U.S. Launches Criminal Probe into Bitcoin Price Manipulation • Hacker News Board

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#11

Post by bhouston » Thu, May 24, 2018, 10:37 AM UTC

sine wrote: post #6

TangoTrotFox wrote: post #4

Markets are constantly manipulated and what we consider acceptable or not seems at times quite arbitrary. For instance quantitative easing is a practice we engage in whose entire purpose is to artificially inflate the value of markets to help spur 'growth.' Is the problem that people may be trying to manipulate the price of decentralized commodity or that people are investing in a decentralized commodity without real…

decentralized commodity This is a misconception about cryptocurrencies such as Bitcoin or Ethereum. Both are highly centeralized, in the hands of a tiny oligarchical ownership along with a small group of mining warehouses. https://news.earn.com/quantifying-decentralization-e39db233c...

And they are likely going to get more centralized over time. The smaller currencies, outside of the top 10, are now all likely vulnerable to 51% attacks. I wouldn't be surprised if that grows to include any outside of the top 5 soon.

It looks like this is how smaller currencies die, they are vulnerable at any time to 51% attacks thus no one wants to use them. At least in the traditional banking system if you had a lot of money you could manipulate exchange rates, but you couldn't just outright steal when you had extreme market power.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#12

Post by mamon » Thu, May 24, 2018, 10:48 AM UTC

bhouston wrote: post #10

TangoTrotFox wrote: post #4

Markets are constantly manipulated and what we consider acceptable or not seems at times quite arbitrary. For instance quantitative easing is a practice we engage in whose entire purpose is to artificially inflate the value of markets to help spur 'growth.' Is the problem that people may be trying to manipulate the price of decentralized commodity or that people are investing in a decentralized commodity without real…

Central banks are in the business of market manipulation via interest rates, and money supply. This is to control growth and inflation so that business cycles are smoothed out to a degree.

The problem with that approach is that market cycles serve important purpose: they faciliate best allocation of our resources by ensuring that inefficient companies will go bankrupt. Smoothing those cycles out enables poorly managed companies to stay in business for way too long. Then, since there's a limit to a market manipulation that central banks can do we end up with one huge crisis, like Great Depression, or 2008 housing buble, instead of series of small ones.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#13

Post by TangoTrotFox » Thu, May 24, 2018, 10:53 AM UTC

sine wrote: post #6

TangoTrotFox wrote: post #4

Markets are constantly manipulated and what we consider acceptable or not seems at times quite arbitrary. For instance quantitative easing is a practice we engage in whose entire purpose is to artificially inflate the value of markets to help spur 'growth.' Is the problem that people may be trying to manipulate the price of decentralized commodity or that people are investing in a decentralized commodity without real…

decentralized commodity This is a misconception about cryptocurrencies such as Bitcoin or Ethereum. Both are highly centeralized, in the hands of a tiny oligarchical ownership along with a small group of mining warehouses. https://news.earn.com/quantifying-decentralization-e39db233c...

Decentralization does not mean owned by everybody, it means owned by nobody.

For instance imagine we had a mine that was effectively infinitely large (for the sake of the analogy). If we allowed absolutely anybody with a pickaxe to to come in and mine it, we might call it decentralized. Nobody would own the mine. That one group sent a million miners to go mine it would not suddenly make them owners, even if they happened to receive the largest benefit from the it. By contrast centralization would be when one individual or group forcefully stops, generally with government support, any other individual from mining in "their" mine. In this case they would indeed own the mine. In the case of Bitcoin there is absolutely and literally nothing stopping from somebody from starting up a mass mining farm becoming the new plurality beneficiary.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#14

Post by asfasgasg » Thu, May 24, 2018, 11:09 AM UTC

bhouston wrote: post #9

sine wrote: post #3

Earlier quoted context omitted.

This is an execelent flowchart detailing the regulatory policy on spoofing on US stock markets: https://pbs.twimg.com/media/DXD3RlQVoAALYLa.jpg

Is this serious?

The person who wrote it was probably serious, but it is not correct.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#15

Post by Retric » Thu, May 24, 2018, 11:13 AM UTC

TangoTrotFox wrote: post #13

sine wrote: post #6

Earlier quoted context omitted.

decentralized commodity This is a misconception about cryptocurrencies such as Bitcoin or Ethereum. Both are highly centeralized, in the hands of a tiny oligarchical ownership along with a small group of mining warehouses. https://news.earn.com/quantifying-decentralization-e39db233c...

Decentralization does not mean owned by everybody, it means owned by nobody. For instance imagine we had a mine that was effectively infinitely large (for the sake of the analogy). If we allowed absolutely anybody with a pickaxe to to come in and mine it, we might call it decentralized. Nobody would own the mine. That one group sent a million miners to go mine it would not suddenly make them owners, even if they happ…

Due to centralization of hardware the Chinese government can trivially do a 51% attack. That's a form of centralization your ignoring due to an overly specific definition.

The tiny block size is arguably an ongoing 51% attack from an oligarchy that is in collusion. Again, depending on what you consider centralization having a tiny group that's in direct communication easily qualifies.

Pas: In your example if the only option is to use picks from one company or your hands because other tools are confiscated at the enterance then it's very centralized.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#16

Post by Entangled » Thu, May 24, 2018, 11:15 AM UTC

sine wrote: post #5

For anyone who hasn't been following, the prevailing theory is that the largest Cryptocoin exchange "Bitfinex" also runs an altcoin called "Teather" which was marketed as being backed 1:1 by USD. So far they've created 2.8 BILLION USDT and coincidently the times they create millions of these happens to be in the middle of extreme market crashes. See this chart: https://i.imgur.com/Uo07d1d.jpg More details here: https…

So, BTC created 16 million coins from air and nobody complained. Ripple created 100 billion coins from air and nobody complained. Tron, Stellar, Cardano, Iota, all in the billions. The top 1000 coins were created from air and nobody complained (most are scams).

Why creating Tethers from thin air is now a cause of concern? That's a coin just like every coin out there, like Tron, Verge, EOS, they're created from nothing by a program, they have the value the market decides it has and the creator has all the right to print all the coins they want just like everybody else.

And the market has decided USDT has more value than all other coins combined as it is number two in volume just behind BTC.

People use USDT as a safe harbor when markets collapse, it has its use, a very valuable use. Of course they will print trillions if they could, everybody would print trillions of their shitty coins and cash out tanking the market if they could, that's the nature of cryptocurrencies.

I fail to see why people complain about Tether (highly valuable) and not about the rest of the scam coins that are draining the market from stupid money.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#17

Post by jasonmorton » Thu, May 24, 2018, 11:20 AM UTC

Here https://drive.google.com/file/d/0Bzu6iGPza2s9amFURTFzenRWVGg... are some slides from a talk I gave last year at Strata about what spoofing and layering is, and how a trading firm or exchange might detect or prevent them.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#18

Post by [deleted] » Thu, May 24, 2018, 11:21 AM UTC

bhouston wrote: post #11

sine wrote: post #6

Earlier quoted context omitted.

decentralized commodity This is a misconception about cryptocurrencies such as Bitcoin or Ethereum. Both are highly centeralized, in the hands of a tiny oligarchical ownership along with a small group of mining warehouses. https://news.earn.com/quantifying-decentralization-e39db233c...

And they are likely going to get more centralized over time. The smaller currencies, outside of the top 10, are now all likely vulnerable to 51% attacks. I wouldn't be surprised if that grows to include any outside of the top 5 soon. It looks like this is how smaller currencies die, they are vulnerable at any time to 51% attacks thus no one wants to use them. At least in the traditional banking system if you had a lo…

[deleted]

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#19

Post by zdkl » Thu, May 24, 2018, 11:21 AM UTC

bhouston wrote: post #11

sine wrote: post #6

Earlier quoted context omitted.

decentralized commodity This is a misconception about cryptocurrencies such as Bitcoin or Ethereum. Both are highly centeralized, in the hands of a tiny oligarchical ownership along with a small group of mining warehouses. https://news.earn.com/quantifying-decentralization-e39db233c...

And they are likely going to get more centralized over time. The smaller currencies, outside of the top 10, are now all likely vulnerable to 51% attacks. I wouldn't be surprised if that grows to include any outside of the top 5 soon. It looks like this is how smaller currencies die, they are vulnerable at any time to 51% attacks thus no one wants to use them. At least in the traditional banking system if you had a lo…

The case of coins that optimise for consumer/general purpose hardware (by employing PoW algorithms suited for CPUs, or explicitely switching algorithms periodically) is interesting in this context.

Traditional cloud platform providers are also in a position to impact mining on those. I doubt that any coin could cope with those warehouses of potential mining power.

I'm looking closely at monero on this subject. Despite or because of their hardcore emphasis on privacy, that project has made interesting decisions regarding how to deal with potentially hostile miners.

Disclaimer: Yep, you guessed it, I hold coins, and monero is among them. I'm not saying buy XMR, but definitely take a look at their "politics".

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#20

Post by thisisit » Thu, May 24, 2018, 11:22 AM UTC

This going to be interesting. They will ask all the US based exchanges - Coinbase, Circle etc for their trade and order data for analysis. Coinbase has already fought and lost a case when it came to sharing the data for tax purposes. And one of the touted features of cryptocurrency has always been anonymity.