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Author Topic: One day.. like gold.. the price of bitcoin will be manipulated by banks  (Read 4501 times)
notig
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April 29, 2013, 04:59:27 AM
 #1

Here is what I gather from precious metals.. especially gold: the price is heavily manipulated.

The thing that occurred to me... you really can't manipulate the price of a commodity by buying up all of it to then try to corner the market and then flood the market with sales. The reason is as you buy the commodity up it gets more expensive and you end up making other people rich and not yourself. So instead of buying up all the gold........ banks (or whoever is in charge of this manipulation) simply go to people who have large amounts of gold and say hey can I borrow this? The large sums of gold are lent because they will be paid handsomely as a cut for manipulating the market.

Now that a large hoard of gold is "borrowed" it can basically be used to flood the market and outpace any buy orders. The only threat would be someone with such huge reserves of cash that they could buy all the gold and screw the manipulators.


Disclaimer: this is all just theory and I actually don't know much about gold price manipulation... it's just guessing.

so in the same way... right now the bitcoin market can be manipulated because it's so small. but once it's huge it will be harder to manipulate. Manipulators would have to borrow large amounts of bitcoins and then flood the market with them.

I've read and watched different things about gold and the one odd thing is how gold gets borrowed all the time. Why would you ever borrow gold instead of just borrowing money? I think market manipulation is the only real reason for it.
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According to NIST and ECRYPT II, the cryptographic algorithms used in Bitcoin are expected to be strong until at least 2030. (After that, it will not be too difficult to transition to different algorithms.)
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April 29, 2013, 05:16:26 AM
 #2

Your point is very true, but you must understand that Bitcoin is a huge leap in the right direction, that is, out of the hands and control of any small group.
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April 29, 2013, 05:20:27 AM
Last edit: April 29, 2013, 05:56:55 AM by casascius
 #3

The free market remedy is the altcoin.

When the free market decides that the ownership of Bitcoins is too lopsided in a manner that is against the public interest, or that there are too many coins out there that are sitting idle, not circulating, and causing people anxiety... those people will start accepting altcoins for their goods and services and will potentially make the value of a Bitcoin plummet.  That should be an incentive for big/majority holders to make sure the coins start flowing.  I mean, this is why Bitcoin is succeeding...the people buying it are jumping, at least in a small part, out of the dollar and euro and perhaps even gold.

And by altcoins, I don't mean any specific altcoin.  In other words, it's not going to be a run to Litecoin.  If the masses start chanting that all old money needs to go down the toilet, they'll start accepting a brand new coin totally free of prior speculators.  The old money won't go to zero, it will just go down a lot and lose its "bubble air" as the speculators jump ship (probably a good thing for stability overall).

You'll have cryptocoin clients with plugins that allow entities to pick which coin they will and won't accept for whatever reason, so the overhead of businesses deciding to accept or not accept a new "whatever coin" will be trivial, especially if there are mostly automated tools and platforms for converting them to whatever asset the business really wants to hold or do their accounting in.

OK, I will admit, I've wandered into pure speculation territory myself.  It is at least plausible, however, I think.  I can't imagine people would want Bitcoin if one entity had a significant percentage of the total coins and was using it to disrupt the markets (presumably without concern for a loss of their own wealth).

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper or hardware wallets instead.
agentbluescreen
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April 29, 2013, 05:44:19 AM
 #4

the price of bitcoin was manipulated by banks a week ago, where were you?

We need better trading rules for these penny-stock market exchanges and I have put them forward.

altcoin- shmaltcoin!
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April 29, 2013, 08:33:28 PM
 #5

As long as you accept fiat money for your gold or BTC, you just simply open a wide-door for manipulation. Remove all fiat money from precious metal and BTC exchanges and/or remove all paper instruments ETF's, futures, etc. ; manipulation would disappear almost instantly.

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April 30, 2013, 07:31:31 PM
 #6

Bitcoin price manipulation is a complex topic.
1. There are around 0.1BTC and less trades to shift prices up, change SMA etc.
2. Gox had sell lag to decrease price fall.
3. Gox limits money withdrawals to increase BTC price.
4. Biggest sharks swim in biggest ocean - Gox - to control market. Thats why although Gox sucked so epically it is still having 80% market share.

Market is contolled by those who has the most BTC or the most money.
We see on market about 1mln BTC and buying or selling 100000 BTC would call new "bubble" run or panic sell of.
At the same time we have 10 mln Bitcoins in existance (already half of cap, while it is still beta...).
Countires to protected their currencies store gold reserve and are able to buy or sell excessive amount of currency to stabilize the price - they are main player.
In BTC main player is unknown and stabilization of price is not main goal as BTC is paradise for speculation, thats why we see such sudden price jumpes like never before in history.

BTC is Japan, Gox is Japan, i suspect those milions of BTC are in Japan hands too (we have 10 milions released while still in Beta, isn't it strange?). They can't sell it cause the market is to small...

------
I didn't use word on P. Interesting how many BTC fanatics will put me on ignore list anyway... Smiley
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April 30, 2013, 08:50:06 PM
 #7

That is a hard call, but i would think BTC price is already heavily manipulated. It doesn't take much to move the market because it is very small compared to other markets that are already being manipulated. Players with access to the fiat spigots are moving the bigger markets, so they are probably manipulating btc as well. The fact that only one exchange has about 80% of the market share probably isn't a good thing either.

If the status quo financiers hate btc so much their strategy might be to bubble it up and crash it over and over again until everybody gets sick and tired of it and quits. They can get rich in the meantime and/or corner all the bitcoins. Maybe they actually love BTC and it is their secret NWO tool. It has all the features that the tin foil hats have been warning us about.

Is there a way to find out which addresses are mt gox account addresses with any probability? Like maybe correlate addresses in the blockchain with the mt gox api that somewhere like bitcoinity uses? Or probably the feed does not have addresses? Or maybe a different way? Then maybe we can figure out who's doing what.
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April 30, 2013, 08:58:12 PM
 #8

If the status quo financiers hate btc so much their strategy might be to bubble it up and crash it over and over again until everybody gets sick and tired of it and quits. They can get rich in the meantime and/or corner all the bitcoins. Maybe they actually love BTC and it is their secret NWO tool. It has all the features that the tin foil hats have been warning us about.

Except the centralised control. Important difference. The dystopian New World Order is based on some kind of global centralised government. I suppose the UN, IMF and the currency "SDR" would be closer to that end.

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May 01, 2013, 05:07:19 AM
 #9

Governments are pwned by the finance/corporate bloc. This is discernible by the fact that governments do not issue money, but rather must borrow it. When the financial sector implodes, governments bail them out with money they borrow from it, which they make their publics pay for. When governments can't make interest payments on their debt, multinationals profit from stripping public assets as collateral. Who campaign finances all the posturing stooges that are elected into office? The government is merely the legal arm and muscle of the finance/multinational corporate bloc any more, a veil of legitimacy to hide the true string pullers from the masses.

Look at this:
https://bitcointalk.org/index.php?topic=12109.0 and http://www.marketoracle.co.uk/Article39704.html
This will be central control.

Put these 2 together and you have more centralized control:
http://anonymity-in-bitcoin.blogspot.com/2011/07/bitcoin-is-not-anonymous.html
http://www.youtube.com/watch?v=TuET0kpHoyM

I'm not saying that bitcoin was invented for this purpose, but it can certainly be co-opted by the current power elite with more ease than some care to admit.


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May 01, 2013, 10:24:16 AM
 #10

Here is what I gather from precious metals.. especially gold: the price is heavily manipulated.

Well you need to realize that (these days anyway), the gold market is kept down by huge amounts of "naked shorting", a completely unethical trading practice, that for some odd reason is LEGAL... JP Morgan is finally being sued for naked shorting over the past 10-15 years. People claim that JP Morgan was allowed to do this because they are carrying water for the Fed. The key to this manipulation is that it all happens through futures markets. Futures markets for commodities (sort of) make sense because of production fluctuations, high cost of carry, and difficulty of physically moving the commodity. None of these issues effect BTC. Thus, a bitcoin futures market makes no sense - why would anyone purchase a promise to deliver BTC, when they could just get the coin? 

Point being, downing BTC prices won't work using the (known) techniques that are employed against the gold prices.
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May 03, 2013, 07:03:28 AM
 #11

To be honest, if a bank, or government wanted to target an altcoin, say btc for a good example, they could jsut invest in building a bunch of ASICs or a cluster farm of GPU style miners (or build more chips that can do the same work for less power) for scrypt based miners, and bombard the network with them.  They have more purchasing power, and in general can get all the stuff cheaper.  Pre-tax, wholesale prices, cheap or free electricity, dedicated staff, greater buying power and don't really ahve to worry about profits.  If their goal is to destroy the value of existing altcoins in relation to fiat currency, they can do that just by flooding.  They don't necessarily have to buy the stuff, they can just devalue it through hardware, which would probably end up being alot cheaper too.
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May 03, 2013, 10:12:08 AM
 #12

Here is what I gather from precious metals.. especially gold: the price is heavily manipulated.

Well you need to realize that (these days anyway), the gold market is kept down by huge amounts of "naked shorting", a completely unethical trading practice, that for some odd reason is LEGAL... JP Morgan is finally being sued for naked shorting over the past 10-15 years. People claim that JP Morgan was allowed to do this because they are carrying water for the Fed. The key to this manipulation is that it all happens through futures markets. Futures markets for commodities (sort of) make sense because of production fluctuations, high cost of carry, and difficulty of physically moving the commodity. None of these issues effect BTC. Thus, a bitcoin futures market makes no sense - why would anyone purchase a promise to deliver BTC, when they could just get the coin? 

Point being, downing BTC prices won't work using the (known) techniques that are employed against the gold prices.

ROTFLMAO


A bitcoin is an Over the Counter (OTC) Credit-Swap (funded Credit Default Swap or fCDS).

To you, it is only worth what the last guy sold it to you for and made off with. You funded "his" credit for it and the next guy (is assumed to be willing to) fund yours!

http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

The reason Bitcoins/Altcoin tokens are legal is because they are OTC derivatives. Otherwise they would be a Ponzi scheme.

https://bitcointalk.org/index.php?topic=175708.msg1832923#msg1832923

Since the value is determined by a stupid "penny-stock market" that you can flood with worthless, private Federal Reserve Printing Company "They-Owe-Us Notes" and take over like a penny stock the Fed is doing this (manipulating it downward to take it all over) today...



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May 04, 2013, 06:10:42 AM
 #13

Here is what I gather from precious metals.. especially gold: the price is heavily manipulated.

Well you need to realize that (these days anyway), the gold market is kept down by huge amounts of "naked shorting", a completely unethical trading practice, that for some odd reason is LEGAL... JP Morgan is finally being sued for naked shorting over the past 10-15 years. People claim that JP Morgan was allowed to do this because they are carrying water for the Fed. The key to this manipulation is that it all happens through futures markets. Futures markets for commodities (sort of) make sense because of production fluctuations, high cost of carry, and difficulty of physically moving the commodity. None of these issues effect BTC. Thus, a bitcoin futures market makes no sense - why would anyone purchase a promise to deliver BTC, when they could just get the coin? 

Point being, downing BTC prices won't work using the (known) techniques that are employed against the gold prices.

ROTFLMAO


A bitcoin is an Over the Counter (OTC) Credit-Swap (funded Credit Default Swap or fCDS).
To you, it is only worth what the last guy sold it to you for and made off with. You funded "his" credit for it and the next guy (is assumed to be willing to) fund yours!

The reason Bitcoins/Altcoin tokens are legal is because they are OTC derivatives. Otherwise they would be a Ponzi scheme.

Since the value is determined by a stupid "penny-stock market" that you can flood with worthless, private Federal Reserve Printing Company "They-Owe-Us Notes" and take over like a penny stock the Fed is doing this (manipulating it downward to take it all over) today...


Slow down there Dr. Maiden Lane - this is no FCDS. Any token of value is worth whatever you think you can trade it for.  From wiki:

A derivative is a financial instrument which derives its value from the value of underlying entities such as an asset, index, or interest rate.

I don't see it...
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May 04, 2013, 06:39:27 AM
Last edit: May 04, 2013, 07:13:26 AM by agentbluescreen
 #14

Here is what I gather from precious metals.. especially gold: the price is heavily manipulated.

Well you need to realize that (these days anyway), the gold market is kept down by huge amounts of "naked shorting", a completely unethical trading practice, that for some odd reason is LEGAL... JP Morgan is finally being sued for naked shorting over the past 10-15 years. People claim that JP Morgan was allowed to do this because they are carrying water for the Fed. The key to this manipulation is that it all happens through futures markets. Futures markets for commodities (sort of) make sense because of production fluctuations, high cost of carry, and difficulty of physically moving the commodity. None of these issues effect BTC. Thus, a bitcoin futures market makes no sense - why would anyone purchase a promise to deliver BTC, when they could just get the coin?  

Point being, downing BTC prices won't work using the (known) techniques that are employed against the gold prices.

ROTFLMAO


A bitcoin is an Over the Counter (OTC) Credit-Swap (funded Credit Default Swap or fCDS).
To you, it is only worth what the last guy sold it to you for and made off with. You funded "his" credit for it and the next guy (is assumed to be willing to) fund yours!

The reason Bitcoins/Altcoin tokens are legal is because they are OTC derivatives. Otherwise they would be a Ponzi scheme.

Since the value is determined by a stupid "penny-stock market" that you can flood with worthless, private Federal Reserve Printing Company "They-Owe-Us Notes" and take over like a penny stock the Fed is doing this (manipulating it downward to take it all over) today...


Slow down there Dr. Maiden Lane - this is no FCDS. Any token of value is worth whatever you think you can trade it for.  From wiki:

A derivative is a financial instrument which derives its value from the value of underlying entities such as an asset, index, or interest rate.

I don't see it...

The underlying asset is the particular Bitcoin itself and it's transaction network, which are of both utilitarian value and intrinsic value.

The Funded Credit Swap value is the "exchange value" supplied to it by the penny stock markets that pretend to be "exchanges". You fund it's previous owners credit loss over his having obtained it and the next owner funds your credit loss on it, to obtain it from you.

This is also why it's perfectly also workable as a Medium of Labour Exchange, since a contractors credit loss is represented by his accepting it as payment (because of the developer's credit loss in obtaining it to pay him.)

Even only two counterparties can forever Funded Swap one back and forth the way Morgan and Goldman swap their (continuously in credit default) trading losses back and forth to finance them fixing various markets.  One side sells short, the other profits, then they reverse after their daily "arms length" fCDS swap is exchanged. It just lets them know how far to go into hock, that the other side will bear back to them.

With theirs (cDs) however, there is no "fund" at either end, the only intrinsic value is in a matched pair of perennially "Defaulted" day-loans that are never assumed nor discharged (by either party) who's values are just swapped back and forth.

This is ALSO how with very little or no actual worthless FRNs they can engineer a hostile take over and drive Bitcoin markets down again and again until they own all or the vast majority of the "penny shares" (Bitcoins)....

We need

- regimented tightly grouped and well populated marginal fee step-echelon bid/ask rungs about the current basis price, (to enable bargaining while still making economical large liquidity BTC-exchange transfers),

- onerous, exponentially increasing further out of range bid/ask price fees (excepting trigger "support buys", to penalize speculation) and

- onerous exponentially increasing daily trading frequency fees (again to penalize speculation).

along with higher minimum volume trades.
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May 09, 2013, 12:28:24 AM
 #15

Well, does anybody give a shit about this? Maybe more of us (including myself) ought to understand this mumbo jumbo.

I do understand that totally unregulated environments inevitibly progress into a monopoly or cartel.

I also understand that if you are a money printer, it's not that huge of a thing to reel off a continuous wad of FRNs and manipulate markets and buy all the BTC. You barely even have to manipulate any markets to get all the BTC if you got your hand on the money spigot. The entire monetization of bitcoin is about 1/84th of what the FED adds to their balance sheet every month with fresh QE. Think about that.

agentbluescreen how do we enforce your fixes on the exchanges without force of law?
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May 09, 2013, 01:55:12 PM
 #16

...  words...  endless, meaningless words...

Slow down there Dr. Maiden Lane - this is no FCDS. Any token of value is worth whatever you think you can trade it for.  From wiki:

A derivative is a financial instrument which derives its value from the value of underlying entities such as an asset, index, or interest rate.

I don't see it...

Just put him on ignore.  His main rhetorical device is to repeat his baseless claim using lengthy posts devoid of meaning.  He is indeed a philosopher, in the worst sense of the word.

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May 10, 2013, 12:11:09 PM
 #17

...  words...  endless, meaningless words...

Slow down there Dr. Maiden Lane - this is no FCDS. Any token of value is worth whatever you think you can trade it for.  From wiki:

A derivative is a financial instrument which derives its value from the value of underlying entities such as an asset, index, or interest rate.

I don't see it...

Just put him on ignore.  His main rhetorical device is to repeat his baseless claim using lengthy posts devoid of meaning.  He is indeed a philosopher, in the worst sense of the word.

Thanks - I see now that his post history is indeed a labyrinth of babble...
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May 10, 2013, 02:05:20 PM
 #18

Manipulation is pretty easy while the coins are still being generated.  For instance most of the population of the world would likely lose interest if say China decides to mass produce 1TH/s units and keep them all inside their own country.


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May 12, 2013, 07:17:17 AM
 #19

As long as you accept fiat money for your gold or BTC, you just simply open a wide-door for manipulation. Remove all fiat money from precious metal and BTC exchanges and/or remove all paper instruments ETF's, futures, etc. ; manipulation would disappear almost instantly.

I think the Fincen guidelines pretty much states that almost everything is their jurisdiction to observe outside the united states LOL!

http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

   De-Centralized Virtual Currencies

            A final type of convertible virtual currency activity involves a de-centralized convertible virtual currency (1) that has no central repository and no single administrator, and (2) that persons may obtain by their own computing or manufacturing effort.

          1) A person that creates units of this convertible virtual currency and uses it to purchase real or virtual goods and services is a user of the convertible virtual currency and not subject to regulation as a money transmitter. (This ones iffy, cause miners are not creating it, they are merely being rewarded with it, are we really users? but I'd like to follow the spirit of the law)

          2)  By contrast, a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter. (can't buy Gold/Silver or any currency, we need your ID, don't pass go.)

In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency.( This ones is where I am confused too, what is bitcoin, under any law can it be considered a corporation? if so are laws actually applicable to it? Smiley you know the whole being a person thing, with rights and responsibilities, are miners accepting a reward possibly payment in stock of exchangeable value that puts everyone at default Smiley Think buying World of Warcraft Gold and selling it to someone else for Cash. what if you have your own virtual goods store in Second LIfe?

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May 13, 2013, 02:50:28 AM
 #20

I honestly believe that this is already happening, due to following facts:

1) mtgox has monopoly on trades
2) mtgox uses a chart that seems to make price rises more favorable (at most 1month past is viewable)
3) there is no regulatory authority, control algorithm to highlight suspicious trading aimed at inflating the value artificially (companies like avalon and BFL could have the Funds and Hashpower to dictate the price of the system by flooding the market with high prices and small trades would follow suit
"If he is charging xxx$ why should I charge less" )

could burst the bubble before it even takes a real grip on the world economy.
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