Pump and Dump or manipulation

[Wagner2014]

Thoughts on the fact that some very early adopters have 1000s if not 100s of 1000s of coins, which they obtained for next to nothing?

If they can sell a significant amount of their coins for anywhere near the current price, they are already fabulously wealthy, regardless of whether bitcoin is successful long term or not.

These people would have every motivation to ensure the price stays at a certain level by:

1. Investing in or creating bitcoin companies to make it appear progress is being made to developing market/ecosystem;
2. Promoting general awareness of bitcoin to the public - including participating in bubble creation and resulting media coverage;
3. Purchasing limit quantities of bitcoin at key times to keep the price moving in the direction they like;
4. Etc., etc.

See for example this article, especially the last 2 paragraphs: "The Scheme" and "The Moral":

http://rationalwiki.org/wiki/Bitcoin

Thoughts?

[adamstgBit]

their isn't That many early adopters, and they are not holding 100% of their hoards anymore, i'm sure many sold 20-40% at 20 - 30$  
and some have made deals to sell off Large amounts of coins off the markets for a discount i'm sure...

so, "early adopters" are now the 30-80$ buy ins

[mgio]

The only early adopter I know that had 10s of thousands of coins sold off ALL his coins at an average price of $175 during the bubble.

Not many of them are left anymore.

[Chalkbot]

So, Bitcoin has a built in incentive for early adopters to develop infrastructure, promote adoption, and limit buying/selling, and that is somehow bad?

If you're asking if I'd rather have a bitcoin where only 9 dudes know about it and they can only send it directly to one another, since it's not accepted anywhere, and therefore has next to zero exchange value... I would say no.

I have no negative feelings toward the people who got into bitcoin before me, good for them. I hardly think they are waiting for the right moment to destroy bitcoin and leave with their riches. That would be moronic.

I don't have thousands of bitcoin, but my average buy-in is Below $10, so I guess some people would consider that "early adopter" status. I still have bitcoin because I like bitcoin and what it does. I suspect that those before me have similar feelings about bitcoin, and therefore don't have a reason to try and destroy it.

[adamstgBit]

So, Bitcoin has a built in incentive for early adopters to develop infrastructure, promote adoption, and limit buying/selling, and that is somehow bad?

If you're asking if I'd rather have a bitcoin where only 9 dudes know about it and they can only send it directly to one another, since it's not accepted anywhere, and therefore has next to zero exchange value... I would say no.

I have no negative feelings toward the people who got into bitcoin before me, good for them. I hardly think they are waiting for the right moment to destroy bitcoin and leave with their riches. That would be moronic.

I don't have thousands of bitcoin, but my average buy-in is Below $10, so I guess some people would consider that "early adopter" status. I still have bitcoin because I like bitcoin and what it does. I suspect that those before me have similar feelings about bitcoin, and therefore don't have a reason to try and destroy it.

Yes,

and i'm sure 90% of bitcoin used to buys things, buy bitcoin related products & services    bitcoin is a self sustained economy, and it just got going

[Wagner2014]

So, Bitcoin has a built in incentive for early adopters to develop infrastructure, promote adoption, and limit buying/selling, and that is somehow bad?

If you're asking if I'd rather have a bitcoin where only 9 dudes know about it and they can only send it directly to one another, since it's not accepted anywhere, and therefore has next to zero exchange value... I would say no.

I have no negative feelings toward the people who got into bitcoin before me, good for them. I hardly think they are waiting for the right moment to destroy bitcoin and leave with their riches. That would be moronic.

I don't have thousands of bitcoin, but my average buy-in is Below $10, so I guess some people would consider that "early adopter" status. I still have bitcoin because I like bitcoin and what it does. I suspect that those before me have similar feelings about bitcoin, and therefore don't have a reason to try and destroy it.

Thanks for the response, but, no, I am not asking a lot of the questions you pose above. I am not saying something is "bad" or "good" or asking how people feel about the early adopters. I'm just trying to understand the market dynamics. I also never claimed anyone was trying to "destroy" bitcoin. That makes no sense.

In the case of bitcoin, the early adopters are like the founders of a company who obtained stocks for next to nothing. To the extent that they have large holdings they have certain incentives which could influence the market due to their actions and motivations.

Here's an interesting article which you may or may not have seen re large bitcoin transactions:

http://eprint.iacr.org/2012/584.pdf

[Chalkbot]

Thanks for the response, but, no, I am not asking a lot of the questions you pose above. I am not saying something is "bad" or "good" or asking how people feel about the early adopters. I'm just trying to understand the market dynamics. I also never claimed anyone was trying to "destroy" bitcoin. That makes no sense.

In the case of bitcoin, the early adopters are like the founders of a company who obtained stocks for next to nothing. To the extent that they have large holdings they have certain incentives which could influence the market due to their actions and motivations.

Here's an interesting article which you may or may not have seen re large bitcoin transactions:

http://eprint.iacr.org/2012/584.pdf

Sorry, I clicked your link, which appeared to be mostly FUD to me, and assumed that you were proposing that it had some kind of merit.

In response to the article; While bitcoin aims to be a completely decentralized payment network, the reality is that it's nowhere near achieving that status yet. It is technically possible, but bitcoin has grown almost entirely within the confines of places like Mt. Gox, Silkroad, blockchain wallets, and the services that preceded those like Tradehill, and Bitcoinica, etc. The result is that bitcoins have almost always been accumulating somewhere in large quantities. These entities typically keep their own ledgers for who owns how many of the bitcoins in their massive pool of coins by which address they came into it from. Transactions between users never hit the blockchain, they just adjust the ledger. Try sending coins from one Mt. Gox account to another and you will see what I mean. When the "hot wallet" (the wallet they send and recieve from for the service) exceeds an amount of coins they are likely to need to cover day-to-day transactions, it is good practice to move coins out of it into a "cold wallet" (where the coins never move). This would be achieved by sending a large block of coins between the two, coins that can belong to thousands of different users. By this model, there is no NEED to move more than 20% of the coins around. That would only be the case if daily bitcoin volume was high enough to warrant it (which it isn't, and I don't find that to be unusual).

So while I've read studies like the pdf you posted there dozens of times before, my opinion is that you can't make accurate assumptions from this data whatsoever, and currently it looks exactly how I'd expect it to look. For some people that is enough, and for others, their fears will never be ablated, because it will be a long time before it will start to look any different than it does now.

[superduh]

Very few people have large quantities of coins especially how mantly you are talking about. Your whole point is moot

[chufchuf]

Cry me a river. Bitcoin is a great store of value and penguins are better than sheep to have sex with

[codesuela]

Cry me a river. Bitcoin is a great store of value and penguins are better than sheep to have sex with

why so defensive? do you feel threatened? honestly I don't see any crying going on.


anyway I believe it is an complicated issue. On one hand those people, who are probably somewhat capable and smart people for the most part are both the lifeblood, boon but also bane. They have an incentive to keep pushing the adaptation of bitcoin and indoctrinating new people into our little cult. To build services and infrastructure that also keep raising the valuation of a bitcoin. On the other hand people watch these addresses closely and should Satoshi himself choose to abandon bitcoin by liquidating his coins this could lead to a very fast conclusion of the bitcoin experiment. Also people get jealous because they feel the early adaptors received too much compensation for their work and denounce bitcoin as a ponzi scheme.
And then there are people like me who heard about bitcoin and considered mining back when you could still use your cpu but passed on it because it seemed too much of a far fetched idea to be viable. I still remember that post where I first read about bitcoin where someone recommended mining and said that he makes a bunch of coins just by letting bitcoin-qt mine with his cpu while hes using the computer.

edit:
The article http://rationalwiki.org/wiki/Bitcoin doesn't seem very rational. It starts outs neutral but as of the hardware paragraph it seems the author(s) seem to have lost interest in maintaining neutrality and instead go into full attack mode. In fact it comes of as a hit piece by a bitter knowitall who comes of just as bad as the "annoying Randroid fools" he slams

[RationalSpeculator]

Thoughts on the fact that some very early adopters have 1000s if not 100s of 1000s of coins, which they obtained for next to nothing?

That is not true.

In the case of bitcoin, the early adopters are like the founders of a company who obtained stocks for next to nothing.

That is also not true.

Work (study), time, energy, uncertainty, high risk, vision, is not nothing. In fact, very few are able.  

Interesting that you never hear people say your second phrase, as everybody knows it is not true. Even the common man.

But applied to bitcoin you see it all over the place.

I think you suffer from jealousy and are unconscious about it as well as trying to rationalize it.

I find your remark 'for next to nothing' devaluing to the entrepreneur/investor.

Without them bitcoin wouldn't be here, it would have failed.

[Itcher]

Hey, I could help you. Thanks for the rationalwiki-link. Interesting to read, worth to thought about it. You want to discuss it?

"Bitcoin "mining" was designed to bribe early users with exponentially better rewards than latecomers could get for the same effort."

do you know any big innovation which doesn't work like this? Compare it to the google-share. Or to anything. Oil. Cars. Who's first, is in advance.

This

Ok, this: Bitcoin is a new thing, too fantastic to describe?

effectively makes Bitcoin a pump-and-dump scheme ...

wherein these early adopters, who have more bitcoins than anyone else ever will, hype it up so they can offload their bitcoins onto fools

You think, this is Bitcoin made for? Hype it and offload the Bitcoins onto fools? If this is your attention, forget them. Let the other think about free money and all the innovation, Bitcoin spends to society. Let them build a world, where everybody can mikroinvest without any bank, and so on ...

Basically, this means the system runs on opportunism, especially among people who like the idea of decentralized techno-money.

Definie opportunism? Or do you mean optimism? What people? Ah, those who like the idea of ... Bitcoin. And now?

: only 22% of existing Bitcoins are in circulation at all, there are a total of 75 active users/businesses with any kind of volume, the Mt. Gox exchange is responsible for 90% of all Bitcoin transactions ever, one (unidentified) user owns a quarter of all Bitcoins in existence

I presume, this numbers are not correct. Gox- 90 percent? One user a quarter of all Bitcoins?

But go on, dive in and get rich[b/]


Also the wiki has a good link, an article from Paul Krugman in the NYT (2012). Great definition of Bitcoin:

But it turns out that there is a difference: Bitcoin, rather than fixing the value of the virtual currency in terms of those green pieces of paper, fixes the total quantity of cybercurrency instead, and lets its dollar value float. In effect, Bitcoin has created its own private gold standard world

[Wagner2014]

Thoughts on the fact that some very early adopters have 1000s if not 100s of 1000s of coins, which they obtained for next to nothing?

That is not true.

In the case of bitcoin, the early adopters are like the founders of a company who obtained stocks for next to nothing.

That is also not true.

Work (study), time, energy, uncertainty, high risk, vision, is not nothing. In fact, very few are able.  

Interesting that you never hear people say your second phrase, as everybody knows it is not true. Even the common man.

But applied to bitcoin you see it all over the place.

I think you suffer from jealousy and are unconscious about it as well as trying to rationalize it.

I find your remark 'for next to nothing' devaluing to the entrepreneur/investor.

Without them bitcoin wouldn't be here, it would have failed.

First, I am not jealous at all. I don't even know the identity of the early adopters.

Second, I value entrepreneurs. I think innovation should be rewarded.

In other words, you have me all wrong.

My main concern is my investment. I am interested in what the early investors/adopters/inventors will do with their coins or do with their wealth that will affect my wealth.

You also miss my point re "next to nothing." My point is not that they don't deserve the coins/shares, but that they have certain interests/motivations which may be add odds with current investors due to their entry point - at a much low cost. You totally misrepresented my position here.

As a so-called "rational" speculator you come off a bit emotional in this case.

[RationalSpeculator]

Thoughts on the fact that some very early adopters have 1000s if not 100s of 1000s of coins, which they obtained for next to nothing?

That is not true.

In the case of bitcoin, the early adopters are like the founders of a company who obtained stocks for next to nothing.

That is also not true.

Work (study), time, energy, uncertainty, high risk, vision, is not nothing. In fact, very few are able.  

Interesting that you never hear people say your second phrase, as everybody knows it is not true. Even the common man.

But applied to bitcoin you see it all over the place.

I think you suffer from jealousy and are unconscious about it as well as trying to rationalize it.

I find your remark 'for next to nothing' devaluing to the entrepreneur/investor.

Without them bitcoin wouldn't be here, it would have failed.

First, I am not jealous at all. I don't even know the identity of the early adopters.

Second, I value entrepreneurs. I think innovation should be rewarded.

In other words, you have me all wrong.

My main concern is my investment. I am interested in what the early investors/adopters/inventors will do with their coins or do with their wealth that will affect my wealth.

You also miss my point re "next to nothing." My point is not that they don't deserve the coins/shares, but that they have certain interests/motivations which may be add odds with current investors due to their entry point - at a much low cost. You totally misrepresented my position here.

As a so-called "rational" speculator you come off a bit emotional in this case.

I did feel irritation coming up when reading your 'next to nothing'.

I think it is rational to feel irritated when someone devalues your achievement.

When others point out here that you devalue an achievement, you say you didn't mean it that way. But why did you say it that way then?

I might be projecting onto you past trauma, I'm open to that.

Upon further investigation though you devalue in other sentences too, the 'scheme' you link to talks about 'Bitcoin mining was designed to bribe early users', another degenerating statement. I also see that others picked up on your way of talking. It's not proof that the fault lays with you but it's another indication it might be you, not me.

What's the proof that I respond emotional rather then rational?

[semaforo]

Thoughts on the fact that some very early adopters have 1000s if not 100s of 1000s of coins, which they obtained for next to nothing?

If they can sell a significant amount of their coins for anywhere near the current price, they are already fabulously wealthy, regardless of whether bitcoin is successful long term or not.

These people would have every motivation to ensure the price stays at a certain level by:

1. Investing in or creating bitcoin companies to make it appear progress is being made to developing market/ecosystem;
2. Promoting general awareness of bitcoin to the public - including participating in bubble creation and resulting media coverage;
3. Purchasing limit quantities of bitcoin at key times to keep the price moving in the direction they like;
4. Etc., etc.

See for example this article, especially the last 2 paragraphs: "The Scheme" and "The Moral":

http://rationalwiki.org/wiki/Bitcoin

Thoughts?

1. What would be more beneficial- a) making it appear that progress is being made in the development of bitcoin infrastructure by creating or investing in bitcoin companies or b)actually building functional bitcoin infrastructure so that bitcoin becomes more and more attractive to "normal" people and they can benefit from the savings and efficiency gains it offers?
2. Certainly, anyone who has bitcoin, whether 1 coin or 100,000, has an interest in there being media coverage.
3. I have the impression there are definitely people out there manipulating the market and profiting greatly at the expense of smaller traders. This is the case on wall street, so why would bitcoin markets be an exception?

     Bitcoin is like the Blade of pyramid schemes. All of their strengths, and none of their weaknesses.

This seems to be heading in an Illuminati of bitcoin direction. I think most of the people who have huge amounts of bitcoin didn't get those huge amount by being dumb. They know that, like with any company, too rapid growth can be damaging. I think bitcoin is in good hands.