Analysis of Some Bitcoin Concepts | Bitcointalksearch.org

Wenbing

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There is gold in volatility..

Quote from: Cnut237 on April 08, 2020, 08:51:36 AM

Quote from: Wenbing on April 08, 2020, 08:17:35 AM

How then do we recognise the two and be able to distinguish whale's price movement from genuine price trend in the market?

This can be difficult. But if a coin's price is moving differently to the rest of the crypto market, and the movement is very sudden, and there is no clear reason why it should be moving, then that means you might need to investigate further. Also if the price fluctuation is limited to a single exchange, that can be another clue.

Wow, what a great analysis.
The movement of whale price fluctuations seems artificial and uncommon from the rest of the market.

Its synonymous to inflation caused by artificial scarcity or hoarding.

I'm learning a lot. Thanks

Cnut237

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Quote from: Wenbing on April 08, 2020, 08:17:35 AM

How then do we recognise the two and be able to distinguish whale's price movement from genuine price trend in the market?

This can be difficult. But if a coin's price is moving differently to the rest of the crypto market, and the movement is very sudden, and there is no clear reason why it should be moving, then that means you might need to investigate further. Also if the price fluctuation is limited to a single exchange, that can be another clue.

Wenbing

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There is gold in volatility..

Quote from: Cnut237 on April 08, 2020, 06:16:49 AM

Quote from: Wenbing on April 08, 2020, 03:04:29 AM

Wow! This is a great analysis.

The temporal hike in price of the bitcoin is created by whales in order to make huge profit.
What if the price falls instead of rising for them to make profit?

Can there be a situation were instead of the price of bitcoin to rise it then decline leading to the whales' loss?

'Whales' can of course do the reverse, and sell huge amounts of a coin to reduce the price, and then buy up more at a big discount. They can manipulate the price up or down to make money.

The only ways a whale can lose really are a) another whale manipulates the market in the opposite direction at the same time, or b) there is a genuine price movement in the opposite direction at the same time, say from breaking news (good or bad).

We do need to be careful about ascribing all sudden price movements to whales, when we don't know how often it is genuine whale activity, and how often normal market movement. Also a 'whale' is not necessarily an individual - there are pump-and-dump groups set up for the purpose of market manipulation. Remember also that big coins such as bitcoin are much harder to manipulate as they have much bigger order books.

Thanks once again for further clarification.
I'm now cleared about movement in price. It can be caused by either whales' activities or genuine market trends.

How then do we recognise the two and be able to distinguish whale's price movement from genuine price trend in the market?

Cnut237

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Quote from: Wenbing on April 08, 2020, 03:04:29 AM

Wow! This is a great analysis.

The temporal hike in price of the bitcoin is created by whales in order to make huge profit.
What if the price falls instead of rising for them to make profit?

Can there be a situation were instead of the price of bitcoin to rise it then decline leading to the whales' loss?

'Whales' can of course do the reverse, and sell huge amounts of a coin to reduce the price, and then buy up more at a big discount. They can manipulate the price up or down to make money.

The only ways a whale can lose really are a) another whale manipulates the market in the opposite direction at the same time, or b) there is a genuine price movement in the opposite direction at the same time, say from breaking news (good or bad).

We do need to be careful about ascribing all sudden price movements to whales, when we don't know how often it is genuine whale activity, and how often normal market movement. Also a 'whale' is not necessarily an individual - there are pump-and-dump groups set up for the purpose of market manipulation. Remember also that big coins such as bitcoin are much harder to manipulate as they have much bigger order books.

Wenbing

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There is gold in volatility..

Quote from: mk4 on April 08, 2020, 03:05:33 AM

Quote from: Wenbing on April 08, 2020, 01:47:11 AM

Your contribution is analytical enough. When the fixed supply of bitcoin is achieved, miners will be rewarded by fee and no longer bitcoin.

The fees that are rewarded to miners are still bitcoin. Remember that we pay transaction fees with bitcoin too.

Quote from: Wenbing on April 08, 2020, 01:47:11 AM

I can now see that the whales can cause fluctuations in the market price of bitcoin by pumping and dumping.

Sure. But it's pretty much the same with most if not all markets. If I personally own 10% total ownership of a certain stock, I could surely manipulate it to some extent. It's just that the stock markets are heavily regulated, in contrast to bitcoin and cryptocurrencies whereas it's pretty much free markets.

Quote from: mk4 on April 08, 2020, 03:05:33 AM

Quote from: Wenbing on April 08, 2020, 01:47:11 AM

Your contribution is analytical enough. When the fixed supply of bitcoin is achieved, miners will be rewarded by fee and no longer bitcoin.

The fees that are rewarded to miners are still bitcoin. Remember that we pay transaction fees with bitcoin too.

Quote from: Wenbing on April 08, 2020, 01:47:11 AM

I can now see that the whales can cause fluctuations in the market price of bitcoin by pumping and dumping.

Sure. But it's pretty much the same with most if not all markets. If I personally own 10% total ownership of a certain stock, I could surely manipulate it to some extent. It's just that the stock markets are heavily regulated, in contrast to bitcoin and cryptocurrencies whereas it's pretty much free markets.

Thanks for the addition .
I now see why the whales have the capacity to influence the price of the market because the market for Bitcoin is free which runs on the forces of demand and supply of bitcoin.

Quote from: pooya87 on April 08, 2020, 03:20:01 AM

Quote from: Wenbing on April 08, 2020, 03:11:02 AM

Surely, this will cause a disincentive to miners in the longrun.

you have to keep in mind that this "long run" is a little short of a hundred years from now. it is not like it would be any problem within our lifetime. and who knows how things are going to be like by then, with a bigger capacity in year 2100 each block could have enough transaction with a tiny fee to end up paying miners the same amount of money they are earning today with 12.5 bitcoin reward per block.

Thanks, the long run is really long if it is 2100 when the final bitcoin will be mined.
That means in the short run the miners will make huge profit mining.

This will also affect investors being that some investors invest to make money in the long-run, that is both capital gain and dividend.

So, what do you think will be the investors' reaction to mining companies?

[moderator's note: consecutive posts merged]

pooya87

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Quote from: Wenbing on April 08, 2020, 03:11:02 AM

Surely, this will cause a disincentive to miners in the longrun.

you have to keep in mind that this "long run" is a little short of a hundred years from now. it is not like it would be any problem within our lifetime. and who knows how things are going to be like by then, with a bigger capacity in year 2100 each block could have enough transaction with a tiny fee to end up paying miners the same amount of money they are earning today with 12.5 bitcoin reward per block.

Wenbing

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There is gold in volatility..

Quote from: Pffrt on April 08, 2020, 02:54:52 AM

Quote from: Wenbing on April 08, 2020, 01:14:26 AM

1.Halving:
Its a concept that means that the bitcoin supply will be fixed in circulation thereby reducing the total number of bitcoin of miners by half in every five years.

It's not every five years, it's four years. Halving happen once in a four year and will be continue till the last BTC. In other words, halving happens every 210000 blocks.
It's not like that halving will not have any negative affect. If the price continues to fall below than 5000, after this halving, more miners will give up mining. However, when price will go high, more miner will again join the network. So, the affects you are talking about are kind of increasing/decreasing chart.

Thanks for the correction and more insights.
Rewarding miners with bitcoin for their computational effort of mining and rewarding them with mining fee when the finite limit is reached have big difference in my opinion.

Surely, this will cause a disincentive to miners in the longrun.

mk4

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Quote from: Wenbing on April 08, 2020, 01:47:11 AM

Your contribution is analytical enough. When the fixed supply of bitcoin is achieved, miners will be rewarded by fee and no longer bitcoin.

The fees that are rewarded to miners are still bitcoin. Remember that we pay transaction fees with bitcoin too.

Quote from: Wenbing on April 08, 2020, 01:47:11 AM

I can now see that the whales can cause fluctuations in the market price of bitcoin by pumping and dumping.

Sure. But it's pretty much the same with most if not all markets. If I personally own 10% total ownership of a certain stock, I could surely manipulate it to some extent. It's just that the stock markets are heavily regulated, in contrast to bitcoin and cryptocurrencies whereas it's pretty much free markets.

Wenbing

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Activity: 532

Merit: 36

There is gold in volatility..

Quote from: Cnut237 on April 08, 2020, 02:29:34 AM

Quote from: Wenbing on April 08, 2020, 01:14:26 AM

2. Volatility and Whale:
Volatility and whale are concepts that look correlated. The activities of whales can create trends that'll affect the market price of bitcoin.

My question is how does volatility and whale actually correlate to cause fluctuations in the market?

This is all caused by low trading volumes and thin order books. The smaller the amount of coins in existing buy and sell orders, the easier it is for someone with a lot of coins to manipulate the price.
Say a coin has the following sell orders: 10 coins at $2, 50 coins at $3, 40 coins at $4, 800 coins at $5.
This means that with $20 you can buy all of the '$2' coins, with another $150 you can buy all of the '$3' coins, with another $160 you can buy all of the '$4' coins. So if you spend 20+150+160=$330, then you can single-handedly pump the 'price' of the coin from $2 to $5.
There's then a good chance that people will see the price rising, and decide this is a good coin to buy, and so everyone will start buying, increasing the price further. But only you, the 'whale' know the real reason the price increased. So now coins are trading for maybe $7, you can sell all or some of your coins for say a 'bargain' price of $5, and make a huge profit.

That's it in essence. If there is not much volume, it is easy for someone rich to manipulate the market. In practice this means that low cap alts are prone to pump-and-dump schemes such as the above, whereas something like bitcoin that has higher volumes is more difficult to manipulate - because it costs more to do so.

Wow! This is a great analysis.

The temporal hike in price of the bitcoin is created by whales in order to make huge profit.
What if the price falls instead of rising for them to make profit?

Can there be a situation were instead of the price of bitcoin to rise it then decline leading to the whales' loss?

Pffrt

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Quote from: Wenbing on April 08, 2020, 01:14:26 AM

1.Halving:
Its a concept that means that the bitcoin supply will be fixed in circulation thereby reducing the total number of bitcoin of miners by half in every five years.

It's not every five years, it's four years. Halving happen once in a four year and will be continue till the last BTC. In other words, halving happens every 210000 blocks.
It's not like that halving will not have any negative affect. If the price continues to fall below than 5000, after this halving, more miners will give up mining. However, when price will go high, more miner will again join the network. So, the affects you are talking about are kind of increasing/decreasing chart.

Cnut237

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Quote from: Wenbing on April 08, 2020, 01:14:26 AM

2. Volatility and Whale:
Volatility and whale are concepts that look correlated. The activities of whales can create trends that'll affect the market price of bitcoin.

My question is how does volatility and whale actually correlate to cause fluctuations in the market?

This is all caused by low trading volumes and thin order books. The smaller the amount of coins in existing buy and sell orders, the easier it is for someone with a lot of coins to manipulate the price.
Say a coin has the following sell orders: 10 coins at $2, 50 coins at $3, 40 coins at $4, 800 coins at $5.
This means that with $20 you can buy all of the '$2' coins, with another $150 you can buy all of the '$3' coins, with another $160 you can buy all of the '$4' coins. So if you spend 20+150+160=$330, then you can single-handedly pump the 'price' of the coin from $2 to $5.
There's then a good chance that people will see the price rising, and decide this is a good coin to buy, and so everyone will start buying, increasing the price further. But only you, the 'whale' know the real reason the price increased. So now coins are trading for maybe $7, you can sell all or some of your coins for say a 'bargain' price of $5, and make a huge profit.

That's it in essence. If there is not much volume, it is easy for someone rich to manipulate the market. In practice this means that low cap alts are prone to pump-and-dump schemes such as the above, whereas something like bitcoin that has higher volumes is more difficult to manipulate - because it costs more to do so.

Wenbing

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There is gold in volatility..

Quote from: mocacinno on April 08, 2020, 01:21:52 AM

Quote from: Wenbing on April 08, 2020, 01:14:26 AM

--snip--
The question is this:
How does this concept of halving work to achieve the goal of a fixed Bitcoin supply by 2140 without creating negative effects for the miners in the network?

The fixed supply is simple, more info can be found here: https://en.bitcoin.it/wiki/Controlled_supply
On that page, look at the table in section "Projected Bitcoins Long Term" and you'll see how a fixed supply is created by the halvings.

As for negative effects: it is hoped that by the time the block reward is close to 0, miners will mine for the sum of the fees of the transactions in the block they solve. It's possible some miners won't be able to mine profitably and turn their ASIC's off... It's possible the diff will drop... We'll see

Quote from: Wenbing on April 08, 2020, 01:14:26 AM

--snip--
My question is how does volatility and whale actually correlate to cause fluctuations in the market?

--snip--

Not really my area of expertise. But a whale is somebody with enough cashflow to disrupt the unregulated market. Basically pump a coin by buying a lot of it, pump the price upwards, then dump their bag while the price is high.
Can't really give you more info about this subject tough... I'm not a trader

Your contribution is analytical enough. When the fixed supply of bitcoin is achieved, miners will be rewarded by fee and no longer bitcoin.

I can now see that the whales can cause fluctuations in the market price of bitcoin by pumping and dumping.

mocacinno

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Quote from: Wenbing on April 08, 2020, 01:14:26 AM

--snip--
The question is this:
How does this concept of halving work to achieve the goal of a fixed Bitcoin supply by 2140 without creating negative effects for the miners in the network?

The fixed supply is simple, more info can be found here: https://en.bitcoin.it/wiki/Controlled_supply
On that page, look at the table in section "Projected Bitcoins Long Term" and you'll see how a fixed supply is created by the halvings.

As for negative effects: it is hoped that by the time the block reward is close to 0, miners will mine for the sum of the fees of the transactions in the block they solve. It's possible some miners won't be able to mine profitably and turn their ASIC's off... It's possible the diff will drop... We'll see

Quote from: Wenbing on April 08, 2020, 01:14:26 AM

--snip--
My question is how does volatility and whale actually correlate to cause fluctuations in the market?

--snip--

Not really my area of expertise. But a whale is somebody with enough cashflow to disrupt the unregulated market. Basically pump a coin by buying a lot of it, pump the price upwards, then dump their bag while the price is high.
Can't really give you more info about this subject tough... I'm not a trader

Wenbing

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Merit: 36

There is gold in volatility..

I have been going through some of the important terminologies and concepts of Cryptocurrency and Bitcoin. I have found some terms to be have some correction which affect the way the market operates.

I want your inputs on the following concepts.

1.Halving:
Its a concept that means that the bitcoin supply will be fixed in circulation thereby reducing the total number of bitcoin of miners by half in every five years.

According to Bitcoin white paper, by 2140 the total Bitcoin Supply will be fixed at a finite number of 21million in circulation.

The question is this:
How does this concept of halving work to achieve the goal of a fixed Bitcoin supply by 2140 without creating negative effects for the miners in the network?

2. Volatility and Whale:
Volatility and whale are concepts that look correlated. The activities of whales can create trends that'll affect the market price of bitcoin.

My question is how does volatility and whale actually correlate to cause fluctuations in the market?

Your contributions will be very helpful because I love to study meditatively and analytically.

Topic: Analysis of Some Bitcoin Concepts (Read 193 times)