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Topic: 2013-07-13 GigaOm: BTC will prosper until governments/banks decide to crush it (Read 994 times)

legendary
Activity: 1246
Merit: 1016
Strength in numbers
a  hundred million dollars worth
That would be _really_ _really_ expensive, there are much less expensive ways to create disruption. Plus, markets have a fun way of absorbing that kind of crap and laughing all the way to the bank, it's very risky that it could have the opposite.

That is really not that much money when you are creating 85 Billion USD out of thin air every month... :/

It gets exponentially more expensive. Each wave they run enriches normal users and traders who will naturally save some of their gains as bitcoins each time.

And as mentioned there has already been tons of volatility and still bitcoin exists.

If they are going to make say 10x more volatility than we've seen they are going to be selling coins for at least 100x less than they bought them for. Essentially endless huge injections of cash into the bitcoin scene.

If they buy one coin from me for $5000 I can absorb 100 coins when they are dumping at $5. There are a limited number of coins they can dump before having to turn back around and send the price back towards infinity. Even people who don't buy coins back for some reason will be so rich that they won't feel the need to bail on the way down.

People who do have the bizarre behavior of buying high and selling low to amplify an attack like this will go broke themselves and not be involved in future rounds. Many have already been shaken out by normal volatility anyway.
hero member
Activity: 715
Merit: 500
The writer's title suggests that bitcoin can be crushed overnight. The article then nulls its own title by explaining how it would take at least a year for government to kill bitcoin by repeatedly pumping and dumping the currency (each pump and dump would take months, and would need to be repeated many times). The writer seems emotionally charged and presents unlikely and highly complex possibilities as if they are simple probabilities.

I don't think the US government has any intention on destroying BTC. IF so, then what about LTC? Ok, then FTC? Ok, then PPC? And so on... What about the rest of the world? Shall we repress our nation's ability to compete in technological and financial marketplaces? The point is that even in this incredibly early stage, virtual currency offers very valuable niche services, financial power, and payment solutions that just are not possible with traditional systems. It's typically a losing battle to attempt to repress something that holds a global demand and lacks a central choke point. Remember, virtual currency is still very young. Even if bitcoin is thwarted, which I don't think it will be and certainly can not be done so simply as this author suggests, than the next virtual currency will be right behind it.
member
Activity: 88
Merit: 10
a  hundred million dollars worth
That would be _really_ _really_ expensive, there are much less expensive ways to create disruption. Plus, markets have a fun way of absorbing that kind of crap and laughing all the way to the bank, it's very risky that it could have the opposite.

That is really not that much money when you are creating 85 Billion USD out of thin air every month... :/
legendary
Activity: 2114
Merit: 1031
This also assumes there is only one "market" to dump onto...

Mtgox has shrunk it's marketshare of trading & other exchanges don't always track price exactly.

We've seen 5-10% differences in price between exchanges recently.  As more exchanges pop up, this "attack" will be even harder & require more coordination to effect all exchanges.

I'm not worried.  There are plenty of people who don't even use the exchanges because they have their own "value" for bitcoin & it is loosely related to what the exchanges say.
sr. member
Activity: 453
Merit: 250
If volatility was going to kill bitcoin, it would have done it by now. The real question will be whether people's desire to avoid middlemen, inflation, surveillance and restrictions is stronger than their desire to not make already rich early adopters richer. The jury is still out on that one.
staff
Activity: 4284
Merit: 8808
a  hundred million dollars worth
That would be _really_ _really_ expensive, there are much less expensive ways to create disruption. Plus, markets have a fun way of absorbing that kind of crap and laughing all the way to the bank, it's very risky that it could have the opposite.

I think the whole premise of attack from parties like that is a bit thin. Part of the reason that Bitcoin could even be argued to be some kind of threat to them is that it represents something so foreign to them.  It's an outside context problem, if you will. If it weren't they'd just adapt and then it wouldn't be much of a threat. But if they don't then it really is an OCP and they probably won't respond at all until it's too big for them to do so successfully.   (Or alternatively, I would argue that the only times such forces could successfully disrupt it would be during the "then they ignore you" and "then they laugh at you" stages, simply because it is such a weird and far out idea).
legendary
Activity: 1450
Merit: 1013
Cryptanalyst castrated by his government, 1952
The author's sole contention is that government/banking interests will disrupt BTC thus: "gradually purchase large sums of Bitcoins, a  hundred million dollars worth given the current market cap would be plenty. Then flash sell them to flood the market and drive the price down. Rinse, repeat."

To me one obvious counterargument is that kind of manipulation only works when there are people eager to exchange between BTC and fiat. No fiat, no leverage.

In these early days, such manipulations appear not to deter "enough" people from choosing BTC. While it is likely that many people are in fact deterred by volatility and media FUD about volatility, BTC use continues to grow. You can fool some of the people all of the time - that doesn't matter.

Regardless, the value of one BTC will always be one BTC, no matter what governments and banks do. The choke point is fiat, so just say no to fiat.         Smiley
hero member
Activity: 950
Merit: 1001
This commenter gets it:
Quote from: JoeSixPack
The very same hypothetical volatility which would make Bitcoin a poor choice as a currency would make it an attractive speculation.

A lot of people _want_ to gamble in such an unpredictable boom/bust/boom market.

And what if someone had inside knowledge of the moves the big banks were making before they made them?

Bitcoin might well flourish in such a manipulated environment.

https://en.bitcoin.it/wiki/FAQ#Is_Bitcoin_open_to_value_manipulation.3F
legendary
Activity: 1638
Merit: 1001
₪``Campaign Manager´´₪
Well-written article, only I don't agree with the conclusion.  
I don't think volatility attacks would kill bitcoin.  It would only slow down adoption and lose the manipulators money in the process.  At least, that's my belief for now.
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