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

nytimes.com

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

#171

Post by mr_spothawk »

tomkarlo wrote: post #159
john_moscow wrote: post #122

Earlier quoted context omitted.

I'd say there's a simpler explanation. Bitcoin has a limited predictable supply, so its price is mostly a function of the demand. And demand correlates with expectations, that typically follow the hype cycle [0]. I'm not sure how much someone managed to single-handedly manipulate the price, but the plain old human psychology, FOMO and the positive feedback loop for media writing about bitcoin demand definitely played…

Is the supply really "limited"? Sure, there's finite number of "coins" that can be generated. But unlike physical objects, there's not really any special property of that unit. Also, you can just generate a new currency of more units and similar utility (as has happened many times recently.) Objects in the real world have utility that's directly linked to their unit value. That's not necessarily true for Bitcoin... i…

while the supply of digital coins is infinite (you could fork btc, or any other chain, or create different coins that could then be forked) the supply of Bitcoins is finite & knowable. this is a component of the argument by "maximalists" who suggest that alternate coins/tokens are bullshit by design, and anybody who thinks they aren't is necessarily in favor of inflationary money.

> Objects in the real world have utility that's directly linked to their unit value.

Could you explain what this means to you? I don't understand what you're saying

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

#172

Post by mr_spothawk »

ComradeTaco wrote: post #124
captainbland wrote: post #110

Earlier quoted context omitted.

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.

Bitcoin could go the way of any number of other cyptos; back to zero. In any case, nobody uses Bitcoin as a currency because it's logistically harder for 99.9% of people, and nobody uses it as a store of value because its insanely volitale. Bitcoin is really just a speculative asset.

I know people who use Bitcoin as a currency.

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

#173

Post by Animats »

FireBeyond wrote: post #128
zaroth wrote: post #97

Earlier quoted context omitted.

Not that I would trust them, but literally the next sentence; Through our Transparency [1] page, anyone can view both of these numbers in near real-time. [1] - https://wallet.tether.to/transparency

And right beneath that, "Our reserve account is regularly audited". By whom? Where can anyone see these audits, for transparency's sake?

Tether fired their auditor for asking too many questions.[1]

[1] https://www.coindesk.com/tether-confirms-relationship-audito...

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

#174

Post by DINKDINK »

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…

>magical fountain of fake dollars

The problem though is that if ether really were a "magical fountain of fake dollars" that would be reflected somewhere in the market price of tethers. Look at the price charts for tether->USD it's pretty nominally 1:1 https://cryptowat.ch/markets/kraken/usdt/usd

The most contrarian one could argue is that people who sold bitcoin for fraudulent tethers haven't tried to withdrawal them /at all/ and therefore the tetherUSD liquidity hasn't been tested.

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

#175

Post by bsaul »

skybrian wrote: post #113
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.

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.

Thanks for this analogy. I've spent a lot of time explaining that the fact that a currency is officially supported by a state makes all the difference, but your comparison is just perfect.

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

#176

Post by kerng »

So, the Bitcoin price rose because people bought it (via Bitfinex). The price fell when it was sold. I imagine doing a similar study on transactions from Coinbase (which has a big user base and volume) might reveal similar results.

Is there evidence that this was orchestrated or was done maliciously by a small group of actors. The headline is written like there is more to it.

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

#177

Post by ufo »

DINKDINK wrote: post #174
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…

>magical fountain of fake dollars The problem though is that if ether really were a "magical fountain of fake dollars" that would be reflected somewhere in the market price of tethers. Look at the price charts for tether->USD it's pretty nominally 1:1 https://cryptowat.ch/markets/kraken/usdt/usd The most contrarian one could argue is that people who sold bitcoin for fraudulent tethers haven't tried to withdrawal them…

One problem with the market price for tethers is that it is actually very hard to sell them for USD. For example, Bitfinex does not allow USD withdrawals, only Bitcoin withdrawals.

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

#178

Post by DINKDINK »

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?

>how could such a determination be possible?

At the start of 2017 there were still lots of uncertainties and risk about how the Bitcoin ecosystem would handle certain waring factions inside of it.

Will businesses be able to write closed-door agreements and coopt the digital asset or Will the protocol remain immutable, continuing it's value proposition to the market.

The second option succeeded, risk was removed: that's a reasonable thesis to a price appreciation. Markets hate risks/unknowns.

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

#179

Post by mr_spothawk »

hcknwscommenter wrote: post #119
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

"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…

the same is literally true for a nuclear-armed opponent and the dollar. piles of cash would still exist in bunkers and wallets around the world, and would retain some value.

a more interesting evaluative plot-element might be something like:

how many developers would need to die for bitcoin to be exterminated?

vs.

how many economists would need to die for the dollar to be exterminated?

frankly, if some gov wanted digital coins (or their supporting networks) destroyed... I think it would be easier than reducing a traditional, national currency to rubble.

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

#180

Post by mr_spothawk »

grosjona wrote: post #104
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.

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 ze…

> only a matter of time before they group together and get their leverage

it's already done. see, for instance: - the impact of digital campaign outreach in the 2008 election - various 3letter "cyber" groupos since early 2000s - anonymous circa 3 years ago - btc manipulation last year

there are probably more

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