Consent and the price of bitcoins in China

[Severian]

To be brief, Bitcoin’s price setting is being hijacked by vested business interests that have little to no concern for the larger Bitcoin community. Going completely against the idea of a decentralized currency, a majority of Bitcoin users mysteriously look in one central direction, mtgox, to tell them what their money is worth. At the same time, mtgox’s price is obviously being manipulated and the price is being kept under its true value. A comment commonly seen in Bitcoin related discussions, usually made by people in the banking/finance sector, is “How do I short this shit?”

Consent and the price of bitcoins in China

[chriswilmer]

There is a lot of volume on other exchanges (i.e., BTC-e, bitstamp)... so, this doesn't make sense to me. Also, if nefarious traders are "keeping the price low"... well, that sounds great for most people on this forum. More time to buy bitcoins.

[justusranvier]

If you're worried about short sellers then just make sure to always take actual possession of your bitcoins. All of the dirty tricks that Wall Street firms play with the exchanges are possible because they can get away with selling things they don't actually have, and can plunder customer accounts without anyone realizing it.

Send your national currency to Mt Gox, trade it for bitcoins, and withdraw those bitcoins to an address you control. If everybody does that it it would make shorting risky and naked shorting impossible.

[DublinBrian]

If you're worried about short sellers then just make sure to always take actual possession of your bitcoins. All of the dirty tricks that Wall Street firms play with the exchanges are possible because they can get away with selling things they don't actually have, and can plunder customer accounts without anyone realizing it.

Send your national currency to Mt Gox, trade it for bitcoins, and withdraw those bitcoins to an address you control. If everybody does that it it would make shorting risky and naked shorting impossible.

Good point. But now with Coinlabs takeover of MtGox's US accounts, some customers may be able to sell bitcoins on MtGox, without having to deposit them on MtGox first. This "naked shorting" would require Coinlab to collaborate. But Coinlab have already stated that they intend to facilitate Wall St players.

I care very much about the needs of the institutional investors.”

To be clear, I have no reason to suspect Coinlab are anything but 100% ethical, but we have to be aware that such things are possible. To prevent "naked shorting" of bitcoin on any exchange, everyone should withdraw their bitcoins from the exchanges at the end of each trading day and not leave them on the exchange for long periods.

[ArticMine]

The best way to deal with short sellers is to first let them short. Then take delivery and watch the short squeeze unravel.

The common source of stocks to short lies margin accounts because if one buys stocks on margin then the brokerage can lend those shares so that they can be sold short since the shares are no longer segregated.

[Melbustus]

Do we have any way to estimate how many coins people leave on MtGox? Personally, I transfer my coins to my own wallet after every purchase, but I'm not a trader (I've never even sold a single bitcoin).

With how little friction there is moving bitcoin around, it seems pretty stupid to leave it under 3rd party management unless there's lots of transparency and guarantees (which gox doesn't provide, but CoinLab actually might).

[Severian]

Send your national currency to Mt Gox, trade it for bitcoins

I believe the point of the essay was staying away from Gox.

[oakpacific]

I am very sure that the high bitcoin price is created by artificial financial barriers.

[justusranvier]

I believe the point of the essay was staying away from Gox.

I understand that, I just don't agree. If you've got money in a bank account you're not going to withdraw it without being monitored, so you might as well send it to the exchange with the best liquidity to buy Bitcoins with. After you take possession of the bitcoins you have a lot more options with regards to privacy and plausible deniability.

[iCEBREAKER]

TL;DR 

"boo hoo hoo, mtgox is a BIG MEANIE for having first mover advantage       

the network effect is NO FAIR and I HATE 80/20 Pareto equilibrium        "

[Severian]

After you take possession of the bitcoins you have a lot more options with regards to privacy and plausible deniability.

Agreed. I just don't like exposing myself anymore than I have to. Withdrawing cash and buying offline from the start adds even more privacy and deniability.

"boo hoo hoo, mtgox is a BIG MEANIE for having first mover advantage 

Not at all. I'm not the envious sort.

But I am a little paranoid about the Money Powers seizing control of the exchange price. Goxilla's move to the US strikes me as a possible setup for such a thing.

[Severian]

I am very sure that the high bitcoin price is created by artificial financial barriers.

That might be part of it, but bitcoins are also just hard to get for a lot of people, barriers or not. The technical jump is a longer one previous to the first financial jump. Paradigm shifts take some getting used to. Encrusted, ancient ideas such as centralized exchanges are also bound to be hugged a lot tighter by some more than others.

[justusranvier]

Withdrawing cash and buying offline from the start adds even more privacy and deniability.

No way to withdraw cash without being recorded on camera.

[oakpacific]

After you take possession of the bitcoins you have a lot more options with regards to privacy and plausible deniability.

Agreed. I just don't like exposing myself anymore than I have to. Withdrawing cash and buying offline from the start adds even more privacy and deniability.

"boo hoo hoo, mtgox is a BIG MEANIE for having first mover advantage

Not at all. I'm not the envious sort.

But I am a little paranoid about the Money Powers seizing control of the exchange price. Goxilla's move to the US strikes me as a possible setup for such a thing.

I think there are also many institutional investors out there understand bitcoin's potential and uniqueness, and even the evil guys are not a cohesive group, Wall Street have such dominance with their financial instruments mostly because they had a headstart, others will have to play by their rule. now in the bitcoin world all evil guys are gonna fight each other on a level playing field, American hedge funds, European Rothschild wannabes, Chinese red capitalists, Russian mafias, Middle East oil princes....no one group will be dominant forever.

[crazy_rabbit]

The solution is to diversify. Use Bitfloor or other exchanges.

[Severian]

now in the bitcoin world all evil guys are gonna fight each other on a level playing field, American hedge funds, European Rothschild wannabes, Chinese red capitalists, Russian mafias, Middle East oil princes....no one group will be dominant forever.

I imagine Jamie Dimon in 4 or 5 years as just another Bitcoin grifter trying to scam people for a few coins. A man can dream, anyway.

[Severian]

No way to withdraw cash without being recorded on camera.

There's also no way to deposit cash when buying bitcoins without encountering the same cameras. It always reminds me why I use Bitcoin when I'm at the bank.

[Severian]

The solution is to diversify.

Wisdom. That applies to everything.

One more point made on the blog about Goxilla or any other exchange under regulation: In the end, they'll fall on the side of the regulating body, not Bitcoin users.

[justusranvier]

In the end, they'll fall on the side of the regulating body, not Bitcoin users.

True, but it won't matter as long as you have your bitcoins instead of letting the exchange hold them.

[Severian]

True, but it won't matter as long as you have your bitcoins instead of letting the exchange hold them.

Pardon my ignorance, but is there a reliable way to see how many coins are being held at gox at any given time?