The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market • Hacker News Board

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#141

Post by carc » Fri, Dec 08, 2017, 3:53 PM UTC

redblacktree wrote: post #117

VMG wrote: post #78

Earlier quoted context omitted.

Anyone who has a miner can generate bitcoin. Only the FED can create new USD.

This isn't really true. New USD is created anytime someone gets a loan. The Fed impacts that money creation only indirectly by setting rates (not considering QE -- even with QE, the point remains: new money is created when a loan is made by a fractional-reserve institution) Edit to further elucidate: It isn't exactly the loan that creates money, but what happens with the money after the loan. It will almost certainly…

This is simply false.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#142

Post by aaavl2821 » Fri, Dec 08, 2017, 3:54 PM UTC

deweller wrote: post #106

aaavl2821 wrote: post #59

Market manipulation is a big risk here. Basically "wolf of wall st" style shenanigans, or the stuff that salomon brothers did in the mortgage bond market in the 1980s. Essentially a few big investors who've cornered the market, acting in concert, can move the market essentially according to their own desire. I read yesterday that the order book for btc was $33 million (don't know what the daily volume is; could anyon…

I don't understand the idea that a whale could move the market and make money off it. To move the market, you need to spend money. The only way it works is if you create some kind of momentum and the market continues to go up. But rational markets will sell into the artificial momentum and the price will be be close to where you started. The net result is that you lost money. I believe there is momentum in markets (t…

You are right, it doesn't always work, but it can work, and work really well. The way you make money is by creating volume and momentum. You buy in a low volume market, where it's cheaper to move the market, then if volume takes off and price momentum builds, you can sell much more volume without moving the market. We aren't talking about people liquidating their entire stakes, but you can make a few million here and there easy.

There is strong incentive to collude: collusion unlocks the potentially powerful profit engine of market manipulation. You make more money working together than you could on your own. If people try to screw each other too much the whole thing falls apart, as market movements are no longer predictable to the colluders, and their advantage is gone. So yeah collusion can break down in cases but as a rule people understand they make more money together

If you don't buy that theory, id recommend reading about Solomon brothers or even watching the wolf of wall st. Martin shkreli did this stuff too. I think it was Jim cramers tactic for a while (talk your book on tv, get retail volume in small cap stocks and sell into that) JP morgan and other early wall st financiers did this sort of stuff. It happens in the real world even now; I've heard from friends at big banks that they know people who will sometimes do stuff like this

market manipulation is how people make real money in unregulated markets. cornering the market is and always has been the holy grail for market manipulation and profiting in unregulated markets. It's why regulation exists. Its a theory in the same way that evolution is a theory

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#143

Post by simias » Fri, Dec 08, 2017, 3:55 PM UTC

theorique wrote: post #50

simias wrote: post #20

Earlier quoted context omitted.

It seems pretty obvious to me as well. Given huge speculation surrounding them at the moment I'm surprised we don't hear more people warning about these things. I don't think I want to live in a world where BTC replaces the USD/EUR/... Untraceable money means that corruption and tax evasion would be easier than ever. Democratic governments would be worse off in dealing with that, because unlike totaliatrian regimes t…

BTC is not "untraceable money". Everybody has (or can have) a copy of the blockchain, which is the cryptographically signed and verified ledger. If anything, it is more traceable and public than physical cash. The difference is that you don't know who 63dca1f6eddfb659d71ec5244ab950a4 or e3557c1e589e2a687f6afe1a253196ca are. But when you do associate a person with a given key, that association probably persists over t…

I replied to to this point in the parent comment but to expand on that:

>If anything, it is more traceable and public than physical cash.

That's true, but cash has its own set of limitations. Using cash to transfer large sums of money in not very convenient and good luck explaining to the border police why you have $20 million in cash with you. Spending and laundering large amounts of cash without raising suspicions is also pretty difficult.

>But when you do associate a person with a given key,

s/when/if/

>that association probably persists over time.

How so when you can generate a virtually infinite number of new addresses whenever you like and the current practice is to avoid reusing the same address if at all possible?

Sure if I buy some drugs in BTC and then I see that some money transits directly from the destination address to the known address of some politician then I know that something fishy is going on.

But if the money is then split and merged to a bunch of different addresses, then moved to an exchange in china where it's converted to LiteCoins, then put through a coin mixer, then moved to an exchange in Brazil where it's converted back to Bitcoins then I wish good luck to the IRS employees.

And you can do all of that from the comfort of your home in an afternoon, through TOR, without having to reveal your identity to any 3rd party.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#144

Post by mmgutz » Fri, Dec 08, 2017, 3:56 PM UTC

beager wrote: post #112

mmgutz wrote: post #96

I read an interesting analogy yesterday in a poker chat of all places. The guy basically said, let's put bitcoin to buy a coffee litmus test. If I were to buy a cup of coffee in the current frenzy, I would be at the cashier waiting a day for the transaction to go through and when it does go through the fee for transaction would be greater than cost of the coffee. If that is true, how is bitcoin better? Would that tra…

The narrative has shifted as the dynamics and value have shifted. It’s more like gold now. You wouldn’t pay for coffee with gold.

Right, I wouldn't. Maybe it's better termed cryptomineral instead of cryptocurrency.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#145

Post by prophesi » Fri, Dec 08, 2017, 3:56 PM UTC

IkmoIkmo wrote: post #128

There's absolutely no source to the claim that 40% is owned by 1000 people. Only at the very end of the article we see a lateral claim, that 17% of bitcoin is held in just 100 addresses. It's not unlikely the same reasoning (i.e. 40% of coins on top 1000 addresses) is used for the larger claim. But that says very little. A bitcoin address after all can be shared by many users, in the same way a bank vault can contain…

> There's absolutely no source to the claim that 40% is owned by 1000 people. Only at the very end of the article we see a lateral claim, that 17% of bitcoin is held in just 100 addresses.

Yeah, I really dislike that the title sounds like it's a fact.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#146

Post by avar » Fri, Dec 08, 2017, 3:56 PM UTC

specialp wrote: post #114

avar wrote: post #85

Earlier quoted context omitted.

> The top 1000 holders of gold > don't have anywhere near 40% > of the market. You're right, they have a lot more than that. Total world gold reserves are around 30K tons. The US alone has 8K tons, Germany 3K, IMF 3K, Italy 2.5K etc. So just the to 2 holders of Gold have almost 40% of the market, and the top 10 have 80%. 1. https://en.wikipedia.org/wiki/Gold_reserve

I guess you didn't read the article you posted as evidence. In that article it says all the gold ever mined is 187,200 tons. Percentage of reserves != percentage of gold market. That would have the USA at ~5% and that is a country of 300+ million people. This is a lot different than 1000 individuals.

In the context of this discussion, which is gold holders hypothetically pumping & dumping the market it's pretty much only the big reserve holders that matter.

How do you think someone who's gold holdings are 1 kg in a warehouse embedded in motherboards is going to extract that to dump it on the market? Most gold by weight is effectively illiquid, while every Bitcoin is equally liquid.

As the source the article uses[1] discusses the breakdown of those 187,200 tons is:

* Jewellery: 89,200 tonnes, 47.6%

* Private investment: 40,000 tonnes, 21.4%

* Official sector: 31,500 tonnes, 16.8%

* Other: 26,500 tonnes, 14.2%

* Below ground stocks: 57,000 tonnes

So around 50% of the number you're quoting is gold still in the ground. To repeat your snarky remark: Did you read the article?

I guess counting the official sector and private investment the top 10 official holders "only" have around 30% of the liquid market, which is way more distorted than Bitcoin, and very comparable in this context of a few owners of large liquid assets being able to distort the market.

1. https://www.gold.org/about-gold/gold-supply/gold-mining/how-...

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#147

Post by varjag » Fri, Dec 08, 2017, 3:56 PM UTC

burger_moon wrote: post #95

tCfD wrote: post #76

Earlier quoted context omitted.

Committed ideological Bitcoin supporters commonly believe in a network effect race condition spiral they call 'hyperbitcoinization' which models a world where a sort of event horizon in market adoption had been crossed, and everyone on Earth is forced to use bitcoin either directly or indirectly. In this techno-feudalist scenario, being one of the Bitcoin 1% or even 10% means the world is at your feet, and if you've…

Reminds me of this satire post from reddit (4yrs old). https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_time...

It correctly predicted BTC at $10k in 2017. So much for satire!

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#148

Post by simias » Fri, Dec 08, 2017, 3:57 PM UTC

knocte wrote: post #49

simias wrote: post #20

Earlier quoted context omitted.

It seems pretty obvious to me as well. Given huge speculation surrounding them at the moment I'm surprised we don't hear more people warning about these things. I don't think I want to live in a world where BTC replaces the USD/EUR/... Untraceable money means that corruption and tax evasion would be easier than ever. Democratic governments would be worse off in dealing with that, because unlike totaliatrian regimes t…

> Untraceable money Bitcoin is not untraceable money, it can be even more traceable than normal currency. It could be stablished as a law that public money when being spent in the blockchain needs to be auditable by the people (identities of sender and recipient known), and this way you would end up with even less corruption than the current system. > Deflation means that the rich will get richer Wrong. Rich people d…

>> Deflation means that the rich will get richer

>Wrong. Rich people don't have money, they have holdings. Most of the holdings that rich people nowadays have are not money.

Isn't one reason for not hoarding cash (and instead investing it in various holdings, stock market, etc...) is that money loses value? If I was a millionaire in dollars I definitely wouldn't keep that on my bank account, slowly having it lose its value. If I was a millionaire in BTC I'd have a hardware wallet with my secret keys in a safe and that's about it.

>Deflation just benefits the savers, as opposed to the spenders. Some savers might be rich but not all.

Sure, but conversely I can tell you that the people who don't save money are overwhelmingly poor. For a big chunk of humanity saving money is a luxury.

>Incentivising saving instead of consumption may make the planet a bit greener.

Coin mining will take care of filling that gap, don't worry.

If rich people reduce their investments because of deflation how do you redistribute wealth?

>Plus, if one day we stop measuring cryptocurrency value with a fiat-unit of measure, maybe we find out that the cryptocurrency value is actually the stable value.

Well yeah, 1BTC == 1BTC, that's stable I guess. If BTC replaces fiat it'll stabilize eventually but it will still be deflationary. My arguments were about that, not the current instability.

>The asset that is not stable is the fiat currency because it's being depreciated all the time. The day all stores in the planet denominate prices in cryptocurrency, the bad consequences of deflation (hoarding for the sake of profit) will be almost imperceptible.

That's kind of the hand waving I was talking about in my previous comment. I don't see how you can justify you jumping to that conclusion.

How can you assume that switching from an inflationary to a deflationary economy "will be almost imperceptible"?

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#149

Post by frgtpsswrdlame » Fri, Dec 08, 2017, 3:57 PM UTC

clarkmoody wrote: post #135

sevensor wrote: post #28

It's interesting to see how this is playing out. Libertarians have long argued that government-issued fiat currency is a tool of state oppression. Now we have a real-world experiment demonstrating on a grand scale what happens when you create a currency by consensual fiat. I'd be interested to hear what libertarians think about this: Is Bitcoin truly the kind of currency libertarians have been advocating? Have I misc…

Government-issued currencies usually come with legal tender laws and citizens are required to pay taxes using the government money. Since taxes are not voluntary, this creates built-in demand for the fiat money. The creators of alternative competitor-money are punished as well. The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first. A si…

>Since taxes are not voluntary

>The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first.

Do you believe obeying property law is voluntary? I find it to be coercive.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#150

Post by clarkmoody » Fri, Dec 08, 2017, 3:59 PM UTC

Nursie wrote: post #140

clarkmoody wrote: post #135

Earlier quoted context omitted.

Government-issued currencies usually come with legal tender laws and citizens are required to pay taxes using the government money. Since taxes are not voluntary, this creates built-in demand for the fiat money. The creators of alternative competitor-money are punished as well. The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first. A si…

>> Early adopters took a big risk on a fledgling technology I can't agree with that. Early adopters really didn't take a lot of risk, they ran a mining program for a while, or bought some BTC for a few cents to a few dollars.

In some countries, Bitcoin has been outlawed. Owning stuff the government doesn't like is certainly a risk.

They also endured 90% drops in value from early peaks to troughs. Bitcoin could have gone to zero at any point if the system had failed. (It still could)

Some invested time learning about new technology that could've gone nowhere.