary systems, because central banks will always guarantee liquidity by acting as a lender of last resort.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#130

Post by hinkley »

fyi1183 wrote: post #129
hinkley wrote: post #108

Earlier quoted context omitted.

Fractional reserve guarantees that the max multiplier between money in motion and money at rest is never more than 10x. If I’m supreme ruler of the world and I replace all currency with Hinkley Bucks, 100 of them in total, and I put them in the bank, they loan 90 to a guy who builds a house. The builder and all their suppliers and employees put that 90 in the bank, and the bank loans 81 to a guy starting a grocery st…

The 10x thing is a common misconception generated by the fact that 10 is a nice round number that works well for this type of just-so story. The Wikipedia article on reserve requirements has a handy table by country, from which you can see that the required ratio is actually less than 10 in most of the developed world. In fact, several countries have no reserve requirements at all! Following your logic, those countri…

10% isn't a fact, it's an example that is close enough to illustrate the thought experiment but allow you to do the math in your head (I originally learned about this years ago in a personal finance podcast).

And of course the fact that I have $65 in my wallet right now instead of in the bank takes $650 out of the cycle. If you're in a country where people don't trust the banks that much, or people have almost no money, a big fraction of all the money in play may be in cash, in someone's pocket, a safe, a cash register, an ATM, a briefcase, or hiding under their mattress.

Banks usually don't lend money out to just anybody, so the worst case scenario never actually happens. Or only happens once every 70 years. If there aren't too many banks in your country then you oversee more of the money supply and the house of cards effect should be more obvious than here.

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