Bitcoin's Price Was Artificially Inflated Last Year, Researchers Say (nytimes.com)

A concentrated campaign of price manipulation may have accounted for at least half of the increase in the price of Bitcoin and other big cryptocurrencies last year, according to a paper released on Wednesday by an academic with a history of spotting fraud in financial markets. From a report, first shared to us by reader davidwr: The paper by John Griffin, a finance professor at the University of Texas, and Amin Shams, a graduate student, is likely to stoke a debate about how much of Bitcoin's skyrocketing gain last year was caused by the covert actions of a few big players, rather than real demand from investors. Many industry players expressed concern at the time that the prices were being pushed up at least partly by activity at Bitfinex, one of the largest and least regulated exchanges in the industry. The exchange, which is registered in the Caribbean with offices in Asia, was subpoenaed by American regulators shortly after articles about the concerns appeared in The New York Times and other publications. Mr. Griffin looked at the flow of digital tokens going in and out of Bitfinex and identified several distinct patterns that suggest that someone or some people at the exchange successfully worked to push up prices when they sagged at other exchanges. To do that, the person or people used a secondary virtual currency, known as Tether, which was created and sold by the owners of Bitfinex, to buy up those other cryptocurrencies.

Comments

It was Willybot

[xack]

The big MtGox bubble in 2013 was caused by Willybot. Other bots have been developed since then to pump the price. I seen the price of Bitcoin rise over a 1000 dollars in a minute at the peak of the bubble due to bot activity.

Re:It was Willybot

[freeze128]

Thank you for not calling it "Mount Gox"...

Re:It was Willybot

[Joce640k]

Anybody who looks at a graph of bitcoin prices can see it's artificial. It goes in stairsteps, not the sloping ups and downs of human buying. Sometimes the humans come in and mess it up but watch it for a few days and you'll see it clearly. Robotrading.

(find a 12 or 24 hour view of prices to see it best)

It goes up a step, up a step, up a step, ... then crashes down again. Somebody definitely a lot of robots set up doing the pumping and dumping.

Re:It was Willybot

[dcw3]

You mean like stock prices, and automated trading? Why should this be any different?

It has no intrinsic value

[Theaetetus]

So the price is always artificially inflated.

Re:It has no intrinsic value

[Hognoxious]

*froth froth* fiat currency *froth froth* inflation *froth froth* tax *froth froth* Venezuela *froth froth*.

(roman_mir is temporarily indisposed)

Re:It has no intrinsic value

[pellik]

That's not really true. It's like saying that because music can be copied it has no intrinsic value. There is a utility value in bitcoin that other payment methods don't offer. It also has value to people who have trouble keeping or moving money in other formats due to legal issues (Russia). Bitcoin has found a real niche and it's not going to collapse to nothing unless another coin fully takes its place.

Re:It has no intrinsic value

[mrwireless]

Doesn't the same go for all money since we went off the gold standard?

Re:It has no intrinsic value

[Drethon]

Doesn't the same go for all money since we went off the gold standard?

Isn't that true when we were on the gold standard? The value of gold had to be artificially be held down in order to make gold the standard of trade. Ultimately all any form of money represents is an intermediate form to convert the value of your work into goods you desire, though gold at least has some value in electronics but I think that value is swamped by the perceived value for jewelry.

Re:It has no intrinsic value

[Spy Handler]

That's not really true. It's like saying that because music can be copied it has no intrinsic value.

Depends what you mean by music.

I have a mp3 file of Beethoven's Piano Concerto #5. What is the value of my mp3 file? How much will I get if I were to sell it? What is its liquidity?

Answer is zero. On the other hand if you're talking about the artistic value of the piece or its contribution to human culture, then the answer is priceless.

Re:It has no intrinsic value

[jythie]

Question is, are they they same people? Ok, probably a lot of them are.. techno libertarianism tends to define a lot of ethics based off what benefits the speaker and it is every else's fault if it doesn't.

Re:It has no intrinsic value

[DontBeAMoran]

Beethoven's Piano Concerto #5 is priceless.
Bitcoin's value is price-less.
Ergo, Beethoven invented Bitcoin.

Re:It has no intrinsic value

[vtcodger]

"Doesn't the same go for all money since we went off the gold standard?"

A gold standard MIGHT have some provide some stabilization. Sometimes. Maybe.

But unless all borrowing and lending is prohibited or at least the exchange of IOUs is prohibited, the money supply can expand or contract and inflation/deflation/speculation etc can still occur. Further, any new supply of Gold will be inflationary and any failure to find more Gold will be deflationary. Gold based currency is only perfectly stable if just enough Gold is added to the system to exactly match increases (or worse perhaps, decreases) in the size of the economy.

That is to say that if you put Paul Volker or a clone thereof in charge of your economy, you have a shot at monetary stability -- with or without Gold. Put Alan Greenspan or the like at the helm and a Gold Standard won't help you much.

Re:It has no intrinsic value

[OldPappy]

If I recall correctly, at one time, the US government set the price of gold at $35 per ounce. They also had laws on the book which prevented ordinary citizens from buying and selling gold, except in jewelry, and other items. Don't recall all the ins and outs of this.

Re:It has no intrinsic value

[bill_mcgonigle]

We're told by many here on /. that music HAS no intrinsic value because it CAN be copied. That pirating music OK, because the artist made their money once on the sale of the first recording, so there is no need for them to make money on later sales of that product.

Who says that? All value is relative and individual.

*Many* people are willing to pay eighty-nine cents or a buck twenty nine for a song. Others are willing to pay fourteen dollars a month for unlimited music.

Some people are willing to pay three dollars for the utility that a crypto provides; others are willing to pay twenty thousand.

In all those cases a market allocates the resources from the people who value something more to the people who value something less.

It's only in the Socialist ideal of one fixed value for a commodity that anybody can dare announce that an orange is worth more than an apple. But that fails every time it's tried, and for obvious reasons. Mises's "Economic Calculation Problem" paper is a good read on the technical subject, or Hazlit's "Economics in One Lesson" is a more gentle introduction. Both are available for free just a google search away, but that doesn't mean nobody values them. It's left as an exercise for the reader to figure out what additional actors may be involved in the value chain.

Re:It has no intrinsic value

[Anonymous Coward]

>or something like a property record

Yes, except the government is an authority on property records and controls the ledger, so there is no need for a blockchain on property titles.

Basically it needs to be something where (1) you have no central managing authority, and (2) it needs public verification of the entire ledger.

There aren't a lot of these problem sets in the wild. Maybe for public domain documents not owned by the government? Bitcoin had to invent a problem for this solution.

Re:It has no intrinsic value

[farble1670]

Bitcoin has found a real niche and it's not going to collapse to nothing unless another coin fully takes its place.

Yes and it's niche is transactions on the gray or black market where you have no other choice but to use it.

Re:It has no intrinsic value

[farble1670]

We're told by many here on /. that music HAS no intrinsic value because it CAN be copied.

Unfortunately (or not, depending on your outlook) that's very true. People today aren't paying for the music, they are paying for the service that make it available to them; the slick app that manages the music on their PC or mobile devices, the data center that provides fast downloads and streaming of the music, the licensing deals with publishers that provide acccess to a large catalog from a single subscription, and so on.

Re:It has no intrinsic value

[misnohmer]

You mean like most modern currencies, US dollar, Euro, etc? None of them are backed by anything tangible and most of their supply (85%+) is virtual.

Re:It has no intrinsic value

[Drethon]

If I recall correctly, at one time, the US government set the price of gold at $35 per ounce. They also had laws on the book which prevented ordinary citizens from buying and selling gold, except in jewelry, and other items. Don't recall all the ins and outs of this.

Yep this, though I don't know much beyond the generic overview either.

Re: It has no intrinsic value

[Arunex]

is the us government not tangible? what about other governments?

No value at all

[pubwvj]

Bitcoin has no value. It is just smoke and mirrors.

Paper money is only mildly better, especially now that it has no gold backing.

Gold backed was also not real.

Gold in fact has no real value other than what it can actually be used for to make things of use.

To find something with real value we need to go back to beans, firewood, pork, tools, etc. These sorts of things have real value.

Re:No value at all

[pellik]

But how can we be sure what we perceive is real? What is the value of firewood in a computer simulation?

Re:No value at all

[ljw1004]

To find something with real value we need to go back to beans, firewood, pork, tools, etc. These sorts of things have real value.

Thanks for your 2c^H^H^H half a bean

Re:No value at all

[Jeremi]

Bitcoin has no value. It is just smoke and mirrors.

Also, Justin Beiber has no value, because I can't stand his music or his personality.

Also, Windows 10 has no value, because I don't like Microsoft and only use MacOS and Linux.

Also, stating that "X has no value" has no value, since that's really just a statement of your personal opinion of X's value to you. X obviously has some value, at least to the people who are using X, otherwise they would not be willing to pay money for X. It's a buyer's willingness to pay for X that defines X's value -- at least for that buyer. You can disagree with the buyer's estimate, but doing so is no more useful than disagreeing with their taste in music, or anything else.

Re:No value at all

[Srin Tuar]

slashdot is like a nocoiner HQ.. they really want bitcoin to go away and stop trammeling their lawn.

Re:No value at all

[Drethon]

Yep and hauling around firewood in your pocket does not go very well. Gold and silver as high density value items, that represent the value of what they can be traded for more than intrinsic value, works great. Paper money even better in that it is even more value dense, electronic money is closing on infinitely value dense (I can carry entire country's value on my phone) is amazing, except for how easy it can be manipulated.

Re:No value at all

[XxtraLarGe]

>Bitcoin has no value. It is just smoke and mirrors. Paper money is only mildly better, especially now that it has no gold backing.

The difference between Bitcoin & cash is how easy it is to lose your Bitcoin. Lose the private key to your Bitcoin wallet, and you'll never be able to recover it. Lose the key to a safe that money's kept in, at least you can still open the safe. Sure, you can burn money and destroy it, but lost money can usually still be found.

Gold backed was also not real. Gold in fact has no real value other than what it can actually be used for to make things of use. To find something with real value we need to go back to beans, firewood, pork, tools, etc. These sorts of things have real value.

Isn't that true about anything, including beans, firewood, pork, tools, etc.? How much value do beans have to someone allergic to them? How much value does firewood have to someone who lives in an apartment building? How much value does pork have to a Muslim, a Jew or a vegetarian? What value does an impact wrench have to a paraplegic? Gold is almost universally recognized by most cultures throughout history as being a valuable commodity. Women seem to especially like it, and most men like women, so gold has value to them as well.

Re:No value at all

[DRJlaw]

Bitcoin has no value. It is just smoke and mirrors.

Paper money is only mildly better, especially now that it has no gold backing.

Gold backed was also not real.

Gold in fact has no real value other than what it can actually be used for to make things of use.

To find something with real value we need to go back to beans, firewood, pork, tools, etc. These sorts of things have real value.

Insightful, yet the analysis of paper money misses the point. The things that have "real" value at the things that other people will accept as payment in exchange. Who will accept paper money as exchange for the taxes that you owe? The government (federal, state, local). Who owes taxes to the government? An awful lot of people. Therefore an awful lot of people need and will accept paper money.

Bitcoin has "real" value, but it's a thinly traded and small market -- not a lot of people will accept it, and also not a lot of people need it. Paper money has "real" value and an immense market. Your examples of other things with "real" value are not better than paper money, but in fact worse -- they're barter -- because fewer people will accept them and they have smaller markets. I do not need a house-load of beans, firewood, pork, tools, etc. and for the most part I will not accept them because I do not want to have deal in them beyond my near-team consumption needs.

You'd have everyone become a barterer or general merchandiser in a bartering system. That is not an improvement.

Re:No value at all

[ISayWeOnlyToBePolite]

But how can we be sure what we perceive is real? What is the value of firewood in a computer simulation?

To repeat the common sense argument made by G. E. Moore for an external world:

Here is one hand,
And here is another.
There are at least two external objects in the world.
Therefore, an external world exists.

You don't have to fully agree, just accept that it's probably real enough and that actions are likely to have consequences and you'll be fine.

Re:No value at all

[Anonymous Coward]

Dollars are backed by lead. More recently they are also backed by Predator drones carrying Hellfire missiles. While this is a different type of backing than what you describe, it does increase the dollar's value.

Re:No value at all

[DontBeAMoran]

Don't blame me, I voted for Kodos.

Re:No value at all

[DontBeAMoran]

Gold is almost universally recognized by most cultures throughout history as being a valuable commodity.

And that's because god has taught us to like gold so that we would search for it, refine it, store it, etc. And once god comes back they will take all the gold from us.

p.s.: god is aliens.

Re:No value at all

[jwhyche]

What is the value of firewood in a computer simulation?

It is L$99 which would translate into about say, 90 cents depending on the exchange.

https://marketplace.secondlife...

Re:No value at all

[HeckRuler]

Utility is what you can use it for.

Value is what you can trade it for.

Money has no utility beyond it's value. People trade it for shit.

the dollar is tied to the utility of the full faith and credit of the United States

Ahhhh, the utility of "faith". Uh huh. ok, I can roll with that: Bitcoin is tied to the utility of the full faith of hard encryption and math. So far all the servers in the NSA, FBI, CIA, Amazon, and Google combined would still take millennia to crack hard encryption and thwart about $5 of electricity on commodity hardware. Maybe you can call that "Real Power", but I'd lean more towards REAL ULTIMATE POWER with ninjas and shit.

I've got a significant amount of faith that 1+1=2 and factoring large numbers is a bitch and a half.

Re:No value at all

[vtcodger]

"except for how easy it can be manipulated."

Well that, and the theft thing. The fact that anonymous entities somehow manage to walk off with other anonymous entities' cryptocurrency despite the purported difficulty of doing so is less than encouraging.

Re:No value at all

[lhunath]

The value of beans is as real as the value of anything, bitcoin included.

Before you start making claims about what has value, consider defining value first.

If you feel value is a thing that enables you to use something to actually do something, get something, trade something or get something done, then beans are as valuable as bitcoin is.

But from your comment about "smoke and mirrors", it seems like perhaps you feel that value is only real if it is somehow permanent, unchanging, unfleeting. If that's your definition of value, I doubt you will ever find anything that meets the need to satisfy your insecurities.

Re:No value at all

[sjames]

On the other hand, how much value does gold have to someone who is starving? If the starvation is serious enough, the Jew or Muslim will eat the pork in order to live. Most vegetarians will as well.

Re:No value at all

[HeckRuler]

Bitcoin uses SHA-256. Child, teach thyself.

Re:No value at all

[HeckRuler]

Again, the US dollar likewise has no intrinic utilty. If the mechanics of bitcoin's scarcity being tied to math and encryption doesn't count, then the fact that all those US soldier are paid in US dollars doesn't count either.

But they both count. The US dollar is strong, for a whole variety of reasons, and I can trust that certain people will accept bitcoins as a form of payment.

Re:No value at all

[desdinova 216]

I voted for Cthulhu, you insensitive clod. after all, why choose the lesser evil?

Re:No value at all

[desdinova 216]

so, you're into beastiality?

Re:No value at all

[desdinova 216]

it's not the gold itself, it's the latinum that is contained within.

Re:No value at all

[Carewolf]

Bitcoin has no value. It is just smoke and mirrors.

Paper money is only mildly better, especially now that it has no gold backing.

Gold backed was also not real.

Gold in fact has no real value other than what it can actually be used for to make things of use.

To find something with real value we need to go back to beans, firewood, pork, tools, etc. These sorts of things have real value.

Real currencies are debt backed. They are backed by everybody talking loans to buy things, and that way tied to the value of all those things bought on a loan. Assuming most companies would always want to have most of their economic worth fully active, that makes the majority of the worth of the entire country being the backing of the country's currency.

Re:No value at all

[farble1670]

Paper money is only mildly better, especially now that it has no gold backing.

Um, what? Your BTC lost ~20% of it's value over the last week. The dollar in my pocket pretty much has the same buying power as it did a year ago.

Re: No value at all

[farble1670]

That dollar in your pocket is worth a few percent less today than it was last year and has probably lost about 90% of it's value since your grand parents were the age you are now

Yes, I learned about inflation when I was 7 years old, thanks. Obviously that's not the same as losing 20% of it's value in a day.

Re:No value at all

[sjames]

Not always. If you and some other guy are starving and help is weeks away, good luck buying the last burger from him with your gold.

Re:No value at all

[Drethon]

Except I won't accept an entire countries crypto wealth as payment. But I will take silver and gold.

If your crypt currency is so valuable, then prove it. Go to Walmart and buy something. Any size, any value, but do it with a crypto currency, ANY crypto currency.

If your unable, then it just proves the point that it really has no value.

I said electronic money, not crypto currency. Go to Walmart and try to buy something with gold and silver and see what happens, but they will take digital ones and zeros in the form of credit cards all day long. Does that prove gold and silver has no value?

Re:No value at all

[dcw3]

"Real value" is in the eye of the beholder. Approximately 7 billion people seem to be just fine with the "real value" of paper money, and could give a rat's ass that Neanderthals whine about fiat currencies.

Re:No value at all

[dcw3]

And yet how many people have lost their Bitcoins. How many scams have we heard of in it's short existence? It's going to be a while before the general public is going to gain confidence that measures are in place to prevent these things before they're ready to adopt crypto on a daily use basis.

Re:No value at all

[dcw3]

If someone screws around with your payment in dollars, you can take them to court, or get US law enforcement evolved. Who exactly do you have covering your ass with Bitcoin?

Re:No value at all

[HeckRuler]

You realize that Visa just eats the cost of credit card fraud and passes it on to merchants, right? Last year was $16 Billion. B. Billion. YEARLY. In the US. (But, that's all identify theft).

Now, Visa (and credit cards as a whole) is a monetary system. No doubt about it. A privately run monetary system that charges merchants the right to accept money, and takes a slice of every transaction. Anyone with your number can go to nearly any store online in any country and spend YOUR money. But Visa is pretty good about identifying fraud, forgiving the customer, and then just eating it. LIKEWISE, anyone with the key to your bitcoins can simply take your money, but there's no-one taxing all the merchants in the world to offset it.

before they're ready to adopt crypto on a daily use basis.

I honestly don't see that happening. It's pretty trivial to make phone transfers, or something that works like a credit card (And then a massive rollout for merchants to switch their PoS systems, which is happening with Google and Apple's pay by phone systems). But the transaction times would have to come down to seconds. Which isn't going to happen for bitcoin, and probably any other crypto that gets popular. Maybe if there was a culture of "I'll trust this $5 action will clear eventually, go on your way". But... hell dude, it works GREAT for Internet purchases. They don't ship till it clears. Easy peasy. There's really nothing in the way of Amazon accepting bitcoin... you know, other than the wildly fluctuating value.

Re:No value at all

[HeckRuler]

....The COURT.

The court doesn't care if the contract stipulates payment in cash, cows, gold, barrels of oil, securities, or rick-roll-memes. Someone screws you, you can take them to court. Let me make that clear: You can sue anyone for anything.

If someone breaks into your house and steals your cat, it's not like the police are going to tell "tough shit, cats aren't made of US cash, so you can pound sand". Now, if you somehow give your credit card number to someone online and they start spending your money, the police WILL likely tell you to pound sand as they're laughably unprepared to handle cybercrime. But hey, they'll file a case. Wheeeee. Good luck taking an IP address to court. Even if they make a fraudulent US bank transfer, and steal your certified, totally-real, US dollars, you ain't got NO ONE covering your ass. Not the court, not the police, that money is more than likely JUST GONE.

Re:No value at all

[dcw3]

I don't think your comment on credit card fraud is relevant from a consumer point of view since they don't feel any direct impact. If they use Bitcoin, they don't have that protection that you mentioned. So, again, why would the general public care about any crypto currency until it becomes more secure/easy to use?

Point taken on the transaction times...I agree.

Re:No value at all

[dcw3]

Sorry, I don't have experience with it, so it was an honest question.

Re:No value at all

[pubwvj]

I can't eat bitcoins.
I can't build a house out of bitcoins.
I can't drive a bitcoin down the road.
I can't breed bitcoins to make more bitcoins.
Bitcoins don't keep me warm.
Although, the bitcoin mining machine will keep you warm but that is a side effect of burning electricity that must be paid for and the computer must be paid for and the house must be paid for that contains the mine.

Re:No value at all

[pubwvj]

"Complete bullshit. The only real value is what somebody is willing to pay for something."

Real value means I can do something with the thing other than trade it. For instance, beans can feed me, firewood can heat my home, a tractor is a tool I can use to do things with, a pig can be bred to produce piglets and thus more pigs that will grow on my pastures so that I can slaughter them and eat them and sell them. Those are all real values.

Re:No value at all

[pubwvj]

Conartistry... You're very good.

Re:No value at all

[pubwvj]

Nope. You're making assumptions.
I never had bought nor sold any bitcoins.

Re:No value at all

[lhunath]

No sure what your point is.

You can't eat gold, you can't build a house out of cows, you can't drive firewood down the road, you can't breed salt, beans don't keep you warm. What exactly are you trying to say? Everything generates value for different reasons. Bitcoin has its own, just like cows do, and neither are universally useful.

Re:No value at all

[farble1670]

Wow, you completely invalidated my point. Whoosh?

Re:No value at all

[pubwvj]

If I understood correctly you were saying I trade in bitcoins. I don't. Ergo you are wrong. Whoosh yourself.

Re:No value at all

[farble1670]

If I understood correctly you were saying I trade in bitcoins. I don't. Ergo you are wrong. Whoosh yourself.

You are either retarded or being deliberately obtuse. Either way, bye.

Re:No value at all

[HeckRuler]

Someone tells your bank to move some money. Bank verifies it's you because only you would know your password and/or your pets name and what street you were born on. But it was not you. Regardless, bank has successfully followed due process as stated in that form you signed and never read when making an account, and you're fucked.

Someone frauds your visa card, and TYPICALLY Visa will reimburse you. Usually it's pretty simple. When it's not and for whatever reason Visa doesn't want to give away money, it surprisingly comes down to how much you bitch and moan at them. Regardless, the merchants eat the cost through higher transaction fees. What are they going to do? NOT accept Visa, that's a laugh.

No, dollars and crypto are not as safe (or otherwise) as each other.

Correct. Assuming you can properly handle your keys, crypto is much more safe. Assuming you can restrain yourself and not fall into debt, Visa credit is much more safe (unless you're the merchant).

It actually does

[rsilvergun]

it has the value of the drugs it's being used to buy and money laundering done with it. That's what formed the base of the Crypto currency market (with a smattering of ransomware and video game 'skin' gambling). A serious of transactions that needed to be kept off the books. It was only later Crypto currencies branched out into unregulated and unbacked securities (e.g. the "Proof of Stake" coins that have become so popular).

If you want to see Bitcoin's price _really_ tank legalize drugs, crack down on money laundering and kill the securities scams. It'll go back to a few bucks a coin while the rest of the currencies will be worthless.

Re:It actually does

[ArchieBunker]

That fact that you think Bitcoin is used for illegal things is a sure sign you're clueless. Bitcoin is not an anonymous currency. For all your untraceable things you use Monero.

Re:It actually does

[GameboyRMH]

The fact that you think Bitcoin isn't used for illegal things in spite of its lack of built-in anonymity features is a sure sign that you're being obtuse. Early darknet black markets primarily used Bitcoin. You don't need to provide a name or address to have a wallet.

Re:It actually does

[thegarbz]

it has the value of the drugs it's being used to buy and money laundering done with it.

No it doesn't because the prices of those drugs got adjusted with varying values of bitcoin. That's precisely the problem, the only thing bitcoin was pegged to was the value of traditional currencies against which it was traded.

Re: It actually does

[Arunex]

bitcoin's only use is speculation in fact

Shocked!

[Hognoxious]

Shocked, shocked is anyone?

Disagree

[bjdevil66]

Value is a perceived desire within someone for something.

So based on your list of valuable things.. Did you post this from 1840's rural Minnesota?

Well, at least some non-fraud profit in BC

[gweihir]

This is an excellent research opportunity into how unregulated markets will be manipulated. I am glad to see somebody took it.

Pity the fool..

[h8sg8s]

Pity the fool who jumped in at $15k expecting a rocket ride to riches..

Welcome to the Modern World

[mschwanke97402]

It was clear to me from the outset that Crypto-Coins were even funnier money than government fiat currency. Now we see that the eCoins are rather more susceptible to all sorts of fudgery.

Re:Welcome to the Modern World

[jythie]

Smaller the pool, the easier it is for wealthy parties to manipulate it. I wish I could remember the actual events, but I can recall years ago in class we went over case studies of firms or even individuals able to manipulate the currencies of small/poor nations. Cryptocurrency, even all the coins put together, is still well within the range of what well financed individuals can screw with and fleece other investors.

Re:Welcome to the Modern World

[mschwanke97402]

Smaller the pool, the easier it is for wealthy parties to manipulate it. I wish I could remember the actual events, but I can recall years ago in class we went over case studies of firms or even individuals able to manipulate the currencies of small/poor nations. Cryptocurrency, even all the coins put together, is still well within the range of what well financed individuals can screw with and fleece other investors.

My point is that in the modern age, with electronic coins, people can manipulate the exchanges directly via hacking, exploiting the coin's algorithms, etc. Yes, it is clear that many of the crypto-currencies are basically closely held by a few individuals or organizations and can be easily manipulated by old-school brute force financial trickery too,

Re:Welcome to the Modern World

[iggymanz]

some thing has been done in metals markets too, there is nothing about crypto-currency markets that is special

Re:Welcome to the Modern World

[dcw3]

Yup...
https://www.investopedia.com/a...

Just like LIBO

[ve3oat]

We all remember LIBO, right? The London Interbank Offered Rate. One of the causes of the 2008 bank crash, especially in Europe. Same thing -- under the table manipulation of a rate by a few key players for their own benefit. It can and will happen in any unregulated market. Just finished reading "Open Secret" by Erin Arvedlund, 2014, ISBN 978-1-59184-668-0. "The global banking conspiracy that swindled investors out of billions". I would recommend it highly. Cryptocurrency investors, watch out!

Color me surprised

[Notabadguy]

Raise your hand if you're surprised.

Pump And Dump

[ComputerGeek01]

It's almost as if investment stuff is regulated for a reason: https://www.investopedia.com/t...

No Fucking Shit Sherlock

[Khyber]

Anyone that watched the buy/hold/sell orders on any exchange knew that was what was happening.

Not quite

[slashmydots]

It was much higher than the 10 month turnaround on equipment + electricity which has been the norm for a very long time. BUT it was almost exclusively due to idiots in Wall Street dumping money into it when the SEC said they could mixed with idiots reacting to idiots on Wall Street doing this.

Re:"Researchers"

[ISayWeOnlyToBePolite]

And how do we know these "researchers" are not artificially pushing down the price of Bitcoin now...

They are actually real researchers who have written a paper describing their findings. Previous to this they released a paper about manipulation of the VIX. To describe and expose asset manipulation publicly while being held to the standards of science is their career, and they are doing quite well. To suggest that they also secretly engage in asset manipulation seems far fetched at best.

Scams in cryptocurrencies?

[Luthair]

Thats unpossible.

Pump and dump

[wbr1]

Pump and dump - it's not just for hookers anymore.

Google "Layering"

[rsilvergun]

why do you think there are so many crypto currencies now? You buy Monero with cash and then Ethereum with your Monero and maybe two or three other currencies in there and then finally buy some bitcoin and cash it out. That's how you do the money laundering.

As for buying drugs with bitcoin, yeah, and lots of folks get caught. Lots of folks don't. Right now in a lot of the world drug laws are selectively enforced. In America if you're middle class or above and white you can pretty much do drugs with impunity. Depending on your jurisdiction you can do drugs if your black as long as you stick to your side of town.

Our drug policy is how we enforce racial segregation in the parts of the country that want it. It's also how we bust up groups of young people when they start protesting for change. This isn't me making crap up either. Nixon's old aids admitted to it.

Re:Google "Layering"

[farble1670]

Nixon's old aids admitted to it.

Good thing Nixon's aids aren't running the country right now.

Re:Google "Layering"

[ET3D]

The main reason there are so many cryptocurrencies is that it's easier to make money off a new currency than an old one. If a coin takes off, early adopters make a lot of money.

Re:Google "Layering"

[dcw3]

I'm gonna call your post racist. Primarily because you clearly think we're still living in the 60s.

Re:"Researchers"

[DontBeAMoran]

Bitcoin hasn't been mined with GPUs for years, how would it affect GPU prices?

Re:FAKE NEWS! THAT WOULD BE HIGHLY ILLEGAL!

[DontBeAMoran]

The only crypto-currency that is guaranteed to keep its value is Dogecoin. Since the beginning, one Dogecoin has always had a value of one Dogecoin.

Investors?

[HeckRuler]

Bitcoin.

rather than real demand from investors

Investors in... bitcoin. You've ready entered crazy town. It's an internet currency. People speculating on it are already nuts. The fact that things are crazy in crazy town isn't shocking at all. And frankly it doesn't subtract from it's utility. IF you get $50 worth of bitcoin, do your transactions, and then sell your coins for cash, bitcoin still does it's job. Cheaper, faster, more secure international money transfers. ...And laundering. That too.

Re:Investors?

[thedarb]

Word.

So what?

[Zorpheus]

What exactly is the problem here? They bought bitcoins when they were cheaper. This seems totally normal to me. Even if it was with the intent to push the prices up, isn't that also done with everything? Three central banks do that for sure. And if rising prices animate others to buy something without intrinsic value then it's their fault I would say.

No shit.

[thedarb]

The entire thing is a get rich quick scam of one form or another. Really, why would you invest in this stuff?

Surprising absolutely no one

[sjbe]

A concentrated campaign of price manipulation may have accounted for at least half of the increase in the price of Bitcoin and other big cryptocurrencies last year,

Just say it. It's a Ponzi scheme. Admit it and you'll feel better.

If you are an honest believer in cryptocurrencies I admire your earnest faith in humanity but virtually everything about cryptocurrences virtually screams scam to anyone with a functioning brain and any sense of skepticism. It is nothing more than a bunch of greedy people trying to make a fast buck from credulous fools using the latest financial fad.

Re:Surprising absolutely no one

[iggymanz]

eh, same things done with metals like gold and silver too...no difference

doesn't matter what the market's good/currency is, can be done in all of them

Re:Surprising absolutely no one

[dcw3]

The vast majority of civilization doesn't treat currency as an investment. Sure there are folks that do, but they are a tiny fraction of 1%. Until there's some price stabilization, buying and selling crypto currency will put you at the mercy of the wild swings in value, not something that most of the public or businesses care to be involved with.

Re:Don't rule out government's intervention

[Actually, I do RTFA]

Discrediting an alternative currency, which the government can not control, to protect their own fiat papers is the motive. As for the means â" recall the NSA buying computing power by the acres...

If the US government decides to bring down bitcoin via sustained 51% attacks then bitcoin is going down. It's not a "discrediting" it's literal destruction of the currency's functionality. Much the same way as if the US government decided to bring down the currency of some small nation by conquering it.

Now, I think both of those unlikely. But they are both well within their capabilities.

Securities fraud is what

[sjbe]

What exactly is the problem here?

Please go research what a Ponzi scheme is and maybe you'll comprehend. Then go research Pump and dump. Finally try to understand the meaning of the term securities fraud.

Even if it was with the intent to push the prices up, isn't that also done with everything?

No it isn't.

Re: Securities fraud is what

[Zorpheus]

Maybe you just don't know how stocks work.

Childs play

[sjbe]

Cryptocurrency, even all the coins put together, is still well within the range of what well financed individuals can screw with and fleece other investors.

The British Pound is well within the range of what well financed individuals and hedge funds can screw with. Bitcoin and other so called cryptocurrencies are childs play by comparison.

Value depends solely on belief

[sjbe]

Real currencies are debt backed.

Not really they aren't. What every currency and every asset for that matter are backed by is nothing more than belief. People believe it has value and so it does. Usually there is some rationality to this belief but not always. You cannot explain the price of gold based on any sort of rational valuation. (Which is why a gold standard is a stupid idea) You can say a currency is backed by something but all you are doing in that case is making a derivative and the value still ultimately depends on belief in the value of the underlying asset. (which again is why a gold standard is a stupid idea)

Cryptocurrencies are stupid for many reasons but not because of what they are (or aren't) backed by.

Thank Goodness !

[Anonymous Coward]

All my money is safe in BitConnect.

No,

[rsilvergun]

but their successors are. That's blindingly obvious enough I really shouldn't have to point it out...

Re:No,

[farble1670]

but their successors are. That's blindingly obvious enough I really shouldn't have to point it out...

But really, telling people they are retards when they don't agree with you, how's that working? Educating a lot of folks? Changing peoples' minds much? Converting people to your way of thinking?

Re:Don't rule out government's intervention

[mi]

Destroying it may be too much — and will stink, if the attempt (successful or not) becomes known. Discrediting is far more subtle and easier to deny, yet achieves the same goal. Oh, and it also allows a few people with advance knowledge to make a tidy profit...

Of course, I have no proof, but it is obvious, there is motive and there is capability...

Re:For easily launderable money

[Hallux-F-Sinister]

Use quarters. They are easy to buy and sell and you can launder them with soap and water.

While cleaning coins does not (up to the point where they are unrecognizable) alter their face-value, it does reduce their numismatic value, and every coin collector and dealer, as well as every publication I've ever seen on the subject, strongly disrecommends doing so. For example...

Didn't call you a retard

[rsilvergun]

I said you were ignoring a blindingly obvious point. I didn't say why you were ignoring it. There's probably no converting you. You're either a professional troll or someone like me: completely beaten into the ground by life and lashing out. I lash out from the left with hope for the future. You're doing it from the right with hope that it all burns. I can't convert you, you're too far gone. What I can do is keep your kind from doing any more harm.

Re:Didn't call you a retard

[farble1670]

There's probably no converting you.

Dude this isn't about beliefs, it's about your inability to make a coherent argument. FTR I don't disagree with your points.

If you think today's admin is doing X, just say it and provide some temporally relevant evidence. But saying the admin of 50+ years ago did it, and expecting people to take that as evidence that it's going on today? I mean, maybe there is some link between Nixon's admin and Trump's, but it isn't well known for sure and expecting the reader to make that leap is ridiculous.

Our drug policy is how we enforce racial segregation .... This isn't me making crap up either. Nixon's old aids admitted to it.

It's like if I said, "Our society is racist, George Washington admitted to having slaves." Does you the latter part of that sentence support the first?

I can't convert you, you're too far gone. What I can do is keep your kind from doing any more harm.

As a side, overreacting like a nutjob to anyone that criticizes you doesn't help you win over the reader.

Re:FAKE NEWS! THAT WOULD BE HIGHLY ILLEGAL!

[mydn]

I deeply regret my lack of mod points.

What part of "Distributed" are you missing

[DrYak]

A serious of transactions that needed to be kept off the books.

Off the books ? Using a system with a distributed public ledger ? (which can by design be checked and controlled by all nodes of the network ?)
Somebody hasn't been paying attention to *what* bitcoin protocole was designed for.
The main point isn't off the books. It's pretty much the opposite : it ends up in everyone's book by design.
The main point is that there isn't (in theory, though in practice some mining pools are becoming worrying) a single central authority.
There's no "Bitcoin Inc." that you can sue to make transaction stop.

In the drugs' case : even if you've been buying drugs, there's no bank that can be sued because they helped an illegal transaction and there's no way to freeze the transaction.
(As a counter example, one of the first big push for crypto-currencies was when Visa and Mastercard companies decided to freeze donations to Wikileaks. This is the exact kind of thing which bitcoin protocol makes impossible because there's no single entity that could enforce such freeze. You would have to persuade the majority of the nodes on the network to refuse the transaction successfully)

Making crime easy

[sjbe]

eh, same things done with metals like gold and silver too...no difference

Oh but there are some very big and important differences. Not the least of which is that you don't have to handle and exchange a hunk of metal.

doesn't matter what the market's good/currency is, can be done in all of them

In principle yes but some crimes are far more elegant and easy to get away with than others. Cryptocurrency is a criminal's wet dream. Hard to trace, hard to restrict, no physical object to handle, crosses borders easily, confused and conflicted to non existent regulations, fairly easy to convert to other currencies or assets, and a bunch of greedy fools clamoring to get rich quick using it. You couldn't design a better system for money laundering and facilitating illegal payments if you tried.

Shocking

[dcw3]

I'm shocked, shocked I say, that scammers would go to where the money is. Sure, I believe crypto currency is the way of the future, but I predict a lot of shenanigans before the general public feels comfortably safe in its usage.

Re:Don't rule out government's intervention

[Actually, I do RTFA]

Well, the number of 51% attacks is apparently non-zero and increasing...

Re:Just like video cards thanks F***ing miners!

[dcw3]

You shoulda bought stock in Micron like I did.

Re:FAKE NEWS! THAT WOULD BE HIGHLY ILLEGAL!

[dcw3]

Is it pronounced like "doggie" or "dodgy? If the latter, why would someone buy into something like that...

dodgy /däj/

adjective
Britishinformal
adjective: dodgy; comparative adjective: dodgier; superlative adjective: dodgiest
dishonest or unreliable.
"a dodgy secondhand car salesman"
potentially dangerous.
"activities like these could be dodgy for your heart"
of low quality.

Re:Don't rule out government's intervention

[dcw3]

It's okay, you're safe under that tinfoil hat. NSA doesn't do squat with currency.