Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say • Hacker News Board

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#101

Post by josu » Wed, Jun 13, 2018, 4:36 PM UTC

paulpauper wrote: post #58

josu wrote: post #37

I don't know, I followed all the ride very closely, and I don't think that manipulation played that big of a role. Bitcoin was clearly undervalued at the beginning of the year, when its price was around $1,000. Bitcoin needed a protocol update, however, the community couldn't agree on how to proceed, and there was the threat of a contentious fork, where bitcoin would split in 2. In the end, the protocol update was ca…

Bitcoin was clearly undervalued at the beginning of the year, when its price was around $1,000. how could such a determination be possible?

Perspective. We didn't know it at the time, but looking back it's pretty obvious. Once the issue of the forks and the SegWit activation was cleared, the price rose relatively fast.

And I'm talking in relative terms; it was undervalued relative to what happened next.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#102

Post by craigc » Wed, Jun 13, 2018, 4:38 PM UTC

ggggtez wrote: post #91

craigc wrote: post #56

Earlier quoted context omitted.

> I am sure many said something similar about housing prices in 2005. The difference is that the housing prices were clearly in a bubble and banks were intentionally packaging subprime mortgages that they knew were bad and selling them as a low risk investment. This is much much different than Bitcoin. I would argue that Bitcoin is the only asset class that is not currently in a bubble. > The article doesn't prove th…

>The difference is that the housing prices were clearly in a bubble The above article shows that Bitcoin was at the very least, in a bubble last year, and may still be one. >and banks were intentionally packaging subprime mortgages that they knew were bad and selling them as a low risk investment. And nearly every coin has an ICO which is a "sure thing". Everyone is selling their coin like it's a low risk investment.…

> So, you're living in denial then?

No, I believe that Bitcoin is going through a more general adoption wave.

So yes, it was in a bubble last year, but it is all part of a larger adoption pattern. It is the same way Amazon stock was in a bubble from 1998 to 2000 when its value rose from $3 to over $100 and back down to $5, but where is it today?

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#103

Post by tylerhou » Wed, Jun 13, 2018, 4:40 PM UTC

gowld wrote: post #62

kgwgk wrote: post #28

Today Matt Levine talks about this paper in his daily column: https://www.bloomberg.com/view/articles/2018-06-13/judge-rul... "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…

What's the difference between a real dollar and a fake dollar? All dollars are first-order fake.

You can only pay taxes with real dollars.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#104

Post by grosjona » Wed, Jun 13, 2018, 4:42 PM UTC

Donzo wrote: post #74

gowld wrote: post #62

Earlier quoted context omitted.

What's the difference between a real dollar and a fake dollar? All dollars are first-order fake.

Real US Dollars have a very large arsenal with unimaginable destructive powers propping up their value. The dollars may be fake but the man with the gun who is standing behind them is very real.

You're forgetting about the army of hackers who are propping up the value of Bitcoin and other cryptocurrencies.

Why own weapons when you can control the people who own them?

As our software systems get more complex and as we become more reliant on them, hackers become increasingly influential politically and economically.

Lawyers, doctors and financiers have had thousands of years to figure out how to gain unfair zero-sum leverage within capitalism, software engineers, on the other hand, didn't exist until recently but it's only a matter of time before they group together and get their leverage.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#105

Post by Retric » Wed, Jun 13, 2018, 4:42 PM UTC

kgwgk wrote: post #28

Today Matt Levine talks about this paper in his daily column: https://www.bloomberg.com/view/articles/2018-06-13/judge-rul... "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…

Fraud seems to be easier than you might think. For comparison Bitcoin is about the size Madoff was dealing with. Bitcoin is still loose change in terms of the global economy.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#106

Post by gus_massa » Wed, Jun 13, 2018, 4:42 PM UTC

spiorf wrote: post #79

Donzo wrote: post #74

Earlier quoted context omitted.

Real US Dollars have a very large arsenal with unimaginable destructive powers propping up their value. The dollars may be fake but the man with the gun who is standing behind them is very real.

This is the internet, and those weapons can't fire down here. Try, instead, to delete a two week old transaction from the bitcoin blockchain. You will find that even with military-sized funding, you can't. That's what is backing up bitcoin's value

The ETH/ETC fork essentially reversed a month old transaction. It's not Bitcoin, but they still have a 1/2 marketcap. If the value comes from irreversibility, their marketcap should be almost 0. [Moreover, ETC is the irreversible chain and the value is 1/30 of the value of ETH.]

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#107

Post by vinceguidry » Wed, Jun 13, 2018, 4:45 PM UTC

paulgb wrote: post #8

What I don't get about the theory that Tether was used to intentionally manipulate markets, is that if you have a money-printing machine, you don't need to manipulate markets as a business model. You can just print money, that's the business model. Of course it's possible that that influx of capital will move a thin market. But Occam's razor seems to imply that that's a side effect rather than the intent.

Just having money doesn't mean anyone thinks it's worth anything. You have to manipulate the market at least a little to sell people on your money.

Anyone can print ETH tokens.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#108

Post by craigc » Wed, Jun 13, 2018, 4:45 PM UTC

ceejayoz wrote: post #98

craigc wrote: post #90

Earlier quoted context omitted.

Ahhhh. Okay that makes more sense. Although at the time they did have accounting and audits. The last audit was September 2017, I believe.

No, Tether never completed an audit. Their auditor fired them. Their claimed "frequent professional audits" on the home page encompasses precisely zero completed audits. https://www.coindesk.com/tether-confirms-relationship-audito... > Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reason…

Wrong. They were fired after their audit in September 2017 which is available here:

https://tether.to/wp-content/uploads/2017/09/Final-Tether-Co...

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#109

Post by Jasper_ » Wed, Jun 13, 2018, 4:45 PM UTC

josu wrote: post #101

paulpauper wrote: post #58

Earlier quoted context omitted.

Bitcoin was clearly undervalued at the beginning of the year, when its price was around $1,000. how could such a determination be possible?

Perspective. We didn't know it at the time, but looking back it's pretty obvious. Once the issue of the forks and the SegWit activation was cleared, the price rose relatively fast. And I'm talking in relative terms; it was undervalued relative to what happened next.

> Once the issue of the forks and the SegWit activation was cleared, the price rose relatively fast.

Yes, we know the ship is unsafe because otherwise the front wouldn't have fallen off! We know the price rose. This article is suggesting that the price rose not because it was undervalued, but because it was manipulated upwards by people pumping it up with fake numbers.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#110

Post by captainbland » Wed, Jun 13, 2018, 4:45 PM UTC

kgwgk wrote: post #28

Today Matt Levine talks about this paper in his daily column: https://www.bloomberg.com/view/articles/2018-06-13/judge-rul... "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…

In either of these situations it seems like hodling until victory pays off. The real loser is, well, the planet as the network continues to consume more and more power.