The dark pool or pools have been operational since roughly 10 days after the release of Litecoin. Historically, almost all the LTC mined by the dark pool appears to be immediately released to the market at BTC-e for sale.
The dark pool provides a major advantage to LTC, which is that is is extremely difficult to attack (unless the dark pool chooses to).
On the flip side, there is the inherent problem of, aside from an unlikely 51% attack, these two scenarios:
- The dark pool is being mined by computers infected with trojans (botnet). The release of virus definitions for these trojans would result in the rapid collapse of the hash rate by 80%, requiring weeks to lower the difficulty. This is a likely scenario, as the hash rate here does not vary with the price of LTC (as you might expect for someone who has to worry about the costs of electricity).
- The dark pool decides to contract the supply by not bringing any LTC to the market for a long time, hence manipulating the market. The possibility remains that the dark pool is attempting to assemble as large a mining network as possible before heavily constricting the supply, resulting in only a tiny amount of new coins being mined per day by others. The result would be massive deflation.
The strange thing is that so far, the dark pool appears to have decided to sell as much as their LTC as possible. With 80-90% of the mining capacity, the dark pool can act as a "central bank" for LTC; so why are they inflating it so intensely?
See the present dark pool size here: http://pool-x.eu/net
And historic network hash rates here: http://www.litecoinpool.org/charts
The dark pool provides a major advantage to LTC, which is that is is extremely difficult to attack (unless the dark pool chooses to).
On the flip side, there is the inherent problem of, aside from an unlikely 51% attack, these two scenarios:
- The dark pool is being mined by computers infected with trojans (botnet). The release of virus definitions for these trojans would result in the rapid collapse of the hash rate by 80%, requiring weeks to lower the difficulty. This is a likely scenario, as the hash rate here does not vary with the price of LTC (as you might expect for someone who has to worry about the costs of electricity).
- The dark pool decides to contract the supply by not bringing any LTC to the market for a long time, hence manipulating the market. The possibility remains that the dark pool is attempting to assemble as large a mining network as possible before heavily constricting the supply, resulting in only a tiny amount of new coins being mined per day by others. The result would be massive deflation.
The strange thing is that so far, the dark pool appears to have decided to sell as much as their LTC as possible. With 80-90% of the mining capacity, the dark pool can act as a "central bank" for LTC; so why are they inflating it so intensely?
See the present dark pool size here: http://pool-x.eu/net
And historic network hash rates here: http://www.litecoinpool.org/charts
Isn't the point of a central bank to inflate for profit and deflate for panic leading to profit in the inflation stage?
