Bitcoins

vectistim

JohnRo wrote: »

Unlike central banks, privileged acess and manipulation, there is no way miners, or any other individual or organisation, can directly influence the value of your bitcoins or how you choose to use them, other than through the free market.

Price manipulation would probably be quite easy[1]:
Release a computer virus that sets up wallets all over the place and then punt some bitcoins back and forth across your zombie network in such a way that your trades impact on the market price in the way you want them too.
I suppose this would essentially be a deliberate version of the flash crashes that occur due to algorithms fighting each other at the microsecond trade level.

[1] For a determined organization

JohnRo

vectistim wrote: »

Price manipulation would probably be quite easy[1]:
Release a computer virus that sets up wallets all over the place and then punt some bitcoins back and forth across your zombie network in such a way that your trades impact on the market price in the way you want them too.
I suppose this would essentially be a deliberate version of the flash crashes that occur due to algorithms fighting each other at the microsecond trade level.

[1] For a determined organization

Do you honestly think that wouldn't have been done if possible, the incentives for such schemes are already massive and there are some seriously smart people involved with bitcoin.

At present the bitcoin protocol allows 7 transactions per second maximum.

vectistim

JohnRo wrote: »

Do you honestly think that wouldn't have been done if possible, the incentives for such schemes are already massive and there are some seriously smart people involved with bitcoin.

At present the bitcoin protocol allows 7 transactions per second maximum.

If the system is limited to 7 transactions per second that probably makes it easier as we don't have to try so hard to make our zombie network's trades a significant proportion of total activity.

Two options:
1) How do we know this isn't already happening? (Might help to explain some of the roller coaster) I seriously doubt there's been any rigorous analysis of bitcoin flows that could sufficiently prove or disprove this.

A quick google provides this:
http://blog.p2pfoundation.net/how-the-bitcoin-1-manipulate-the-currency-deceive-its-user-community-and-make-its-future-uncertain/2013/06/30


2) It will probably be much easier to do this if the buying and selling system becomes less clunky.

BoracicLint

JohnRo wrote: »

Unlike central banks, privileged acess and manipulation, there is no way miners, or any other individual or organisation, can directly influence the value of your bitcoins or how you choose to use them, other than through the free market.

But as mining becomes too competitive, and the rewards become less attractive, then the number of network nodes will decrease as more and more average miners can't compete. That would result in the control of the blockchain falling into just a few hands. Eventually you could have the situation where one pool of miners have 51% of the hashrate. As with any financial instrument, Bitcoin is not immune from the greedy and the power hungry.

JohnRo

BoracicLint wrote: »

But as mining becomes too competitive, and the rewards become less attractive, then the number of network nodes will decrease as more and more average miners can't compete. That would result in the control of the blockchain falling into just a few hands. Eventually you could have the situation where one pool of miners have 51% of the hashrate. As with any financial instrument, Bitcoin is not immune from the greedy and the power hungry.

It's a self defeating endeavour, a 51% attack is basically a destruction play.

Who would invest the (truly) vast amounts of time, energy and expense needed at this stage, just to end up with literally nothing at the end of it?

JohnRo

Sethan wrote: »

Is that per wallet? And even 1 transaction of 1*enter the amounts of 0 you want here* is still quite big.
On my previous post regarding the dependency of governments and bank,I didn't meant they're linked,I meant BTC can become a collateral victim.Because truth is, if governments want to shut it,they can.And we cannot do anything about it.Governments are watching us,shaping our communication and so on and we can't do ****.Surely taking down BTC is way easier.That aside,panic selling has been present for hundreds of years.And no matter the instrument of choice,is happening and will still happen. And people get caught in the crossfire. I will be confident in,and maybe use BTC when it will be more of what it wants to be,a currency,and less of a field for quick-easy-buck speculation. Say what you want about fiat currency, but if BTC wants to survive and be adopted by all the people and governments,it needs to act more like one,for good and for bad.

That's a lot more measured, governments cannot stop btc, they can drive it deep underground. Unless they're going to pull the plug on the whole internet which isn't going to happen in the modern world, it may be something which the NSA are working towards on a selective basis though, who knows.

BTC a phenomenon at present, it's got way ahead of itself imho and a lot of people have jumped in thinking they'll make a quick killing (and have I guess) with all the volatility that has causes but the march of progress won't stop unless there is a massive coordinated effort to try and stop it. That would require the "establishment" showing everyone their true nature.

richie799

Nice_Weather_For_Ducks wrote: »

I like having my money an account that is covered by my bank if a fraudster empties it. With bitcoin it would be gone forever!!

I just heard 96000 bitcoins were stolen from a Sheep Marketplace, Google it

paddyrg

Satoshi wrote: »

just buy the dips and sell the peaks.

Got to be honest, that line worries me a little for a couple of reasons. 1) it's what practically the whole stock market is - it's gambling as to whether the dip is a dip or a collapse, likewise selling at a peak could easily be selling on the foothills of a mountain. It's retrospective advice, however without knowing the future, it's gambling.
2) It sounds abstracted from the mechanism of which it is a part. The prices change because people buy and sell, and demand changes. Buying and selling is a part of that mechanism, which affects those prices. If I sell 20,000 BTC tomorrow at the live market rate, it'll affect that market, the 'value' will drop. Likewise with a buy. Everyone wants to sell on peaks and buy on dips, but that's what creates the massive instability making it a near-useless token for storing value.
3) zero-sum - for you to make a profit buying low and selling high, some other poor sap has to make an equivalent loss. Or the market is truly unlimited in a huge ponzi-esque fashion. Madoff did great at that for 40 years, but eventually the wheels always fall off of Ponzi schemes. Anyway, if we believe for a moment it isn't some huge bubble or self-perpetuating Ponzi-esque escalation of value, it means someone has to lose a dollar for every one you make. On average, that'll be around a half (or realistically much more - losers tend to get out of a market) of speculators have to lose money.

None of that is specific to BTC but had to just mention it as it suggests a naivete around investing in general.

csm888

paddyrg wrote: »

Everyone wants to sell on peaks and buy on dips, but that's what creates the massive instability making it a near-useless token for storing value.

What about everything else that trades on a market, people buy and sell Gold on perceived dips and peaks, but the price is stable enough to store value. What you say about volatility may be true, but your reasoning to arrive at the conclusion is clearly wrong.

paddyrg wrote: »

3) zero-sum - for you to make a profit buying low and selling high, some other poor sap has to make an equivalent loss.

This again is not true, if an asset is appreciating in value, wealth is being created.

paddyrg wrote: »

Or the market is truly unlimited in a huge ponzi-esque fashion. Madoff did great at that for 40 years, but eventually the wheels always fall off of Ponzi schemes.

It may be other things, but Bitcoin is not a Ponzi scheme by definition, look it up.

jimjames

csm888 wrote: »

What about everything else that trades on a market, people buy and sell Gold on perceived dips and peaks, but the price is stable enough to store value. What you say about volatility may be true, but your reasoning to arrive at the conclusion is clearly wrong.

I'd also say that the gold price has similar volatility to create problems. Not to the same extent as Bitcoins but still a rollercoaster over the last 30-40 years that wouldn't be a store of value if you came to sell at the wrong time. I'd rather have a currency that I know the value is retained at any specific time.

http://www.bbc.co.uk/news/magazine-25255957

csm888 wrote: »

This again is not true, if an asset is appreciating in value, wealth is being created.

I'm not quite sure that just because an intangible asset is appreciating that it is actually creating wealth. Tulips selling for thousands might have made a few rich but not sure it created wealth rather than transferring money from the gullible to the less so.