CoinLab News = Price collapse

[myself]

some ppl in this thread dont know what a warehouse house is  a Bitcoin warehouse should apply same rules and principles that grain-elevators start to apply since the speculation bubble in Chicago commodity market

[1714174954]

1714174954

[dooglus]

So really, you can as well have these coin ranges in a form of a public but anonymous ledger. Anybody who knew his/her id in the ledger would be able to verify quickly that their coins are on display. No overlaps possible. No communication needed

That's exactly how these guys do it:

http://www.bullionvault.com/audit.do?startsWith=A

[siulynot]

Important Article: http://silvervigilante.com/coinlab-repatriates-funds-to-us-no-thanks/



"GoldMoney and Bullion Vault use ViaMat for storage. Many of the retail storage facilities, at the end, use ViaMat to store metals.
Although playing right into the hands of the bankers, there is no evidence that this is a backdoor way of mass market drive-by-shooting to occur in Bitcoin, just as it does in silver.
As essentially a new “exchange,” Coinlab can now technically enable just a few individuals or organization to trade and sell on the exchange without Bitcoin backing their trade, since they could, technically, BE the exchange.  So, my concern is that this could be the entrance of 33 Liberty into the Bitcoin market to sell BTC they do not have and, as silver vigilantes will know, tank the price."


"You think Bitcoin price above silver price has not been acknowledged by High Finance? It’s likely, contrarily, they know what’s going on, and they are not pleased with this new p2p currency stealing headlines, allowing the entire world to ignore fiat in real time, now, today. Nothing short of a 51% attack on the network can allow them to control the price.  The dominant financial system must protect itself from $100 Bitcoin prices as large-scale investors move into the market. Marketing this new advent as a bank, the place to store your Bitcoin, the Bitcoin community has to acknowledge that the Powers That Be will need a mechanism (bank/exchange) to control our beloved BTC price. There is merely not enough supply at these new levels to sustain any sort of serial million dollar investments without really moving the price.  Check the Mt. Gox tick chart, the price was knocked from $34.80 to $33.15  off 22,000 BTC sold in around one hour; that means only $748,000 in BTC needed to be moved in one hour to move the price 4.75%. That is 6.1 days worth of BTC supply.
Or maybe I’m just missing the point?"


What im a saying is not a tinfoil hat argument... its a very valid argument that every US Citizen must be aware of. Especially if you refinanced your house to invest the money in bitcoin ;P

[molecular]

Important Article: http://silvervigilante.com/coinlab-repatriates-funds-to-us-no-thanks/



"GoldMoney and Bullion Vault use ViaMat for storage. Many of the retail storage facilities, at the end, use ViaMat to store metals.
Although playing right into the hands of the bankers, there is no evidence that this is a backdoor way of mass market drive-by-shooting to occur in Bitcoin, just as it does in silver.
As essentially a new “exchange,” Coinlab can now technically enable just a few individuals or organization to trade and sell on the exchange without Bitcoin backing their trade, since they could, technically, BE the exchange.  So, my concern is that this could be the entrance of 33 Liberty into the Bitcoin market to sell BTC they do not have and, as silver vigilantes will know, tank the price."

hm. I don't think your hypothetical situation is comparable to the paper silver game. On some days there's the equivalent of a years worth of silver supply being traded in paper. That would equal 1.3 million BTC (1 year of production). That's just a quantitative comparison. As for the qualitative one: Do you think if I own 1 SLV contract, I could have 5,000 oz of Silver delivered to my door? I don't think so. With BTC on mtgox/coinlab it's different. The buyers of the BTC in your scenario of a massive sell of non-existing BTC might well decide to click on the "withdraw BTC" button, forcing mtgox to come up with "real BTC". This danger of essentially a bank run makes it unlikely for mtgox/coinlab to do this. But maybe I'm misunderstanding?

[poly]

You are not forced to use CoinLab through. There are other exchanges, and generally most people would withdraw their bitcoins after a trade.

[notme]

Important Article: http://silvervigilante.com/coinlab-repatriates-funds-to-us-no-thanks/



"GoldMoney and Bullion Vault use ViaMat for storage. Many of the retail storage facilities, at the end, use ViaMat to store metals.
Although playing right into the hands of the bankers, there is no evidence that this is a backdoor way of mass market drive-by-shooting to occur in Bitcoin, just as it does in silver.
As essentially a new “exchange,” Coinlab can now technically enable just a few individuals or organization to trade and sell on the exchange without Bitcoin backing their trade, since they could, technically, BE the exchange.  So, my concern is that this could be the entrance of 33 Liberty into the Bitcoin market to sell BTC they do not have and, as silver vigilantes will know, tank the price."


"You think Bitcoin price above silver price has not been acknowledged by High Finance? It’s likely, contrarily, they know what’s going on, and they are not pleased with this new p2p currency stealing headlines, allowing the entire world to ignore fiat in real time, now, today. Nothing short of a 51% attack on the network can allow them to control the price.  The dominant financial system must protect itself from $100 Bitcoin prices as large-scale investors move into the market. Marketing this new advent as a bank, the place to store your Bitcoin, the Bitcoin community has to acknowledge that the Powers That Be will need a mechanism (bank/exchange) to control our beloved BTC price. There is merely not enough supply at these new levels to sustain any sort of serial million dollar investments without really moving the price.  Check the Mt. Gox tick chart, the price was knocked from $34.80 to $33.15  off 22,000 BTC sold in around one hour; that means only $748,000 in BTC needed to be moved in one hour to move the price 4.75%. That is 6.1 days worth of BTC supply.
Or maybe I’m just missing the point?"


What im a saying is not a tinfoil hat argument... its a very valid argument that every US Citizen must be aware of. Especially if you refinanced your house to invest the money in bitcoin ;P

How many days of gold supply would you have to sell in an hour to drop it 5%?  More than 6?

[jrussou]

This is possible when you can create commodities out of thin air (like "paper silver").

I have thought of making a proof-of-concept "Casascius Bank" but where I accept no more than about 1000 BTC in total deposits.

The real goal, though, wouldn't be to become a bank.  It would be to illustrate a proof-of-concept: provably secure depositing.

My "bank" would create cryptographic signatures on a daily basis proving in fact that I have every single bitcoin I say I have on deposit.  Meanwhile, I would break down that 1000 BTC into "ranges" to assert that they are owned by specific depositors (but only in a manner where the depositors themselves can identify their own funds, not the public).  For example, if I held 4 deposits for 4 people, and they were 100, 200, 300, and 400, then I would say that coins 1-100 belong to depositor 1, coins 201-400 belong to depositor 2, 401-600 and 601-1000 belong to depositors 3 and 4.  I would sign and send messages to each depositor, which would allow them to reconcile, catch, and out me if (for example), I told two people they each own the same range of coins.

The real goal would be to help the public know they really can and should demand proof that their deposits are safe and sound and not fractionally pledged, the same way "provably fair gaming" is teaching us by example that we should demand, well, provably fair games.

In turn, this would cut down the number of "paper bitcoins" in existence (or rather, I should say, "bitcoin-denominated promises", because the "paper bitcoins" I have in mind - like bitaddress.org and bip38 - are actually close to the best kind of bitcoins you can have!)

I want to build a trading site, and I've thought a little about the best way to store clients' crypto-funds.  What if you provided your clients with an encrypted private key to their onsite wallet?  Then even if your site goes down, they can recover their funds with their own wallet.dat file plus their PW to unlock it.  The only funds that would not exist in their own wallet would be what you have in escrow on your site for open orders in queue.

[bitarrow]

the coins in your trading account dont really exist in your account, most are stored in offline cold wallet. You are only trading imaginary bitcoins. They only become real bitcoins when you withdraw them. If you implement your way then you would have to wait on confirmations to move from your wallet to pending/trading wallet. Sounds like bad and insecure idea to me.

[smoothie]

OP, Yes CoinLab news = Price Collapse upwards 

[bitarrow]

OP, Yes CoinLab news = Price Collapse upwards 

lol +1

[Kazu]

This is the dumbest theory ever. They will either charge interest on the shorts, or there will be a spread and a limited holding time which essentially equates to interest, or there will be a bit of both. In any case, the end result is that you end up having to pay back more BTC than you sold. Any noob can tell you that selling BTC then buying more back later will drive the price up, not down. Shorts only drive the price down in the short term or when there is an "inverse-bubble" like scenario in which everybody is borrowing borrowed stuff, which, unless the currency completely dies out, will still drive the price up in the long term.

[arepo]

In addition to the news that CoinLab is gonna manage USA/CA funds from Mtgox, they are announcing a professional, safe and licensed trading platform for US Corporations.

Trading platform = shorting.

3 or 4 medium sized corporations with 3 or 4 multimillion shorts puts the prices in $10 or below in no time.

and what the hell would be the point of shorting btc down to $10???

that's rully dum. there's massive support at $50... the price would probably overshoot to the hundreds and they'd suffer huge losses...

fud

[Kazu]

Quick question, it seems like allowing people to short bitcoins except through a binary options model is ridiculously risky for both the lender and the shorter.

Why? Because bitcoin is illiquid. Imagine shorting bitcoin, and suddenly the price starts rocketing. On a large short the slippage would be so huge that a margin call would likely not occur fast enough to prevent the borrower from going into potentially huge debt. So the lender is forced to require a huge 40%+ margin. I mean, seriously, on a fast moving btc market just the spread has been 20% or more. On my larger orders (which really aren't that large) the slippage has been huge. Now imagine orders of $1M plus interest. Take the current model supply curve for instance. Oh shit, we went over $150, margin call time... oh woops, it requires $160 plus spread to get those bitcoins back. And thats in the current relatively stable market.

[notme]

Quick question, it seems like allowing people to short bitcoins except through a binary options model is ridiculously risky for both the lender and the shorter.

Why? Because bitcoin is illiquid. Imagine shorting bitcoin, and suddenly the price starts rocketing. On a large short the slippage would be so huge that a margin call would likely not occur fast enough to prevent the borrower from going into potentially huge debt. So the lender is forced to require a huge 40%+ margin. I mean, seriously, on a fast moving btc market just the spread has been 20% or more. On my larger orders (which really aren't that large) the slippage has been huge. Now imagine orders of $1M plus interest. Take the current model supply curve for instance. Oh shit, we went over $150, margin call time... oh woops, it requires $160 plus spread to get those bitcoins back. And thats in the current relatively stable market.

A huge 40% margin!  Oh no!!!

That be 2/5ths as bad as just trading without leverage .

[Kazu]

Quick question, it seems like allowing people to short bitcoins except through a binary options model is ridiculously risky for both the lender and the shorter.

Why? Because bitcoin is illiquid. Imagine shorting bitcoin, and suddenly the price starts rocketing. On a large short the slippage would be so huge that a margin call would likely not occur fast enough to prevent the borrower from going into potentially huge debt. So the lender is forced to require a huge 40%+ margin. I mean, seriously, on a fast moving btc market just the spread has been 20% or more. On my larger orders (which really aren't that large) the slippage has been huge. Now imagine orders of $1M plus interest. Take the current model supply curve for instance. Oh shit, we went over $150, margin call time... oh woops, it requires $160 plus spread to get those bitcoins back. And thats in the current relatively stable market.

A huge 40% margin!  Oh no!!!

That be 2/5ths as bad as just trading without leverage .

Uh? For shorts, even without any true leverage, it would still majorly hurt small traders in the volatile market that can drop or skyrocket 10%+ because of random DDOS's. In fact it would probably contribute to even greater volatility due to margin call chains & the subsequent slippage.

[arepo]

looks like we're gearing up for a long squeeze, actually. check out them lending rates on bitfinex.

[Ichthyo]

looks like we're gearing up for a long squeeze, actually. check out them lending rates on bitfinex.

You should look at their statistics page

Right now the situation is rather moderate bullish (600k USD loans taken) and the trading activity is also just moderate. The low rates on BTC loans mean that only few people seriously intend to short. Which is just sane behaviour -- shorting bitcoin is playing with fire. It almost never pays back, you get out with some scars, if lucky. This was indeed different in fall 2011, but since more than one year, we had some phases of stability but simply never any seriously exploitable downtrend.

[mgio]

Shorting does not reduce the price at all. It simply reduces volatility. And for bitcoin, that is a good thing.

[Ichthyo]

Shorting does not reduce the price at all. It simply reduces volatility. And for bitcoin, that is a good thing.

true, but the point is, shorting wasn't lucrative most of the time for BTC.
Which is reflected in the low BTC loan rates on Bitfinex, when compared with the loan rates for USD

[chriswilmer]

What's the deal with Coinlab? Why are they so behind schedule?