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Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

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

#361

Post by throwawayhhakdl »

Sargos wrote: post #309
throwawayhhakdl wrote: post #5

Earlier quoted context omitted.

I always get downvoted for asking this but... doesn’t that seem like a really bad idea that makes you far far more vulnerable to physical crime? If a guy mugs you at an atm, the bank is going to flag something as suspicious. If a guy mugs you for your private key, you have no recourse for all of your holdings- and the getaway is a lot easier. Physical crypto crime feels like it would be very prevalent if it became “m…

By the time crypto goes mainstream people will be using smart contract wallets like Argent and Gnosis Safe that implement things like social key recovery, daily transfer limits, and other common sense measures.

How do those differ from banks besides being subject to less regulation.

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

#363

Post by Acrobatic_Road »

ppf wrote: post #341
Acrobatic_Road wrote: post #337

Earlier quoted context omitted.

Price feeds are the answer? The price feeds in question don't even track the price of Dai - so I am not even sure what mechanism you have thought up to explain to yourself how Maker works. If you are still having trouble understanding the system there is no shortage of resources available. Of course if you dismiss the resources because of an anti-cryptocurrency bias as you have then you will end up clueless since thi…

I've read the previous, very long, answer. Yes, it explains how the Maker system works, but it does not explain which parts constitute the Dai to USD peg. The price feeds track the price of Eth, which is used to set the price of Dai if automatic settlement is needed (something I learned from the resources you describe!). If that doesn't set the price of Dai, then what does? Are you suggesting it's an emergent behavio…

When someone's ethereum CDP is liquidated onto the market it is auctioned off for Dai before the collateral no longer backs the Dai. The price feed determines when a CDP is in need of liquidation. This mechanism is important because it keeps the system overcollateralized.

There is also something called global settlement. This is for major upgrades (they are doing one on the 16th) and also in case of emergencies. The price feeds in this case are used to determine Dai holder's proportional claims to the collateral (using the target price 1 Dai = 1 USD). It may happen happen Dai holders get less or more depending on the circumstance. In addition Maker is a major Ethereum application so if it failed the price of Ether would tumble. That is part of the reason they are expanding to support more collateral types in the update slated for the 16th.

So every Dai is a rough promise for one dollar but that does not answer why Dai is stable day to day. It works like this: When the price of Dai falls under 1 dollar, CDP owners will buy it up and close their positions at a discount which will put upward pressure on the price. Likewise, if the price of Dai goes above one dollar then fresh CDPs will be opened and fresh Dai will be sold on to the market, putting downward pressure on the price. If that isn't enough, the interest rate is manually adjusted to fine-tune the supply.

In the future part of the interest will be payed in to an optional savings account for Dai holders. The idea is that by adjusting the APR the demand for Dai can be fine-tuned. When rates are high people will buy Dai and lock in in a savings account. If demand is too high rates can be lowered causing an inverse affect.

https://blog.makerdao.com/introduction-to-emergency-shutdown...

I hope that helps.

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

#364

Post by anyfoo »

askmike wrote: post #232
Nursie wrote: post #230

Earlier quoted context omitted.

Nobody said that back then, no. They said there had been an over-exuberant market with people throwing stupid money at any old idea, but nobody was saying "the internet is a bust" or even "we don't know the use-cases" because there were a ton of other useful, successful things going on with it. You said it yourself - you're too young to actually know a lot about that, but you use it to bolster your arguments anyway.

> but nobody was saying "the internet is a bust" Many people were saying this, Paul Krugman (one of the leading economists) went as far as comparing the internet to the fax machine: "The growth of the Internet will slow drastically, as the flaw in 'Metcalfe's law'–which states that the number of potential connections in a network is proportional to the square of the number of participants–becomes apparent: most peopl…

I was there. By the time the dotcom bubble burst, the Internet was already everywhere, having steadily grown as a household technology since first introduced to the general populace just a few years earlier.

The dotcom bubble was then precisely a symptom of the Internet's runaway success: Everyone wanted to use it, massive amounts of money were being made with it, and so everyone thought they could make money with it as well. As a result, even the stupidest ideas got funding.

When the bubble burst, it caused a significant economical upset. It did not have any really noticeable effect on the Internet itself, its usage, and the availability of most of the services that were actually in use. I don't think anybody remembers a time where Internet usage "dipped" from its massive momentum since the mid-90s, because the dip was largely economic.

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

#365

Post by bart_spoon »

scottlocklin wrote: post #348
bart_spoon wrote: post #92

Earlier quoted context omitted.

High frequency trader, I presume?

No, never did it for a living (did consult for some over the years) and this sort of ad hominem nonsense pointed towards people who know what they're talking about is why we can't have nice things.

It wasn't ad hominem, it was largely in jest as most of the people I've encountered who don't like Michael Lewis are HFTs who didn't like Flash Boys. If you are worried about substantial discussion here, perhaps you could start by detailing why you disagree with Michael Lewis, rather than dismiss him outright with generic, detail-devoid dismissals that he doesn't know anything, as opposed to yourself who does "know what you're talking about".

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

#366

Post by lostmsu »

Nursie wrote: post #339
lostmsu wrote: post #335

Earlier quoted context omitted.

I don't understand, did they acquire dollars to back up those issuances, or not?

Probably not. Nobody knows the full story, but given that the pattern is one of responding to market movements rather than looking like money flowing in to a market from investors, it seems unlikely. Further, given their outright lies about auditing and the recent admission that only 75% of tether is backed by cash or cash-like instruments, it looks a lot like a huge fraud to me. Make your own mind up I guess, but if…

> Probably not.

That is not enough to support claims of the paper.

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

#367

Post by Nursie »

lostmsu wrote: post #366
Nursie wrote: post #339

Earlier quoted context omitted.

Probably not. Nobody knows the full story, but given that the pattern is one of responding to market movements rather than looking like money flowing in to a market from investors, it seems unlikely. Further, given their outright lies about auditing and the recent admission that only 75% of tether is backed by cash or cash-like instruments, it looks a lot like a huge fraud to me. Make your own mind up I guess, but if…

> Probably not. That is not enough to support claims of the paper.

Yeah, it is, given they've done the analysis and reported on how likely it is.

If you have thorough refutation prepared, I suggest you publish. So far your argument appears to be "nuh uh"

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

#368

Post by lostmsu »

Nursie wrote: post #367
lostmsu wrote: post #366

Earlier quoted context omitted.

> Probably not. That is not enough to support claims of the paper.

Yeah, it is, given they've done the analysis and reported on how likely it is. If you have thorough refutation prepared, I suggest you publish. So far your argument appears to be "nuh uh"

People do "technical analysis" on a daily basis, only to be wrong 50% of times.

The paper is quite filled with terms unclear to a non-finance 3rd party, but here is what I gathered from reading it diagonally and your explanation:

Their only argument about Tether in question not being cash backed is that it is infused exactly at the moments when Bitcoin goes down, and that is "not consistent" with what investors generally do.

Well, duh. Maybe it is not consistent with investing in, for example, falling Microsoft stock after some scandal reveals malpractice. But in case of cryptocurrencies, which historically have been very volatile, it makes quite a bit of sense to buy on a downward turn.

I don't see any reasoning in the paper, assigning probabilities to their expectations for investor behavior versus the reality of Tether trading conditioned on both hypothesis. And that assumption is the cornerstone of the claim. 80% of the paper for whatever reason is spent proving an obvious fact, that large Tether infusions are causing the rise of cryptocurrency prices.

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

#369

Post by alwillis »

arcticbull wrote: post #257
icelancer wrote: post #119

Earlier quoted context omitted.

This is absurd hyperbole. There are people working on legitimate answers to your concerns, such as the Lightning Network and other initiatives.

Lightning is worthless because it requires an on-chain transaction to open and close, so it inherits all the same scaling issues as Bitcoin.

Let me further clarify: Lightning is not worthless and has already become the basis of a new industry of apps and services.

Like any low-value transaction using bitcoin, like the proverbial cup of coffee, it’s not necessary to wait for even one confirmation before doing anything.

Plain vanilla lightning uses a UTXO (that’s what a bitcoin on the blockchain is, an unspent transaction) to open a channel. But you don’t have to wait 10 minutes for at least 1 confirmation before using the payment channel.

I’ve received multiple LN transactions with various LN apps and it’s always been instant.

Once the payment channel is opened, it stays open as long as it needs to. But the killer feature is being able to transact without requiring the underlying bitcoin blockchain; it’s only required once the parties decide to close the channel.

Same thing with multi hop payments.

There are many enhancements being worked on, like loop-in, loop-out and submarine swaps, which handle providing liquidity to enable transactions and the ability to make swaps between chains, like being able to “swap” between bitcoin and light coin if that was desired.

There’s also work happening to enable one on-chain UTXO to fund multiple payment channels in one go.

So tens of thousands of transactions can take place without touching the underlying blockchain.

So there’s no lag when it comes to opening or closing a payment channel.

There are no scalability issues; we’ll have more LN nodes than Bitcoin full nodes (about 55,000 worldwide) by this time next year and it’ll be fine.

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

#370

Post by Nursie »

lostmsu wrote: post #368
Nursie wrote: post #367

Earlier quoted context omitted.

Yeah, it is, given they've done the analysis and reported on how likely it is. If you have thorough refutation prepared, I suggest you publish. So far your argument appears to be "nuh uh"

People do "technical analysis" on a daily basis, only to be wrong 50% of times. The paper is quite filled with terms unclear to a non-finance 3rd party, but here is what I gathered from reading it diagonally and your explanation: Their only argument about Tether in question not being cash backed is that it is infused exactly at the moments when Bitcoin goes down, and that is "not consistent" with what investors gener…

> People do "technical analysis" on a daily basis, only to be wrong 50% of times.

That's because 'technical analysis' of an irrational market, for the purposes of projecting price movements, is worthless.

That's not the same as retrospectively examining things that have occurred in the past.

> in case of cryptocurrencies, which historically have been very volatile, it makes quite a bit of sense to buy on a downward turn.

But not in huge monolithic chunks.

Look, you live in denial if you want, but it's been pointed out so many times that tether is dodgy as all hell (and they've more or less admitted it themselves too). We'll find out sooner or later what's gone on.

In the mean time, try not to bankrupt yourself.

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