I was surprised to read that the US regulators feel they have jurisdiction to regulate bitcoin transactions. How can this be - is it just because there are BTC futures now?
U.S. Launches Criminal Probe into Bitcoin Price Manipulation
41–50 of 228 posts
Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation
#42Earlier quoted context omitted.
I'm lost. Why is it significant that they supposedly create Tether during market crashes?
You can create Tether out of thin air and use it to move the market in a favourable direction.
But assuming Tether was legitimate, wouldn't they also need to create new Tether units during extreme market crashes because that's when the highest demand for Tether would be, so they'd run out of the existing Tether?
They wouldn't need to create new Tether during bull runs, because nobody cares about putting their money into Tether then.
Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation
#43Earlier quoted context omitted.
To be fair almost every financial advisor ever would have told you to stay away from bitcoin because it was an unknown quantity and very high risk. In hindsight everyone of them was wrong if you bought in at any point between 2009 and mid - 2017 and sold in the last 6 - 8 months. Also they have been calling bitcoins death since about 2009 when it was created so I would not put too much faith in those predictions. If…
They would've been right if it was the Zimbabwaean dollar if you bought it in the 80's, or one of Bernie Madoff's financial products. They could still be right, given time. They've been right for Bitcoin Gold, for example. They were right when MtGox crashed.
My point was more that as a regulated individual a financial advisor should never have advised an investment in bitcoin. Even if the market proved them wrong (as it has up to now) it doesn't make them wrong for not advising you to invest in it.
Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation
#44Earlier quoted context omitted.
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. Despit…
I think it's only postponing the inevitable. If any cryptocoin manages to become "the new dollar" the incentives to micro-optimize the mining will be tremendous. Even assuming that they manage to create an algo (or change it often enough) to make custom ASIC pointless it just means that it's CPU vendors who have the edge. Intel, AMD and friends could sell their first batches of new and improved CPUs for a primer during the first months. And it's even less risky for them than for cryptocurrency ASIC vendors because CPUs don't immediately become useless if they can't be used to mine cryptocurrency. It's just a bonus.
On top of that even if a cryptocurrency manages somehow to completely level the playing field when it comes to mining hardware you still have significant differences when it comes to cost of electricity. Bitmain will stop building ASICs and start building hydroelectric dams instead.
I can't see how you can imagine a future where cryptocurrencies are successful and it's still worthwhile for individuals to mine in their basements. There's always be economies of scale that'll favor the cartels.
Beyond that it might even be possible that PoW algorithms designed to run on general purpose CPUs can end up giving more power to the cartel than an ASIC optimized algorithm because in the latter case the network consensus can decide to hard fork and change the PoW algorithm, hurting immensely the ASIC vendors and their users. That gives leverage. Similarly a new cryptocurrency or minority fork can protect itself from a 51% attack by changing the PoW algorithm, making highly-optimized mining farms unable to attack the coin (Bitcoin Gold should probably have considered that).
Meanwhile if everybody uses general-purpose server farms to mine then they can easily be repurposed to attack any small coin, making sure that the coin they favor remains dominant.
Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation
#45Earlier quoted context omitted.
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…
Besides double spending attack they can also censor certain transactions not allowing them to be confirmed.
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Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation
#46Earlier quoted context omitted.
You can create Tether out of thin air and use it to move the market in a favourable direction.
But assuming Tether was legitimate, wouldn't they also need to create new Tether units during extreme market crashes because that's when the highest demand for Tether would be, so they'd run out of the existing Tether? They wouldn't need to create new Tether during bull runs, because nobody cares about putting their money into Tether then.
Day traders use Tether a lot, even during bull runs. Because the market never closes, many full-time traders put their crypto all into tether when they're done trading for the day.
Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation
#47Earlier quoted context omitted.
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 nothin…
> Why creating Tethers from thin air is now a cause of concern? If you are claiming they are backed by USD, and you are creating them out of thin air, then that's a scam. Other coins are only valued based on how the market values them. There is no fraud there; you are not claiming that you will redeem them for something else, they just represent themselves and are valued based on how useful people find that particula…
>MtGox was also a scam by the end, since they were trading on their exchange bitcoins and USD that they didn't actually have for people to cash out.
Heh. When a bitcoin exchange does it, it's a "scam". When a bank does it, it's "fractional reserve".
Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation
#48Earlier quoted context omitted.
> Why creating Tethers from thin air is now a cause of concern? If you are claiming they are backed by USD, and you are creating them out of thin air, then that's a scam. Other coins are only valued based on how the market values them. There is no fraud there; you are not claiming that you will redeem them for something else, they just represent themselves and are valued based on how useful people find that particula…
>MtGox was also a scam by the end, since they were trading on their exchange bitcoins and USD that they didn't actually have for people to cash out. Heh. When a bitcoin exchange does it, it's a "scam". When a bank does it, it's "fractional reserve".
Banks don't pretend that they're not fractional reserve.
Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation
#49I was surprised to read that the US regulators feel they have jurisdiction to regulate bitcoin transactions. How can this be - is it just because there are BTC futures now?
How could they possibly not have jurisdiction when a large percentage of bitcoin traders and several large exchanges are in the US?
Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation
#50Earlier quoted context omitted.
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 20…
This austrian-style economic thinking about market cycles lines up with bitcoin ideology but is far from being accepted in mainstream economcs. It is flimsy pseudoscience.
Appeals to authority are generally not great, but this is made even more bizarre given that our current economic systems seem to be teetering on a precipice. Think about how truly desperate we are when we need to resort to quantitative easing, zero interest rates, and even flirting with negative interest rates - just to desperately try to maintain the status quo.
This doesn't mean any alternative is better, but rather that trying to refute alternatives by appeals to authority is an even worse idea than it usually is. And it's usually already an awful idea!