How Bots Brought Bitcoin up from $150 to $1000

[MNbag]

https://www.investopedia.com/news/bots-drove-bitcoins-150to1000-rise-2013-paper/

Yep, it appears that the golden child of crypto has some secrets.

[dothebeats]

This was not really hidden to the public. It was hinted and proven that bots operating in the now-defunct Mt. Gox was responsible for taking bitcoin up to its first remarkable ATH back in 2013. They also have this lovely name to the bot, 'Willy' as they call it, and the other one I can't remember. Those reports regarding the bot was already circulating when I entered the scene on March 2014, and more and more evidence on the existence of these manipulating bots surfaced weeks after the first reports were published.

Pump and dumps back then were rampant, and given that Mt. Gox impose no trading fees back then, it's not really impossible that bots can do such things and drive the price up to new heights.

[Hydrogen]

2013 was the year of silk road. Ross Ulbricht (aka Dread Pirate Roberts) ran a TOR marketplace (silk road) where users could purchase goods for bitcoin. This greatly expanded bitcoin's utility and userbase, driving its price upwards. As indicated by bitcoin crashing horribly after silk road was shut down. (China banned bitcoin in some capacity, in the same timeframe, its a toss up as to which was more responsible.)

MtGox (Magic The Gathering Online eXchange) crypto exchange started out as a small hobbyist platform created by a MENSA member to trade magic the gathering cards. Due to lack of technical support, the exchange didn't scale well when it was expanded to suit a larger userbase, as it grew in size through support of crypto markets. MtGox's basic operations were so bad, hackers stole millions from MtGox, without the theft being noticed for weeks / months.

MtGox was poorly maintained and poorly secured. It lacked competent developers or financial support. I doubt they had the financial or technical base to pull off a bot based pump of anything.

[Tytanowy Janusz]

Yep, it appears that the golden child of crypto has some secrets.

From 1.5B$ to 10B$? According to Wikipedia there are currently 2,755 Billionaires. So every single one of them was able to manipulate bitcoin as much as he wanted pushing BTC form 150 to 1000$ in ... 1 day. I think that liquidity was that poor that days that even 1 mln $ was enough to paint daily candle how you wanted. But does it matter now? With close to 1T marketcap? With biggest companies investing in BTC, with countries investing in BTC? With Fidelity (one of the largest asset managers in the world with $4.9 trillion in assets under management) suggesting that every well balanced portfolio should hold at least 5% in BTC? I don't think so.

[The Sceptical Chymist]

OP, is this going to be your tactic on the forum--posting a link and making a one-sentence comment on it?  I gave you a merit for the NFT thread, but I think that's going to be it if this is what you're going to do.  The article you linked to is from 2019 and is old news--very old news, and I'm sure a lot of members here already know the story behind Mt. Gox.  I certainly was familiar with the bot thing.

MtGox was poorly maintained and poorly secured. It lacked competent developers or financial support. I doubt they had the financial or technical base to pull off a bot based pump of anything.

Mark Karpeles isn't a stupid person, and he's an excellent coder from what I've read.  He could have easily been behind the bot all by himself, and I wouldn't put it past him to pull that kind of crap.  You're right about the poor maintenance and security and development.  I was just getting interested in bitcoin when Mt. Gox was imploding, and I never visited their website.  Now I kind of wish I had, just to see what it was like.

It's amazing that they were the exchange back in 2013.  It's also amazing that you had to wire them money for deposits and that it could take weeks to create an account.  I'm reading Bitcoin Billionaires, and it's an excellent account of the early days of bitcoin.

[Hydrogen]

Mark Karpeles isn't a stupid person, and he's an excellent coder from what I've read.  He could have easily been behind the bot all by himself, and I wouldn't put it past him to pull that kind of crap.  You're right about the poor maintenance and security and development.  I was just getting interested in bitcoin when Mt. Gox was imploding, and I never visited their website.  Now I kind of wish I had, just to see what it was like.

....

The infamous Mark Karpeles made a bugged php script and sent 2 609 BTC to broken address. As you can see below, one of these address start with "s-" but regular bitcoin address start with "1","3" or "bc1" :
https://blockchair.com/bitcoin/address/s-272edf45031dd498e7b3ae89e11ff21b
(more info here)

 


Whether he was a good or bad coder. He didn't update or maintain MtGox regularly. When hackers stole millions in BTC from MtGox. The theft went undetected for months.

He never invested time or energy into the infrastructure or codebase side of the exchange. He was always way behind. Even on basic upkeep, backing up data and maintenance.

[The Sceptical Chymist]

The infamous Mark Karpeles made a bugged php script and sent 2 609 BTC to broken address. As you can see below, one of these address start with "s-" but regular bitcoin address start with "1","3" or "bc1" :
https://blockchair.com/bitcoin/address/s-272edf45031dd498e7b3ae89e11ff21b
(more info here)

Whether he was a good or bad coder. He didn't update or maintain MtGox regularly. When hackers stole millions in BTC from MtGox. The theft went undetected for months.

He never invested time or energy into the infrastructure side of the exchange. He was always way behind. Even on basic upkeep, backing up data and maintenance.

Well, shoot....I never said he was a perfect coder or couldn't make mistakes.  And yes, I agree with everything you wrote about him being a sloth (and also a control freak from what I've read).  If I'm not mistaken, he didn't let the small staff of Mt. Gox do much of anything, certainly not much of importance. 

Karpeles also didn't create the exchange, which I'm sure you know.  He probably thought it was just fine when he took possession of it and continued to pay attention to his cat and manga and Mt. Gox's coffee shop rather than security and everything else that goes into running an online exchange.