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Author Topic: Gold collapsing. Bitcoin UP.  (Read 2010083 times)
Adrian-x
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October 04, 2014, 03:05:05 AM
 #13201

Can anyone speculate as to what has been up with all the dumping?  Where are all these coins coming from?

My first guess would be that is the BTC that Karpeles stole.

I think the missing Gox BTC took us to $2 in 2011-12, this is the start of capitulation and whale re-balancing.

not sure what you're referring to.  you mean the guy Kevin who stole around 2000BTC?

I was thinking the Gox hack that saw a huge crash in 2011 I think it was about 1M coins stolen, I'm of the opinion Gox was running under a fractional reserve system ever since then but that's old news.

But yes I think the big Bitcoin guns know it's not who finishes with the most Bitcoin but who ends up with the most wealth. I hope it's whales selling off into old bids (the new faithful) collecting cash on the exchanges in preparation for a new rally, but I think the rally is months away.

The longer the better in my view it creates space for more numerous hands, and tests the resolve of Bitcoin proponents.

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Melbustus
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October 04, 2014, 03:16:28 AM
 #13202

Can anyone speculate as to what has been up with all the dumping?  Where are all these coins coming from?

My first guess would be that is the BTC that Karpeles stole.

I think the missing Gox BTC took us to $2 in 2011-12, this is the start of capitulation and whale re-balancing.

not sure what you're referring to.  you mean the guy Kevin who stole around 2000BTC?

Although the evidence is circumstantial, a plausible case can be made that the great bitcoin theft actually took place in 2011, and all the following events were the result of Mark trying to fix it:

http://www.reddit.com/r/Bitcoin/comments/1zdnop/peter_rs_theory_on_the_collapse_of_mt_gox/


I've always liked that theory, *except* where is the ~1,000,000 BTC transaction (or handful of transactions adding up to that) in mid June 2011? (note: I've never bothered to look, but never heard anyone mention their existence, either).

Sidenote: It was the rebound from $0.01 to ~$17 after that hack that gave me enough confidence in the bitcoin economy/userbase to make my first purchases and sign up here. And I remember watching those penny trades in real-time. Crazy.

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Peter R
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October 04, 2014, 03:30:19 AM
 #13203


I've always liked that theory, *except* where is the ~1,000,000 BTC transaction (or handful of transactions adding up to that) in mid June 2011? (note: I've never bothered to look, but never heard anyone mention their existence, either).


Yes, that's a weakness of the theory indeed.  I only looked briefly (I never got into looking at specific transactions or any deeper blockchain analysis).  There's probably enough total output volume to conceal 1,000,000 coins, but it's certain no smoking gun.

There's no smoking gun, but there's enough output volume to conceal ~1,000,000 BTC.  Here's a graph of bitcoin transfers for June 2011 constructed from data I just pulled from blockchain.info.  Note that I'm not sure re time zones, so look at the 18, 19, and 20th when thinking about what happened at the time of the hack.  Also note this is a log scale so that both curves are readable.  



Remember that total output volume is 100% accurate, but blockchain.info's estimated transaction volume depends on an algorithm that attempts to identify change and may thus be unreliable.  

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cypherdoc
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October 04, 2014, 03:34:33 AM
 #13204

Can anyone speculate as to what has been up with all the dumping?  Where are all these coins coming from?

My first guess would be that is the BTC that Karpeles stole.

I think the missing Gox BTC took us to $2 in 2011-12, this is the start of capitulation and whale re-balancing.

not sure what you're referring to.  you mean the guy Kevin who stole around 2000BTC?

Although the evidence is circumstantial, a plausible case can be made that the great bitcoin theft actually took place in 2011, and all the following events were the result of Mark trying to fix it:

http://www.reddit.com/r/Bitcoin/comments/1zdnop/peter_rs_theory_on_the_collapse_of_mt_gox/


I've always liked that theory, *except* where is the ~1,000,000 BTC transaction (or handful of transactions adding up to that) in mid June 2011? (note: I've never bothered to look, but never heard anyone mention their existence, either).

Sidenote: It was the rebound from $0.01 to ~$17 after that hack that gave me enough confidence in the bitcoin economy/userbase to make my first purchases and sign up here. And I remember watching those penny trades in real-time. Crazy.

yeah, while totaling those volume bars during few days is difficult, i don't see evidence of 1M BTC traded during that time.

btw, the current pullback was a result of Gox also.  it's a good thing they're out of biz:

Peter R
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October 04, 2014, 03:45:03 AM
 #13205

Melbustus, what do you think happened?  Or let me clarify: do you think a single entity controls (or recently controlled) the 750,000 missing GoxBTC?


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Melbustus
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October 04, 2014, 03:48:43 AM
 #13206


I've always liked that theory, *except* where is the ~1,000,000 BTC transaction (or handful of transactions adding up to that) in mid June 2011? (note: I've never bothered to look, but never heard anyone mention their existence, either).


Yes, that's a weakness of the theory indeed.  I only looked briefly (I never got into looking at specific transactions or any deeper blockchain analysis).  There's probably enough total output volume to conceal 1,000,000 coins, but it's certain no smoking gun.

There's no smoking gun, but there's enough output volume to conceal ~1,000,000 BTC.  Here's a graph of bitcoin transfers for June 2011 constructed from data I just pulled from blockchain.info.  Note that I'm not sure re time zones, so look at the 18, 19, and 20th when thinking about what happened at the time of the hack.  Also note this is a log scale so that both curves are readable.  



Remember that total output volume is 100% accurate, but blockchain.info's estimated transaction volume depends on an algorithm that attempts to identify change and may thus be unreliable.  


Indeed.

Regardless, I also can't shake the feeling that the Gox story somehow goes back to that hack. Maybe the attacker took an image of all the code or server state and was able to later exploit vulnerabilities over time allowing him to steal coins... Or maybe the attacker found and deleted hot private keys for kicks (and Karpeles was dumb enough to not have an offline backup). Who knows. None of the shorter-term-focused explanations fit, besides catastrophic key loss (which Karpeles could certainly be incompetent enough to allow).

In any event, I'm glad Gox is dead, but I'm not looking forward to the further drama that will inevitably result from the bankruptcy court case. Gox still manages to haunt us.

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
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smooth
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October 04, 2014, 03:50:40 AM
 #13207

yeah, while totaling those volume bars during few days is difficult, i don't see evidence of 1M BTC traded during that time.

If it was stolen, there is no reason to think it would have traded quickly. It probably would have moved on the blockchain, although if the thief had some reason to believe he got the only copy of the private keys (some sort of inside-ish job most likely), he might not even do that right away.

cypherdoc
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October 04, 2014, 03:56:12 AM
 #13208

yeah, while totaling those volume bars during few days is difficult, i don't see evidence of 1M BTC traded during that time.

If it was stolen, there is no reason to think it would have traded quickly. It probably would have moved on the blockchain, although if the thief had some reason to believe he got the only copy of the private keys (some sort of inside-ish job most likely), he might not even do that right away.



part of Peter's theory, though, is that 1M coins were sold driving the price down to $10.
blaaaaacksuit
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October 04, 2014, 03:56:45 AM
 #13209

Can anyone speculate as to what has been up with all the dumping?  Where are all these coins coming from?

My first guess would be that is the BTC that Karpeles stole.



That's what I've been thinking too this whole time. Wasn't sure if I was crazy.
cypherdoc
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October 04, 2014, 04:04:28 AM
 #13210

part of my problem with your theory, Peter, is that i was a buyer during the time from June to Nov.  i was in contact with Mark over IRC several times and i never got the feeling he was under pressure.  once, i had a problem withdrawing a chunk of coin and he had to write a script to get my coin out.  he shredded another chunk doing so but didn't pass that on to me.  and he shrugged it off as in no big deal. that single act made me a fan thereafter.  naively it turns out. fortunately, i didn't get hurt as a result.  but then there was also the Bitomat.pl bailout of 17000 BTC he donated to losers on that exchange.  along with numerous other philanthropic acts over the ensuing years.  
Melbustus
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October 04, 2014, 04:06:06 AM
 #13211

...Or let me clarify: do you think a single entity controls (or recently controlled) the 750,000 missing GoxBTC?


Doubt it, since it seems to me that Gox has been insolvent for a very long time (which fits with the rest of your theory, obv). That said, if the keys weren't simply lost/destroyed, I think it's likely that someone did control on the order of that many coins at some time during the 2nd half of 2011. I'd posit that they likely sold/spent the vast majority of them over the years, but who knows if they kept a bunch too.

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Melbustus
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October 04, 2014, 04:10:10 AM
 #13212

part of my problem with your theory, Peter, is that i was a buyer during the time from June to Nov.  i was in contact with Mark over IRC several times and i never got the feeling he was under pressure.  once, i had a problem withdrawing a chunk of coin and he had to write a script to get my coin out.  he shredded another chunk doing so but didn't pass that on to me.  and he shrugged it off as in no big deal. that single act made me a fan thereafter.  naively it turns out.  but then there was also the Bitomat.pl bailout of 17000 BTC he donated to losers on that exchange.  along with numerous other philanthropic acts over the ensuing years. 


I think he was just a careless and generally unconcerned guy. Never met him or interacted with him, but all his interviews, comments, and code seem that way to me.

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marcus_of_augustus
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October 04, 2014, 04:20:20 AM
 #13213

Quote
btw, the current pullback was a result of Gox also.  it's a good thing they're out of biz:

Gox has shutdown at all three major peaks ... we haven't had a blow-off top yet without a technical failure of the main centralised price discovery mechanism that initiates it.

smooth
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October 04, 2014, 04:21:58 AM
 #13214

yeah, while totaling those volume bars during few days is difficult, i don't see evidence of 1M BTC traded during that time.

If it was stolen, there is no reason to think it would have traded quickly. It probably would have moved on the blockchain, although if the thief had some reason to believe he got the only copy of the private keys (some sort of inside-ish job most likely), he might not even do that right away.



part of Peter's theory, though, is that 1M coins were sold driving the price down to $10.

Do you mean down to $2? In that case, even if true, the thief wouldn't necessarily have had to sell them all, only "enough" to drive the price down to $2 and extract whatever USD profit he wanted at the time. He could easily have held the rest of the coins, and perhaps could even be selling them now (100% speculation on that last of course).

cypherdoc
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October 04, 2014, 04:24:19 AM
 #13215

yeah, while totaling those volume bars during few days is difficult, i don't see evidence of 1M BTC traded during that time.

If it was stolen, there is no reason to think it would have traded quickly. It probably would have moved on the blockchain, although if the thief had some reason to believe he got the only copy of the private keys (some sort of inside-ish job most likely), he might not even do that right away.



part of Peter's theory, though, is that 1M coins were sold driving the price down to $10.

Do you mean down to $2? In that case, even if true, the thief wouldn't necessarily have had to sell them all, only "enough" to drive the price down to $2 and extract whatever USD profit he wanted at the time. He could easily have held the rest of the coins, and perhaps could even be selling them now (100% speculation on that last of course).



i'm just going by his Reddit write up which posits a 1M BTC selloff taking the price from 32 to 10.  as i said, i don't see those volume bars adding up to that #BTC trades during those few days.
Peter R
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October 04, 2014, 04:43:47 AM
 #13216

i'm just going by his Reddit write up which posits a 1M BTC selloff taking the price from 32 to 10.  as i said, i don't see those volume bars adding up to that #BTC trades during those few days.

I meant that a bunch of coins had recently been deposited at MtGox...they weren't necessarily traded.  I'm just trying to concoct a reasonable explanation for why the coins weren't in cold storage (my explanation is that Mark was disorganized and extremely busy during the May/June run up, and a bunch of coins flooded into Gox during this time and left sitting on his server).  Of course, this assumes the theft even took place--something that may not be true.  

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smooth
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October 04, 2014, 05:06:10 AM
 #13217

i'm just going by his Reddit write up which posits a 1M BTC selloff taking the price from 32 to 10.  as i said, i don't see those volume bars adding up to that #BTC trades during those few days.

I meant that a bunch of coins had recently been deposited at MtGox...they weren't necessarily traded.  I'm just trying to concoct a reasonable explanation for why the coins weren't in cold storage (my explanation is that Mark was disorganized and extremely busy during the May/June run up, and a bunch of coins flooded into Gox during this time and left sitting on his server).  Of course, this assumes the theft even took place--something that may not be true.  

A huge number of coins probably did flood in, that is entirely plausible. The rise was very fast and to a level that was orders of magnitude higher than cost for most Bitcoin holders at the time. Whether it was 1M and how many of them would have been sold I have no idea.


Erdogan
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October 04, 2014, 09:31:01 AM
 #13218

Can anyone speculate as to what has been up with all the dumping?  Where are all these coins coming from?

My first guess would be that is the BTC that Karpeles stole.

I think the missing Gox BTC took us to $2 in 2011-12, this is the start of capitulation and whale re-balancing.

not sure what you're referring to.  you mean the guy Kevin who stole around 2000BTC?

Although the evidence is circumstantial, a plausible case can be made that the great bitcoin theft actually took place in 2011, and all the following events were the result of Mark trying to fix it:

http://www.reddit.com/r/Bitcoin/comments/1zdnop/peter_rs_theory_on_the_collapse_of_mt_gox/

Good theory, I like it.

This means that the parameters for the exponential value curve (the rising part of the s-curve) are lower than what can be deduced from the complete history up till now. We have to regard price levels from 2012 up till now as erroneous. I am too lazy to draw a new curve, maybe someone else can do it.



oda.krell
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October 04, 2014, 12:23:41 PM
 #13219

Can anyone speculate as to what has been up with all the dumping?  Where are all these coins coming from?

My first guess would be that is the BTC that Karpeles stole.

I think the missing Gox BTC took us to $2 in 2011-12, this is the start of capitulation and whale re-balancing.

i sincerely hope that most whales are rebalancing as it would be the most bullish thing yet --> distribution into stronger, more numerous hands.

More numerous: yes (at least I hope so).

Not "stronger" hands, though, that's a naive classification and you should know better than to use it. The key point is: distribution into hands that don't have experienced major returns on their investment yet and are therefore not tempted to lock in a guaranteed profit vs. a potential higher profit.

We don't argue with peoples' risk preferences, otherwise we don't need a market.

Not sure which Bitcoin wallet to use? I suggest to take a look at Electrum.
Electrum is an open-source lightweight client: user friendly, fast, and one of the safest ways to store, send or receive bitcoins.
For executables (Windows, OSX, Linux, Android), source code and documentation, see the Electrum homepage.
Nekrobios
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October 04, 2014, 12:25:26 PM
 #13220

Who says more numerous hands either? If prices are allowed to decline, then that is because of less numerous hands typically. Strong hands are few, they take the liquidity from the market and allow it to surge without resistance. The distribution happens in the bubble phase and the subsequent bull trap.

Accumulation = Many Small => Few Big Players
Distribution = Few Big => Many Small players
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