The Myth of the Manipulator

[the joint]

Allowing a caveat for Gox, there is no "manipulator."

The potential to profit far exceeds any other incentive to trade.  Any "manipulation" is simply an attempt to make profit...just like every other trader in the market. 

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[gmaxwell]

Allowing a caveat for Gox, there is no "manipulator."
The potential to profit far exceeds any other incentive to trade.  Any "manipulation" is simply an attempt to make profit...just like every other trader in the market. 

Come on—  Someone who executes trades at odds with their own beliefs in the valuation of the good in order to trigger software or psychological bugs in the other people on the exchange is a manipulator.  They are fairly called a manipulator rather than an honest trader not primarily because they trade on N-th order effects but because they _reduce*_ the efficiency of the market rather than increase it.


*(you can argue that they increase it long term by hardening the counterparties to these attacks— but the hardening wouldn't be required if the manipulators didn't exist, and the induced inefficiency today is very real while the increase in long term efficiency is more speculative)

[runeks]

^ I think the argument you make in your second paragraph is very relevant. If these 'manipulators' weren't there to reveal bugs in trading bots, these bugs might just be triggered by normal trading at some other point in time. I think it's just as fair to blame the trading bots for the instability as it is blaming the ones who take advantage of them.

I mean, we have a bunch of smaller speculators trying to make money, and one (presumably) big speculator we called the 'manipulator'. Why is the 'manipulator' the bad guy just because he has more cash behind his speculation? If he is better at speculating than the smaller guys he will win, but I don't see why he is 'bad' while the small guys are not.

[the joint]

Both the "manipulator" (aka dude with loot) and other traders both are trying to achieve the same end, but of course, each will naturally use whatever means is within their capacity to achieve that end.  Even someone with a "mere" 100 BTC could be seen as a "manipulator" to someone with 5 BTC.  After all, will that 5 BTC make for a good buy/sell wall on TradeHill?  No, but 100 BTC stands a much better chance of holding temporarily in the midst of a Gox swing.

The "manipulator" is simply the extreme on the spectrum, so those farther from the extreme tend to label it that way.  The "manipulator's" methods vary from ours because of his relative power and capacity.  But, those in the middle of the spectrum vary similarly with respect to those at the very low end of the spectrum.

[runeks]

^ Agreed. I also think it's very relevant that the current volatile nature of the exchange rate of Bitcoins is brought out in the open, instead of hoping that people leave it alone so we can get a stable exchange rate of Bitcoins to established currencies at $2.50 or whatever. The thing is that the exchange rate is easily manipulated, and people who are thinking of investing their money in Bitcoins are better off if they know this. Bitcoin is currently not a good store of value, by any means. It can't be at ~$2. At this price it just takes too little money to affect the price, and we shouldn't try to hide this by going after "manipulators", in my opinion. It is in our interest that the volatile nature be revealed so that fewer people risk burning their fingers, thus building a poor reputation for Bitcoin, because they consider Bitcoins a stable store of value.

[Dan The Man]

The greatest trick the manipulator ever pulled was convincing the world he doesn't exist.

[robocop]

Maniplation wouldn´t work when the other side wouldn´t play these game too speculate too.

But I don´t have a problem with the "manipulation" because I see Bitcoin more than a currency like euro or dollars and for me it is a principle to invest in Bitcoin.
For me the current value is very unimportant and if the price is falling then I can change my money in Bitcoin again and increase my positions steady.

[the joint]

The greatest trick the manipulator ever pulled was convincing the world he doesn't exist.

This is one of the dumbest things I've read all day.

[bitclown]

The greatest trick the manipulator ever pulled was convincing the world he doesn't exist.

This is one of the dumbest things I've read all day.

I thought it was funny.

[the joint]

The greatest trick the manipulator ever pulled was convincing the world he doesn't exist.

This is one of the dumbest things I've read all day.

I thought it was funny.

Fair enough.

[RandyFolds]

[Transisto]

The smaller you are the more easily you can be manipulated,

My fictitious manipulator has now ~3Ths of hashing power and is dumping all it's profit on the market.
How come the hashrate is rising while the price is tanking ?

This manipulator is not attempting to make a profit, he's attempting to destroy the BTC economy with a 51% attack.

A handful of people would spend Billions on that.
If it's not happening now, it will happen, trust me.

I think few people here truly realize how tiny is Bitcoin market cap compare to the wallet of those who want to keep full control ?

[gewure]

there_is_very_obvious_visibly_for_everyone_watching_mtgoxlive.com_a_manipulator

[runeks]

[...]
How come the hashrate is rising while the price is tanking ?

This manipulator is not attempting to make a profit, he's attempting to destroy the BTC economy with a 51% attack.

A handful of people would spend Billions on that.
If it's not happening now, it will happen, trust me.

I think few people here truly realize how tiny is Bitcoin market cap compare to the wallet of those who want to keep full control ?

The hash rate is declining. It has been declining since the beginning of August.

Other than that I strongly disagree that anyone is willing to spend billions on performing any attack on Bitcoin. I don't disagree that Bitcoin could become a threat to credit card companies, I just don't think they care right now. And when they do care - when Bitcoin is big enough to threaten them - it's too late. Hopefully.

We definitely agree that someone could easily manipulate the price of Bitcoins - as they would be able to do with any $15M market. I just don't think they're doing it.

[Transisto]

[...]
How come the hashrate is rising while the price is tanking ?

This manipulator is not attempting to make a profit, he's attempting to destroy the BTC economy with a 51% attack.

A handful of people would spend Billions on that.
If it's not happening now, it will happen, trust me.

I think few people here truly realize how tiny is Bitcoin market cap compare to the wallet of those who want to keep full control ?

The hash rate is declining. It has been declining since the beginning of August.

Other than that I strongly disagree that anyone is willing to spend billions on performing any attack on Bitcoin. I don't disagree that Bitcoin could become a threat to credit card companies, I just don't think they care right now. And when they do care - when Bitcoin is big enough to threaten them - it's too late. Hopefully.

We definitely agree that someone could easily manipulate the price of Bitcoins - as they would be able to do with any $15M market. I just don't think they're doing it.

Not billions, more like the cost of flipping a switch,  banks purchase ~300 billion in computers every year. they need to use ~3 million of it to 51% BTC.

I could have overestimated numbers by 1000x and it would still be true.

[gewure]

you know.. i was very sceptic about the existance of a single "the manipulator"..

untill i watched it with my own eyes: bid walls as high as 100.000BTC out of nowhere. you recognize the edgey structure of the bids? this has been all orchastrated by one person and his trading bot. sitting on a shitload of money, not allowing the price to drop lower than 2.2

since than you know the story.. this happened roughtly 2 months ago. One of the reasons why i think the actual price of 6.5$ is kind of not 'natural'.. i would have loved to see bitcoin drop to 1.5 (where bid resistance would have been a lot more 'natural') and than rise again.. but mr. manipulator doesnt allow so.

white line: the bids i remember before this **** happened

[Transisto]

Lots of people can play the market with millions for fun so I care very little about vague speculation.

Just getting tired of : "The" as if there was only one manipulator.

[rjk]

Lots of people can play the market with millions for fun so I care very little about vague speculation.

Just getting tired of : "The" as if there was only one manipulator.

It's just that when the depth numbers show an increase of 100,000 all exactly at the same instant, it is obvious that a single entity is making that happen. Certainly it could be possible for multiple entities to work together and set up bids at exactly the same moment and price, but if that were the case it would still make sense to refer to them as a single entity. Now of course, when all those 100,000 coins sold to someone, I can assume the buyer was not the seller (unless someone likes to give fees to mtgox just to play around ), and that would mean a minimum of 2 large players.

Having a single entity to blame for all our woes is convenient too

[the joint]

Both the "manipulator" (aka dude with loot) and other traders both are trying to achieve the same end, but of course, each will naturally use whatever means is within their capacity to achieve that end.  Even someone with a "mere" 100 BTC could be seen as a "manipulator" to someone with 5 BTC.  After all, will that 5 BTC make for a good buy/sell wall on TradeHill?  No, but 100 BTC stands a much better chance of holding temporarily in the midst of a Gox swing.

The "manipulator" is simply the extreme on the spectrum, so those farther from the extreme tend to label it that way.  The "manipulator's" methods vary from ours because of his relative power and capacity.  But, those in the middle of the spectrum vary similarly with respect to those at the very low end of the spectrum.

^^^^
Already explained it to ya'll.

[Oldminer]

The manipulator aka The boogieman