Live data from Hacker News

Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

bloomberg.com

191–200 of 377 posts

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#191
post #24

Clickbait title. The subtitle is probably more accurate: "The series of $1,000 days that brought BTC to a record above $19,600 could have been the work of one entity" I'm very skeptical. It is certainly possible that a single entity may have encouraged the rally. But there is no way that a single entity actually moved the markets this much. The amount of cash required would be significant. During this time, there wer…

You're implying a single exchange moving the market needs cash to move it. If the ecosystem has decided one exchange is the lead price, then they manipulate the price without needing the underlying assets. Furthermore, bitcoin is one of the only markets I've seen which rewards "whales" instead of punishing them, because in most markets moving the market you will lose money to slippage. The market price will retract a…

> because in most markets moving the market you will lose money to slippage. The market price will retract after you bump it.

That's not slippage. Slippage is when you get filled at a higher (or lower) price than you were expecting. Prices moving up when an asset is bought is normal on traditional exchanges as well.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#192
post #157

It's impossible to have a discussion based on news reports, so here's a link for the original paper. I copied the title and abstract below. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066 I browsed through the paper. Their main result, if I understood correctly, is that they found "considerable evidence that Tether is used to purchase Bitcoin following Tether authorization and a drop in Bitcoin price, and…

And it seems unlikely that Ethereum's 100X rise in 2017 had nothing to do with the ICO boom.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#193
post #157

It's impossible to have a discussion based on news reports, so here's a link for the original paper. I copied the title and abstract below. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066 I browsed through the paper. Their main result, if I understood correctly, is that they found "considerable evidence that Tether is used to purchase Bitcoin following Tether authorization and a drop in Bitcoin price, and…

Tether is starting to look like a Madoff-scale Ponzi scam. What maintains the $1 price of Tether is a continual net inflow of cash. Tether is known not to be backed with sufficient real assets.[1] If there's a period of net outflow from Tether, the whole house of cards comes crashing down.

[1] https://www.marketwatch.com/story/tether-reverses-claim-of-1...

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#194
post #102

Earlier quoted context omitted.

Dai is explained here: https://www.youtube.com/watch?v=GnoQOlVTMeg

The only way to find out is to watch a 20 minute video by a crypto nutter? Is there not a simple explanation for how Dai is pegged to the dollar?

If you have an adversarial mindset (which is absolutely healthy) and want to understand it well enough to not immediately come up with counterarguments whose only valid reply is "RTFM", yes, it takes at least 20 minutes. But regardless, I'll bite.

DAI has a couple of intended use-cases. I will focus here on the "stable coin" asset, meaning you should be able to expect it's value to not go up or down over time. It is inherently debt.

The main component of DAI is "CDPs", Collateralized Debt Positions. There is a smart contract on the ETH blockchain. Smart contracts are computer code on the blockchain that are "open trustless execution", meaning you can inspect the source code, verify that it matches the deployed bytecode, and be certain that any transaction follows the rules. In DAI, there is no entity that can even theoretically exit-scam you.

The configuration parameters of this smart contract is set by votes by the holders of the MKR token. This token is traded on public markets and is the speculative token of the ecosystem.

You can deposit assets into this smart contract. The current version of DAI only takes ETH, but the intention is that MKR holders will consider any significant asset representable on the ETH blockchain. This includes other stablecoins (think fiat-backed tokens), tokenized equity or government bonds (which have already been issued on the ETH blockchain), tokens backed by commodities like gold, etc.

When you deposit assets into the smart contract, you get DAI in return, representing a loan backed by the deposited assets. How much DAI you get in return is determined by an oracle (meaning a smart contract providing data external to the blockchain). This oracle is aggregated from several other oracles, similarly public and approved by the MKR governance. In general, the system is over-collateralized at any point in time.

There is an incentive and liquidation system around the whole things that goes a bit further to ensure that the price remains stable despite fluctuations - and so far the DAI/USD price has remained really close to 1 throughout the ETH/USD long bleed of 2018, including short periods of high volatility.

There is some degree of risk involved of course, most notably including the oracle price feeds. There is a road map to both increase transparency and decrease the possibility of collusion between oracle providers.

There is also the "emergency shutdown", which involves freezing and instant liquidation, but this comes at a big cost to the MKR holders who have to approve it.

Despite having been running for several years and having dozens of people (I think over 100 now?) it is, of course, still to a large part an experiment that is still evolving. But so far it has been performing better than I thought. And there is no way you could call it a scam.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#195
post #157

It's impossible to have a discussion based on news reports, so here's a link for the original paper. I copied the title and abstract below. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066 I browsed through the paper. Their main result, if I understood correctly, is that they found "considerable evidence that Tether is used to purchase Bitcoin following Tether authorization and a drop in Bitcoin price, and…

I applaud going back to the original source, but the paper has been updated.

See this better Bloomberg article: https://www.bloomberg.com/news/articles/2019-11-04/lone-bitc...

Relevant quotes:

> One entity on the cryptocurrency exchange Bitfinex appears capable of sending the price of Bitcoin higher when it falls below certain thresholds, according to University of Texas Professor John Griffin and Ohio State University’s Amin Shams. Griffin and Shams, who have updated a paper they first published in 2018, say the transactions rely on Tether, a widely used digital token that is meant to hold its value at $1.

> “Our results suggest instead of thousands of investors moving the price of Bitcoin, it’s just one large one,” Griffin said in an interview. “Years from now, people will be surprised to learn investors handed over billions to people they didn’t know and who faced little oversight.”

> “This pattern is only present in periods following printing of Tether, driven by a single large account holder, and not observed by other exchanges,” they wrote in their new peer-reviewed paper, set to be published in a forthcoming Journal of Finance.

> “Simulations show that these patterns are highly unlikely to be due to chance. This one large player or entity either exhibited clairvoyant market timing or exerted an extremely large price impact on Bitcoin that is not observed in aggregate flows from other smaller traders.”

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#197
post #195
post #157

It's impossible to have a discussion based on news reports, so here's a link for the original paper. I copied the title and abstract below. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066 I browsed through the paper. Their main result, if I understood correctly, is that they found "considerable evidence that Tether is used to purchase Bitcoin following Tether authorization and a drop in Bitcoin price, and…

I applaud going back to the original source, but the paper has been updated. See this better Bloomberg article: https://www.bloomberg.com/news/articles/2019-11-04/lone-bitc... Relevant quotes: > One entity on the cryptocurrency exchange Bitfinex appears capable of sending the price of Bitcoin higher when it falls below certain thresholds, according to University of Texas Professor John Griffin and Ohio State Universi…

Damn, you're right, I linked the old paper. Oops!

But it seems that the new one is "set to be published in a forthcoming Journal of Finance". So it's not published yet.

I find it impossible to have a discussion based on Bloomberg article, as good as it my be.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#198

Crazy use for Bitcoin: mine Bitcoin in satellites with giant solar arrays, at a capacity that makes it cheaper than terrestrial mining. Since terrestrial mining no longer economical, it ceases altogether resulting in reduction of energy consumption. I.e. space Bitcoin mining captures solar energy in space and sends it to earth in the form of coin, which is much safer than beaming the energy itself. I'm sure there are…

> sends it to earth in the form of coin

You realize this doesn't actually transfer any energy, right? Assuming you're not joking, all you've done is calculate the world's most expensive sha256.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#199

Earlier quoted context omitted.

It doesn't even scale to millions of users. And basically every project that tries to claim different is just ignoring the problem and trying to pump their own price. Everything in cryptocurrencies is a scam.

The internet didn't support millions of users after a decade either. Is the internet a scam? I'm not sure why you are saying all efforts go into a flawed second layer? a) Dozens of teams are working on other efforts. b) Many do not consider lightning flawed.

The internet was scalable by design.

Bitcoin is not.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#200
post #2

The more I know about cryptos, the more I remain skeptical. The only people I know that uses cryptos seriously are acquaintancies from latin america, and none of them for storing value, with the exception of Venezuelans. Not even argentinians, that just buy as many dollars they can. IMO this is a thread worth reading on this topic: https://www.reddit.com/r/worldnews/comments/dj2jro/the_large...

Anyone who uses crypto seriously wonders how people can use banks. Your reddit link is some guy writing a couple of paragraphs about having customers too stupid to buy it themselves. Their entire job is based around keeping people too ignorant to control their money.

As long as there is a hurdle where people can be "too stupid" to use BTC without getting scammed, BTC will never see wide adoption.
Post reply on HN