maybe pirate is just a front for banks/governments/people who would destroy btc?

[paulie_w]

i wrote this in another thread but i think it maybe deserves its own. sorry to anyone who disagrees.

lets consider for a moment. if people are so stupid as to give 500,000 btc to someone with absolutely no credibility, identification, etc then we may have no chance whatsoever of hanging onto this currency and building any kind of real value with it.

that's because: the exact same method could be used by governments, banks and other interests that do not want btc to be anything more than a funny hobby currency (if that), locking up huge amounts of capital and constantly fucking with the markets to make it basically unusable for commerce.

this seems pretty serious to me. in fact, we have no proof either way that "pirate" isn't actually that very thing.

this is one thing that makes me seriously question whether bitcoin can work. certainly i believe in cryptocurrency... but bitcoin designed in this way, coupled with the apparent stupidity of speculators who would give coin away so easily? they'll ruin it for all of us.

if anyone can tell me why i am technically wrong, i'd like to hear it.

[Etlase2]

the first rule of bitcoin: do not question the limited supply

https://bitcointalk.org/index.php?topic=11627.0

[paulie_w]

no, this is not the same question, and I am not talking about deflation.

if someone controls, say, 2 million BTC, then the issue is that they can constantly mess with the exchange rate, create panics, etc.

they can even more or less _AUTOMATE_ this (ie, write a program to poison the market with fluctuations). this would _remove_ value from the economy because people would simply stop using it for anything.

[markm]

Quote: "do not question the limited supply"

Oh yeah good point. Once "the man" owns all the bitcoins, except maybe for some trivial token number of them all the billions of peons will have to make do with, maybe the virtues of altcoins will start to occur to people. Hey "the man", wanna buy up all those too? Bargain prices!

-MarkM-

[Etlase2]

if someone controls, say, 2 million BTC, then the issue is that they can constantly mess with the exchange rate, create panics, etc.

and why would they be able to constantly mess with the exchange rate and create panics?

[paulie_w]

is your question _really_ suggesting that this would not be possible?

the answer is by automating pump & dump where that entity retains control of the majority of the btc.

clearly, based on last week's activities, this would not be a difficult thing to achieve.

[Etlase2]

I was trying to oh-so-gently lead you back to "because there is a strictly limited supply", a flaw I consider fatal.

[DeathAndTaxes]

is your question _really_ suggesting that this would not be possible?

the answer is by automating pump & dump where that entity retains control of the majority of the btc.

clearly, based on last week's activities, this would not be a difficult thing to achieve.

Sure you can do it at a cost.  Take 500K BTC sell them all, then buy them back.  Guess what you have less than 500K BTC.  Keep doing that and eventually you have 0 BTC.  Idiots lose money in scams all the time.  It is simply a form of economic darwinism.  Money moves to the strong.  Those who do due diligence, require enforceable contracts, and build strong business relationships will accumulate the capital at the expense of those who don't.

Now what is different about Bitcoin is you have a some people who became incredibly wealthy in a short period of time.  A lot of them will lose their coins and they will be transferred to stronger hands.

[Herodes]

Do we know 100% that Pirate did/do control 500K BTC ?

[Gabi]

if someone controls, say, 2 million BTC, then the issue is that they can constantly mess with the exchange rate, create panics, etc.

and why would they be able to constantly mess with the exchange rate and create panics?

To destroy Bitcoin?

Banks can lose billions if bitcoin become widespread.

[paulie_w]

is your question _really_ suggesting that this would not be possible?

the answer is by automating pump & dump where that entity retains control of the majority of the btc.

clearly, based on last week's activities, this would not be a difficult thing to achieve.

Sure you can do it at a cost.  Take 500K BTC sell them all, then buy them back.  Guess what you have less than 500K BTC.  Keep doing that and eventually you have 0 BTC.  Idiots lose money in scams all the time.  It is simply a form of economic darwinism.  Money moves to the strong.  Those who do due diligence, require enforceable contracts, and build strong business relationships will accumulate the capital at the expense of those who don't.

Now what is different about Bitcoin is you have a some people who became incredibly wealthy in a short period of time.  A lot of them will lose their coins and they will be transferred to stronger hands.

i really don't believe that this is the only way that manipulations can play out. sophisticated investors have been gaming the traditional currency markets for ages in order to get more of it into their hands, not always to the benefit of everyone else (usually to the contrary).

[dust]

Do we know 100% that Pirate did/do control 500K BTC ?

He claimed over 500k btc.  Various estimates based on from the community put him at 350-500k.  Both of these numbers are going on the assumption that he was not running a ponzi, in which case he would have significantly less real btc than the total value of his accounts on paper.

[SysRun]

The more complicated a conspiracy theory, the less likely it is true.

An elephant with laser cannons may have caused the latest earthquake, but the evidence points toward plate tectonics.

[Piper67]

The more complicated a conspiracy theory, the less likely it is true.

An elephant with laser cannons may have caused the latest earthquake, but the evidence points toward plate tectonics.

Yeah, 'cause plate tectonics isn't complicated at all 

Generally speaking, Occam's razor applies, but only where there is no preponderance of evidence.

[paulie_w]

also it isn't that complicated.

it's clear to me that if you wanted to destroy bitcoin, all you'd need to do is get ahold of a certain % of the coin which you could then write some smart trading algorithms against, with the assumption that your competition basically doesn't exist.

it's hardly implausible.

[sunnankar]

An elephant with laser cannons may have caused the latest earthquake, but the evidence points toward plate tectonics.

Actually, according to Fmr. Gov. Ventura more evidence points at HAARP than either laser equipped elephants or plate tectonics, particularly when there are geo-political ramifications.

[hashman]

also it isn't that complicated.

it's clear to me that if you wanted to destroy bitcoin, all you'd need to do is get ahold of a certain % of the coin which you could then write some smart trading algorithms against, with the assumption that your competition basically doesn't exist.

it's hardly implausible.

Ok so you can manipulate the price on an exchange.   

Sorry I'm a bit slow today.  Can you connect the dots for me, how do we get to the "destroy"  bit? 

[paraipan]

also it isn't that complicated.

it's clear to me that if you wanted to destroy bitcoin, all you'd need to do is get ahold of a certain % of the coin which you could then write some smart trading algorithms against, with the assumption that your competition basically doesn't exist.

it's hardly implausible.

Ok so you can manipulate the price on an exchange.   

Sorry I'm a bit slow today.  Can you connect the dots for me, how do we get to the "destroy"  bit? 

Same here, I have my bitcoins right here, perfectly fine, so your point is...

[paulie_w]

yes that's true, they can still be exchanged for their own "value", but what we have traditionally been doing here is plotting 1BTC against a certain number of USD. by creating massive fluctuations (and therefore panics), it would be pretty easy to drive the 'exchange value' totally out of the market, or at least scaring people to the degree that very few are holding onto BTC, driving down the peak values.

am i really thinking so outside the box that this seems crazy? i want bitcoin to succeed as much as anyone else; i would really like someone to tell me why this wouldn't be possible.

[BladeMcCool]

say you are the Fed and you are shaking in your boots because bitcoin basically obviates your entire business model. And so you decide to conjure up enough FRNs to buy ALL The available bitcions. Well theres only so many bitcoins on the market, and by buying them all up you'll push the price up and create a mania. Now you want to dump them, so you sell them all off, fast, you crash the price. Then you're fighting to buy them all back again at this lower price, but you're not the only buyer, theres a lot of other people out there who are just waiting for bitcoins to go on sale before buying them up. So you lost control of half your bitcoins when you dumped them, and now you can only buy back what is still for sale again, only because now supply-for-sale is less, the price is higher than it was. OOPS PLAN FAILS. To buy the entire supply once again you have to push the price up even further. So yeah you get to create a series of manias and crashes that in effect funnel bitcoins to the people who want to 'buy them on sale' while slowly moving the average price up and also further destroying your little fiat central bank currency in the process. Maybe I got that wrong but thats how I see that scenario playing out.