Bitcoin Forum

Can somebody explain how DDoS makes BTC price drop?

if trading sites become unaccessable some people tend to panic selling, which increases load on the servers even more.

Did you not watch the market implode today??

That's how it effects the price.

It doesn't.  People just don't want to admit that investor confidence might be shook, and the whole meteoric rise in price was all a charade, so they are looking for a scapegoat.


If anything, MtGox lag slowed the freefall.

BTC exchanges are HEAVILY weighted to the buy side since some many new people are opening accounts.  When you freeze access to the site, these new buyers cannot get on and buy so it makes it easier to sell.  When things freeze up and fall, people with little sense panic and yell fire as they run to the exits.

you forget a trading platform with shitty implemented algorithms  ::)

Except for the fact that the huge drops in price are always combined with huge MtGox lag.

Unfortunately they will be fixing this today (tomorrow there) and I cannot write my trade bot to take advantage of it.

How about something like a SOP policy to HALT trading when shit like this happens?   Who runs that place?   Really need an adult run exchange, there should be enough money in it to get real people interested.

Yeah, thats the point. The lag allows Mtgox to prop the market (by slowing down the freefall) during a crash.

i missed the "crash", but a few minutes ago i saw a quote somewhere here that said they stopped accepting new orders for some time. anyone knows more about this?

Oh man! If only I could wire transfer from my country I could rise that little number back to heaven.
How is it usd 130 and all you guys not buying?

It exacerbates panic sales and obscure price information to participants.

I am so done with MTGOX though. They've had PLENTY of time and money to upgrade their hardware to industry standard.

I had market orders fail to go through during the lag. Dont know about anyone else though.

the lag causes market sell orders placed at $230 to be executed at $150. so i don't think it slows it down, instead it fuels it up even more

Why do people use MtGox then? Bitcoin 24 or BitStamp don't charge any fees and I havent seen them down never.

Exactly.   When you are unable to do the business that people contract you to do, you HALT until you are ready.   They should have HALTED trading.   They are idiots.

stopping to accept new orders is a first step, but i guess they are just too greedy  >:(

Lack of liquidity really.

I find it so incompetent that I wonder if it is not the exchange itself.   Say they get too "short" because they are borrowing (without asking) other people's deposited coins to keep the market going, waiting for a break to cover these shorts.   And the pullback does not come and their "facilitation of trade" actually becomes a HUGE liability.   Wouldn't a nice plunge help fix that?
Can anyone tell me why the above is not plausible?

Exactly. The sell-off started well before the lag. Trading curbs and circuit breakers slow panic selling on the NYSE/Nasdaq......the lags stems panic on Mt Gox. Everyone is using this DDoS(??)/lag as an excuse for a correction. That said, there are no trading curbs in currencies. Forex does not have circuit breakers. What does BitPay do during an outage??? Should a currency (or quasi-currency) ever have a circuit breaker?

Before this, the last 4 minor corrections were accompanied by the same lag (subsequent to a sell-off, not prior) and tiny bot trades on an inflated ask (e.g., 0.02 BTC trades well above the stream of sells) that kept the bid/ask high while most of the sales were actually occurring much much lower, which is why it always jumped back up so quickly after a sell-off even though the buys were minuscule compared to the much larger dump. The bot trades always appeared at key support levels, just as they did today. The panic selling would normally stop when lag increased to point that Gox was unresponsive. This time the selling was too intense.

https://bitcointalk.org/index.php?topic=172540
https://bitcointalk.org/index.php?topic=170483

A DDoS would only stem panic selling.....nobody should ever place market orders. Never ever....

"You can blame the DDoS for the lag but not the correction, which would've happened regardless. To blame this correction on the lag/DDoS is ridiculous because that would be saying that half the worth of a currency can be destroyed simply because people have a tough time logging into their forex account. If my equities platform lagged out I would be highly annoyed, but it would not destroy the stock market and force me to liquidate. This thing was headed down well before and independent of this lag....

If this was a DDoS attack, how can that cripple a multibillion dollar market this easily? If it can, then this market is overvalued because there is an extreme level of systematic risk. Is bitcoin (by way of its service providers) really so fragile that it gets cut in half in the blink of an eye simply because Gox lags out massively? That's even scarier than a natural panic sell-off and subsequent lag after a meteoric rise. On the NYSE, they have circuit breakers that halt trading intentionally because that quells panic (which is what I think this lag does, contrary to what most of you think). If anything, a DDoS would prevent the sell-off from being as deep and as fast as it would have been.

If one can truly blame this on an attack, then bitcoin needs Wall Street help (I hate to say it). What's worse, a currency that has a deep and natural sell-off (like this, IMO) or a currency that can be completely wrecked by a hacker? I opt for natural sell-off.....because otherwise we need a very strong and experienced organization (e.g., Goldman et al.) to step in and provide a platform."

https://bitcointalk.org/index.php?topic=172550.msg1796607#msg1796607

How can micro transactions affect the price?

I agree; they shouldn't. But somehow the bid/ask go right back up to the level of these tiny trades after a sell-off (sometimes a 5% -10% move based on nothing but a teenth of a coin). They didn't today because the sell-off was too large, but it happened in all 4 previous recent minor sell-offs. It makes no sense for the price to pop back up based on these minuscule trades. The bid/ask move up erratically and never follow the trades down in and orderly way. It's almost as if the bots are used to put green on the screen and stem the psychology of a panic sell. But that doesn't explain why the bid/ask shoot directly back up after 100's of coins have been dumped at much lower prices.

Honestly, it's irresponsible of MtGox to even offer the option of issuing a market order given the known horrible performance of their matching engine. At minimum, they should not allow market orders when lag is significant.

Agreed. Don't use Market Orders. And definitely don't make it the default option, which I think it might be.

DDoS is just another word for 'many people trying to sell at once'

so, mtgox is pump & dumping themselves?

Bot puts up buy at $x
Noobs sell at market price $x

rinse and repeat

Yes, I agree the bot can eat all buy orders that newbies create and make the price go down, but why make it in tiny transactions?
Is this done because they sell BTC from thousands of accounts at once with bots, and cant sell large amounts as they need to be verified?

People who don't understand how it works will think they will get the price they currently see on the screen with a market order, but when it lags and there is volatility, they can end up getting shafted by a lower price than they wanted to sell their bitcoins for once it goes through.