Topic: The Black Swan Scenario (Read 1887 times)

While the particular event that collapses a system may be unpredictable, the susceptibility of a system can be observed by how fast that system recovers from a traumatic event. The longer the system takes to return to homeostasis, the weaker the system.

This behavior can be observed in all sorts of systems: society, family, ecology, economics, health, ect.

For instance, a person starts taking months, instead of weeks, to get over simple illnesses or injuries will often succumb to a more serious problem like a hip fracture, even though a healthy person would still recover from it.

Note that many economies are taking longer and longer to recover from stress, often not even fully recovering anymore. I suspect a lot of things could push them over the edge now. For instance, imagine if the USA population moves 25% of it's wealth to cryptocurrencies. In the past, I think the USA would withstand the stress, today I doubt it.

Perhaps one of the best-known explanations for trying to explain this non-linear behavior of the markets was given by Ralph Nelson Elliot through his popular theory of Elliot Waves (based in turn on Dow's theory). But as with all theories around the technical analysis, there is no general consensus of acceptance of this idea and, on the contrary, there is much skepticism about it.

More information: https://en.wikipedia.org/wiki/Elliott_wave_principle

However it is necessary to clarify that these usual drops are not not a "black swan" which is characterized by being an unexpected and unusual event.

mostlikekly it would be bug in code can brig BTC to 0 but without such bug BTC is safe.
Altcoins also can be safe for while but with rissing  maretcap this is big shorting opportunity to exploit.

The regulation are never to kill any financial activity abut are here to streamline them in a good way to be helpful for the progress of the society. Thing get wrong when money or wealth is stored at a certain place, the circulation of wealth is very important to keep the society in a balance and alive.

Thanks for all the input!

Well guys I don’t understand that when will we accept the general logic that after every height there has to come a drop and this is how the things have to complete the life cycle. Now why does it happen is a good topic to be discussed. This is easy to understand as well so, that new things could come up.

me too. the ico thing shits all over securities regulations in most cases. if governments decided to actually do something then an awful lot of projects are going to be exposed.

poloniex is the other. where would the alt market be without it? sure, there are others but that's the place that started these ultra pumps. the place is falling apart with a few tens of thousands of users. imagine what would happen if hundreds of thousands joined in. it might only take a few weeks to get that many.

I could see something happening with poloniex and gov't regulation starting out with ICOs and then further expanding their authority over the entire market.

Regulations could do it, big time.  Exchanges going down?  Nah, we've seen that with Gox and Cryptsy and that has not had a big effect.  I don't think anything of that nature would qualify as a "black swan event".  But government throwing a monkey wrench into the works could certainly mess everything up in a big way.

Also a pump & dump by an enormous whale could end badly.  I worry that this is what we're currently experiencing.  If big money gets involved and drives the price to insane heights (in progress), the dump could be disaster when they take their money out.  And they will.

Well, you could make them centrally governed but maintained by permitted, but distributed nodes, thus making the infrastructure kinda decentralized and hard to attack, which would be the likely scenario of state issued blockchain currencies. I'm not saying i'm a fan, but there is merit to the idea nonetheless.

About the "Altcoin-killer" event: Having the SEC approve the ETF and getting a good solution to Bitcoins scaling issue could create a giant rally into Bitcoin, so big in fact, that altcoins could suffer from people cashing out to get in on the Bitcoin action. 

I think many of the smaller fears I've seen listed so far like: terrorist attacks (of a small scale), virus spreading (electronic not RNA), regulation, scams/dumps are all accounted for to some extent in daily exchanging.  These things happen and will continue to happen and will have regional / coin specific effects.

It would take something of a global or multi-national nature to be a true black swan that could tank the entire crypto market as it is today.

I think the realistic scenario is more like what is upthread, with a continuing boom for several months to a year with a downturn of several months to a year to follow the end of that which will culminate in a new rise that will bring the market caps of the larger currencies to the point they can now no longer be dismissed and the government WILL step in at that point. 

My thought is with the whales controlling the markets as they do now, and the overwhelmingly simple market manipulation they can twiddle out to make profits on top of profits they (the whales) are doing what they can to curry favor and/or suppress regulation.  Once the market is of a tangible size that market shifts could have real world economic impact that will come to an end, and much of what's been enjoyed AND cursed of this scene for the past 5 years will slowly fade into IRS/SEC/SS bureaucracy.   

I don’t think we need something that serious, we just need a few bad news and the whole upwards momentum will vanish, if another hack happened then that would be enough in my mind to crash the price since once again confidence in exchanges will be shaken.

Poloniex becoming a GOX would be a huge short term blow to all coins on there. Waves would become a top 5 coin in marketcap as they not on Poloniex.

Supervirus with 70%+ mortality rate

Would really make most commodities worthless

 Worsening world economy is the greatest threat to crypto. In tough times non tangible things lose attentionOna small scale a economic crisis or two helps crypto as citizens in places hit that way move to crypto for its safety, but there is no safety any place during depressions and recessions.

guys, a black swan will happen eventually in anything, including crypto.
It could be anything, a hack, a terrorist attach, another ETH style or DAO style incident,
one of the big coins goes scam, a few big whales cashing in at the same time, etc etc...

You have to think about that, because when it does, you crash and burn(talking from experience in the stock market)

There is no way to predict these things, so tread carefully all, I'm still trying to figure it all out myself, so any opinions / views welcome

unless the internet infrastructures are totally destroyed

Absolutely agree, the essence of this event is its unpredictability, however there is a popular tendency to consider a huge drop as a "black swan" because as a general rule, the usual result of that event is a great drop.

A cryptocurrency which is not decentralized makes no sense whatsoever, so gov backed blockchains are pointless.

It is government backed blockchains. Their own digital currency, maybe backed by gold!