How I would manipulate the Bitcoin exchange market

[btcminer021]

How I would manipulate the Bitcoin exchange market

http://www.247btc.com/bitcoins/134/how-i-would-manipulate-the-bitcoin-exchange-market-and-how-a-discrete-double-auction-could-stop-me/

Great article.

[1715587819]

1715587819

[1715587819]

1715587819

[Bitmeat]

Great article, and I'm pretty sure this is what one or more well financed parties have been doing since at least January. People tend not to remember the lag spikes that "crash" the market from $40ish to $30ish and back, despite being a major correction 

An exchange with 80% of the volume, that can only handle a pathetic 35 trades per second before lagging out means you can just "DDOS" it from the comfort of your desktop, without having to go to all the trouble of paying for a botnet or performing a real DDOS attack.

With $60,000 worth of servers you can easily build a backend that can handle 1000+ trades per second. MtGox makes that much money every day. My pa always taught me to "never assume conspiracy where incompetence would give the same result"

[bassclef]

Thanks for posting. Good information all traders should be aware of.

[Xiaoma]

My pa always taught me to "never assume conspiracy where incompetence would give the same result"

Beautiful saying, I should write it down to remember it.

[Xiaoma]

Actually, the article about the double auction say something very similar to what I wanted to discuss in the forum last week...

I never heard about the double auction, but my idea was to only update the USD/BTC rate every 30 minutes, based on average transactions since the previous update. This would still let the market go up and down according to demand/offer, but would keep "instant traders" out of the exchange because there is no way they can use the usual techniques to profit from minute by minute fluctuations.

Still a vague idea that needs more thinking, but I feel that some bright minds could come up with a good plan.

[btcminer021]

An exchange with 80% of the volume, that can only handle a pathetic 35 trades per second before lagging out means you can just "DDOS" it from the comfort of your desktop, without having to go to all the trouble of paying for a botnet or performing a real DDOS attack.

With $60,000 worth of servers you can easily build a backend that can handle 1000+ trades per second. MtGox makes that much money every day. My pa always taught me to "never assume conspiracy where incompetence would give the same result"

Exactly what I think is happening, and shows the greed involved when the largest BTC exchange grows too fast and without really showing they care. Easily a good time for others to step in with some capital and dominate the exchange market. More security, more compute power is all you need!