Bitcoin Forum

The us gov, is the second btc shareholder. Tim draper, etc.
What would prevent him, to create, or reuse a virtual exchange, fake the rates (like mtgox), and sell all the coins at funny prices?
Is there a way to find the real btc-usd  rate (not the x exchange rate), between blockchain transactions and fiat money?

How can we control state agents corruption,  corporate espionage from being tracked if now everyone can be paid without the need for banked tracked transactions. Is hard to get a front man linked in a jury investigation, now  harder is to link virtual wallets, with illicit lobbying activities inside the government.

i would say no.  people base the value of bitcoin on the exchange rate they see.  if its faked, then it becomes real afterwards.

Mt gox didn't fake the rates, from what I know, they blocked BTC withdrawals, so the price fell down within their exchange. Simply people started to panic and sell at any rate. Then, allegedly, Karpeless was buying cheap bitcoins on his own exchange and selling them at normal rates elsewhere.

How would anyone fake the rates? They would have to create exchange closed to the public and buy from themselves (otherwise they'd lose a lot of money buying overpriced bitcoins from others). But absolutely no one would give a shit about such rates, since no 'outsider' would be able to trade there.

Every country has some level of corruption. Corruption is more difficult to prevent after bitcoin is seen as a kind of  currency which is anonymous. Sometimes it is ambiguous as donation or bribery. It will depend on how the law distinguish them.

Im sitted on loads of coins. I create or buy an exchange to sell them without lowering the price. With this conditions:
Fake buy orders to balance up my sell orders.
In my exchange, certain buy orders are flagged as fake so i can profit from newcomers without impacting on transactions. Dollars, bitcoins, is my volume i move it wherever i want (im a market maker, i dont pay fees or nothing for moving), meanwhile others are buying my coins high and im getting dollars. After all in all exchanges transactions are anonymous, who knows which is wich, and who is who.
The transactions could all be displayed to all, who knows what is happening internally, in terms of banking audits.

And why sell at funny prices when they can auction the coins and get more USD? As long as you can move coins and USD from and to virtual exchange, you can make money with arbitrage if the prices differs from other exchanges

Funny prices = Higher than market. Someone have 30000 btc to control prices, and there are 140.000 coins arround to fluctuate prices wherever they want. For me it spells HONEYPOT, everywhere. They bought the coins really cheap, what is the cost of operation to raid Silk Road, now they can do whatever they want with a global cryptocoin economy.

But how do you know the existence of said wallet. is all hidden. They will not tell you "hi i have this wallet". With power i could even fake my death. Im the government i make ids. Cryptos, or some kind of exchange have to be protected against central control or monopoly from big shareholders.

Doesnt matter if much higher or lower, with arbitrage you can make money eighter way. In your example people would be selling bitcoin more often than buying there until the price stabilizes with other exchanges. So it cost USD to the manipulator setting higher prices and he acquire more BTC

You serious?
You opened an exchange and faked the price up, say 700 USD, while everywhere it's say 380 USD. You don't get any buy orders, but you get shitload of sell orders. What happens when I (and hundred of others) move my BTC and try to sell? Orders won't get executed? You think no one will notice? You wouldn't last an hour.

Orders will be partially accomplished, with and algorithm, trading bots will adjust to sell in a way for maxing gains. I fake the market to stay at the price of others markets, meanwhile i try to sell at the price without lowering too much my coins (i need to sell without being the big whale). Not all buy orders will be executed, Bank deposits to get out last days, someone will notice something, all will dont care, until they are late and wasted, it will be weeks.
What percentage of exchanges are clear to the public about bank audits, do they all pass financial regulations? the moment you are in you only have a piece of number in a screen, until you try to get out.

you do realise right now that no one knows how much real bank notes sit in btc-e, bitstamp and bitfinex bank accounts right?

you do realise that just moving 200 coins on btc-e causes peoples naive belief that the market cap of $5billion shoots up to $6 billion.. right... simply because someone ate 200 coins of sell orders (causing a $75 price wall difference($357-$450) due to most sell orders only being 0.011btc).

you do realise that last year mtgox when they had active trading, was doing in excess of 150k coin volume. and btc-e was close behind... but this year btc-e is well under 20k. bitstamp doesnt really exceed 25k. and in both cases most of that volume is internal movements of the MySQL database. not deposits and withdrawals of actual fiat.

so as the OP asks, ignoring the exchanges naive valuation of the market cap because no one can, with any sanity, truly value 13million coins on the bases of less than 200 coins moving around per hour. especially if they cant put a proper dollar value against the cap as a proper measure.

im not saying that its a flaw.. just a naive human acceptance.

i think when things like winklevoss ETF open, where they have to be transparent about the fiat reserves and bitcoin holdings. then a more accurate and healthy valuation can be found.

but right now the only transparent and direct 100% real fiat-bitcoin trade is localbitcoins.

You cannot manipulate the price from your order book. If you were to have fake trades take place at above market prices then people would deposit their bitcion on your exchange, sell the bitcoin and attempt to arbitrage on other exchanges. When you are dealing with an efficient market, the only way to create higher prices is to have more demand for the security.

So now you don't want to sell your coins at 'funny' prices (above market rate), but just dump them without driving the prices down? You lost me here...


You mean sell orders?


You mean withdrawals? What you'll be concern with is BTC deposits, these take 1 hour tops. If the price is higher than anywhere else, you'd have a shitload of BTC flying your way (not USD). So it's real sell orders vs your fake buy orders, and since all of them would aim to sell instantly, you'd either have to buy them all with your own USD, or quickly drive the price below the market rate to discourage from selling. In either way you're fucked.


The exchanges are shitty indicator of value, I 100% agree with that. But sadly that's the only indicator that can be used by merchants accepting bitcoins. And they need the price indicator.

Sure I can laugh at the low price, I can value BTC that I hold at say $1000 and commit not to sell below that, but the very moment I decide to buy something with bitcoins, this 'exchanges naive valuation' becomes real.

Haven't used localbitcoins yet, but don't think anyone would be willing to buy BTC from me significantly above the rate on exchanges. Correct me if I'm wrong.

your wrong. localbitcoins is the most truest valuer so far, as it only deals in bank transfers for bitcoin (direct swaps). it has no crappy bot playing mysql representing values. its just simple bitcoin for real fiat.

currently local bitcoins is $50 above crappy exchanges. when bitcoin exchanges were around $400+ last week local bitcoins was still at the $500 mark.

the only problem now is that the little fish are now using local bitcoins.. without smart brains. so instead of selling bitcoins at a true value of $500+, they are stupidly looking at the exchange price and sheep following exchanges thus selling lower. localbitcoins should be the trend setter not the last sheep. (rant over)

but anyways, local bitcoins is where actual 100% bank account -> bitcoin valuations lay.. not the crappy day trading bots of mysql database driven exchanges