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Worries Grow That the Price of Bitcoin Is Being Propped Up

nytimes.com

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Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#191

Post by api »

acct1771 wrote: post #164
monktastic1 wrote: post #151

Earlier quoted context omitted.

You could say that humanity has repeatedly and organically come to a solution broadly known as government and regulation.

Worked great in 2008.

It did and it didn't. On one hand, we stopped a panic that would have led to a true depression. On the other hand we did so by actually increasing the power and wealth of many of the people and organizations responsible for creating the conditions that led to the panic.

Do that long enough and you get a civilization run by overconfident incompetents and shielded fraudsters. That build up of delusional bozos at the top is one of the things that eventually leads to collapse.

Bitcoin was in some ways a protest in code form. Why can't we create a software defined monetary system that is transparent and where corrupt and incompetent human orgs can be replaced by algorithms?

I like that idea, but Bitcoin itself was really just a proof of concept. We're not there yet. In the meantime we've gotten a silly bubble that's starting to look like a parody of the project's original goals.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#192

Post by tooltalk »

jzymbaluk wrote: post #179
acct1771 wrote: post #164

Earlier quoted context omitted.

Worked great in 2008.

It actually did. The market was on it's way to crashing harder than the great depression, but it didn't, probably thanks in some part to government being able to intervene and control monetary policy

You mean the gov't regulation prevented the GD that it created?

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#193

Post by vim_wannabe »

maxerickson wrote: post #21
1123581321 wrote: post #6

What’s the difference between legitimate technical trading and propping up a market? Is it just volume?

Fraud. Market participants are relying on the exchange to give them correct information about trades and to only issue orders that are backed by real assets. If the exchange puts in orders that aren't backed by assets, they eventually will not be able to close out all accounts (because there aren't real assets to do that with).

What if an internet service provider sells Internet subscriptions that are not backed by real bandwidth. If enough customers want to stream video the ISP will not be able to provide enough bandwidth for them.

Would you call that fraud?

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#194

Post by duskwuff »

cptskippy wrote: post #35
granaldo wrote: post #27

Is Tether highly exposed only to bitcoin and not ethereum? Bitcoin price seems to be taking a heavier hit than Ether https://www.coingecko.com/en

I was noticing that the other day. I wonder if that's because Ethereum has contract functionality and thus as some intrinsic value to it.

On the other hand, the main application for those contracts is ICOs -- which are themselves primarily a speculative instrument. It's turtles all the way down.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#195

Post by cgyulay »

Genuine question: whether or not Tether is fraudulent, how much can a currency with a market cap of ~$2B affect the greater ecosystem, or even just Bitcoin with a purported market cap of ~$150B? Obviously a scandal of this magnitude in a major cryptocurrency is bad for the whole environment for a host of reasons...but if Tether is really just a ~$2B fabricated cash injection, how much could it really prop up BTC?

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#196

Post by mattbeckman »

My hope is that there isn't a complete crash before some of the most unique and important ideas being built on blockchain technology have a chance to come to light.

It might need a 2014 reset before it happens, but there are plenty of ideas not yet able to be executed because the crypto community at large are waiting for the technology to catch up.

I have a business plan in the works on a nonprofit that would benefit the world as a whole. I don't want investors or an ICO or whatever. I just want crypto to still be exciting by the time I build it, otherwise it'll be that much harder to onboard anyone who would benefit from such a system.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#197

Post by Aunche »

conanbatt wrote: post #131
simias wrote: post #84

The somewhat ironic part is that one of the core concepts of Bitcoin is that you can't counterfeit it. You can mathematically prove how many coins you own, if somebody sends you 3 BTC then once it's been validated on the blockchain you know that the money is now yours, they can't have lied, it can't bounce like a cheque Except this Bitfinex thing shows that while an amount of bitcoin can't be manipulated or counterfe…

The most interesting thought to me right now is how the situation will develop if or bitfinex/tether crashes the market hard. I am not a fan of the SEC getting involved. Taking crypto as an experiment, I think it is better for the market to take a hit and then find organic solutions. If the SEC gets involved and busts bitfinex/tether, the community loses the opportunity to become 'unbailable'. Yes , people will lose…

Your overestimating the financial intelligence of the average person. Think about the billions people waste on actual pyramid schemes. These are the same types of people who will be screwed over the most by a cryptocurrency crash. Is a slightly more efficient cryptocurrency market really worth the hardship of thousands of people?

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#198

Post by maxerickson »

vim_wannabe wrote: post #193
maxerickson wrote: post #21

Earlier quoted context omitted.

Fraud. Market participants are relying on the exchange to give them correct information about trades and to only issue orders that are backed by real assets. If the exchange puts in orders that aren't backed by assets, they eventually will not be able to close out all accounts (because there aren't real assets to do that with).

What if an internet service provider sells Internet subscriptions that are not backed by real bandwidth. If enough customers want to stream video the ISP will not be able to provide enough bandwidth for them. Would you call that fraud?

I certainly find the leeway advertisers have infuriating.

On the other hand, I would sign up for an ISP knowing full well that their advertised bandwidth is "best effort". I would not sign up with an exchange knowing that their intention to give my money back was "best effort".

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#199

Post by fdchn2018 »

nickbauman wrote: post #186
simias wrote: post #84

The somewhat ironic part is that one of the core concepts of Bitcoin is that you can't counterfeit it. You can mathematically prove how many coins you own, if somebody sends you 3 BTC then once it's been validated on the blockchain you know that the money is now yours, they can't have lied, it can't bounce like a cheque Except this Bitfinex thing shows that while an amount of bitcoin can't be manipulated or counterfe…

The problems we're seeing with cryptocurrencies are utterly unsurprising if you know what money really is and how it actually works. I think people who are excited about cryptocurrencies assume that money is merely a tool to facilitate transactions between parties of people. The fundamental model of this is two people bartering goods, lol, in some sort of imagined "forest primeval" before money was invented. That mon…

Finally created an account to reply to this. There is a great thread on Reddit called - Where has all the world's money gone, explain it like I'm 5. It starts from a convenient barter system. As I was reflecting on the various ICOs I realised that the technology and the blockchain makes the old barter system very efficient. So I do believe that in fact it is a substitute for that behaviour. In fact Im convinced that bitcoin or something like it will become the new gold. If you also think about why we needed to elect representatives, it was so that they would represent the needs of the people. Once I can vote/discuss a topic on the blockchain, I dont need representatives anymore. The blockchain and crypto currencies are going to change the way democracies operate. We're not going to need our elected leaders. This is why you see them spreading so much FUD. Cause they know they're going to be irrelevant in the system and access to all that money is going to go. Tomorrow if I want to build a bridge - going to setup a smart contract - with escrow payments - validated by the people. You hit your milestone and the money gets released. And why not it be digital money. This new wave is being built ground up and govts cannot stop it - even if they want.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#200

Post by seanhunter »

conanbatt wrote: post #160
kelvin0 wrote: post #130

My question is: what is the value of a Bitcoin? It looks to me like a great way to transfer currency and facilitate exchange of goods, but not much more than that. So 'investing' in this digital currency itself does not make much sense to me, because intrinsically it has no 'real' value. I might be misinformed about the subject, in which case I would gladly like to be shown my error. For example, why don't I invest i…

I like to compare Bitcoin to Land. When people migrated over to america, land was basically worthless: there was too much of it and too few people. As the more fertile and better located land was taken, prices started to rise. As land supply is inelastic, the price can only tend to go up as long as the demographics expand. Bitcoin has a limited amount and even more has a diminishing supply (as coins get lost, stolen,…

The problem with this argument is that while supply of bitcoin itself is inelastic, anyone who wants to do so can create an altcoin, meaning the supply of altcoins in general is infinite, and since they are functionally extremely similar to each other if people can't buy bitcoin at an attractive price, they can simply buy something else that works the same way.
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