[HN Gopher] To the moon: defining and detecting cryptocurrency p...
___________________________________________________________________
To the moon: defining and detecting cryptocurrency pump-and-dumps
(2018)
Author : dgellow
Score : 115 points
Date : 2021-01-09 17:35 UTC (5 hours ago)
(HTM) web link (crimesciencejournal.biomedcentral.com)
(TXT) w3m dump (crimesciencejournal.biomedcentral.com)
| f430 wrote:
| Paul Le Roux as awful as he is for the stuff he has done, is
| truly a rare breed. Built E4M, a prototype to Truecrypt, was his
| first cryptographic software he put out. Using his knowledge, he
| was able to catapult himself to the lucrative international
| drug/weapon smuggling market.
|
| Finally, the Australian fellow who claimed he was Satoshi has
| been trying to unlock several million bitcoins from genesis that
| supposedly belonged to Paul before his capture and incarceration.
|
| If you follow this theory, essentially a money laundering drug
| lord coded the bitcoin, for unknown purpose but we can probably
| take a guess.
|
| Bitcoin's biggest utility isn't for small individual traders
| rather it is a vehicle for laundering massive amounts of money.
| Snuff films with children, drugs, humans, and other depraved ways
| of making money are the entirety of bitcoins usage.
|
| source: https://news.bitcoin.com/the-many-facts-pointing-to-paul-
| le-...
| dgellow wrote:
| How is that relevant to the shared article?
| ur-whale wrote:
| >essentially a money laundering drug lord coded the bitcoin,
|
| To quote Hitchens:
|
| "Extraordinary claims require extraordinary evidence and what
| can be asserted without evidence can also be dismissed without
| evidence".
| f430 wrote:
| We have coincidental evidence at best but until Paul is
| released and he can prove his identity with his private key
| of course Hitchens is going to be unhappy.
|
| But the lack of evidence simply isn't enough to suggest he
| isn't the creator. You can use whatever academic term to
| justify against this.
| sorokod wrote:
| This may come as a shock but Christopher Hitchens died.
|
| About a decade ago.
| ur-whale wrote:
| I posit the existence of a giant duck living on Uranus.
|
| The lack of evidence to the contrary simply isn't enough to
| suggest that it isn't the case.
| f430 wrote:
| > I posit the existence of a giant duck living on Uranus.
|
| Cmon now, that is not analogous. We have evidence to
| suggest there is no oxygen on Uranus therefore it is
| impossible to have ducks living on your anus.
| arcticbull wrote:
| You could probably get one duck to live on your anus, but
| not for long. Not enough room for a pair. Sounds
| uncomfortable, either way.
|
| With that said I like this write-up. It's not proven but
| there sure is smoke.
|
| https://www.wired.com/story/was-bitcoin-created-by-this-
| inte...
| tromp wrote:
| > trying to unlock several million bitcoins from genesis
|
| The genesis block only holds 50 BTC in reward which due to a
| technicality cannot be spent. And as Yoda might say, spend or
| spend not, there is no try. Either you know Satoshi's private
| key, or you don't. Faketoshi clearly doesn't.
|
| Bitcoin's biggest utility at the moment is pure speculation.
| f430 wrote:
| Which is why the false prophet from down under raised money
| to start that massive decrypting effort. I didn't even
| mention the other wallets he tried to unlock without success.
|
| Coincidence? When there are more than 4 or 5, you start
| thinking.
|
| I will agree that Bitcoin is just a large ponzi scheme which
| will collapse as soon as they can't find the next
| "speculator" to buy their coins at a high price.
|
| It's just hilarious seeing it play out over and over again
| with exactly the same result.
| moralsupply wrote:
| > It's just hilarious seeing it play out over and over
| again with exactly the same result.
|
| You mean, the result that it keeps going up (with large
| drawdowns, but with exponential growth nevertheless)?
|
| If you're so sure Bitcoin will crash, short it on a futures
| market. You can make a lot of money with that insight if
| you're proven to be right.
| yeneek wrote:
| There are dozens of theories who Satoshi is. All transactions
| in bitcoin are public, that makes it really a bad idea to use
| it for illegal activity. I doubt that criminal mastermind would
| create system to publicly backup incriminating evidence.
| seibelj wrote:
| I have been working in crypto / blockchain for years. Crypto
| projects simply cannot find engineers, it is impossible to hire
| people with these skills. You will make more money as a software
| engineer in crypto than you will anywhere else other than FAANG.
| And one major benefit is crypto companies are decentralized and
| almost always remote - as a developer in a foreign country you
| can make multiples what you could in a standard software firm.
|
| Don't listen to the HN haters and nocoiners who have been telling
| lies for years. This is one of the most exciting and interesting
| industries you can work in. Keep an open mind and see what
| positions are available at the top coins on coingecko.com.
| ipnon wrote:
| This seems like a weak paper on the face of it, especially
| considering it is coming from a criminal justice journal and not
| a quantitative finance journal. The existence of pump and dumps,
| I would say, is obvious, in and out of crypto. But this paper
| fails by lacking a method to confidently detect pump and dump
| schemes. They successfully detect 2 of 4 schemes, no better than
| a coin toss. You might say this is better than nothing, but 50%
| is not really enough to either protect or extend your portfolio
| in the face of an impending pump and dump.
|
| Assuredly there are many crypto hedge funds able to predict pump
| and dumps with much higher accuracy, but they are keeping the
| methods to themselves to protect their intellectual property.
| dgellow wrote:
| For a better approach, you can check this paper from 2020:
| https://arxiv.org/pdf/2005.06610.pdf.
|
| Quote from the paper:
|
| > Not only our performances are considerably better than
| theirs, we score 93.1% of precision and 91.4% recall against
| their 50.1% precision and 75.0% recall, but our detector is
| also faster.
| sosuke wrote:
| Makes me wonder what they would say about the current market.
| arcticbull wrote:
| Well, if it found a pump and dump it would say "call the
| SEC."
|
| Thing is, the stock market may be erratic on smaller
| timescales but it is a legitimate and fair place to trade,
| and people roughly speaking all have access to the same
| information when making those trades. Speculative mania is
| not a pump and dump. It's poor decision making, and
| generally speaking, that's not illegal.
|
| On the other hand, if I start a stable coin, let's call it
| Anchor. Then I get a bunch of un-banked exchanges to use it
| in lieu of dollars because they can't get legitimate
| banking and don't want to bother with AML, KYC, the
| sanctions list or enabling international terrorism. I then
| start printing 750 million totally un-backed Anchors per
| day. I then use them to buy Bitcoin to drive the price up
| parabolically. I then sell all my Bitcoin for dollars to
| the most recent institutional clowns invested, and flee
| from the island I currently reside on to a different
| island. _That 's_ crime.
| darawk wrote:
| You've been repeating this Tether stuff for a few years
| now. Still waiting for the collapse. I'm sure its coming
| any day now.
| arcticbull wrote:
| Always works until it doesn't. Madoff's scheme lasted 20
| years and collected $50B, including many multi hundred
| million dollar checks from institutional investors.
|
| Asset-backed commercial paper is another great example.
| [1]
|
| Head's up, btw, nobody's seen their CEO or CFO in about a
| year now haha.
|
| I'm going to screenshot this comment by the way for
| r/agedlikemilk :)
|
| [1] http://www.tr0lly.com/uncategorized/tether-heads-i-
| win-tails...
| rglullis wrote:
| Started reading a comment full of false equivalences and
| trying to put _all_ projects and people working on crypto
| as criminals and _yes, of course it is the guy with the
| inappropriate username_.
|
| I am not going to defend Tether, I truly wish they
| disappeared into a ball of fire and took every crook with
| them.
|
| However, you could avoid the hyperbole. There are ~14
| billion USDT minted, and BTC alone is going for a market
| cap of 500bi. The top 3 "serious" exchanges are all
| averaging $1bi+ in daily volume (and if you believe they
| are doing wash trading, Uniswap alone is in the same
| ballpark and wash trading there would be very costly).
| Tether is bad, but to think they are able to prop BTC
| (and crypto in general) to this bubble is delusional.
|
| Also, it's interesting how you downplay the fact that the
| Fed printed 22% of the dollars in circulation in _2020
| alone_ with the majority of it destined to bail out banks
| and surely to end up under control of Wall Street. Also
| interesting how you seem to be so bothered by the lack of
| KYC /AML of some exchanges and pull the "enabling
| terrorism" card, yet you see no problem in the Stimulus
| Bill having 10 million dollars for Pakistan. Perhaps if
| the crypto projects start saying that the funds are going
| to gender studies your worries will be eased?
| arcticbull wrote:
| I didn't realize a synonym for a muskox was an
| inappropriate name lol. Just wait till you hear what
| other animals are named! For your reference I've attached
| a photo of the eponymous magnificent beast in question
| [0].
|
| There are ~14 billion USDT minted, and BTC alone is going
| for a market cap of 500bi.
|
| $14B my dude, that information is _stale_ as all heck.
| They 're printing $700 million dollars worth per day
| right now. Their market cap just reached $24B. Remember
| just days ago when microstrat announced a blockbuster
| $400M investment? Tether prints that every 12 hours.
|
| See the way market cap works is you only have to control
| the most recent trade to set the market cap. That means
| literally nothing. The old trope goes if you print 1
| trillion of your own crypto and sell it to a buddy for
| $1, that's a $1T market cap.
|
| $24B of cash, with $700M new printed every single day
| buying up Bitcoin is absolutely enough to control the
| price. That's simple economics, and you can find an
| explanation anywhere. I can of course provide you with an
| article if you find yourself unable to obtain one.
|
| > Also, it's interesting how you downplay the fact that
| the Fed printed 22% of the dollars in circulation in 2020
| alone with the majority of it destined to bail out banks
| and surely to end up under control of Wall Street.
|
| This is utterly irrelevant. The inflation rate is
| trending around 2% per annum. If that goes up, they'll
| print less or claw back more. Supply is not the only
| factor in the determination of inflation, velocity of
| money is critical. I suggest you learn more about the
| money supply before trying to reinvent it.
|
| In fact if we pretend for a moment that bitcoin is a
| currency, you can see that while the supply is flat-ish,
| the price is skyrocketing. This is massively deflationary
| for a currency, and this is in fact, in part, due to a
| reduction in velocity of money (aka HODL BRUH).
|
| > Perhaps if the crypto projects start saying that the
| funds are going to gender studies your worries will be
| eased?
|
| I have no idea where you're going with that and I won't
| be following you. This has nothing to do with social
| policy and everything to do with the North Korean
| government collecting hundreds of millions of dollars to
| fund their nuclear weapons program.
|
| [0] https://www.alaskaphotographics.com/alaska-photo-
| articles/mu...
| rglullis wrote:
| You are not helping your case. It's been a while already
| where they stopped claiming to have USD to back the USDT
| and are claiming to have "diverse investments".
|
| Just in last two weeks the price of BTC basically
| doubled. ETH as well. Printing _now_ kind of correlates
| with the price hike. Yes, if we assume that they are
| _completely_ naked, then all of this printing is
| fraudulent (whether at 14 or 24B). _However_ , if they do
| have reserves, this printing does make sense in the
| overall market.
|
| Anyway, still curious how the 9 trillion printed by the
| Fed and the 10 million going to "Pakistani NGOs" [0] does
| not bring you the same outrage as a bunch of people
| putting their own _time, money and effort_ in crypto
| projects. Has any bitcoiner hurt you?
|
| [0]: https://finance.yahoo.com/news/coronavirus-relief-
| legislatio... : getting funds from government aid and
| putting in corrupt, violent pockets is one of the oldest
| tricks in the book. 10 million is "nothing" in
| international terms, but it can go quite a long way to
| help fund terrorist cells in Pakistan, no?
| [deleted]
| arcticbull wrote:
| > You are not helping your case. It's been a while
| already where they stopped claiming to have USD to back
| the USDT and are claiming to have "diverse investments".
|
| Why on earth would you believe them now? You probably
| believed them the first time too :) Do you have the
| audit? Either way the Tether T&C's don't actually give
| anyone holding Tether right to withdraw anything from
| Tether. Ever. Not assets, not dollars, nothing. There's
| nothing stopping them from running with all of those
| assets, they may or may not have, legally.
|
| Ask their CEO or CFO! If you can find them that is,
| they've been missing for about a year now, nobody's heard
| from them.
|
| > Just in last two weeks the price of BTC basically
| doubled. ETH as well. Printing _now_ kind of correlates
| with the price hike. Yes, if we assume that they are
| completely naked, then all of this printing is fraudulent
| (whether at 14 or 24B). However, if they do have
| reserves, this printing does make sense in the overall
| market.
|
| It actually always did. [1]
|
| > Anyway, still curious how the 9 trillion printed by the
| Fed and the 10 million going to "Pakistani NGOs" does not
| bring you the same outrage as a bunch of people putting
| their own time, money and effort in crypto projects. Has
| any bitcoiner hurt you?
|
| Money printing is irrelevant. Totally and utterly
| irrelevant so long as inflation remains on track for 2%.
| The whole reason for printing was to offset a reduction
| in velocity of money. You're pointing at a system
| working, that you don't understand, and screaming fraud.
| You're basically a financial anti-vaxxer. Everything you
| need to learn about finance, about economics, is
| available to you at your local college. The course is
| called "ECON-101."
|
| Put all the time and effort and money into crypto you
| want, I know plenty of beanie baby collectors who do the
| same!
|
| > Has any bitcoiner hurt you?
|
| Of course not, I made a ton of money on crypto on the run
| up and sold in January 2018 lol.
|
| If you saw someone's house on fire, would you say to
| yourself, huh, that's weird, and walk away? Or would you
| maybe tell people that they're about to get seriously
| hurt.
|
| [1] https://twitter.com/JacobOracle/status/13461330836454
| 76869/p...
| rglullis wrote:
| > Why on earth would you believe them?
|
| I don't! I'm just saying that _this crazy printing is
| consistent with the current market_.
|
| I also tell loud and clear to stay away from them and to
| any exchange that wants you to be holding this shit. This
| doesn't mean that I swear off anyone working in crypto as
| a fraud like Tether.
|
| > Money printing is irrelevant (...) You're pointing at a
| system working
|
| Working _for whom_? For the ones that already have access
| to cheap capital? For companies in Wall Street that have
| enough money in their balance sheets to buy Uruguay or
| half the Mediterranean? For banks that should 've been
| liquidated decades ago?
|
| Inflation rate is under the target? Oh great, so now all
| the small business owners will go bankrupt and _not_ be
| able to afford the things they need at almost the same
| price they were before, and the rest of the unemployed
| people can just take their $600 checks to buy a PS5 to
| kill the time they will be spending at home. Yay,
| economics!
|
| > 10M to Pakistani NGOs rounds to zero.
|
| How about the 700M to Sudan? In any case, it's not the
| amount. It's the absurd "crypto is used by criminals and
| funds terrorists" claim while being completely blind for
| an obvious mechanism that is taking tax-payer money and
| putting in very questionable hands.
| arcticbull wrote:
| > I don't! I'm just saying that this crazy printing is
| consistent with the current market.
|
| And every other bull market since Tether was formed,
| yeah.
|
| > I also tell loud and clear to stay away from them and
| to any exchange that wants you to be holding this shit.
| This doesn't mean that I swear off anyone working in
| crypto as a fraud like Tether.
|
| Tether is 80% of trading volume lol. The water is so
| murky you could build a hut out of it. There _is_ no
| market without Tether. Not one that looks anything like
| you imagine it does.
|
| > Inflation rate is under the target? Oh great, so now
| all the small business owners will go bankrupt and not be
| able to afford the things they need at almost the same
| price they were before, and the rest of the unemployed
| people can just take their $600 checks to buy a PS5 to
| kill the time they will be spending at home. Yay,
| economics!
|
| Ah now I see the issue.
|
| You've conflated fiscal, monetary, foreign and social
| policy into one abomination. This is your mistake. The
| Fed only manages the money supply. This is monetary
| policy. The Fed does this by increasing and decreasing
| the supply of money and managing interest rates and aims
| at a target 2% rate of inflation. It has done this
| _incredibly_ successfully.
|
| Then there's fiscal policy - and by extension social
| policy. This is government spending on social programs
| and also on foreign aid. Businesses going bankrupt are
| being allowed to do so by bad fiscal policy and not bad
| monetary policy and no amount of crypto will change that.
| Only you voting will change that.
|
| That's _not_ economics, that 's fiscal and social policy.
| For instance, Canada is centrally banked, and doesn't
| have the issues you're pointing out because their fiscal
| policy was to provide everyone $2000 per month during
| COVID and is now paying small business rents. This is
| nothing to do with Bitcoin.
|
| And your NGOs and the Sudan. This is both a distraction,
| whataboutism, and also not monetary policy. This is
| foreign policy. This is nothing to do with Bitcoin. This
| would still happen with Bitcoin, of course, but bitcoin
| also opens up a new avenue _on top of_ making the
| situation strictly worse.
|
| Please, learn about economics. Take an ECON-101 course.
|
| > Not every crypto project is a fraud.
|
| No, but most of them are. And the ones that aren't don't
| solve anything better than a classical solution because
| trust is a huge optimization.
|
| By all means, continue working on crypto. It's not
| illegal, its just, you know, not smart. But poor
| decisions tend not to be criminal!
| dorkwood wrote:
| > They successfully detect 2 of 4 schemes, no better than a
| coin toss.
|
| How would you go about detecting a pump and dump scheme by
| flipping a coin?
| alexpetralia wrote:
| 1. Assign pump-and-dump scheme to heads
|
| 2. Flip coin
|
| 3. Evaluate results
| mckirk wrote:
| That's simple! You think "this is probably a pump-and-dump",
| then flip a coin and go post about it on Twitter if it comes
| up heads.
| ethn wrote:
| 50% is a bit better than you think. If you were to do a coin
| toss on each as a basis of determination you would only have a
| 25% chance of getting 2 correct. As n-schemes becomes larger,
| the coin toss does much worse in respect to the Bayesian
| probability.
| fsdfgsfsdfsdfsd wrote:
| But they were detecting 2 out of 4, not 2 out of 2. I think
| you are incorrect.
| LukeShu wrote:
| I think they're both incorrect.
|
| They ran the model on historical data. Of 4 a priori known
| P&Ds, the model detected 2 of them. To say that they've got
| accuracy of a 50% or "no better than a coin toss", ignores
| all of the non-P&D events that it correctly didn't identify
| as a P&D. If you did a coin toss, you would flip the coin
| much more than 4 times.
| rossdavidh wrote:
| You really would also want to have some sort of loss
| function, or at the very least a general idea of whether
| you most need to avoid false positives or false
| negatives. If it was most important to avoid incorrectly
| saying it's NOT a P&D, then this is not good performance.
| If you need it to nearly always avoid saying something
| which is not a P&D (and thus might be a great investment
| opportunity), but given that you want to avoid as many as
| you can, 50% might be good.
| fsdfgsfsdfsdfsd wrote:
| True
| analyst74 wrote:
| Chance of tossing 2/4 in a 4 coin toss is 37.5%, no?
|
| 0/4: 6.25%, 1/4: 25%, 2/4: 37.5%, 3/4: 25%, 4/4: 6.25%
| geraldbauer wrote:
| For a best of crypto quotes incl. pumping up the gigantic Bitcoin
| ponzi, see https://github.com/openblockchains/crypto-quotes
|
| SCAM ALERT! SCAM ALERT! SCAM ALERT!
|
| > The U.S. Dollar is no longer a reliable store of value. Cameron
| and I (Winklevoss Twins Capital) make the case for $500 000
| Bitcoin. Number go up! To the moon!
|
| > When Elon Musk puts the Tesla balance sheet into Bitcoin, we'll
| have to change the Bitcoin rallying cry from "to the moon!" to
| "to Mars!"
|
| -- Tyler Winklevoss, Bitcoin Billionaire
|
| or
|
| > There are 3.5 billion smart phones on the planet. All of them
| can hold bitcoin. None of them can hold gold. Bitcoin is the
| future. Number go up! To the moon!
|
| -- Cameron Winklevoss, Bitcoin Billionaire
|
| Given the challenge of how to invest $600 million in treasury
| reserves, after a lifetime of experience and months of analysis,
| I decided on an allocation of 100% Bitcoin, 0% Bonds, 0% Stocks,
| 0% Real Estate, 0% Gold. Seems rational to me. Number go up! To
| the moon!
|
| -- Michael Saylor, Business Intelligence Billionaire
|
| and on on.
| bagels wrote:
| Is there a market for put options on bitcoins?
| tux3 wrote:
| You may be joking, but there are plenty of those.
|
| Seeing the bubble is the easy part. Timing the top? Much
| harder!
| possiblelion wrote:
| absolutely, Deribit is the market leader on that. just be
| careful, put options on BTC have bankrupted a lot of people.
| robkop wrote:
| You weren't joking. They've got a live count per day [0].
|
| [0]: https://pro.deribit.com/statistics/BTC/insurance-fund
| f430 wrote:
| > put options on BTC have bankrupted a lot of people.
|
| If you understand that Bitcoin options really aren't
| options then this shouldn't come as a surprise.
|
| Shady exchanges see massive positions and have successfully
| manipulated bids and ask (most of it is fake) to trick
| others into selling or buying which in turn moves prices
| even more.
|
| Once they take out the "option traders" they simply move on
| to the next.
|
| Yet the inexperienced "speculator" believes its his fault.
|
| Wat I credit bitcoin and its community for is its ability
| to create a bubble of their version of reality which is
| almost always getting people to buy the bitcoins they are
| already holding. Without them, the system would collapse
| and they would lose their investment.
|
| Bitcoin is a vehicle for transfering wealth from the FOMO
| ignorant crowd who shouldn't be speculating on ponzi
| schemes. So many ruined lives because little guys bought
| into crypto, ICO, and other false hopes.
|
| Bitcoin will bankrupt a lot more people I'm afraid.
| radu_floricica wrote:
| If you play the market sure, you should expect a hefty
| risk to get burned.
|
| But to me, a birdseye view of bitcoin is a currency
| that's created by design to be deflationary, that found a
| niche as a value store. Sure, there are ups and downs,
| and also considerable risks long term (regulatory first
| of all), but it should be noted that pretty much anybody
| that ever bought btc has lived to see a higher price,
| regardless of ups and downs. That's what makes it very
| good for what it does (long term value store).
| arbol wrote:
| Deribit
| ZitchDog wrote:
| It is stupid to short Bitcoin. Bitcoin has no fundamental
| value, but its fundamental value is greater than zero. Since
| the value of a Bitcoin is impossible to predict it could just
| as easily go up as down.
| BlueTemplar wrote:
| This is true, but only because nothing has fundamental
| value.
| nullc wrote:
| For US investors? Sure. LedgerX.
|
| (Unlike some other place LedgerX is physically delivered, and
| not just a bucket-shop sidebet on the market).
|
| They have contracts out to Dec2022, though volume on the
| Dec2022 contracts haven't been particularly significant yet
| and generally puts trade much less vigorously than calls
| there.
|
| https://trade.ledgerx.com/live
| ThePowerOfDirge wrote:
| How, without every government banning it, do you see bitcoin's
| value going to zero?
|
| https://www.visualcapitalist.com/the-feds-balance-sheet-the-...
| classified wrote:
| Bernie Madoff went to jail when he couldn't sustain his scam
| any longer. When the crypto bubble pops, the prison-as-a-
| service industry might experience a boom since they won't have
| enough cells to house all the scamsters.
| Calamity wrote:
| The thing that has surprised me the most with the current crypto-
| craze is the number of people that I consider generally quite
| rational/thoughtful who could nonetheless not resist the
| temptation to jump onto the bandwagon. I'm left thinking that
| they must know what they're doing and that they simply enjoy the
| thrill of a game of musical chairs.
| AznHisoka wrote:
| Putting money into Bitcoin is a rational decision because
| others are irrational and bidding it up.
| netrus wrote:
| Isn't "putting money into Bitcoin" the same thing as "bidding
| it up"? Both actions have the same level of rationality,
| whatever that might be.
| paulryanrogers wrote:
| While true there are other factors keeping some money out.
| Like those concerned with the environmental impact of the
| electricity generation and short lived ASICs.
| HarryHirsch wrote:
| It's worrying, isn't it, people putting money into bitcoin
| because there are no productive investment opportunities
| available in the real world. That's secular stagnation.
| thebean11 wrote:
| Wouldn't necessarily call bitcoin non-productive, any more
| than an unprofitable startup is non-productive. The
| technology does currently have niche use cases, and the
| decentralization can be a positive. It's a bet that
| "productive" things will be enabled by it.
| shaolinspirit wrote:
| being rational is overrated, modernism is boring
| tchalla wrote:
| Most situations aren't black and white. Crypto (in particular
| Bitcoin) is an investment asset. Every asset comes with risks.
| The way to adjust for the risk is to have the right proportion
| of your investment into the asset. It's the same for gold,
| equity or any other investment instrument.
| graeme wrote:
| If there were no investor protections then anyone following
| this "just put a bit into different things" strategy would
| get hosed by scams. It only works because investment laws
| keep out most grifters from raising funds.
|
| Bitcoin isn't a typical investment instrument in that sense,
| so I'm not sure applying the same heuristic works.
| kgwgk wrote:
| The key is diversification! You put part of your fortune in
| bitcoin, part in ethereum, part in dogecoin, part in beanie
| babies, part in baseball cards, part in fine wines, part in
| vintage comic books, part in tulips...
| paulryanrogers wrote:
| Durability of tulips is suspect. And some bitcoin miners
| are stealing electricity in the third world. So maybe
| double down on the surer bets like Dogecoin.
| ada1981 wrote:
| Folks grandfathered into the Tesla supercharger network
| can set up a sweet trunk mining rig...
| arcticbull wrote:
| Or beanie babies! They don't make them anymore so you've
| got scarcity built right in. Each one of the same type is
| fungible.
|
| I suggest you convert your corporate balance sheet over
| to beanie babies immediately for maximum gains.
| Findeton wrote:
| Well if the FED and the ECB weren't printing tens of thousands
| of millions of fake money every month and calling it
| Quantitative Easing I might have agreed maybe. Truth is
| government issued money is worth less and less over time, as
| the scheme is designed to create inflation and thus make
| government debt sustainable by robbing everyone else's savings
| year by year.
| solinent wrote:
| It seems to me the investment community has accepted bitcoin
| at this point, with major institutional investors finally
| buying in now--1 billion from microstrategy, for example--so
| expect to see it go up more. I think it will keep going up
| until it gets regulated, I'm sure they'll continue to find
| ways to "increase liquidity" despite Bitcoin.
| pixel_tracing wrote:
| There's money on the table what sane capitalist wouldn't jump
| at the chance to take some in?
| JumpCrisscross wrote:
| With income inequality the way it is, there is intense demand
| for lottery tickets. That brings the dumb money. And smart
| money tends to keep an eye on where the dumb money wanders.
|
| Disclosure: I think cryptos are this generation's baseball
| cards. I have exposure to companies that make money trading
| cryptos and selling services to crypto investors.
| paulryanrogers wrote:
| As someone who bought in the era of overproduced baseball
| cards I think this comparison is apt, if personally painful.
| At least I can burn them to cook and stay warm in an
| emergency.
| randomopining wrote:
| It's a deflationary store of value, it does make sense to
| invest some into it.
| xyzelement wrote:
| There's only so much that my dog can poop per day. Some of
| the poop gets lost when I scoop it off the sidewalk. And
| eventually he will die and not poop any more. Thus my dog's
| turds are a deflationary store of value but I wouldn't say
| "it makes sense to invest in some."
|
| Disclosure - I made up the dog.
| thebean11 wrote:
| The dismissiveness of (presumably) otherwise thoughtful
| people on this forum still surprises me. Do you really find
| that comparison valuable in evaluating the tech?
| xyzelement wrote:
| I was looking to make a finance, not tech point.
| Specifically that there are many things that are finite
| and "deflationary" but obviously without value.
|
| Point being that the scarcity argument of bitcoin is on
| its own not persuasive.
|
| I used the cheeky example of dog poop because I though it
| was cute but I guess it was"too cute" and obscured the
| point.
| HarryHirsch wrote:
| _store of value_
|
| The value comes from being able to manipulate the price, one
| would suppose.
| fsdfgsfsdfsdfsd wrote:
| How can you manipulate the price?
|
| I suppose there are now some whales, including governments
| that seized BTC from criminals, that could induce a crash
| by selling thousands of BTC within a short frame of time.
| But that may be true for many stocks as well.
| strathmeyer wrote:
| The more dumb stuff people say about Bitcoin, the more room
| you know it has to rise.
| paulryanrogers wrote:
| Why is the comment dumb?
| fsdfgsfsdfsdfsd wrote:
| Because it is not so easy to manipulate the price,
| presumably.
|
| It depends on the trading volume. For many "altcoins" or
| "shitcoins" it may be true, because they have low trading
| volume. Bitcoin probably less so these days.
| ricardo81 wrote:
| Given the market cap of 800 billion for BTC at the
| moment, presumably it should by relatively hard to
| manipulate.
|
| I'd read elsewhere that there was a tiny minority of BTC
| holders that own 95% of it, no idea of the authenticity
| of that.
|
| As a Layman, my assumption is the more liquidity in the
| market, the harder it would be to manipulate and less
| reason to dump onto the market if a large stakeholder.
| FriendlyNormie wrote:
| Hello there, retard. Tell us what you've learned throughout
| all the research you've done on Tether. Oh, nothing? Kill
| yourself.
| 14 wrote:
| I think it is a high risk high reward system. For some there is
| very little risk in investing several thousand dollars, that is
| a pay check or 2. But if things go well the reward could be
| your money quadrupling or more.
| kgwgk wrote:
| This applies to all Ponzi schemes. And despite the solid
| investment case most people end up holding the bag.
| TazeTSchnitzel wrote:
| Bitcoin itself is currently undergoing something not completely
| dissimilar to a pump-and-dump. Because of the difficulty of
| transacting USD for cryptocurrency purposes, a pegged currency
| called "Tethers", specifically USDT, is being used as a
| substitute. It's supposed to be backed 1:1 by USD reserves, but
| it's clear at this point that the amount of USD reserves do not
| match the number of USDT in circulation and they're just printing
| money to buy BTC. The markets using real USD are then matching
| the USDT price and this allows the printers to cash out. Once
| regulators strike, many investors will realise they have a lot of
| useless paper money (USDT) and suddenly much less valuable BTC.
|
| Or so many allege, at least:
| https://amycastor.com/2020/11/21/are-pixie-fairies-behind-bi...
| woah wrote:
| Tether definitely seems very fishy, but they've been around for
| a pretty long time. People were saying this exact thing in the
| 2017 bull market but then there was a savage bear market the
| next year (~10x BTC price drop) and Tether is still fine. What
| is the event that will reveal that the emperor has no clothes?
| [deleted]
| TazeTSchnitzel wrote:
| The New York Attorney General is currently on Tether's case
| and its latest deadline is 15 January 2021 for Tether to
| produce documents, but that deadline may slip again...
| arcticbull wrote:
| Step 1: Open coinmarketcap.com
|
| Step 2: It's all of them.
|
| This system is quick, easy and 100% effective.
| dgellow wrote:
| If people are interested in the topic, a more recent paper from
| 2020 is "Pump and Dumps in the Bitcoin Era: Real Time Detection
| of Cryptocurrency Market Manipulations", available at
| https://arxiv.org/pdf/2005.06610.pdf.
|
| The researchers got some very good results (their detection tools
| has a precision of 93.1% with 91.4% recall), and made their data
| set publicly available on github.
| geraldbauer wrote:
| A little to the moon gem from the best of crypto quotes [1] via
| SEC Investor Education:
|
| > New Year's Financial Resolution: Ponzi scheme "red flags" -
| Avoid too-good-to-be-true "investments" with claims like:
|
| - "To the moon! To the mars!"
|
| - "Number go up!"
|
| - "Yearly return of 300+% in 2020!"
|
| - "Could quadruple in 2021 and rally to $100,000!"
|
| [1] https://github.com/openblockchains/crypto-quotes#sec-
| investo...
| [deleted]
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