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

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

#111

Post by NicoJuicy » Wed, Jun 13, 2018, 4:47 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

But centralisation makes it safer, all quirks aside

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

#112

Post by ceejayoz » Wed, Jun 13, 2018, 4:47 PM UTC

craigc wrote: post #108

ceejayoz wrote: post #98

Earlier quoted context omitted.

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...

That's not an audit. It's a memo.

It explicitly states on the first page that it cannot be relied upon.

When Tether posted it (https://tether.to/announcement-transparency-update/) they stated " These consulting services do not constitute an audit or attestation engagement, which would include a significantly expanded scope of procedures and take substantially more time to complete."

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

#113

Post by skybrian » Wed, Jun 13, 2018, 4:48 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.

What's the difference between a fake promise and a real promise?

The government guarantees that dollars are acceptable for paying taxes. For a promise, that's about as real as you're going to get.

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

#114

Post by mistermann » Wed, Jun 13, 2018, 4:48 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.

One is backed by taxation of the citizens of the government who print it.

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

#115

Post by jrochkind1 » Wed, Jun 13, 2018, 4:49 PM UTC

GuB-42 wrote: post #92

ceejayoz wrote: post #33

Earlier quoted context omitted.

> Creating billions of dollars’ worth of value with a ridiculous perpetual-motion fake-dollar-printing machine is a real innovation. That's silly. Ponzi-style schemes have been around since at least the late 1800s.

If anything, Bitcoin is closer to the even older Tulip-mania than to a Ponzi scheme. A Ponzi scheme is a specific kind of fraud based on the promise of an unreasonably high return on investment which is actually payed by late adopters. Bitcoin doesn't make promises and it doesn't have a cover story to hide the source of the money. It may be a bubble, but it is not a Ponzi scheme.

As good a story as tulip-mania is, it seems it may not quite have been what we think.

https://theconversation.com/tulip-mania-the-classic-story-of...

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

#116

Post by Animats » Wed, Jun 13, 2018, 4:50 PM UTC

bhouston wrote: post #67

cstejerean wrote: post #55

Earlier quoted context omitted.

Which evidence? Because around December when they were printing about a billion dollars worth of tether there was zero evidence it was backed by anything other than wishful thinking. Maybe that’s changed?

My theory is that it was initially not backed fully but after the fact it became backed. A billion or two dollars is not that much money to eventually get, especially if you also hold a lot of valuable BTC as a result of this manipulation. Basically the unbacked tether allowed them to purchase BTC and with the great price increases that become worth way more than the unbacked tether allowing them to leverage that to…

How can it "become backed"? Anyone who buys Tether expects to get Tether tokens. If the issuers created Tether tokens from nothing, there's no way they can become backed. Where would the money come from?

Tether isn't redeemable, anyway. You can't go to the Tether issuers and demand a dollar for your Tether token.

Financial Times: Meanwhile, the supply of Tethers rapidly ballooned, from $50 million to $2.2 billion. That led to an increasing number of questions over whether the dollars that were meant to back the cryptocurrency really existed. It was reported in January that both companies had been subpoenaed in December last year by US regulators, who wanted to look into this.[1]

[1] https://ftalphaville.ft.com/2018/06/13/1528904202000/Has-bit...

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

#117

Post by ethbro » Wed, Jun 13, 2018, 4:50 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

At USD$6.5B for a 51% attack (scraped off a website)...

... that's a smidge over 1% of the US military budget.

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

#118

Post by vkou » Wed, Jun 13, 2018, 4:52 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?

Spirit animals.

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

#119

Post by hcknwscommenter » Wed, Jun 13, 2018, 4:53 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

"Try, instead, to delete a two week old transaction from the bitcoin blockchain."

So that is literally true, but is it really true from a pragmatic sense? If the US government used their military might to destroy a significant portion of large mining installations, would bitcoin really be in any way resistant to that? If the NSA and DOE used their combined supercomputing power to outhash everyone else, couldn't they take over the bitcoin network and do whatever the heck they want with it?

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

#120

Post by grosjona » Wed, Jun 13, 2018, 4:56 PM UTC

Retric wrote: post #96

spiorf wrote: post #79

Earlier quoted context omitted.

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

I can't exactly delete a physical transaction with real money, so that provides zero new benefit.

The Fed can inflate away the value of those transactions anytime they want and not only do you have zero control over this process, it is not even possible to predict it.

The complexity of the financial instruments used by the Fed is intentional and serves to obscure the fact that they are essentially giving free money to large banks and corporations.

Corporations are not getting bigger because they're more efficient at delivering value to consumers - They're getting bigger because the Fed makes sure of it.

The Fed is like a river; those who are closest to the source can get the most out of it. In this case it means bankers, financiers and corporations. Regular workers are far downstream, they get whatever is left.