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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

#261

Post by snowwrestler »

sciyoshi wrote: post #149
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…

> They're literally making up money as they see fit. I'm playing devil's advocate here (I agree that the whole Tether situation is concerning), but also genuinely curious - is this any different than what banks have been doing for forever with fractional reserve? Even if Bitfinex is overcommitted and there's more USDT in circulation than they have in USD reserves, is there a problem unless a lot of people try to conv…

Fractional reserve banking is about the availability of funds, not their existence.

In a bank with fractional reserves, the assets and the liabilities all add up. If I deposit $100, and the bank lends $80 of that out to someone else, the bank has liability to me of $100 and assets of $20 cash + $80 loan (a loan is an asset on a bank balance sheet). I can't immediately withdraw all $100, but it all exists.

The bitfinex thing is more akin to the Federal Reserve, which actually can just make up money out of thin air. The big difference between bitfinex and the Fed is that the Fed is a federal agency, created through a legislative process and operated with clear public policy goals. Whereas bitfinex is just some random people somewhere claiming they have $billions in the bank.

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

#262

Post by mdpopescu »

monktastic1 wrote: post #253
conanbatt wrote: post #232

Earlier quoted context omitted.

I disagree vehemently to this proposition. I have never agreed or voted to get those regulations in place. They are not voluntary. But anyone falling for tether today is making an individual decision.

> I disagree vehemently to this proposition. I haven't made a proposition. I just pointed out that historically, when societies have made decisions about this sort of thing, they've generally decided that such individuals require protection via regulations. In general, most of the laws we are expected to follow are not ones we personally agreed to or voted on. I'm not sure that makes them less "organic." If you're ar…

Actually, historically all governments started through conquest (military victory), not social contracts. Societies didn't make any decision - governments did, and societies accepted the status quo.

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

#263

Post by joncrane »

Cthulhu_ wrote: post #37
epmaybe wrote: post #30

Earlier quoted context omitted.

I know what you said is in jest, but did you read what you quoted? The individual in question worked at goldman sachs as an analyst/trader for maybe 3 years (AngelList), and hasn't worked there in at least two years.

Yeah, it's a bit of a trope like "worked at NASA" (atm over 17.000 people work at NASA). "Worked at" means nothing; show us some achievements.

To be fair, a lot of those companies have very rigorous hiring standards. Also many are pretty quick to let people go.

So "hired by GS then left on my terms" is actually a pretty good credential.

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

#264

Post by JoeAltmaier »

dragonwriter wrote: post #260
Jach wrote: post #257

Earlier quoted context omitted.

As Carl Sagan put it, "The fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown."

Columbus really belongs with Bozo and not Fulton and Wright. His plan was ridiculed because it was ridiculous for reasons which were had been clear since before the rise , much less fall, of Rome, could not reasonably have worked, and did not work. He happened to stumble into something unrelated in the course of his crazy plan (which is the only reason anyone on the expedition survived), which lots of people who were…

Ok but it's possible he had a Chinese map from an earlier expedition, and while he misinterpreted where he was going, he was pretty sure that he was going somewhere.

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

#265

Post by mdpopescu »

Aunche wrote: post #197
conanbatt wrote: post #131

Earlier quoted context omitted.

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?

Either (most) people are stupid and they need to be protected for their own good - in which case we have the problem that the same people are nevertheless somehow capable to democratically choose their representatives. Or (most) people are fine taking more risks than you would like them to, and - because you believe you know better - you want to prevent them from doing so.

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

#266

Post by qubex »

naravara wrote: post #220
fdchn2018 wrote: post #199

Earlier quoted context omitted.

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…

>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. There was no "old barter system" the way modern people think of it. The idea that pre-commercial economies operated on a "barter system" in the sense that people are directly exchan…

If anybody is interested by (or feels like contesting) this view of how earlier economies functioned without money and/or how money came to be, I highly recommend Debt by David Graeber (a self-declared radical activist, instigator of the Occupy Wall Street movement, and brilliant anthropologist — I had the good fortune of attending some of his letters, and he is enthralling).

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

#267

Post by conanbatt »

Slansitartop wrote: post #255
conanbatt wrote: post #232

Earlier quoted context omitted.

I disagree vehemently to this proposition. I have never agreed or voted to get those regulations in place. They are not voluntary. But anyone falling for tether today is making an individual decision.

>> You could say that humanity has repeatedly and organically come to a solution broadly known as government and regulation. > I disagree vehemently to this proposition. I have never agreed or voted to get those regulations in place. They are not voluntary. But anyone falling for tether today is making an individual decision. Nevertheless, you benefit from them. It's not like you have to sign up to the regulation tha…

An important distinction has to be made between law abiding and regulation.

Law against murder is: if you do it, you will be jailed.

Regulation against murder is: you cant have anything that harms another human being, and we need to check you up regularly to make sure you haven't killed anyone.

Regulation is not abiding for the law. Thats what lawsuits are about. Regulation is about preventing law to be broken with preventive measures.

> Don't you think it would be foolish to expect every generation to have to rediscover, through trial and error, the benefits of society and government?

I wish we had that, but we can't, we have to live entire generations with laws designed by previous ones. Isn't the drug war on the US a prime example of that? If you put it up for a vote, the majority would vote to make it legal or not prosecute it.

But this is not a topic about the mere existence of government, its about an ecosystem that was born and fueled about how the government and the banks crap on people, and trying to make it better with banks and government is going the other way.

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

#268

Post by joncrane »

aml183 wrote: post #252
cwkoss wrote: post #223

Earlier quoted context omitted.

I don't know. Most finance people now have access to bitcoin exposure through trusted institutions via futures. Many of these people felt a lot of FOMO at missing the boat on Bitcoin's last big jump. I think if it drops to $5k, there will be some big players taking a long position in hopes of another order of magnitude movement. Certainly could get much uglier, but I think Tethers vanishing would not be fatal. Also,…

Most, if not all, financial institutions aren't exposed to cryptocurrencies directly either through futures or the underlying currencies. Institutions are defined as endowments, sovereign wealth funds, pensions and asset management firms such as Goldman Sachs. Capital inflow into the cryptocurrency space in aggregate is still less than $10B. If the Norwegian sovereign wealth fund bought Bitcoin, their minimum purchas…

How would that be a net in flow? If Norway buys BTC, someone has to sell it to them. The number of BTC doesn't change.

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

#269

Post by Banderly »

api wrote: post #49
scardine wrote: post #19

Earlier quoted context omitted.

Does Ethereum has any immunity from pump-and-dump and other market manipulation schemes compared to Bitcoin or your comment has nothing to do with the subject?

Of course not. One takeaway I have from both the 2008 crash and the cryptocurrency mania is that it's actually very hard to create a financial system that is not mostly fraud and gambling. There's a couple reasons for this. One is that people are greedy and I've even seen really honest people get weird around money. The second is that humans are extremely prone to falling for the alluring cognitive biases and fallaci…

Agree, this is a fantastic comment.

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

#270

Post by stouset »

sixQuarks wrote: post #182
jzymbaluk wrote: post #179

Earlier quoted context omitted.

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

Have you ever heard of the phrase "kicking the can down the road"?

You can play this argument ad infinitum without actually adding anything of value to this conversation.

Central banking is not perfect, but it has a better track record of stability and growth than any other system that’s been tried at a large scale. Try and remember that the alternatives aren’t optimal economic systems that are immune to bubbles, recessions, depressions, hyperinflation, corruption and manipulation.

If anything the Bitcoin experiment is reinforcing why we have existing regulations in place.

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