Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 183. (Read 907229 times)

Exactly, it seems to me that if this is true the bot was ran in reverse as the game was up and trying to be whole on the fiat and blaming the protocol on the lost BTC is far more believable and probably better from a legal perspective as well. I follow the theory that the coins were stolen a long time ago and all of this was an attempt to make it up but with approx 1,000,000 bitcoins needing making up to be solvent it was always going to be an uphill struggle with the genuine increased adoption as well. Its just a 26 yo man making a billion $ mistake and trying to make it right.

Gox total fiat was lower than the outstanding amount of the customers. The bought it all with goxBTC so it doesn't look like a ponzi. They tried to explain the insufficient BTC away by referring to the "problem" with the Bitcoin protocol.

$3 per ksat is obviously better  

Then in the end all the withdrawals were halted and Willy put on reverse, to dump all the goxcoins bought. I do not know if this made a small or huge loss. Also I don't know the purpose of it, because all(?) withdrawals were canceled, and there was no change happening in the actual liquidity position, except the very last deposits made by arbitrageurs of goxcoins in btc/gxc-exchanges.

Yes I read it.

The main point is that when people send bitcoins or fiat to gox to trade with them, it results in:

people             gox
bitcoins, fiat ->
                  -> bitcoins, fiat.

gox then issues goxcoins in the same quantity, also goxbux.

When Willy/gox buys the goxcoins for uncovered fiat (acting as a CB), it raises the price of goxcoins, and also of bitcoins in other exchanges. But there is no effect on the real bitcoins or real fiat (which are stored in gox) until the customers withdraw.

So during the runup, when gox was still by and large operational, they pumped up the price of BTC and ran into fiat debt, covered only by their customers' fiat deposits. Then they did not pay out the fiat to stay afloat. The higher price in gox induced people to try arbitrage, to deposit coins there, which Willy bought.

At the apex of the bubble, gox had issued a lot of goxbux fraudulently and ran a ponzi with them. They were correspondingly long in goxbtc.
What happened to the real bank balances of gox (in the tune of $100 million) and the real BTC hold (1MBTC?) is still unknown. Both were stolen in some point. This is where the theft occurred - what was played in gox' system goes under other crimes.

Then in the end all the withdrawals were halted and Willy put on reverse, to dump all the goxcoins bought. I do not know if this made a small or huge loss. Also I don't know the purpose of it, because all(?) withdrawals were canceled, and there was no change happening in the actual liquidity position, except the very last deposits made by arbitrageurs of goxcoins in btc/gxc-exchanges.

What the end result seems to me, is that gox pump did raise the bitcoin price. Also gox did act fraudulently for a very long time, and without proof to the contrary, also stole its customer reserves. Who is now holding the reserves, is an important question. Either the trading was so abysmal that they were lost as trading losses (perhaps to the insiders), or Mark holds them and is willing to risk prison because afterwards he will be so rich (yes, such people do exist that can live on after causing suicides of family fathers with their actions), or the 3-letter agencies hold them and Mark has for a short or longer time been a tool, either as a result of profession, bribery, or coercion.

For now, it is a small stain in Bitcoin's reputation that another few % of them are in criminal hands. But the main effect on price has been seen long ago, including the price dips in February-April. All those who lost in gox, need to get back into the game (if they want to stay), and judging from the price action in the last months, they have not done it yet en masse.

I am grateful to the author of the blog for explanation, but I don't think there is any relevance to where Bitcoin and USDBTC are going from now on.

CIA is tasked to acquire a great number of bitcoins without regard to method. They see that the by far the largest exchange is run by a single man show. They use their powers to extract the bitcoins from this single man. Once they have the coins (and the customer data and whatnot) this single man is given a friendly warning of not to talk anything about who the thief was. The prison sentence is likely a short one, and probably the single man has some coins tucked in a brainwallet anyway. It is only a shame that he can never reveal who actually stole the coins.

You mean $3 per kBit

I wanna hear about this malicious CIA explanation. Please tell us!

[Thinking that the bubbles repeat the same pattern.. if SlipperySlope would post his chart of the relative valuation - at least last time they did.

Thanks, I read it. Good work. But that is the non-malicious non-CIA explanation, and therefore likely incorrect

You mean $3 per kBit

i have the same problem

maybe $3 pek k Satoshi is better

I post I wrote in this thread 10 minutes ago got censored within 1 minute. That's pretty normal for this heavily censored and moderated forum, I was just curious if it was you or someone else this time.

you love censoring rpietila or was it someone else this time?

Thanks, I read it. Good work. But that is the non-malicious non-CIA explanation, and therefore likely incorrect

Willy bought goxcoins for goxbtc, which was manufactured from air. Unfortunately, buying goxcoins did not increase the bitcoin reserves at all so this explanation is perhaps not adequate.

Unless you tried to say that it increased the number of suckers that, inspired by gox-bb arbitrage actually deposited BTC to the shithole and took a grave loss.

Yes I read it.

The main point is that when people send bitcoins or fiat to gox to trade with them, it results in:

people             gox
bitcoins, fiat ->
                  -> bitcoins, fiat.

gox then issues goxcoins in the same quantity, also goxbux.

When Willy/gox buys the goxcoins for uncovered fiat (acting as a CB), it raises the price of goxcoins, and also of bitcoins in other exchanges. But there is no effect on the real bitcoins or real fiat (which are stored in gox) until the customers withdraw.

So during the runup, when gox was still by and large operational, they pumped up the price of BTC and ran into fiat debt, covered only by their customers' fiat deposits. Then they did not pay out the fiat to stay afloat. The higher price in gox induced people to try arbitrage, to deposit coins there, which Willy bought.

At the apex of the bubble, gox had issued a lot of goxbux fraudulently and ran a ponzi with them. They were correspondingly long in goxbtc.
What happened to the real bank balances of gox (in the tune of $100 million) and the real BTC hold (1MBTC?) is still unknown. Both were stolen in some point. This is where the theft occurred - what was played in gox' system goes under other crimes.

Then in the end all the withdrawals were halted and Willy put on reverse, to dump all the goxcoins bought. I do not know if this made a small or huge loss. Also I don't know the purpose of it, because all(?) withdrawals were canceled, and there was no change happening in the actual liquidity position, except the very last deposits made by arbitrageurs of goxcoins in btc/gxc-exchanges.

What the end result seems to me, is that gox pump did raise the bitcoin price. Also gox did act fraudulently for a very long time, and without proof to the contrary, also stole its customer reserves. Who is now holding the reserves, is an important question. Either the trading was so abysmal that they were lost as trading losses (perhaps to the insiders), or Mark holds them and is willing to risk prison because afterwards he will be so rich (yes, such people do exist that can live on after causing suicides of family fathers with their actions), or the 3-letter agencies hold them and Mark has for a short or longer time been a tool, either as a result of profession, bribery, or coercion.

For now, it is a small stain in Bitcoin's reputation that another few % of them are in criminal hands. But the main effect on price has been seen long ago, including the price dips in February-April. All those who lost in gox, need to get back into the game (if they want to stay), and judging from the price action in the last months, they have not done it yet en masse.

I am grateful to the author of the blog for explanation, but I don't think there is any relevance to where Bitcoin and USDBTC are going from now on.

I am surprised that many people are assuming that Willy's purpose was to pump the price.  That is the least likely explanation in my opinion.  I believe Willy was used to procure bitcoins so that MtGox could meet BTC withdrawal requests to hide the fact that a huge number of coins had been missing for years.  Pushing the price up was an unfortunate side-effect from Mark's perspective, and a side-effect that eventually forced MtGox to recognize its insolvency.