To the moon: defining and detecting cryptocurrency pump-and-dumps (2018)(crimesciencejournal.biomedcentral.com)
crimesciencejournal.biomedcentral.com
To the moon: defining and detecting cryptocurrency pump-and-dumps (2018)
https://crimesciencejournal.biomedcentral.com/articles/10.1186/s40163-018-0093-5
183 comments
For a better approach, you can check this paper from 2020: https://arxiv.org/pdf/2005.06610.pdf.
Quote from the paper:
> Not only our performances are considerably better than theirs, we score 93.1% of precision and 91.4% recall against their 50.1% precision and 75.0% recall, but our detector is also faster.
Quote from the paper:
> Not only our performances are considerably better than theirs, we score 93.1% of precision and 91.4% recall against their 50.1% precision and 75.0% recall, but our detector is also faster.
Makes me wonder what they would say about the current market.
Well, if it found a pump and dump it would say "call the SEC."
Thing is, the stock market may be erratic on smaller timescales but it is a legitimate and fair place to trade, and people roughly speaking all have access to the same information when making those trades. Speculative mania is not a pump and dump. It's poor decision making, and generally speaking, that's not illegal.
On the other hand, if I start a stable coin, let's call it Anchor. Then I get a bunch of un-banked exchanges to use it in lieu of dollars because they can't get legitimate banking and don't want to bother with AML, KYC, the sanctions list or enabling international terrorism. I then start printing 750 million totally un-backed Anchors per day. I then use them to buy Bitcoin to drive the price up parabolically. I then sell all my Bitcoin for dollars to the most recent institutional clowns invested, and flee from the island I currently reside on to a different island. That's crime.
Thing is, the stock market may be erratic on smaller timescales but it is a legitimate and fair place to trade, and people roughly speaking all have access to the same information when making those trades. Speculative mania is not a pump and dump. It's poor decision making, and generally speaking, that's not illegal.
On the other hand, if I start a stable coin, let's call it Anchor. Then I get a bunch of un-banked exchanges to use it in lieu of dollars because they can't get legitimate banking and don't want to bother with AML, KYC, the sanctions list or enabling international terrorism. I then start printing 750 million totally un-backed Anchors per day. I then use them to buy Bitcoin to drive the price up parabolically. I then sell all my Bitcoin for dollars to the most recent institutional clowns invested, and flee from the island I currently reside on to a different island. That's crime.
Started reading a comment full of false equivalences and trying to put all projects and people working on crypto as criminals and yes, of course it is the guy with the inappropriate username.
I am not going to defend Tether, I truly wish they disappeared into a ball of fire and took every crook with them.
However, you could avoid the hyperbole. There are ~14 billion USDT minted, and BTC alone is going for a market cap of 500bi. The top 3 "serious" exchanges are all averaging $1bi+ in daily volume (and if you believe they are doing wash trading, Uniswap alone is in the same ballpark and wash trading there would be very costly). Tether is bad, but to think they are able to prop BTC (and crypto in general) to this bubble is delusional.
Also, it's interesting how you downplay the fact that the Fed printed 22% of the dollars in circulation in 2020 alone with the majority of it destined to bail out banks and surely to end up under control of Wall Street. Also interesting how you seem to be so bothered by the lack of KYC/AML of some exchanges and pull the "enabling terrorism" card, yet you see no problem in the Stimulus Bill having 10 million dollars for Pakistan. Perhaps if the crypto projects start saying that the funds are going to gender studies your worries will be eased?
I am not going to defend Tether, I truly wish they disappeared into a ball of fire and took every crook with them.
However, you could avoid the hyperbole. There are ~14 billion USDT minted, and BTC alone is going for a market cap of 500bi. The top 3 "serious" exchanges are all averaging $1bi+ in daily volume (and if you believe they are doing wash trading, Uniswap alone is in the same ballpark and wash trading there would be very costly). Tether is bad, but to think they are able to prop BTC (and crypto in general) to this bubble is delusional.
Also, it's interesting how you downplay the fact that the Fed printed 22% of the dollars in circulation in 2020 alone with the majority of it destined to bail out banks and surely to end up under control of Wall Street. Also interesting how you seem to be so bothered by the lack of KYC/AML of some exchanges and pull the "enabling terrorism" card, yet you see no problem in the Stimulus Bill having 10 million dollars for Pakistan. Perhaps if the crypto projects start saying that the funds are going to gender studies your worries will be eased?
I didn't realize a synonym for a muskox was an inappropriate name lol. Just wait till you hear what other animals are named! For your reference I've attached a photo of the eponymous magnificent beast in question [0].
There are ~14 billion USDT minted, and BTC alone is going for a market cap of 500bi.
$14B my dude, that information is stale as all heck. They're printing $700 million dollars worth per day right now. Their market cap just reached $24B. Remember just days ago when microstrat announced a blockbuster $400M investment? Tether prints that every 12 hours.
See the way market cap works is you only have to control the most recent trade to set the market cap. That means literally nothing. The old trope goes if you print 1 trillion of your own crypto and sell it to a buddy for $1, that's a $1T market cap.
$24B of cash, with $700M new printed every single day buying up Bitcoin is absolutely enough to control the price. That's simple economics, and you can find an explanation anywhere. I can of course provide you with an article if you find yourself unable to obtain one.
> Also, it's interesting how you downplay the fact that the Fed printed 22% of the dollars in circulation in 2020 alone with the majority of it destined to bail out banks and surely to end up under control of Wall Street.
This is utterly irrelevant. The inflation rate is trending around 2% per annum. If that goes up, they'll print less or claw back more. Supply is not the only factor in the determination of inflation, velocity of money is critical. I suggest you learn more about the money supply before trying to reinvent it.
In fact if we pretend for a moment that bitcoin is a currency, you can see that while the supply is flat-ish, the price is skyrocketing. This is massively deflationary for a currency, and this is in fact, in part, due to a reduction in velocity of money (aka HODL BRUH).
> Perhaps if the crypto projects start saying that the funds are going to gender studies your worries will be eased?
I have no idea where you're going with that and I won't be following you. This has nothing to do with social policy and everything to do with the North Korean government collecting hundreds of millions of dollars to fund their nuclear weapons program.
[0] https://www.alaskaphotographics.com/alaska-photo-articles/mu...
There are ~14 billion USDT minted, and BTC alone is going for a market cap of 500bi.
$14B my dude, that information is stale as all heck. They're printing $700 million dollars worth per day right now. Their market cap just reached $24B. Remember just days ago when microstrat announced a blockbuster $400M investment? Tether prints that every 12 hours.
See the way market cap works is you only have to control the most recent trade to set the market cap. That means literally nothing. The old trope goes if you print 1 trillion of your own crypto and sell it to a buddy for $1, that's a $1T market cap.
$24B of cash, with $700M new printed every single day buying up Bitcoin is absolutely enough to control the price. That's simple economics, and you can find an explanation anywhere. I can of course provide you with an article if you find yourself unable to obtain one.
> Also, it's interesting how you downplay the fact that the Fed printed 22% of the dollars in circulation in 2020 alone with the majority of it destined to bail out banks and surely to end up under control of Wall Street.
This is utterly irrelevant. The inflation rate is trending around 2% per annum. If that goes up, they'll print less or claw back more. Supply is not the only factor in the determination of inflation, velocity of money is critical. I suggest you learn more about the money supply before trying to reinvent it.
In fact if we pretend for a moment that bitcoin is a currency, you can see that while the supply is flat-ish, the price is skyrocketing. This is massively deflationary for a currency, and this is in fact, in part, due to a reduction in velocity of money (aka HODL BRUH).
> Perhaps if the crypto projects start saying that the funds are going to gender studies your worries will be eased?
I have no idea where you're going with that and I won't be following you. This has nothing to do with social policy and everything to do with the North Korean government collecting hundreds of millions of dollars to fund their nuclear weapons program.
[0] https://www.alaskaphotographics.com/alaska-photo-articles/mu...
You are not helping your case. It's been a while already where they stopped claiming to have USD to back the USDT and are claiming to have "diverse investments".
Just in last two weeks the price of BTC basically doubled. ETH as well. Printing now kind of correlates with the price hike. Yes, if we assume that they are completely naked, then all of this printing is fraudulent (whether at 14 or 24B). However, if they do have reserves, this printing does make sense in the overall market.
Anyway, still curious how the 9 trillion printed by the Fed and the 10 million going to "Pakistani NGOs" [0] does not bring you the same outrage as a bunch of people putting their own time, money and effort in crypto projects. Has any bitcoiner hurt you?
[0]: https://finance.yahoo.com/news/coronavirus-relief-legislatio... : getting funds from government aid and putting in corrupt, violent pockets is one of the oldest tricks in the book. 10 million is "nothing" in international terms, but it can go quite a long way to help fund terrorist cells in Pakistan, no?
Just in last two weeks the price of BTC basically doubled. ETH as well. Printing now kind of correlates with the price hike. Yes, if we assume that they are completely naked, then all of this printing is fraudulent (whether at 14 or 24B). However, if they do have reserves, this printing does make sense in the overall market.
Anyway, still curious how the 9 trillion printed by the Fed and the 10 million going to "Pakistani NGOs" [0] does not bring you the same outrage as a bunch of people putting their own time, money and effort in crypto projects. Has any bitcoiner hurt you?
[0]: https://finance.yahoo.com/news/coronavirus-relief-legislatio... : getting funds from government aid and putting in corrupt, violent pockets is one of the oldest tricks in the book. 10 million is "nothing" in international terms, but it can go quite a long way to help fund terrorist cells in Pakistan, no?
Lol, if they're holding enough BTC, and they can pump the price enough they can basically go as high as they want and still be "backed".
Maybe this has been the plan all along.
If tether disappears and takes all the cash and BTC with them what happens?
Maybe this has been the plan all along.
If tether disappears and takes all the cash and BTC with them what happens?
[deleted]
> You are not helping your case. It's been a while already where they stopped claiming to have USD to back the USDT and are claiming to have "diverse investments".
Why on earth would you believe them now? You probably believed them the first time too :) Do you have the audit? Either way the Tether T&C's don't actually give anyone holding Tether right to withdraw anything from Tether. Ever. Not assets, not dollars, nothing. There's nothing stopping them from running with all of those assets, they may or may not have, legally.
Ask their CEO or CFO! If you can find them that is, they've been missing for about a year now, nobody's heard from them.
> Just in last two weeks the price of BTC basically doubled. ETH as well. Printing _now_ kind of correlates with the price hike. Yes, if we assume that they are completely naked, then all of this printing is fraudulent (whether at 14 or 24B). However, if they do have reserves, this printing does make sense in the overall market.
It actually always did. [1]
> Anyway, still curious how the 9 trillion printed by the Fed and the 10 million going to "Pakistani NGOs" does not bring you the same outrage as a bunch of people putting their own time, money and effort in crypto projects. Has any bitcoiner hurt you?
Money printing is irrelevant. Totally and utterly irrelevant so long as inflation remains on track for 2%. The whole reason for printing was to offset a reduction in velocity of money. You're pointing at a system working, that you don't understand, and screaming fraud. You're basically a financial anti-vaxxer. Everything you need to learn about finance, about economics, is available to you at your local college. The course is called "ECON-101."
Put all the time and effort and money into crypto you want, I know plenty of beanie baby collectors who do the same!
> Has any bitcoiner hurt you?
Of course not, I made a ton of money on crypto on the run up and sold in January 2018 lol.
If you saw someone's house on fire, would you say to yourself, huh, that's weird, and walk away? Or would you maybe tell people that they're about to get seriously hurt.
[1] https://twitter.com/JacobOracle/status/1346133083645476869/p...
Why on earth would you believe them now? You probably believed them the first time too :) Do you have the audit? Either way the Tether T&C's don't actually give anyone holding Tether right to withdraw anything from Tether. Ever. Not assets, not dollars, nothing. There's nothing stopping them from running with all of those assets, they may or may not have, legally.
Ask their CEO or CFO! If you can find them that is, they've been missing for about a year now, nobody's heard from them.
> Just in last two weeks the price of BTC basically doubled. ETH as well. Printing _now_ kind of correlates with the price hike. Yes, if we assume that they are completely naked, then all of this printing is fraudulent (whether at 14 or 24B). However, if they do have reserves, this printing does make sense in the overall market.
It actually always did. [1]
> Anyway, still curious how the 9 trillion printed by the Fed and the 10 million going to "Pakistani NGOs" does not bring you the same outrage as a bunch of people putting their own time, money and effort in crypto projects. Has any bitcoiner hurt you?
Money printing is irrelevant. Totally and utterly irrelevant so long as inflation remains on track for 2%. The whole reason for printing was to offset a reduction in velocity of money. You're pointing at a system working, that you don't understand, and screaming fraud. You're basically a financial anti-vaxxer. Everything you need to learn about finance, about economics, is available to you at your local college. The course is called "ECON-101."
Put all the time and effort and money into crypto you want, I know plenty of beanie baby collectors who do the same!
> Has any bitcoiner hurt you?
Of course not, I made a ton of money on crypto on the run up and sold in January 2018 lol.
If you saw someone's house on fire, would you say to yourself, huh, that's weird, and walk away? Or would you maybe tell people that they're about to get seriously hurt.
[1] https://twitter.com/JacobOracle/status/1346133083645476869/p...
> Why on earth would you believe them?
I don't! I'm just saying that this crazy printing is consistent with the current market.
I also tell loud and clear to stay away from them and to any exchange that wants you to be holding this shit. This doesn't mean that I swear off anyone working in crypto as a fraud like Tether.
> Money printing is irrelevant (...) You're pointing at a system working
Working for whom? For the ones that already have access to cheap capital? For companies in Wall Street that have enough money in their balance sheets to buy Uruguay or half the Mediterranean? For banks that should've been liquidated decades ago?
Inflation rate is under the target? Oh great, so now all the small business owners will go bankrupt and not be able to afford the things they need at almost the same price they were before, and the rest of the unemployed people can just take their $600 checks to buy a PS5 to kill the time they will be spending at home. Yay, economics!
> 10M to Pakistani NGOs rounds to zero.
How about the 700M to Sudan? In any case, it's not the amount. It's the absurd "crypto is used by criminals and funds terrorists" claim while being completely blind for an obvious mechanism that is taking tax-payer money and putting in very questionable hands.
I don't! I'm just saying that this crazy printing is consistent with the current market.
I also tell loud and clear to stay away from them and to any exchange that wants you to be holding this shit. This doesn't mean that I swear off anyone working in crypto as a fraud like Tether.
> Money printing is irrelevant (...) You're pointing at a system working
Working for whom? For the ones that already have access to cheap capital? For companies in Wall Street that have enough money in their balance sheets to buy Uruguay or half the Mediterranean? For banks that should've been liquidated decades ago?
Inflation rate is under the target? Oh great, so now all the small business owners will go bankrupt and not be able to afford the things they need at almost the same price they were before, and the rest of the unemployed people can just take their $600 checks to buy a PS5 to kill the time they will be spending at home. Yay, economics!
> 10M to Pakistani NGOs rounds to zero.
How about the 700M to Sudan? In any case, it's not the amount. It's the absurd "crypto is used by criminals and funds terrorists" claim while being completely blind for an obvious mechanism that is taking tax-payer money and putting in very questionable hands.
> I don't! I'm just saying that this crazy printing is consistent with the current market.
And every other bull market since Tether was formed, yeah.
> I also tell loud and clear to stay away from them and to any exchange that wants you to be holding this shit. This doesn't mean that I swear off anyone working in crypto as a fraud like Tether.
Tether is 80% of trading volume lol. The water is so murky you could build a hut out of it. There is no market without Tether. Not one that looks anything like you imagine it does. [1]
> Inflation rate is under the target? Oh great, so now all the small business owners will go bankrupt and not be able to afford the things they need at almost the same price they were before, and the rest of the unemployed people can just take their $600 checks to buy a PS5 to kill the time they will be spending at home. Yay, economics!
Ah now I see the issue.
You've conflated fiscal, monetary, foreign and social policy into one abomination. This is your mistake. The Fed only manages the money supply. This is monetary policy. The Fed does this by increasing and decreasing the supply of money and managing interest rates and aims at a target 2% rate of inflation. It has done this incredibly successfully.
Then there's fiscal policy - and by extension social policy. This is government spending on social programs and also on foreign aid. Businesses going bankrupt are being allowed to do so by bad fiscal policy and not bad monetary policy and no amount of crypto will change that. Only you voting will change that.
That's not economics, that's fiscal and social policy. For instance, Canada is centrally banked, and doesn't have the issues you're pointing out because their fiscal policy was to provide everyone $2000 per month during COVID and is now paying small business rents. This is nothing to do with Bitcoin.
And your NGOs and the Sudan. This is both a distraction, whataboutism, and also not monetary policy. This is foreign policy. This is nothing to do with Bitcoin. This would still happen with Bitcoin, of course, but bitcoin also opens up a new avenue on top of making the situation strictly worse.
Please, learn about economics. Take an ECON-101 course. Stop trying to reinvent what you don't understand. I'm sure this is tough to hear because for many folks in the crypto space a whole lot of their identity gets wrapped up in crypto.
> Not every crypto project is a fraud.
No, but most of them are. And the ones that aren't don't solve anything better than a classical solution because trust is a huge optimization.
By all means, continue working on crypto. It's not illegal, its just, you know, not smart. But poor decisions tend not to be criminal!
[1] https://coinlib.io/coin/BTC/Bitcoin
(@konamicode, reference added here due to rate limit - I was referring to the "Money flow from/to Bitcoin in the last 24 hours" chart showing 12B of flow into Bitcoin was via Tether, out of a total of 15B).
And every other bull market since Tether was formed, yeah.
> I also tell loud and clear to stay away from them and to any exchange that wants you to be holding this shit. This doesn't mean that I swear off anyone working in crypto as a fraud like Tether.
Tether is 80% of trading volume lol. The water is so murky you could build a hut out of it. There is no market without Tether. Not one that looks anything like you imagine it does. [1]
> Inflation rate is under the target? Oh great, so now all the small business owners will go bankrupt and not be able to afford the things they need at almost the same price they were before, and the rest of the unemployed people can just take their $600 checks to buy a PS5 to kill the time they will be spending at home. Yay, economics!
Ah now I see the issue.
You've conflated fiscal, monetary, foreign and social policy into one abomination. This is your mistake. The Fed only manages the money supply. This is monetary policy. The Fed does this by increasing and decreasing the supply of money and managing interest rates and aims at a target 2% rate of inflation. It has done this incredibly successfully.
Then there's fiscal policy - and by extension social policy. This is government spending on social programs and also on foreign aid. Businesses going bankrupt are being allowed to do so by bad fiscal policy and not bad monetary policy and no amount of crypto will change that. Only you voting will change that.
That's not economics, that's fiscal and social policy. For instance, Canada is centrally banked, and doesn't have the issues you're pointing out because their fiscal policy was to provide everyone $2000 per month during COVID and is now paying small business rents. This is nothing to do with Bitcoin.
And your NGOs and the Sudan. This is both a distraction, whataboutism, and also not monetary policy. This is foreign policy. This is nothing to do with Bitcoin. This would still happen with Bitcoin, of course, but bitcoin also opens up a new avenue on top of making the situation strictly worse.
Please, learn about economics. Take an ECON-101 course. Stop trying to reinvent what you don't understand. I'm sure this is tough to hear because for many folks in the crypto space a whole lot of their identity gets wrapped up in crypto.
> Not every crypto project is a fraud.
No, but most of them are. And the ones that aren't don't solve anything better than a classical solution because trust is a huge optimization.
By all means, continue working on crypto. It's not illegal, its just, you know, not smart. But poor decisions tend not to be criminal!
[1] https://coinlib.io/coin/BTC/Bitcoin
(@konamicode, reference added here due to rate limit - I was referring to the "Money flow from/to Bitcoin in the last 24 hours" chart showing 12B of flow into Bitcoin was via Tether, out of a total of 15B).
> Tether is 80% of trading volume lol.
This statement might need a reference to back it up.
This statement might need a reference to back it up.
Provided, thank you for the call out!
It's funny how you try to separate monetary/fiscal/economic policy in relation to the current scenario when it comes to the status quo, but you do not apply the same logic when it comes to crypto. For you, what the Fed does is completely separate from the interests of the financial elites, but what one disgraceful actor in the crypto system is enough to make everyone stupid?
> Only you voting will change that.
First, I don't vote in the US. Second, are you seriously this naive or did you mean this as a joke?
> And the ones that aren't don't solve anything better than a classical solution because trust is a huge optimization.
Ah! And here I see the issue you are having.
No serious person working in crypto ignores the fact that trust helps. The point is that trust should be granular, not a binary property. Every project working on layer-2 networks is basically dealing with the issue of trust vs performance.
Also, another issue is that too much of an optimization makes a system fragile to systemic shocks. It doesn't matter if it is the US, Canada, the EU or a Banana Republic: the response from every government in every crisis has always been to concentrate more power and to ask more of people. Ever bigger houses of cards are built and when they inevitably get blown over, the solution is to get more "optimizations" and to have more bureaucrats with no skin in the game responsible in defining "policies" for people they have nothing in common with, know nothing of their actual problems and have zero incentive to actually care - in fact, if they cared they might end up losing their election or dead by going against the interests of the bigger fish.
When you say that "10M going to Pakistan would also happen in Bitcoin" is missing the point. Money laundering/fraud/tax evasion/mismanagement of public funds will always exist, no matter what. The problem is that a Big central Government is not only be terrible at fighting it, the bigger it gets the more they create it themselves.
You keep telling me to "take a econ course", as you think that my issue is not understanding the logic defended by economists. Far from it. Simply put, I want Homo Economicus logic to go extinct. Too many basic failed moral and ethical principles are built on "logic" backed by economists. Too many "optimizations" proposed by economists made our societies worse. Too much power was taken away from the people and put in the hands of "experts" - which seem a good thing "on average" but in reality made us more unequal, more polarized and less connected.
When people get inevitably screwed over by Tether, there will be a bubble burst and lots of fools (not for lack of warning) will lose their money. Crypto will go on. It's their money they lost, the system as a whole survives and actually becomes stronger. Can you say the same about Government? Do people trust the government more or less after each crisis?
I said in our last exchange as well: I am not the only one that works on crypto without caring about price. Making money is just a nice side-effect. The main motivation (to me at least[0]) is to build the tools that can let people be in charge of their actions including who/when to trust and delegate things . [1]
> Only you voting will change that.
First, I don't vote in the US. Second, are you seriously this naive or did you mean this as a joke?
> And the ones that aren't don't solve anything better than a classical solution because trust is a huge optimization.
Ah! And here I see the issue you are having.
No serious person working in crypto ignores the fact that trust helps. The point is that trust should be granular, not a binary property. Every project working on layer-2 networks is basically dealing with the issue of trust vs performance.
Also, another issue is that too much of an optimization makes a system fragile to systemic shocks. It doesn't matter if it is the US, Canada, the EU or a Banana Republic: the response from every government in every crisis has always been to concentrate more power and to ask more of people. Ever bigger houses of cards are built and when they inevitably get blown over, the solution is to get more "optimizations" and to have more bureaucrats with no skin in the game responsible in defining "policies" for people they have nothing in common with, know nothing of their actual problems and have zero incentive to actually care - in fact, if they cared they might end up losing their election or dead by going against the interests of the bigger fish.
When you say that "10M going to Pakistan would also happen in Bitcoin" is missing the point. Money laundering/fraud/tax evasion/mismanagement of public funds will always exist, no matter what. The problem is that a Big central Government is not only be terrible at fighting it, the bigger it gets the more they create it themselves.
You keep telling me to "take a econ course", as you think that my issue is not understanding the logic defended by economists. Far from it. Simply put, I want Homo Economicus logic to go extinct. Too many basic failed moral and ethical principles are built on "logic" backed by economists. Too many "optimizations" proposed by economists made our societies worse. Too much power was taken away from the people and put in the hands of "experts" - which seem a good thing "on average" but in reality made us more unequal, more polarized and less connected.
When people get inevitably screwed over by Tether, there will be a bubble burst and lots of fools (not for lack of warning) will lose their money. Crypto will go on. It's their money they lost, the system as a whole survives and actually becomes stronger. Can you say the same about Government? Do people trust the government more or less after each crisis?
I said in our last exchange as well: I am not the only one that works on crypto without caring about price. Making money is just a nice side-effect. The main motivation (to me at least[0]) is to build the tools that can let people be in charge of their actions including who/when to trust and delegate things . [1]
[0]: https://hub20.io/architecture/#economies-of-scale-vs-robustness-of-decentralization
[1]: https://trustlines.networkSo you’re building a non custodial wallet? What on earth does that have to do with a single thing you’ve been talking about? Isn’t that illegal in America now?
The reason I suggest an Econ course is you have an awful lot of misconceptions and deep seated misunderstandings of the current system. Much more than I can rectify here pro bono.
For what it’s worth I generally don’t think figuring out who to trust granularly is a real problem. Trust them? Do business with them. Don’t trust them? Maybe don’t. Or involve an intermediary who does like visa that allows clawbacks. We’ve been doing trustful business for tens of thousands of years. I see you’re fairly early along in your speed run of finance.
The reason I suggest an Econ course is you have an awful lot of misconceptions and deep seated misunderstandings of the current system. Much more than I can rectify here pro bono.
For what it’s worth I generally don’t think figuring out who to trust granularly is a real problem. Trust them? Do business with them. Don’t trust them? Maybe don’t. Or involve an intermediary who does like visa that allows clawbacks. We’ve been doing trustful business for tens of thousands of years. I see you’re fairly early along in your speed run of finance.
You've been repeating this Tether stuff for a few years now. Still waiting for the collapse. I'm sure its coming any day now.
Always works until it doesn't. Madoff's scheme lasted 20 years and collected $50B, including many multi hundred million dollar checks from institutional investors.
Asset-backed commercial paper is another great example. [1]
Head's up, btw, nobody's seen their CEO or CFO in about a year now haha.
I'm going to screenshot this comment by the way for r/agedlikemilk :)
[1] http://www.tr0lly.com/uncategorized/tether-heads-i-win-tails...
Asset-backed commercial paper is another great example. [1]
Head's up, btw, nobody's seen their CEO or CFO in about a year now haha.
I'm going to screenshot this comment by the way for r/agedlikemilk :)
[1] http://www.tr0lly.com/uncategorized/tether-heads-i-win-tails...
> Madoff's scheme lasted 20 years and collected $50B, including many multi hundred million dollar checks from institutional investors.
This. Specifically, it's worth noting that Madoff's scheme collapsed in the 2008 financial crisis when people were asking to pull money out of the fund. IOW it worked as long as Madoff could convince more and more people to put money in. When he could no longer make the redemptions, he was caught:
> For years, Madoff had simply deposited investors' money in his business account at JPMorganChase and withdrew money from that account when they requested redemptions. He had scraped together just enough money to make a redemption payment on November 19. However, despite cash infusions from several longtime investors, by the week after Thanksgiving it was apparent that there was not enough money to even begin to meet the remaining requests. His Chase account had over $5.5 billion in mid-2008, but by late November was down to $234 million, a fraction of the outstanding redemptions. On December 3, he told longtime assistant Frank DiPascali, who had overseen the fraudulent advisory business, that he was finished. On December 9, he told his brother about the fraud.
https://en.wikipedia.org/wiki/Bernie_Madoff
This. Specifically, it's worth noting that Madoff's scheme collapsed in the 2008 financial crisis when people were asking to pull money out of the fund. IOW it worked as long as Madoff could convince more and more people to put money in. When he could no longer make the redemptions, he was caught:
> For years, Madoff had simply deposited investors' money in his business account at JPMorganChase and withdrew money from that account when they requested redemptions. He had scraped together just enough money to make a redemption payment on November 19. However, despite cash infusions from several longtime investors, by the week after Thanksgiving it was apparent that there was not enough money to even begin to meet the remaining requests. His Chase account had over $5.5 billion in mid-2008, but by late November was down to $234 million, a fraction of the outstanding redemptions. On December 3, he told longtime assistant Frank DiPascali, who had overseen the fraudulent advisory business, that he was finished. On December 9, he told his brother about the fraud.
https://en.wikipedia.org/wiki/Bernie_Madoff
> Always works until it doesn't. Madoff's scheme lasted 20 years and collected $50B, including many multi hundred million dollar checks from institutional investors.
Madoff's scheme persisted because nobody knew about it. People have been writing articles claiming Tether is a fraud for many years now. The price even dipped a few times as a result. But then it went right back up. There's a reason for that, of course. And that reason is that arbitrageurs are arbitraging, because they can simply withdraw to USD.
> I'm going to screenshot this comment by the way for r/agedlikemilk :)
I'll be waiting :)
Madoff's scheme persisted because nobody knew about it. People have been writing articles claiming Tether is a fraud for many years now. The price even dipped a few times as a result. But then it went right back up. There's a reason for that, of course. And that reason is that arbitrageurs are arbitraging, because they can simply withdraw to USD.
> I'm going to screenshot this comment by the way for r/agedlikemilk :)
I'll be waiting :)
That’s surprisingly not true! People did know about it but didn’t really want to challenge the chairman of the NASDAQ (that was Madoff, to be clear). Just ask the persistently ignored whistleblower Harry Markopolos.
Ya, I know about that guy. But there's a big difference between a regulator ignoring one guy, and the general public ignoring all of the bad press about Tether. But time will tell. We should know in just a few days now.
For what it's worth, I opened a short on Tether, just in case. It's trading above $1, so it's a free option right now.
For what it's worth, I opened a short on Tether, just in case. It's trading above $1, so it's a free option right now.
Now that Jan 15 has come and passed are you going to admit maybe Tether isn't a scam, or are we kicking the can down the road to a later date?
It was already in the crosshairs; the government had its eye on it (just one example: [1]), the press has been making bold claims about the naked money printing, its reputation along with Bitfinex soured, and yet here we are again.
I have no strong opinion either way (although call me skeptical). I am baffled, however.
1 - https://ag.ny.gov/press-release/2019/attorney-general-james-...
I have no strong opinion either way (although call me skeptical). I am baffled, however.
1 - https://ag.ny.gov/press-release/2019/attorney-general-james-...
That was two years and 22 billion dollars ago. Actually the current bull run began the day the tether folks were told they had until January 15th to provide evidence in one of their many ongoing proceedings. Circumstantial? Totally.
Can you provide a reference for this? (I believe you, I would just love to read more about it)
Google is (still) your friend.
https://www.reddit.com/r/CryptoCurrency/comments/ksdfne/why_...
https://coingeek.com/bitfinex-ny-attorney-general-extends-su...
https://www.reddit.com/r/CryptoCurrency/comments/ksdfne/why_...
https://coingeek.com/bitfinex-ny-attorney-general-extends-su...
Oh got it. I guess the bull run is even more aggressive since the 15th, but it's been on a run for a lot longer than that imo.
Thanks for the references, I get what you're saying now!
Thanks for the references, I get what you're saying now!
> They successfully detect 2 of 4 schemes, no better than a coin toss.
How would you go about detecting a pump and dump scheme by flipping a coin?
How would you go about detecting a pump and dump scheme by flipping a coin?
That's simple! You think "this is probably a pump-and-dump", then flip a coin and go post about it on Twitter if it comes up heads.
1. Assign pump-and-dump scheme to heads
2. Flip coin
3. Evaluate results
2. Flip coin
3. Evaluate results
Kind of seems like you detected it at step 1.
> They successfully detect 2 of 4 schemes, no better than a coin toss.
Let’s be real here if I developed an indicator that identified murderers and I showed you that out of the last 4 murders happened in US, I identified 2 of them using this identifier, would you say that I did no better than a coin toss?
There is a lot more to this than just going yes/no when presented after the fact with a situation that you feel that you know for sure is a pump-and-dump.
Let’s be real here if I developed an indicator that identified murderers and I showed you that out of the last 4 murders happened in US, I identified 2 of them using this identifier, would you say that I did no better than a coin toss?
There is a lot more to this than just going yes/no when presented after the fact with a situation that you feel that you know for sure is a pump-and-dump.
50% is a bit better than you think. If you were to do a coin toss on each as a basis of determination you would only have a 25% chance of getting 2 correct. As n-schemes becomes larger, the coin toss does much worse in respect to the Bayesian probability.
Chance of tossing 2/4 in a 4 coin toss is 37.5%, no?
0/4: 6.25%, 1/4: 25%, 2/4: 37.5%, 3/4: 25%, 4/4: 6.25%
0/4: 6.25%, 1/4: 25%, 2/4: 37.5%, 3/4: 25%, 4/4: 6.25%
But they were detecting 2 out of 4, not 2 out of 2. I think you are incorrect.
I think they're both incorrect.
They ran the model on historical data. Of 4 a priori known P&Ds, the model detected 2 of them. To say that they've got accuracy of a 50% or "no better than a coin toss", ignores all of the non-P&D events that it correctly didn't identify as a P&D. If you did a coin toss, you would flip the coin much more than 4 times.
They ran the model on historical data. Of 4 a priori known P&Ds, the model detected 2 of them. To say that they've got accuracy of a 50% or "no better than a coin toss", ignores all of the non-P&D events that it correctly didn't identify as a P&D. If you did a coin toss, you would flip the coin much more than 4 times.
You really would also want to have some sort of loss function, or at the very least a general idea of whether you most need to avoid false positives or false negatives. If it was most important to avoid incorrectly saying it's NOT a P&D, then this is not good performance. If you need it to nearly always avoid saying something which is not a P&D (and thus might be a great investment opportunity), but given that you want to avoid as many as you can, 50% might be good.
[deleted]
True
If people are interested in the topic, a more recent paper from 2020 is "Pump and Dumps in the Bitcoin Era: Real Time
Detection of Cryptocurrency Market Manipulations", available at https://arxiv.org/pdf/2005.06610.pdf.
The researchers got some very good results (their detection tools has a precision of 93.1% with 91.4% recall), and made their data set publicly available on github.
The researchers got some very good results (their detection tools has a precision of 93.1% with 91.4% recall), and made their data set publicly available on github.
.. reading through this paper, the researchers apparently listened in to, and joined, groups on chat media that were called pump and dump `in their names`, and advertised advances and payout by the measured number of others they bring in to the groups !! So its not that hard to detect that !
however, the research actually watches transactions in real time, and predicts events in real time, which is slightly different to my ear..
This paper cites ".. to the moon" as published in Crime Science journal.. and uses it as a baseline to show performance characteristics of their own filters. The authors claim various measureable advances in their filters.
however, the research actually watches transactions in real time, and predicts events in real time, which is slightly different to my ear..
This paper cites ".. to the moon" as published in Crime Science journal.. and uses it as a baseline to show performance characteristics of their own filters. The authors claim various measureable advances in their filters.
Bitcoin itself is currently undergoing something not completely dissimilar to a pump-and-dump. Because of the difficulty of transacting USD for cryptocurrency purposes, a pegged currency called “Tethers”, specifically USDT, is being used as a substitute. It's supposed to be backed 1:1 by USD reserves, but it's clear at this point that the amount of USD reserves do not match the number of USDT in circulation and they're just printing money to buy BTC. The markets using real USD are then matching the USDT price and this allows the printers to cash out. Once regulators strike, many investors will realise they have a lot of useless paper money (USDT) and suddenly much less valuable BTC.
Or so many allege, at least: https://amycastor.com/2020/11/21/are-pixie-fairies-behind-bi...
Or so many allege, at least: https://amycastor.com/2020/11/21/are-pixie-fairies-behind-bi...
Tether definitely seems very fishy, but they've been around for a pretty long time. People were saying this exact thing in the 2017 bull market but then there was a savage bear market the next year (~10x BTC price drop) and Tether is still fine. What is the event that will reveal that the emperor has no clothes?
The New York Attorney General is currently on Tether's case and its latest deadline is 15 January 2021 for Tether to produce documents, but that deadline may slip again…
For the longest time, Tether claimed a 1:1 backing. They referenced audits that didn't exist, and so forth.
Finally, their own lawyer admitted in a court briefing that they had less than 74%.
No-one has heard from their CEO or CFO in over a year.
Next significant court date is next Friday, 1/15.
Finally, their own lawyer admitted in a court briefing that they had less than 74%.
No-one has heard from their CEO or CFO in over a year.
Next significant court date is next Friday, 1/15.
Must say, I'm surprised it's not more like 10%, or 1%
That was the number provided by Bitfinex’s lawyers at a time when there were about 20 billion fewer Tethers in existence. I’d be shocked if it was over 10%. But since they won’t do an audit, we’ll only find out after everything collapses.
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Tether is interesting, and might be a ponzy scheme. But it’s not a pump-and-dump.
I have been working in crypto / blockchain for years. Crypto projects simply cannot find engineers, it is impossible to hire people with these skills. You will make more money as a software engineer in crypto than you will anywhere else other than FAANG. And one major benefit is crypto companies are decentralized and almost always remote - as a developer in a foreign country you can make multiples what you could in a standard software firm.
Don’t listen to the HN haters and nocoiners who have been telling lies for years. This is one of the most exciting and interesting industries you can work in. Keep an open mind and see what positions are available at the top coins on coingecko.com.
Don’t listen to the HN haters and nocoiners who have been telling lies for years. This is one of the most exciting and interesting industries you can work in. Keep an open mind and see what positions are available at the top coins on coingecko.com.
Can you give us example of how much money there is?
I provide services to a top 15 crypto exchange named Poloniex. Check out https://Poloniex.careers
We are fully remote and hire people all over the world. We do not care where you live. We want talented people.
But even outside exchanges, looking at projects, I know people who wrote code for posted projects and were paid in tokens that became very highly valued.
My recommendation is to get involved in a project and see what they can pay. If you are skilled you will be rewarded. In the US it’s standard rates plus token payments which are liquid much sooner than stock options.
We are fully remote and hire people all over the world. We do not care where you live. We want talented people.
But even outside exchanges, looking at projects, I know people who wrote code for posted projects and were paid in tokens that became very highly valued.
My recommendation is to get involved in a project and see what they can pay. If you are skilled you will be rewarded. In the US it’s standard rates plus token payments which are liquid much sooner than stock options.
If you are fully remote, you may want to change the location part of your Careers page. There are some options that feel like they are based out of a location.
How to detect a cryptocurrency pump-and-dump:
1. Is someone trying to sell cryptocurrency? 2. You found it.
1. Is someone trying to sell cryptocurrency? 2. You found it.
The thing that has surprised me the most with the current crypto-craze is the number of people that I consider generally quite rational/thoughtful who could nonetheless not resist the temptation to jump onto the bandwagon. I'm left thinking that they must know what they're doing and that they simply enjoy the thrill of a game of musical chairs.
Most situations aren’t black and white. Crypto (in particular Bitcoin) is an investment asset. Every asset comes with risks. The way to adjust for the risk is to have the right proportion of your investment into the asset. It’s the same for gold, equity or any other investment instrument.
The key is diversification! You put part of your fortune in bitcoin, part in ethereum, part in dogecoin, part in beanie babies, part in baseball cards, part in fine wines, part in vintage comic books, part in tulips...
Let’s try it your way. You can put 1% of your fortune in all those assets you mentioned. Hopefully, you will see the point in trying to make about asset allocation.
On a side note, sarcasm and snark don’t aid better understanding in a discussion. I appreciate your point but it would be better made being direct.
On a side note, sarcasm and snark don’t aid better understanding in a discussion. I appreciate your point but it would be better made being direct.
Durability of tulips is suspect. And some bitcoin miners are stealing electricity in the third world. So maybe double down on the surer bets like Dogecoin.
Folks grandfathered into the Tesla supercharger network can set up a sweet trunk mining rig...
If there were no investor protections then anyone following this “just put a bit into different things” strategy would get hosed by scams. It only works because investment laws keep out most grifters from raising funds.
Bitcoin isn’t a typical investment instrument in that sense, so I’m not sure applying the same heuristic works.
Bitcoin isn’t a typical investment instrument in that sense, so I’m not sure applying the same heuristic works.
Your comment actually embodies one of the most ironic parts of this whole fiasco: Bitcoin, which is purported as the anti-fed/anti-government savior of the future world economy (maybe I'm exaggerating a bit, but I don't think I'm too far off the mark), is ultimately going to serve as one of the best examples of exactly "why" we have regulation and oversight in the first place.
Kgwgk put it better than me I think, with their examples of diversification across bad asset classes.
Also a thought occurs. Many people reading this will think “but these cynics are mistaken. Those who invested in bitcoin have seen massive returns”.
Not so. The paper value of bitcoin is up, but unlike a stock, you don’t own anything. You need someone to actually buy the bitcoin in order to gain value.
Whereas as long as a company has profits, there’s a floor on things. The shares will have real use value so the price can’t fall too low.
Meaning buy bitcoin at $200, own now at $41,000. Only has value if you sell. If everyone tries to sell and no one is buying there’s no floor, none.
Whereas bought Apple at $20, own at $132. The price could fall, but there’s some kind of floor below which it could not fall based on current profits and dividends, and that floor is almost certainly above $32.
Also a thought occurs. Many people reading this will think “but these cynics are mistaken. Those who invested in bitcoin have seen massive returns”.
Not so. The paper value of bitcoin is up, but unlike a stock, you don’t own anything. You need someone to actually buy the bitcoin in order to gain value.
Whereas as long as a company has profits, there’s a floor on things. The shares will have real use value so the price can’t fall too low.
Meaning buy bitcoin at $200, own now at $41,000. Only has value if you sell. If everyone tries to sell and no one is buying there’s no floor, none.
Whereas bought Apple at $20, own at $132. The price could fall, but there’s some kind of floor below which it could not fall based on current profits and dividends, and that floor is almost certainly above $32.
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If you are characterizing crypto as irrational or a thoughtless temptation, I have to imagine you are comparing it to traditional investments like stocks, bonds, etc. Maybe you are right there, maybe you aren't. Personally, I've done terrible at stocks and wonderful at crypto, so i disagree due to experiential knowledge.
If you are comparing crypto to USD savings, it is quite obvious from a 10 year chart which one is irrational. Even if you completely write off the growth of crypto entirely, it is quite easy to beat negative value growth.
If you are comparing crypto to USD savings, it is quite obvious from a 10 year chart which one is irrational. Even if you completely write off the growth of crypto entirely, it is quite easy to beat negative value growth.
> Personally, I've done terrible at stocks and wonderful at crypto, so i disagree due to experiential knowledge.
That basically means that you were early to the party for crypto, and made some bad decisions with stocks (which have yielded some 5% pa in real terms for many decades).
That basically means that you were early to the party for crypto, and made some bad decisions with stocks (which have yielded some 5% pa in real terms for many decades).
A few thoughts:
1. It's not "easy" to beat negative value growth at baseline. EG: a risky investment that loses your entire investment is much worse.
2. If this was year 1999, could you have written exactly the same about .COM stocks shortly before they crashed and burned? If not, what is the thing you see about Crypto that makes that value feel real vs bubbly?
1. It's not "easy" to beat negative value growth at baseline. EG: a risky investment that loses your entire investment is much worse.
2. If this was year 1999, could you have written exactly the same about .COM stocks shortly before they crashed and burned? If not, what is the thing you see about Crypto that makes that value feel real vs bubbly?
Don't get me wrong, crypto is incredibly bubbly. It is physically stressful to keep up with at times.
The bubbles are observable, though, and we have over a decade of time elapsed in order to show that in addition to bubbles (and full corrections!) on that basis of hype, there is an overall growth trend that results from the mathematical scarcity which .com shares lack.
As far as comparison to a dotcom, they had to make payroll, nurture a profitable market, predict changes, outpace rivals etc. Many ways to suffer catastrophic death in that equation. whereas a bitcoin has no such requirement. All it has to do is not inflate too bad.
The bubbles are observable, though, and we have over a decade of time elapsed in order to show that in addition to bubbles (and full corrections!) on that basis of hype, there is an overall growth trend that results from the mathematical scarcity which .com shares lack.
As far as comparison to a dotcom, they had to make payroll, nurture a profitable market, predict changes, outpace rivals etc. Many ways to suffer catastrophic death in that equation. whereas a bitcoin has no such requirement. All it has to do is not inflate too bad.
> All it has to do is not inflate too bad.
So, question: All the other coins, which are also strictly limited mathematically, they are also good long term investments, since they won't inflate too bad? They do all have "an overall growth trend that results from the mathematical scarcity", do they?
So, question: All the other coins, which are also strictly limited mathematically, they are also good long term investments, since they won't inflate too bad? They do all have "an overall growth trend that results from the mathematical scarcity", do they?
You can't essentialize "all the other coins" as if bitcoin is just one. Coins which do not have first mover, publicity, hash power, market cap, and capital inflow rate on their side like bitcoin does will behave entirely differently, and must justify themselves existentially.
Why bitcoin? because dollars suck. Why altcoin? is a legitimate question, but bitcoin has flaws. Personally I like to believe that the 'flip' will occur at some point to ethereum due to its technical and monetary superiority, but I think its more likely that due to the network effect, bitcoin will keep its crown as main coin.
Why bitcoin? because dollars suck. Why altcoin? is a legitimate question, but bitcoin has flaws. Personally I like to believe that the 'flip' will occur at some point to ethereum due to its technical and monetary superiority, but I think its more likely that due to the network effect, bitcoin will keep its crown as main coin.
// All it has to do is not inflate too bad.
Just for fun, I want to share what I conceive as an easy disaster scenario for crypto.
Let's be clear on one thing - the dollar price of BTC is driven by supply and demand. To the extent that more and more people want to buy it, while the available supply for sale is limited, the price goes up.
Let's be soberly clear that the there's another side of the coin - IF there was a case where there were relatively few buyers compared to the supply for sale, the price tumbles.
Then to conceive a disaster scenario we just need to imagine a situation where this happens: where people are selling and there's nobody to buy.
I can easily conceive such a scenario.
Let's first think about who's driving the buying. I guess there are now institutional players but there's also a lot of "wow I heard people made money in BTC so I am going to convince my wife to let me buy some instead of fixing our roof" people. To the extent that such people enter the market, they drive the price up.
At some point, such people will be tapped out of dollars, and the world will be tapped out of such people. In other words, every dollar that someone was going to aggressively/recklessly (from their own position) put into BTC, is already in BTC.
Let's imagine an idealized scenario where no new dollars are going into BTC because of the above, and no dollars are being taken out (because people are HODLing) and ignore mining for this. In this scenario, the price gets "stuck" at whatever level the last trade happened.
Now the thing about people who invest money they can't afford, they very quickly need it. The guy's wife says "the roof has been leaking for 3 months now and you aren't making money in BTC, sell it and fix the roof."
So the guy goes to sell - but there's nobody to sell it to. There's no people sitting on the sidelines because as mentioned above, everyone's already in. So he has to drop the price lower and lower until someone buys it.
Now other people see that the price has moved down. So the prior "greater fool" things "wait, I cashed out my 401k because BTC is going up, but it just sat flat for 3 months and now moved down and I am losing money, OH SH*T, BAIL (or, his wife makes him have this "realization"). So that drops the price even more.
Now there are other people who are looking at this downward movement and going "wait a minute, 3 months ago I felt like I was going to be able to buy an island with my BTC holdings, but now it's starting to look like I can only buy a condo. I better cash some out just in case it slides more because my loss aversion is kicking in and I was bullish before, but now I am experiencing the feeling of "not as rich as I once felt" and it's messing with me.
But this guy doesn't have that many willing people to sell to either, so it keeps sliding and snowballing down.
This is obviously an idealized scenario but you can hopefully see the forces that would cause any bubble to unravel. Once the supply of naive inbound dollars dries out (as it inevitably must), the people who invested last because they were sure it was going to be easy money, get nervous, sell, price slides, that unravels more people who now have something to lose whereas before they felt invulnerable, etc etc all the way down.
Just for fun, I want to share what I conceive as an easy disaster scenario for crypto.
Let's be clear on one thing - the dollar price of BTC is driven by supply and demand. To the extent that more and more people want to buy it, while the available supply for sale is limited, the price goes up.
Let's be soberly clear that the there's another side of the coin - IF there was a case where there were relatively few buyers compared to the supply for sale, the price tumbles.
Then to conceive a disaster scenario we just need to imagine a situation where this happens: where people are selling and there's nobody to buy.
I can easily conceive such a scenario.
Let's first think about who's driving the buying. I guess there are now institutional players but there's also a lot of "wow I heard people made money in BTC so I am going to convince my wife to let me buy some instead of fixing our roof" people. To the extent that such people enter the market, they drive the price up.
At some point, such people will be tapped out of dollars, and the world will be tapped out of such people. In other words, every dollar that someone was going to aggressively/recklessly (from their own position) put into BTC, is already in BTC.
Let's imagine an idealized scenario where no new dollars are going into BTC because of the above, and no dollars are being taken out (because people are HODLing) and ignore mining for this. In this scenario, the price gets "stuck" at whatever level the last trade happened.
Now the thing about people who invest money they can't afford, they very quickly need it. The guy's wife says "the roof has been leaking for 3 months now and you aren't making money in BTC, sell it and fix the roof."
So the guy goes to sell - but there's nobody to sell it to. There's no people sitting on the sidelines because as mentioned above, everyone's already in. So he has to drop the price lower and lower until someone buys it.
Now other people see that the price has moved down. So the prior "greater fool" things "wait, I cashed out my 401k because BTC is going up, but it just sat flat for 3 months and now moved down and I am losing money, OH SH*T, BAIL (or, his wife makes him have this "realization"). So that drops the price even more.
Now there are other people who are looking at this downward movement and going "wait a minute, 3 months ago I felt like I was going to be able to buy an island with my BTC holdings, but now it's starting to look like I can only buy a condo. I better cash some out just in case it slides more because my loss aversion is kicking in and I was bullish before, but now I am experiencing the feeling of "not as rich as I once felt" and it's messing with me.
But this guy doesn't have that many willing people to sell to either, so it keeps sliding and snowballing down.
This is obviously an idealized scenario but you can hopefully see the forces that would cause any bubble to unravel. Once the supply of naive inbound dollars dries out (as it inevitably must), the people who invested last because they were sure it was going to be easy money, get nervous, sell, price slides, that unravels more people who now have something to lose whereas before they felt invulnerable, etc etc all the way down.
I think you should be concerned when your reasoning quickly slips into narrative.
Sure? It was an illustration of supply and demand as I envision them operating as a bubble pops. I think narration is a good way to convey it. Do you follow it but disagree that it's a possible outcome, or something else?
There's a sucker born every minute
Putting money into Bitcoin is a rational decision because others are irrational and bidding it up.
Isn't "putting money into Bitcoin" the same thing as "bidding it up"? Both actions have the same level of rationality, whatever that might be.
While true there are other factors keeping some money out. Like those concerned with the environmental impact of the electricity generation and short lived ASICs.
>> Putting money into Bitcoin is a rational decision because others are irrational and bidding it up.
It all comes down to: investing is great if you buy low and sell high.
Let's just say this - if you aren't able to imagine the scenario under which your BTC (or any investment) crashes down to near zero, you're just not thinking well enough.
I can conjure up a disaster scenario just standing right now in my kitchen, and I don't even own crypto.
It all comes down to: investing is great if you buy low and sell high.
Let's just say this - if you aren't able to imagine the scenario under which your BTC (or any investment) crashes down to near zero, you're just not thinking well enough.
I can conjure up a disaster scenario just standing right now in my kitchen, and I don't even own crypto.
You are right, one should conjure up a disaster scenario. So, here’s a question - if you had 100$, what number between 1-100 would you put as investment into Bitcoin? You can’t use any number outside the range provided.
It's kinda a weird question. If I only had $100, none of it would go into BTC.
Personally I am not invested in BTC at all because I have a pretty thorough "short thesis" on it (you can see a bit of it in my comments in this thread.)
I wouldn't be opposed to betting some play amounts on it (I'd bet short, however) - same as money that I had "invested" in prediction markets - not investments in the "I am building my wealth this way" kind of sense.
Personally I am not invested in BTC at all because I have a pretty thorough "short thesis" on it (you can see a bit of it in my comments in this thread.)
I wouldn't be opposed to betting some play amounts on it (I'd bet short, however) - same as money that I had "invested" in prediction markets - not investments in the "I am building my wealth this way" kind of sense.
It was hard question and intentionally so. I allowed you to lie within your boundaries and yet you chose to not answer. You picked zero despite me explicitly stating the only number you could pick was between 1-100$.
If you go outside the framework of a thought experiment, to play safe - we can’t move a discussion forward. So pick a number based on the hypothetical scenario you mentioned. That’s the entire point of a thought experiment, to test boundaries.
If you go outside the framework of a thought experiment, to play safe - we can’t move a discussion forward. So pick a number based on the hypothetical scenario you mentioned. That’s the entire point of a thought experiment, to test boundaries.
Not sure I follow but I am intrigued. OK well given that the least I can bet is $1, I will bet $1.
Thanks for your answer. Since you chose $1 since it is the least bet, I would like to increase your options. You can now choose any real value between 0.01$ to 100$. You are free to change your answer of $1 to anything you'd like.
You do not need to answer the question. The point I'm trying to make is that as an investor you can invest in an asset class even if you can imagine an Armageddon (crash to zero for BTC) scenario. You just have to allocate the right proportion towards the asset incorporate the volatility. Remember, the same scenario could also happen for any investment asset. The lesser the likelihood of the Armageddons the higher the allocation. You can simply reduce your asset allocation to what you perceive as the likelihood of the Armageddon scenario. I can tell you for sure that none of us can predict a scenario with a 100% probability. Given that, an allocation of 1$ or even 0.01-0.99$ is not a bad idea.
Oh, as far as BTC getting to zero - I can't imagine how that can happen without every government on the planet banning it [0]. Currently, you have governments in well developed economies consider it as an ordinary tangible asset [1] and even trading them from exchanges (9th largest in Europe) [2]!
[0] https://www.visualcapitalist.com/the-feds-balance-sheet-the-...
[1] https://www.winheller.com/en/banking-finance-and-insurance-l...
[2] https://www.bsdex.de/en/
You do not need to answer the question. The point I'm trying to make is that as an investor you can invest in an asset class even if you can imagine an Armageddon (crash to zero for BTC) scenario. You just have to allocate the right proportion towards the asset incorporate the volatility. Remember, the same scenario could also happen for any investment asset. The lesser the likelihood of the Armageddons the higher the allocation. You can simply reduce your asset allocation to what you perceive as the likelihood of the Armageddon scenario. I can tell you for sure that none of us can predict a scenario with a 100% probability. Given that, an allocation of 1$ or even 0.01-0.99$ is not a bad idea.
Oh, as far as BTC getting to zero - I can't imagine how that can happen without every government on the planet banning it [0]. Currently, you have governments in well developed economies consider it as an ordinary tangible asset [1] and even trading them from exchanges (9th largest in Europe) [2]!
[0] https://www.visualcapitalist.com/the-feds-balance-sheet-the-...
[1] https://www.winheller.com/en/banking-finance-and-insurance-l...
[2] https://www.bsdex.de/en/
This sounds like a weird way to invest. According to this logic I should invest $.01 in BTC and then to borrow from a funny commenter in this thread, $.01 in Dodgecoin, $.01 in Ether, $.01 in baseball cards, $.01 in wine, $.01 in beanie babies, etc etc etc etc etc - that basically any investment that exists deserves my dollars.
I disagree. There's plenty of stuff one "could" invest in and very few one "should."
I look at it on expected value basis and then, risk adjusted. Because I have a short case on BTC, I expect any investment in it to have expected value of 0 so any $ allocated to it would be wasted. Instead I spread my money in investments I expect to have positive value, and I invest in many of them for diversification benefits (which may be is what you were getting at?)
But the point of diversification is to secure uncorrelated positive returns. A negative return on the other hand is just a negative return. I totally agree with you that I could be wrong in my short case on BTC, my logic rests on it.
And just in defense of my case - I think about markets as someone who's studied and worked in them for 18+ years. Doesn't mean I am right and I have an open mind. So whenever I encounter someone who has the opposite view, I explain to them my case with the hopes that they can point me to what I am missing, but I always walk away with the impression they hadn't thought about the issue deeply and with nuance. Again, I could totally be wrong, but as an investor if it seems like I did my homework and the others are driven by hype/FOMO/not understanding then I am gonna sit it out :)
I disagree. There's plenty of stuff one "could" invest in and very few one "should."
I look at it on expected value basis and then, risk adjusted. Because I have a short case on BTC, I expect any investment in it to have expected value of 0 so any $ allocated to it would be wasted. Instead I spread my money in investments I expect to have positive value, and I invest in many of them for diversification benefits (which may be is what you were getting at?)
But the point of diversification is to secure uncorrelated positive returns. A negative return on the other hand is just a negative return. I totally agree with you that I could be wrong in my short case on BTC, my logic rests on it.
And just in defense of my case - I think about markets as someone who's studied and worked in them for 18+ years. Doesn't mean I am right and I have an open mind. So whenever I encounter someone who has the opposite view, I explain to them my case with the hopes that they can point me to what I am missing, but I always walk away with the impression they hadn't thought about the issue deeply and with nuance. Again, I could totally be wrong, but as an investor if it seems like I did my homework and the others are driven by hype/FOMO/not understanding then I am gonna sit it out :)
> This sounds like a weird way to invest. According to this logic I should invest $.01 in BTC and then to borrow from a funny commenter in this thread, $.01 in Dodgecoin, $.01 in Ether, $.01 in baseball cards, $.01 in wine, $.01 in beanie babies, etc etc etc etc etc - that basically any investment that exists deserves my dollars.
Honestly, I found that comment disrespectful and making a mockery of a point - it's all too common these days. If I were to take the opposite of the comment, we should NOT invest in anything and stay 100% in cash because each and every asset has risks and volatility.
> I disagree. There's plenty of stuff one "could" invest in and very few one "should."
You know that I agree with you right? I never said you SHOULD invest in BTC. I was making the point that IF one wants to invest in the BTC, then one can do so by a minimal asset allocation. It fits within your "expected value" framework.
> But the point of diversification is to secure uncorrelated positive returns. A negative return on the other hand is just a negative return. I totally agree with you that I could be wrong in my short case on BTC, my logic rests on it.
I agree. But, surely if you were willing to consider an Armageddon scenario for BTC; you could also consider a 100% upside scenario too. We did a thought experiment on the Armageddon scenario, I haven't seen any calculations on the upside.
> And just in defense of my case - I think about markets as someone who's studied and worked in them for 18+ years. Doesn't mean I am right and I have an open mind. So whenever I encounter someone who has the opposite view, I explain to them my case with the hopes that they can point me to what I am missing, but I always walk away with the impression they hadn't thought about the issue deeply and with nuance. Again, I could totally be wrong, but as an investor if it seems like I did my homework and the others are driven by hype/FOMO/not understanding then I am gonna sit it out :)
I am grateful for you that you took the time to listen. I could not find a e-mail or contact on your profile. I'd be happy to take this offline and I want to understand what I am missing here.
Honestly, I found that comment disrespectful and making a mockery of a point - it's all too common these days. If I were to take the opposite of the comment, we should NOT invest in anything and stay 100% in cash because each and every asset has risks and volatility.
> I disagree. There's plenty of stuff one "could" invest in and very few one "should."
You know that I agree with you right? I never said you SHOULD invest in BTC. I was making the point that IF one wants to invest in the BTC, then one can do so by a minimal asset allocation. It fits within your "expected value" framework.
> But the point of diversification is to secure uncorrelated positive returns. A negative return on the other hand is just a negative return. I totally agree with you that I could be wrong in my short case on BTC, my logic rests on it.
I agree. But, surely if you were willing to consider an Armageddon scenario for BTC; you could also consider a 100% upside scenario too. We did a thought experiment on the Armageddon scenario, I haven't seen any calculations on the upside.
> And just in defense of my case - I think about markets as someone who's studied and worked in them for 18+ years. Doesn't mean I am right and I have an open mind. So whenever I encounter someone who has the opposite view, I explain to them my case with the hopes that they can point me to what I am missing, but I always walk away with the impression they hadn't thought about the issue deeply and with nuance. Again, I could totally be wrong, but as an investor if it seems like I did my homework and the others are driven by hype/FOMO/not understanding then I am gonna sit it out :)
I am grateful for you that you took the time to listen. I could not find a e-mail or contact on your profile. I'd be happy to take this offline and I want to understand what I am missing here.
To be clear - you're right, I did the run-through the worst-case scenario, but I did it for someone else who wasn't seeing it. It's not that my own view rests on it.
I won't share my email or other contact here since I tend to share somewhat personal stories on HN so I'd rather it not totally tie to who I am (though really who cares) so let me lay out the simplest view of my short case on BTC.
I believe that valuation matters. I "believe" in the price of an oil futures contract for example because I know it represents the best effort of invested parties to arrive at what that price ought to be (through a market mechanism.) So people say things like "I am bullish on oil as long as it's under $X" - and once it goes above $X (plus some margin perhaps) even the bulls sell. This is good because it's sane behavior in the market.
With Bitcoin, I don't see anyone say "I am bullish until it crosses $X" - the culture of the marketplace is that it's going up no matter the price. In market terms it creates unchecked upward pressure on the price, which in my mind equates to bubble conditions.
And then I have seen enough bubbles burst (in my lifetime and through study of history) to know that unchecked upward pressure will stop just after it reaches its max. And since people aren't anchoring to an analytic $X price, there's likewise no floor on the way down. I spelled out the mechanics of this in what you call Armageddon analysis.
To boil this down very simply: 1. Whenever people are buying without an attempt to valuate, they inflate a bubble. 2. Bubbles always burst.
I have other, more technical and psychological elements to the short case, but this is the simplest piece. People bidding something up without concern for valuation always spells trouble.
I won't share my email or other contact here since I tend to share somewhat personal stories on HN so I'd rather it not totally tie to who I am (though really who cares) so let me lay out the simplest view of my short case on BTC.
I believe that valuation matters. I "believe" in the price of an oil futures contract for example because I know it represents the best effort of invested parties to arrive at what that price ought to be (through a market mechanism.) So people say things like "I am bullish on oil as long as it's under $X" - and once it goes above $X (plus some margin perhaps) even the bulls sell. This is good because it's sane behavior in the market.
With Bitcoin, I don't see anyone say "I am bullish until it crosses $X" - the culture of the marketplace is that it's going up no matter the price. In market terms it creates unchecked upward pressure on the price, which in my mind equates to bubble conditions.
And then I have seen enough bubbles burst (in my lifetime and through study of history) to know that unchecked upward pressure will stop just after it reaches its max. And since people aren't anchoring to an analytic $X price, there's likewise no floor on the way down. I spelled out the mechanics of this in what you call Armageddon analysis.
To boil this down very simply: 1. Whenever people are buying without an attempt to valuate, they inflate a bubble. 2. Bubbles always burst.
I have other, more technical and psychological elements to the short case, but this is the simplest piece. People bidding something up without concern for valuation always spells trouble.
[deleted]
I can imagine several scenarios in which BTC goes to zero.
Some have even happened.
You lose your key, or get hacked, or send to the wrong address and everything you invested is gone.
Oh, and if someone manages to reverse SHA256, or finds a vulnerability in the public key scheme it all becomes worthless instantly... That is if they don't keep it secret and milk the whole thing for everything it's worth.
Some have even happened.
You lose your key, or get hacked, or send to the wrong address and everything you invested is gone.
Oh, and if someone manages to reverse SHA256, or finds a vulnerability in the public key scheme it all becomes worthless instantly... That is if they don't keep it secret and milk the whole thing for everything it's worth.
Of course there is a scenario where any investment goes to 0. If you a smart investor you understand the risks as well, and allocate appropriately. Which is why Bitcoin is just 1% of my overall portfolio.
> I can conjure up a disaster scenario just standing right now in my kitchen, and I don't even own crypto.
Even if Bitcoin goes to zero, many who hold BTC when it hits zero will still have made a profit out of it.
Even if Bitcoin goes to zero, many who hold BTC when it hits zero will still have made a profit out of it.
Yeah, but if BTC goes to zero, it's more relevant to ask "for every 100 investors who ever bought BTC, how many made a net profit and how many made a net loss"?
I suppose you mean "because they had sold a bit of it before" - sure. And someone else has bought it off them and will have lost.
> And someone else has bought it off them and will have lost.
Not the concern of the one making a profit off of this. Not sure it should be either. That's the role of the regulators.
Not the concern of the one making a profit off of this. Not sure it should be either. That's the role of the regulators.
I am not making a moral argument. I am talking about the disaster scenario.
I guess I agree with your point actually - if someone got to a place where they already got more $USD out of bitcoin than they invested, it's safe to play.
I guess I agree with your point actually - if someone got to a place where they already got more $USD out of bitcoin than they invested, it's safe to play.
It's worrying, isn't it, people putting money into bitcoin because there are no productive investment opportunities available in the real world. That's secular stagnation.
Wouldn't necessarily call bitcoin non-productive, any more than an unprofitable startup is non-productive. The technology does currently have niche use cases, and the decentralization can be a positive. It's a bet that "productive" things will be enabled by it.
One can make a good case for certain startups like Theranos or U-Beam to be the same type of non-productive investment as Bitcoin. Bitcoin exists only in the imagination, but some business models or products are just as imaginary because they are physically impossible. It's the same phenomenon, capital being thrown at things increasingly unlikely to yield a return.
"Buying tulips is a rational decision because others are irrational and bidding them up"
Substitute bitcoin for whatever you want: tulips, Beanie babies, etc. Even George Soros, the legendary investor is in favor of putting money in a bubble early on. It's how you make the most money.
It's also how you lose most often. It's a gamble for rich people who have money they can afford to write off. It's not a sound retirement investment.
I think it is a high risk high reward system. For some there is very little risk in investing several thousand dollars, that is a pay check or 2. But if things go well the reward could be your money quadrupling or more.
It’s a deflationary store of value, it does make sense to invest some into it.
store of value
The value comes from being able to manipulate the price, one would suppose.
The value comes from being able to manipulate the price, one would suppose.
How can you manipulate the price?
I suppose there are now some whales, including governments that seized BTC from criminals, that could induce a crash by selling thousands of BTC within a short frame of time. But that may be true for many stocks as well.
I suppose there are now some whales, including governments that seized BTC from criminals, that could induce a crash by selling thousands of BTC within a short frame of time. But that may be true for many stocks as well.
The more dumb stuff people say about Bitcoin, the more room you know it has to rise.
Why is the comment dumb?
Because it is not so easy to manipulate the price, presumably.
It depends on the trading volume. For many "altcoins" or "shitcoins" it may be true, because they have low trading volume. Bitcoin probably less so these days.
It depends on the trading volume. For many "altcoins" or "shitcoins" it may be true, because they have low trading volume. Bitcoin probably less so these days.
Given the market cap of 800 billion for BTC at the moment, presumably it should by relatively hard to manipulate.
I'd read elsewhere that there was a tiny minority of BTC holders that own 95% of it, no idea of the authenticity of that.
As a Layman, my assumption is the more liquidity in the market, the harder it would be to manipulate and less reason to dump onto the market if a large stakeholder.
I'd read elsewhere that there was a tiny minority of BTC holders that own 95% of it, no idea of the authenticity of that.
As a Layman, my assumption is the more liquidity in the market, the harder it would be to manipulate and less reason to dump onto the market if a large stakeholder.
I think some of the whales could make the price tank, at least temporarily. They include some governments who seized thousands of BTC from criminal operations.
But I think the same applies to many stocks. If Musk of Bezos would sell off a majority of their shares in their own companies, it would perhaps also move the price.
At the moment, crashes in Bitcoin can also be seen as a good thing because it helps give more people access to Bitcoin. It's even possible that some of the stakeholders (whales with thousands of BTC) occasionally deliberately induce crashes for exactly that purpose.
But I think the same applies to many stocks. If Musk of Bezos would sell off a majority of their shares in their own companies, it would perhaps also move the price.
At the moment, crashes in Bitcoin can also be seen as a good thing because it helps give more people access to Bitcoin. It's even possible that some of the stakeholders (whales with thousands of BTC) occasionally deliberately induce crashes for exactly that purpose.
There's only so much that my dog can poop per day. Some of the poop gets lost when I scoop it off the sidewalk. And eventually he will die and not poop any more. Thus my dog's turds are a deflationary store of value but I wouldn't say "it makes sense to invest in some."
Disclosure - I made up the dog.
Disclosure - I made up the dog.
The dismissiveness of (presumably) otherwise thoughtful people on this forum still surprises me. Do you really find that comparison valuable in evaluating the tech?
I was looking to make a finance, not tech point. Specifically that there are many things that are finite and "deflationary" but obviously without value.
Point being that the scarcity argument of bitcoin is on its own not persuasive.
I used the cheeky example of dog poop because I though it was cute but I guess it was"too cute" and obscured the point.
Point being that the scarcity argument of bitcoin is on its own not persuasive.
I used the cheeky example of dog poop because I though it was cute but I guess it was"too cute" and obscured the point.
I think your point was made and those who are actually listening have understood it ;) I think your analogy does a good job in conveying the point that deflationary =/= valuable.
Almost ironically, having a deflationary system is something one would really like to avoid if you thought about it. It only rewards hoarding. The king, with his hoard of gold, only grow's richer by the year. As long as he is cash flow positive, the supply upon which the peasants rely on to trade shrinks and therefore the value of each grain increases.
I, for one, don't think this system is one we should be rushing to return to.
Almost ironically, having a deflationary system is something one would really like to avoid if you thought about it. It only rewards hoarding. The king, with his hoard of gold, only grow's richer by the year. As long as he is cash flow positive, the supply upon which the peasants rely on to trade shrinks and therefore the value of each grain increases.
I, for one, don't think this system is one we should be rushing to return to.
Don’t confuse deflationary with the lack of fungibility.
No physical currency can be divided into 10 million pieces, no one has a crystal ball.
No physical currency can be divided into 10 million pieces, no one has a crystal ball.
I'm not sure I follow?
If one year an apple costs 2 gold coins, but next year, that same apple costs only 1 gold coin - this would be deflation. I'm still trading gold coin(s) for an apple (fungible), it's just that the currency itself got stronger against the asset I wanted to purchase.
If one year an apple costs 2 gold coins, but next year, that same apple costs only 1 gold coin - this would be deflation. I'm still trading gold coin(s) for an apple (fungible), it's just that the currency itself got stronger against the asset I wanted to purchase.
Right, because mathematics-wise the deflating asset (if we’re picking on bitcoin specifically) is programmed to do so until 2040 or so when the block rewards run out for miners.
The currency (or asset) will continue to outperform the dollar or any fiat currency because it is setup that way to scale inversely and inverted-like through the magic of fungibility.
No one no where ever created a means of trade accurate to the ten millionth. Go look it up I’ll wait.
Just because something scales inversely to your currency that doesn’t make it a ponzi, it makes it mathematically and theoretically possible; as the market itself has proven for nearly a decade.
The currency (or asset) will continue to outperform the dollar or any fiat currency because it is setup that way to scale inversely and inverted-like through the magic of fungibility.
No one no where ever created a means of trade accurate to the ten millionth. Go look it up I’ll wait.
Just because something scales inversely to your currency that doesn’t make it a ponzi, it makes it mathematically and theoretically possible; as the market itself has proven for nearly a decade.
Yeah deflationary is dumb but not bad when there’s also population deflation.
If millennials invest in btc before boomer pensions get in, it’ll be a needed transfer of wealth.
If there’s a deflationary asset wave, each person is incentivized to get in early. Which I think is what is happening.
Although I think one huge hack or whale unloading could drop the trust in Bitcoin for years.
If millennials invest in btc before boomer pensions get in, it’ll be a needed transfer of wealth.
If there’s a deflationary asset wave, each person is incentivized to get in early. Which I think is what is happening.
Although I think one huge hack or whale unloading could drop the trust in Bitcoin for years.
It was not dismissive, it was refuting the specific contention that something scarce and of limited supply is ipso facto valuable.
I get it isn't a terribly serious example, but I can't help myself... Your dog shit tokens are vulnerable to "counterfeiting", as poop from other dogs would be practically indistinguishable.
DNA analysis would fix that.
Incidentally, I hear that there are all these forks and clones of BTC, many of which have strictly limited supply. So, they are also valuable long term investments, I assume?
Incidentally, I hear that there are all these forks and clones of BTC, many of which have strictly limited supply. So, they are also valuable long term investments, I assume?
The forks aren't widely used and there doesn't seem to be much reason to switch from bitcoin to them. Network effects are quite important here.
It's ok. Made up dog turds are the best kind.
With income inequality the way it is, there is intense demand for lottery tickets. That brings the dumb money. And smart money tends to keep an eye on where the dumb money wanders.
Disclosure: I think cryptos are this generation’s baseball cards. I have exposure to companies that make money trading cryptos and selling services to crypto investors.
Disclosure: I think cryptos are this generation’s baseball cards. I have exposure to companies that make money trading cryptos and selling services to crypto investors.
Smart move. They rake in the profits whether you're right or wrong. I've stock in something similar (plus500), but it makes an insignificant part of my overall portfolio. If you have a minute, feel free to PM a few that have caught your attention - the ideal would of course be something with valuation unaffected by the hype itself ;)
As someone who bought in the era of overproduced baseball cards I think this comparison is apt, if personally painful. At least I can burn them to cook and stay warm in an emergency.
Yeh, well, that's what gets me the most about this. I can imagine the number of people jumping in on the bandwagon with money they can't afford to lose - and the pain that will inevitably ensue.
You mentioned exposue to these companies; is that even possible without access to private equity?
Both Square and PayPal are public and support "buying" of Crypto on their platforms. Coinbase is going to be IPOing soon into much fanfare.
Well if the FED and the ECB weren't printing tens of thousands of millions of fake money every month and calling it Quantitative Easing I might have agreed maybe. Truth is government issued money is worth less and less over time, as the scheme is designed to create inflation and thus make government debt sustainable by robbing everyone else's savings year by year.
It seems to me the investment community has accepted bitcoin at this point, with major institutional investors finally buying in now--1 billion from microstrategy, for example--so expect to see it go up more. I think it will keep going up until it gets regulated, I'm sure they'll continue to find ways to "increase liquidity" despite Bitcoin.
> Truth is government issued money is worth less and less over time
Yes, that's the deal with money, which incentivises you to either spend it or invest it in productive (unlike BTC) enterprises. As it happens, inflation has been very low, arguably too low in the last decade+.
Yes, that's the deal with money, which incentivises you to either spend it or invest it in productive (unlike BTC) enterprises. As it happens, inflation has been very low, arguably too low in the last decade+.
[deleted]
being rational is overrated, modernism is boring
Just for the record, I disagree with the first contention. And, boring is underrated.
There’s money on the table what sane capitalist wouldn’t jump at the chance to take some in?
For a best of crypto quotes incl. pumping up the gigantic Bitcoin ponzi, see https://github.com/openblockchains/crypto-quotes
SCAM ALERT! SCAM ALERT! SCAM ALERT!
> The U.S. Dollar is no longer a reliable store of value. Cameron and I (Winklevoss Twins Capital) make the case for $500 000 Bitcoin. Number go up! To the moon!
> When Elon Musk puts the Tesla balance sheet into Bitcoin, we'll have to change the Bitcoin rallying cry from "to the moon!" to "to Mars!"
-- Tyler Winklevoss, Bitcoin Billionaire
or
> There are 3.5 billion smart phones on the planet. All of them can hold bitcoin. None of them can hold gold. Bitcoin is the future. Number go up! To the moon!
-- Cameron Winklevoss, Bitcoin Billionaire
Given the challenge of how to invest $600 million in treasury reserves, after a lifetime of experience and months of analysis, I decided on an allocation of 100% Bitcoin, 0% Bonds, 0% Stocks, 0% Real Estate, 0% Gold. Seems rational to me. Number go up! To the moon!
-- Michael Saylor, Business Intelligence Billionaire
and on on.
SCAM ALERT! SCAM ALERT! SCAM ALERT!
> The U.S. Dollar is no longer a reliable store of value. Cameron and I (Winklevoss Twins Capital) make the case for $500 000 Bitcoin. Number go up! To the moon!
> When Elon Musk puts the Tesla balance sheet into Bitcoin, we'll have to change the Bitcoin rallying cry from "to the moon!" to "to Mars!"
-- Tyler Winklevoss, Bitcoin Billionaire
or
> There are 3.5 billion smart phones on the planet. All of them can hold bitcoin. None of them can hold gold. Bitcoin is the future. Number go up! To the moon!
-- Cameron Winklevoss, Bitcoin Billionaire
Given the challenge of how to invest $600 million in treasury reserves, after a lifetime of experience and months of analysis, I decided on an allocation of 100% Bitcoin, 0% Bonds, 0% Stocks, 0% Real Estate, 0% Gold. Seems rational to me. Number go up! To the moon!
-- Michael Saylor, Business Intelligence Billionaire
and on on.
How, without every government banning it, do you see bitcoin's value going to zero?
https://www.visualcapitalist.com/the-feds-balance-sheet-the-...
https://www.visualcapitalist.com/the-feds-balance-sheet-the-...
Instead of zero, more like penny-stock prices like Dogecoin and Garliccoin. I see that happening if something better comes along. The first thing that comes to mind is a proof-of-stake system instead of proof-of-work - the energy savings would be considerable - which then replaces BTC.
I remember there was expectation that LTC would get somewhere on the basis that the utility of the Lightning Network give it far more inherent value than BTC’s slower settlement scheme.
I’unno man - Tulips still have value today, don’t they?
I remember there was expectation that LTC would get somewhere on the basis that the utility of the Lightning Network give it far more inherent value than BTC’s slower settlement scheme.
I’unno man - Tulips still have value today, don’t they?
Is there a market for put options on bitcoins?
You may be joking, but there are plenty of those.
Seeing the bubble is the easy part. Timing the top? Much harder!
Seeing the bubble is the easy part. Timing the top? Much harder!
I think 15th of January 2021 is a good candidate for a tipping point. Unless NYAG backs out again, postponing their move against Tether.
If you guys know where one could secure those types of put options, please fill me in. The only avenue atm for me seems to be a spread bet on margin... Which I'm not that keen on as "market irrational for longer than solvent" and so forth.
If I was a betting man I’d say the 21st January - because I can’t help but think BTC’s inflated price is predicated on the uncertainties in our political situation.
I don’t mean that in a “collapse of western civilisation”-sense - I mean it more that Biden may normalise relations with countries where Bitcoin is used for-real because of sanctions or concerns over economic disenfranchisement: if people (and oligarchs) in Russia, Iran and Venezuela can participate in the normative financial systems (SWIFT, Visa, Mastercard, etc) then BTC has far less real utility and thus less value.
Heck, I think if more US states and other countries legalise drugs that would also deal a blow (no pun intended) to BTC’s price.
I don’t mean that in a “collapse of western civilisation”-sense - I mean it more that Biden may normalise relations with countries where Bitcoin is used for-real because of sanctions or concerns over economic disenfranchisement: if people (and oligarchs) in Russia, Iran and Venezuela can participate in the normative financial systems (SWIFT, Visa, Mastercard, etc) then BTC has far less real utility and thus less value.
Heck, I think if more US states and other countries legalise drugs that would also deal a blow (no pun intended) to BTC’s price.
Definitely not a joke. Either side of that trade is a good way to lose money, so I'm not participating.
Just wanted to know if it existed.
Just wanted to know if it existed.
For US investors? Sure. LedgerX.
(Unlike some other place LedgerX is physically delivered, and not just a bucket-shop sidebet on the market).
They have contracts out to Dec2022, though volume on the Dec2022 contracts haven't been particularly significant yet and generally puts trade much less vigorously than calls there.
https://trade.ledgerx.com/live
(Unlike some other place LedgerX is physically delivered, and not just a bucket-shop sidebet on the market).
They have contracts out to Dec2022, though volume on the Dec2022 contracts haven't been particularly significant yet and generally puts trade much less vigorously than calls there.
https://trade.ledgerx.com/live
It is stupid to short Bitcoin. Bitcoin has no fundamental value, but its fundamental value is greater than zero. Since the value of a Bitcoin is impossible to predict it could just as easily go up as down.
This is true, but only because nothing has fundamental value.
absolutely, Deribit is the market leader on that. just be careful, put options on BTC have bankrupted a lot of people.
> put options on BTC have bankrupted a lot of people.
If you understand that Bitcoin options really aren't options then this shouldn't come as a surprise.
Shady exchanges see massive positions and have successfully manipulated bids and ask (most of it is fake) to trick others into selling or buying which in turn moves prices even more.
Once they take out the "option traders" they simply move on to the next.
Yet the inexperienced "speculator" believes its his fault.
Wat I credit bitcoin and its community for is its ability to create a bubble of their version of reality which is almost always getting people to buy the bitcoins they are already holding. Without them, the system would collapse and they would lose their investment.
Bitcoin is a vehicle for transfering wealth from the FOMO ignorant crowd who shouldn't be speculating on ponzi schemes. So many ruined lives because little guys bought into crypto, ICO, and other false hopes.
Bitcoin will bankrupt a lot more people I'm afraid.
If you understand that Bitcoin options really aren't options then this shouldn't come as a surprise.
Shady exchanges see massive positions and have successfully manipulated bids and ask (most of it is fake) to trick others into selling or buying which in turn moves prices even more.
Once they take out the "option traders" they simply move on to the next.
Yet the inexperienced "speculator" believes its his fault.
Wat I credit bitcoin and its community for is its ability to create a bubble of their version of reality which is almost always getting people to buy the bitcoins they are already holding. Without them, the system would collapse and they would lose their investment.
Bitcoin is a vehicle for transfering wealth from the FOMO ignorant crowd who shouldn't be speculating on ponzi schemes. So many ruined lives because little guys bought into crypto, ICO, and other false hopes.
Bitcoin will bankrupt a lot more people I'm afraid.
Deribit is a legitimate exchange.
If you play the market sure, you should expect a hefty risk to get burned.
But to me, a birdseye view of bitcoin is a currency that's created by design to be deflationary, that found a niche as a value store. Sure, there are ups and downs, and also considerable risks long term (regulatory first of all), but it should be noted that pretty much anybody that ever bought btc has lived to see a higher price, regardless of ups and downs. That's what makes it very good for what it does (long term value store).
But to me, a birdseye view of bitcoin is a currency that's created by design to be deflationary, that found a niche as a value store. Sure, there are ups and downs, and also considerable risks long term (regulatory first of all), but it should be noted that pretty much anybody that ever bought btc has lived to see a higher price, regardless of ups and downs. That's what makes it very good for what it does (long term value store).
You weren't joking. They've got a live count per day [0].
[0]: https://pro.deribit.com/statistics/BTC/insurance-fund
[0]: https://pro.deribit.com/statistics/BTC/insurance-fund
If you think you can time the top, why not try Tesla?
I didn't claim I could. I was just wondering if there was a derivative market yet. Speculation on speculation.
Deribit
Bernie Madoff went to jail when he couldn't sustain his scam any longer. When the crypto bubble pops, the prison-as-a-service industry might experience a boom since they won't have enough cells to house all the scamsters.
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A little to the moon gem from the best of crypto quotes [1] via SEC Investor Education:
> New Year's Financial Resolution: Ponzi scheme "red flags" - Avoid too-good-to-be-true "investments" with claims like:
- "To the moon! To the mars!"
- "Number go up!"
- "Yearly return of 300+% in 2020!"
- "Could quadruple in 2021 and rally to $100,000!"
[1] https://github.com/openblockchains/crypto-quotes#sec-investo...
> New Year's Financial Resolution: Ponzi scheme "red flags" - Avoid too-good-to-be-true "investments" with claims like:
- "To the moon! To the mars!"
- "Number go up!"
- "Yearly return of 300+% in 2020!"
- "Could quadruple in 2021 and rally to $100,000!"
[1] https://github.com/openblockchains/crypto-quotes#sec-investo...
Paul Le Roux as awful as he is for the stuff he has done, is truly a rare breed. Built E4M, a prototype to Truecrypt, was his first cryptographic software he put out. Using his knowledge, he was able to catapult himself to the lucrative international drug/weapon smuggling market.
Finally, the Australian fellow who claimed he was Satoshi has been trying to unlock several million bitcoins from genesis that supposedly belonged to Paul before his capture and incarceration.
If you follow this theory, essentially a money laundering drug lord coded the bitcoin, for unknown purpose but we can probably take a guess.
Bitcoin's biggest utility isn't for small individual traders rather it is a vehicle for laundering massive amounts of money. Snuff films with children, drugs, humans, and other depraved ways of making money are the entirety of bitcoins usage.
source: https://news.bitcoin.com/the-many-facts-pointing-to-paul-le-...
Finally, the Australian fellow who claimed he was Satoshi has been trying to unlock several million bitcoins from genesis that supposedly belonged to Paul before his capture and incarceration.
If you follow this theory, essentially a money laundering drug lord coded the bitcoin, for unknown purpose but we can probably take a guess.
Bitcoin's biggest utility isn't for small individual traders rather it is a vehicle for laundering massive amounts of money. Snuff films with children, drugs, humans, and other depraved ways of making money are the entirety of bitcoins usage.
source: https://news.bitcoin.com/the-many-facts-pointing-to-paul-le-...
>essentially a money laundering drug lord coded the bitcoin,
To quote Hitchens:
"Extraordinary claims require extraordinary evidence and what can be asserted without evidence can also be dismissed without evidence".
To quote Hitchens:
"Extraordinary claims require extraordinary evidence and what can be asserted without evidence can also be dismissed without evidence".
We have coincidental evidence at best but until Paul is released and he can prove his identity with his private key of course Hitchens is going to be unhappy.
But the lack of evidence simply isn't enough to suggest he isn't the creator. You can use whatever academic term to justify against this.
But the lack of evidence simply isn't enough to suggest he isn't the creator. You can use whatever academic term to justify against this.
> trying to unlock several million bitcoins from genesis
The genesis block only holds 50 BTC in reward which due to a technicality cannot be spent. And as Yoda might say, spend or spend not, there is no try. Either you know Satoshi's private key, or you don't. Faketoshi clearly doesn't.
Bitcoin's biggest utility at the moment is pure speculation.
The genesis block only holds 50 BTC in reward which due to a technicality cannot be spent. And as Yoda might say, spend or spend not, there is no try. Either you know Satoshi's private key, or you don't. Faketoshi clearly doesn't.
Bitcoin's biggest utility at the moment is pure speculation.
Which is why the false prophet from down under raised money to start that massive decrypting effort. I didn't even mention the other wallets he tried to unlock without success.
Coincidence? When there are more than 4 or 5, you start thinking.
I will agree that Bitcoin is just a large ponzi scheme which will collapse as soon as they can't find the next "speculator" to buy their coins at a high price.
It's just hilarious seeing it play out over and over again with exactly the same result.
Coincidence? When there are more than 4 or 5, you start thinking.
I will agree that Bitcoin is just a large ponzi scheme which will collapse as soon as they can't find the next "speculator" to buy their coins at a high price.
It's just hilarious seeing it play out over and over again with exactly the same result.
> It's just hilarious seeing it play out over and over again with exactly the same result.
You mean, the result that it keeps going up (with large drawdowns, but with exponential growth nevertheless)?
If you're so sure Bitcoin will crash, short it on a futures market. You can make a lot of money with that insight if you're proven to be right.
You mean, the result that it keeps going up (with large drawdowns, but with exponential growth nevertheless)?
If you're so sure Bitcoin will crash, short it on a futures market. You can make a lot of money with that insight if you're proven to be right.
Putting your money where your mouth is both expensive in time and money. Talking is free. I stopped trying to explain bitcoin in 2012
There are dozens of theories who Satoshi is.
All transactions in bitcoin are public, that makes it really a bad idea to use it for illegal activity. I doubt that criminal mastermind would create system to publicly backup incriminating evidence.
How is that relevant to the shared article?
Assuredly there are many crypto hedge funds able to predict pump and dumps with much higher accuracy, but they are keeping the methods to themselves to protect their intellectual property.