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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

#261
post #243

Earlier quoted context omitted.

The social benefit to storing value is de-risking against the future (2). I keep some money in my bank account so that if I need to buy food for a month with no source of income I can(1). If the money in my bank account buys a third as much food tomorrow because it lacks stable value as a store, that's bad for society, because if I'm going to starve to death, I might as well use the remaining energy I have to burn so…

Yes, storing value is useful, but not storing value doesn't make a currency useless. You can always store value in other ways, by purchasing assets - such as food, or another currency. It's worth noting that people tend to like to do this anyway, even when the currency is already pretty stable - because a house you can rap your knuckles against feels like a more secure store of value than numbers in a bank.

I wouldn't say "useless" (it's clearly usable as an agreement between two parties that some amount of value was exchanged).

But it's less useful than a currency where the observed exchange of value between two parties implies that most other parties agree value was exchanged. If you give me 2 BTC today but tomorrow the value of BTC has fallen by 90%, it's almost as if we never exchanged value in the first place. It's certainly not as helpful to me as if you give me $18,500 dollars today and I can spend them tomorrow.

Failure of a currency to act as a store of value damages its utility as a means of exchange, because the amount of value exchanged is imprecise over time.

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

#262

Crazy use for Bitcoin: mine Bitcoin in satellites with giant solar arrays, at a capacity that makes it cheaper than terrestrial mining. Since terrestrial mining no longer economical, it ceases altogether resulting in reduction of energy consumption. I.e. space Bitcoin mining captures solar energy in space and sends it to earth in the form of coin, which is much safer than beaming the energy itself. I'm sure there are…

Instead of launching solar panels into space and getting free energy there, they could be placed on Earth to save the launch costs and get free energy here . Let's ignore that because the following is far more interesting ;) To give you an idea of the scale of the problem that such an enterprise would be dealing with: the ISS has a cooling capacity of less than 100kW and current mining infrastructure has a power cons…

> Instead of launching solar panels into space and getting free energy there, they could be placed on Earth to save the launch costs and get free energy here.

I suppose Solar panels in space can be arranged such that that it's always solar noon, and it's never cloudy. So more efficient at collecting than on the ground, in theory.

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

#264
post #226
post #191

Earlier quoted context omitted.

> because in most markets moving the market you will lose money to slippage. The market price will retract after you bump it. That's not slippage. Slippage is when you get filled at a higher (or lower) price than you were expecting. Prices moving up when an asset is bought is normal on traditional exchanges as well.

I’ll second that, as there seems to be a strange connection between slippage and fundamentals in GP comment. 7777fps, can you please expand on that a bit more?

I think 7777fps just meant that if you buy up an asset with a balance of supply-demand you bid up the price, but then when you try to sell it, you drive the price back down.

But with BTC being a speculative asset, since there was already an excess of demand (price increase), and the excitement of the rising prices drives more demand, by buying up coins you drive up the price even further faster. It's a classic pump-and-dump or market-cornering model. The bubble will burst eventually, unless fundamentals grow enough to cover the speculation.

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

#265
post #165
post #84

Earlier quoted context omitted.

That's an interesting way to think about it. When you say "no one is trading the fundamentals", is that because of some sort of market flaw? E.g., hard to trade that way? Or because there really are no fundamentals to Bitcoin? By the latter I mean that most tradeable instruments are based in some sort of value external to the trading. Stocks have income streams and assets. Commodities have use value. Currencies have…

Even if we assumed that bitcoin had fundamentals, they wouldn't matter in the end of the day. There is too much fraud and price manipulation in the system, which prevents any chance of market self-regulation.

Don't those go hand in hand? It seems to me that fraud and price manipulation are much harder in, say, commodities markets or large-cap stock markets, because people are willing to make big bets on a return to fundamentals. E.g., look at the willingness of people to short stocks that seem overhyped.

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

#266
post #201

Earlier quoted context omitted.

And it seems unlikely that Ethereum's 100X rise in 2017 had nothing to do with the ICO boom.

I also find it hard to believe that the whole cryptoboom of 2017 can be narrowed down to one dimensional Tether-Bitcoin analysis.

Most of the crypto market follows Bitcoin's price, at least roughly. If Bitcoin gets up 5%, Ether and other coins might rise 6,7,10%. If you look at the 30, 60 day, etc charts of BTC vs the others, it's quite clear. So the market following the Bitcoin part is plausible.

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

#267

Crazy use for Bitcoin: mine Bitcoin in satellites with giant solar arrays, at a capacity that makes it cheaper than terrestrial mining. Since terrestrial mining no longer economical, it ceases altogether resulting in reduction of energy consumption. I.e. space Bitcoin mining captures solar energy in space and sends it to earth in the form of coin, which is much safer than beaming the energy itself. I'm sure there are…

[deleted]

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

#268
post #63
post #51

Cryptocurrency is just penny stocks (before regulation). Same pump-and-dump manipulation occurs. Why is this surprising?

What about the flash crash of stock market by a single individual? https://en.m.wikipedia.org/wiki/2010_Flash_Crash

Your source says that the cause of the flash crash is unknown and not shown to be caused by a single individual.

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

#269

Earlier quoted context omitted.

I'm not saying that money isn't useful as a storage of value. What I am saying is that there is very little social benefit from that usage. To decide whether a currency is successful, one should look exclusively at its use as a means of exchange, ignoring any use as a storage of value or speculation target.

The social benefit to storing value is de-risking against the future (2). I keep some money in my bank account so that if I need to buy food for a month with no source of income I can(1). If the money in my bank account buys a third as much food tomorrow because it lacks stable value as a store, that's bad for society, because if I'm going to starve to death, I might as well use the remaining energy I have to burn so…

> I keep some money in my bank account so that if I need to buy food for a month with no source of income I can.

Well, that thing in your bank account is not money, but a complex derivative of it, with different risk and depreciation profiles.

Anyway, some money that you can easily receive from the other side of the world, immediate convert into local currency, and move away without seeing any of it again would be very useful, provide a lot of value, and wouldn't require any value stability if it was created at the moment your peer started the transaction and destroyed as you finished it. Ditto for something you could send very small amounts over the net.

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

#270

Earlier quoted context omitted.

Bitcoin's "market cap" is completely imaginary.

There are companies offering completely useless software 'solutions' that don't even do their useless task well and many of them have stock prices that have grown 100% + since the bailouts, even if they haven't updated their technology since before then. How is the value of BTC more fake than that?

The difference is that if management of the average publicly traded stock shopped it around, they could probably find a buyer for 50% or more of current market cap. Maybe not for the biggest companies like Amazon and Apple. If a substantial fraction of BTC owners tried to exit, they'd have more trouble getting close to nominal value.
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