Topic: We're al getting it wrong (Read 490 times)

Well, this is the volume of these pump and dumps in Bitfinex, but I've seen massive pump and dumps also on Bittrex, Poloniex etc. And these are the core of the speculators. Then there are also normal traders. So the figures would be higher than the one you mention. But I agree that it's only a little share of the total Bitcoins which is moving.

A large pump and sump group is playing in the markets, it doesn't mean much because they can't cash that money out unless the price gets more expensive.

The control of the money supply is only necessary to create inflation or to destroy inflation. Inflation is not needed from the point of view of someone who keeps money as a store of value. In fact the one who keeps money as a store of value is benefited more by deflation. The economy on the other hand would benefit from stable prices in my opinion, where there is no inflation and no deflation. Neither of those are perfect for all situations. Hence benefit someone and disadvantages others.

The value of fiats is more or less stable because they are kept that way by the central authorities that have control over them. Otherwise they would fluctuate as well.

Were all be returning to fiat money because of regulation of the government. Using of bitcoin are still limited which I think is ok s for today. If this will not control by the government, there will really be a big problem in the circulation of the money of the country if all people will switch to blockchain with massive investment at a time.

I can even pinpoint EXACTLY where Satoshi was making this error (at least, in as much as he really wanted to make a currency).  It is here:


http://satoshi.nakamotoinstitute.org/posts/p2pfoundation/3/#selection-41.0-41.460

It is because he thinks he doesn't know how to know the price, that he put in a random emission curve.  The "positive feedback loop" is exactly what's called a deflationary spiral (currency talk) or a speculative bubble (asset talk).

"I don't know how to make a currency, so I'll make you a speculative asset instead".

The best part of bitcoin is our financial freedom towards our money without government intervening on our transactions, meaning we are free from those damn taxes.

sir until all the fiat people are still here, people will keep fighting. Specially the persons that think they are clean with no trace of mistakes.

I understand your sentiments but you cant dictate the users what should be done in their holdings. We have the right where we want to spend it and you cant blame them if they want to earn in the coins of their choice because of its volatility. If the price is not flactuating, I think people will be less interested but it is beneficial to the merchants that looking for alternative payment system.

That is the normal consequence of bitcoin, even though pretended to be a currency, because it has the monetary policy of a highly speculative collectible, in the same way rare paintings or old sports cars are.  A lot of emission when it has no value (when van Gogh wasn't renowed), and a diminishing emission when it catches on, is the recipe for "get-rich-quickly" speculation.  From the moment that a collectible can rise in value without bounds, it becomes of course a speculative asset.  From the moment the only thing such an "asset" has going for it, is its market price, of course you get speculative bubbles and crashes.

The fundamental property of a good currency is that it is constant in value, and hence neutral in its use.  It is a perfect store of value in the short term as well as in the longer term: what you put in, is more or less exactly what you get out of it.  A currency is NOT an investment, and that neutrality is exactly what turns it into a currency: that you can store value in it when you acquire value, and that you can get the same amount of value out of it when you spend it.  That's the entire fluidifying role of a currency in economic relationships.  Nash called such a hypothetical asset an "ideal currency".  In order for an asset to get close to an ideal currency, its emission should be coupled to its market price.  That's the official role that central banks have.  The criticism to central banks is that they abuse of their power, but that is no excuse NOT to have a regulation mechanism.  Bitcoin doesn't have any.  There's no extra emission of bitcoins when the price rises, as it should, if bitcoin were to have the pretence to become a currency.    The naive gold bugs theory that good money is a collectible, is simply wrong.  Collectibles that serve as money can fall in what's called a deflationary spiral, which is nothing else but "a speculative bubble".  You hoard the asset with the hope for it to rise in value.  That hoarding lowers its velocity, which indeed, makes its value increase, which, in its turn, inspires even more people to hoard it.  If people have been hoarding it like crazy, and only a very tiny fraction of its volume is still used as a currency, the price of the currency is extremely high.  It then becomes tempting for the hoarders to "cash out".  That will significantly increase the small pool of circulating currency: if 99% was hoarded, and 1% cashes out, the circulating supply doubles, from 1% to 2%.  This has a strong effect on the price of the asset, which can lead to people wanting to cash out before their gains are gone.  We get a hyper inflation (a crash).

The words "deflationary spiral" and "hyper inflation" are the monetary speak of "speculative bubble" and "crashing, popping bubble" in stock market language.

A collectible goes through these cycles (once, or several times).  It is useless as money, because of the high volatility.  If there is no price-regulation mechanism, there's no hope.  Bitcoin has no price regulating mechanism.

Another way to regulate the price of an asset, is to make it "redeemable" against something: to back it against something.  As such, the price of the asset will remain in the neighbourhood of the redeemable something.  If you can redeem a bitcoin against a Big Mac,  bitcoin's price will not deviate a lot from the market value of a Big Mac.  It is the fact that it is not backed by anything, that allows bitcoin to have huge value.  Nobody would pay a coin $10 000 if it is redeemable against a Big Mac.  It is because it is NOT redeemable against a Big Mac, that paying $10 000 for a coin doesn't sound crazy.

I couldn't forget those days before two years when I bought bitcoin for sending my earrings to my family from abroad.Those were the days when bitcoin was mostly used for what it was created. But now most of the new investors just buy it to earn more profits and when they see a small dip, they immediately sell their bitcoins destabilizing the whole bitcoin market.

It's not a question of value, it's a question about control over you and your money. The vehicle is taxation. It's what finances wars, what pays their bills. With Bitcoin they have no taxation.

If Bitcoin wants to succeed it needs to get accepted as a payment method, which isn't the case in a lot of countries in the world. Therein lies the issue ; governements/banks will go as far as forbidding merchants to accept as a legal payment. Aside the weak link in the chain, aka exchanges which are easily taken out, this is the second chain that is weak...and a chain is only as strong as its weakest link (pun intended)
A bitcoin debit card aka VISA would be nice as it is accepted all over the world.

yes, I think they started it. we just answer their bad assumptions about bitcoin, this is because they are jealous of the enormous bitcoin value, whereas every fiat or virtual currency has advantages and disadvantages.

Absolutely agree, but it is just so hard to resist making an easy profit, just look at the situation now, BTC price can rise at least 2 times in the nearest future (hopefully), than why not try? And about govs, I think they would have wanted to turn us against cryptos anyway, because, as you said - they were made to let people control their money and govs/banks definitely don't like the idea. They want to control people's money themselves.

This has been done over and over again. I am surprised people are only starting to realize it now. Whales play this game called "fear". They sell their coins when bitcoin price have reached a certain upside causing panic in the so called "small miners" or "home miners" making them to sell their bitcoin and not holding them. The same whales buy back at the dip and make big profits within a few time later. This scheme is going on since the foundation of Mt.Gox. Spend your bitcoin when you need to and keep as you need to but without forgetting the power of bitcoin value for a future profit.

Well,we cannot blame those people who enters crypto just for profit,it's not surprising though , it is because of its unanchored value not like to those paper money with dead people that printed on it.Besides it is the government itself that wants to control crypto currency not because of the people who using it,and trying to control it although it is decentralized.Bitcoin serves as a threat to other government so they banned it,like a revolution that will end fiat regime that controlled by some corrupt government.But other people don't see what's bitcoins purpose, they only want its value.

Are you sure about that? With the implementation of segwit the average fee has halved. I remember a month ago you had to pay 800 sat/byte to get into the first block, now it's only 200. One of my transaction in December had a fee of 300 sat /b and was stuck for 3 days!
People are hoarding it because there's not enough merchants. If you are in the US, Japan or Korea it's quite easy to spend coins. In Europe it's much harder, but if you're in India, Africa or China it's a nightmare.


Which one? Because while BTC's acceptance is low, the other cryptos basically don't exist in that field.
I could find a restaurant in my area that accepts BTC. It would take me a while and that would probably be every 1 out of 50, but try to find one that accepts XRP or BCH.
Good luck with that

The price growth is the main reason for this and it's very difficult to control it over a large basis. The demand is heavily increased so it would be very difficult to consider it as only a means of controlling the flow of money alone.

From the statistics you have mentioned, it is possible that a large pump and dump group is playing around the market without fresh supply coming in to the market. Probably that is one of the reasons why the bitcoin price is not seeing any significant growth and only moving within a certain limit. But I believe bitcoin network is also a reason for bitcoin's price movement now.

The network is slow and the fees is high, even though it is decreasing, but still higher than expected. While bitcoin was made to replace the idea of centralization and to give power to common people to control his own money, but we have moved away from that goal long time back and bitcoin became an investment asset. People are preferring to horde it instead of making transactions because of the fees and slow network.

A majority of the frequent transactors are moving to a different currency because that is cheap for them as well as faster. So the acceptability of bitcoin has gone down to some extent. Until we have the network issue fixed through bigger block or lightening network, further increase in price is tough to happen.

To do it one would have to compare statistics from all exchanges around the world, or at least all of the biggest ones in every country.
If we take a single exchange like bitfinex and compare some of the recent pump and dump schemes  we'll at least have a confirmation of what's going on.
January 22 (dump) 6200 btc in 2 h
January 23 (pump) 5900 btc in 2 h
January 26 (dump) 7200 btc in 2.5 h And on the same day there was a quick rebound during which almost 6000 coins were bought back in a little over an hour.

I believe the ones buying back are the same people that were selling during the dump, there's no significant price movement because there's no fresh coins or money coming to the exchanges. It's always the same people playing around with newcomers bringing less than 10% of the capital to the table.