Silk Road forums
Discussion => Off topic => Topic started by: rise_against on March 04, 2012, 04:05 am
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i'm wondering how much impact SR has to do with the price of bitcoins, and as vendors, if we would all decide to hold all our coins for a couple/few weeks just to see what would happen to the value of the coin. how many vendors out there would be willing to do this? perhaps we could drive up the value of the market and increase our profits. . . just a thought.
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your customers are the ones that have to buy those coins at the inflated rate....thanks a bunch
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Good luck
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I wont sell my btc for 2 weeks if you subsidize my income. DEAL? Let's see where the btc price goes. Ready when you are.
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I'd love to inflate the value. I am sitting on 400 coins at the moment with homes that the value spikes :) .
An increase in price from $5.00 to $7.00 could make me almost $10,000 richer :)
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since this has been posted BTC has gone up about ten cents USD
I'm on board.
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your customers are the ones that have to buy those coins at the inflated rate....thanks a bunch
there is one major hole in your argument. the cash value of the products on SR remains the same(pegged to the dollar), so as a customer you will have to buy less coins if the value of the coin increases.
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i'm on board. the trick is going to be for us vendors not to dump our coins all at once at the end of this 2 weeks, or else it will defeat the purpose because the market will crash. we need some sort of vendors union for something like this to actually work.
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Don't forget that you've also got that recent BTC theft to contend with. Somebody out there has 43000 (I think that's what it was) BTC that they're going to need/want to get rid of - so if you guys actually manage to do this and have any kind of measurable impact on the exchange rate, you might end up getting undercut by an uncontrollable rogue element. Just a thought. Market manipulation tends to be a lot harder than it looks.
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i'm wondering how much impact SR has to do with the price of bitcoins, and as vendors, if we would all decide to hold all our coins for a couple/few weeks just to see what would happen to the value of the coin. how many vendors out there would be willing to do this? perhaps we could drive up the value of the market and increase our profits. . . just a thought.
I guess if ALL the vendors really were to keep their coins for a few weeks the value could go up to 10/B. It could be less or it could even be more for sure is that the value would go up SR has become that big of a factor.
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your customers are the ones that have to buy those coins at the inflated rate....thanks a bunch
there is one major hole in your argument. the cash value of the products on SR remains the same(pegged to the dollar), so as a customer you will have to buy less coins if the value of the coin increases.
thats hardly a major flaw at all. The cash value of the products remains the same, true. If i buy 1 BTC for $6 and don't use it right away, the value of the coin will eventually restabilize/fall back to a normal level. The coin i paid $6 for is now only worth $4.
You're working under the assumption that as soon as i get the coin in hand, i'm spending it. And while usually that is the case, it isn't always, and it isn't for everyone. So some people would still be a bit screwed by this if they hold onto their coin for even a couple of days.
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thats hardly a major flaw at all. The cash value of the products remains the same, true. If i buy 1 BTC for $6 and don't use it right away, the value of the coin will eventually restabilize/fall back to a normal level. The coin i paid $6 for is now only worth $4.
You're working under the assumption that as soon as i get the coin in hand, i'm spending it. And while usually that is the case, it isn't always, and it isn't for everyone. So some people would still be a bit screwed by this if they hold onto their coin for even a couple of days.
That would be the case if the buyer decided to hold on to the coin for the few weeks it was worth $8-$10 and then used it right after everyone unloaded their coins at the end of the two weeks.
If vendors can successfully do this, they will give buyers who have BTC in their account to get a great value, and sellers who have exposed escrows and positive balances a chance to make some extra money.
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buying in
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If vendors can successfully do this, they will give buyers who have BTC in their account to get a great value, and sellers who have exposed escrows and positive balances a chance to make some extra money.
^
this
If we manage to drive up the price of the coin and buyers are sitting on coins, they become richer and increase their buying power. if user has 1 bitcoin now, and wants to buy a product that costs 1 bitcoin he can get that 1 item. if we drive the value of the coin up to $10, the buyer can now buy 2 of that item with that same coin he had before.
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Don't forget that you've also got that recent BTC theft to contend with. Somebody out there has 43000 (I think that's what it was) BTC that they're going to need/want to get rid of - so if you guys actually manage to do this and have any kind of measurable impact on the exchange rate, you might end up getting undercut by an uncontrollable rogue element. Just a thought. Market manipulation tends to be a lot harder than it looks.
holy shit, 43,000 stolen? anyone have any info on this theft? thats an insane amount. about $215,000 worth!
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Don't forget that you've also got that recent BTC theft to contend with. Somebody out there has 43000 (I think that's what it was) BTC that they're going to need/want to get rid of - so if you guys actually manage to do this and have any kind of measurable impact on the exchange rate, you might end up getting undercut by an uncontrollable rogue element. Just a thought. Market manipulation tends to be a lot harder than it looks.
holy shit, 43,000 stolen? anyone have any info on this theft? thats an insane amount. about $215,000 worth!
There was an attack on linode.com - the VPS provider - and the attacker went specifically after accounts that were running the bitcoind process. Bitcoinica is said to have lost about 43k BTC. The 'slush' mining pool lost 3K BTC. Here's one article about it - you can find additional discussion on bitcointalk.org and other forums.
(hxxp)://bitcoinmedia.com/compromised-linode-coins-stolen-from-slush-faucet-and-others/
Ouch. And then some.
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Don't forget that you've also got that recent BTC theft to contend with. Somebody out there has 43000 (I think that's what it was) BTC that they're going to need/want to get rid of - so if you guys actually manage to do this and have any kind of measurable impact on the exchange rate, you might end up getting undercut by an uncontrollable rogue element. Just a thought. Market manipulation tends to be a lot harder than it looks.
holy shit, 43,000 stolen? anyone have any info on this theft? thats an insane amount. about $215,000 worth!
There was an attack on linode.com - the VPS provider - and the attacker went specifically after accounts that were running the bitcoind process. Bitcoinica is said to have lost about 43k BTC. The 'slush' mining pool lost 3K BTC. Here's one article about it - you can find additional discussion on bitcointalk.org and other forums.
(hxxp)://bitcoinmedia.com/compromised-linode-coins-stolen-from-slush-faucet-and-others/
Ouch. And then some.
Let's not forget the hacking of Mt. Gox where 500,000+ coins where stolen.
Source: http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+Full+Story/article21942.htm
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Yes, and keep in mind that was back when BTC were over $15.00 apiece.
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Weekly volume must be in the dozen of millions. SR is a tiny fraction compared to the whole BTC economy. SR vendors holding coins for 2 weeks won't do any difference.
The price goes down when the confidence falls. When Tradehill closed, many people didn't knew if the same might happen to other exchangers. The Bitcoinica case is something similar. People don't know what might happen and the price becomes volatile. What IF Bitcoinica had to close because of the theft?
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Don't forget that you've also got that recent BTC theft to contend with. Somebody out there has 43000 (I think that's what it was) BTC that they're going to need/want to get rid of - so if you guys actually manage to do this and have any kind of measurable impact on the exchange rate, you might end up getting undercut by an uncontrollable rogue element. Just a thought. Market manipulation tends to be a lot harder than it looks.
holy shit, 43,000 stolen? anyone have any info on this theft? thats an insane amount. about $215,000 worth!
Here's a link to a forum thread on the stolen coins:
https://bitcointalk.org/index.php?topic=66979.0
It's amazing that the guy says he is going to be able to pay back every coin!
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Thats it guys CRASH the dam Bitcoin market Like the USA crashed the world economy How the hell is everyone going to shop here without Bitcoin
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Isn't one of the reasons we use BTC to push ourselves further from a centralized/controlled currency and the corrupt people who control it? With you holding onto funds to push your profit margin higher while making the people with less bitcoins and the people who are buying bitcoins for products poorer and their bitcoins less valuable if they don't spend them immediately. What a couple thousand+/- instantly hitting the market would do would be another crash in price from 5~USD/BTC to about 2-3. You are what is wrong with the world be happy you have the money. Don't try to control the environment and make it shitty for other people just so you can momentarily gain maybe 3k extra.
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It won't work anyway. The League of Banks attempted to prop up the stock market with billions after the initial small drop in 1929, and 80% of them were wiped out within 24 months.
I'll keep on doing what I always do.... market manipulation doesn't work, at best things just become self-fulfilling prophesy's for a while and the action balances itself out. Trust me, it cannot be done on the long term.
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It won't work anyway. The League of Banks attempted to prop up the stock market with billions after the initial small drop in 1929, and 80% of them were wiped out within 24 months.
I'll keep on doing what I always do.... market manipulation doesn't work, at best things just become self-fulfilling prophesy's for a while and the action balances itself out. Trust me, it cannot be done on the long term.
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It won't work anyway. The League of Banks attempted to prop up the stock market with billions after the initial small drop in 1929, and 80% of them were wiped out within 24 months.
I'll keep on doing what I always do.... market manipulation doesn't work, at best things just become self-fulfilling prophesy's for a while and the action balances itself out. Trust me, it cannot be done on the long term.
if you removed all uncertainty from everything there would be no profit or loss and no interest on capital because every future outcome would already be priced into every transaction.
Thank god we are human so there are profits (measurements of contribution in voluntary associations, rewards for uncertainty/risk) to be had...
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i'm wondering how much impact SR has to do with the price of bitcoins, and as vendors, if we would all decide to hold all our coins for a couple/few weeks just to see what would happen to the value of the coin. how many vendors out there would be willing to do this? perhaps we could drive up the value of the market and increase our profits. . . just a thought.
What will you then say about the resulting rise in cost of escrow?
First of all I think you are talking about hedging, not escrow (escrow is just the holding of funds by a non-interested third party until the buyer signs off on the seller meeting the conditions of the agreement satisfactoriliy).
hedging costs will stay the same as, as far as my own understanding of the hedging operation goes, the pool is adjusted for USD/BTC right away, so you are basically just getting charged a trade fee of <0.5% on either side plus a liquidity/slippage fee. It will still be 2% either side of the transaction (BTC-->USD while in escrow USD-->BTC when completed).
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Isn't one of the reasons we use BTC to push ourselves further from a centralized/controlled currency and the corrupt people who control it? With you holding onto funds to push your profit margin higher while making the people with less bitcoins and the people who are buying bitcoins for products poorer and their bitcoins less valuable if they don't spend them immediately. What a couple thousand+/- instantly hitting the market would do would be another crash in price from 5~USD/BTC to about 2-3. You are what is wrong with the world be happy you have the money. Don't try to control the environment and make it shitty for other people just so you can momentarily gain maybe 3k extra.
i guess you are one of those people who don't understand how it works. i've said it before and i'll say it again. Lets say i have 1 bitcoin. a hit of LSD costs one bitcoin. the value of bitcoin doubles overnight. you still have your 1 bitcoin, but now the hit of LSD costs .5 bitcoins because the listing is pegged to the dollar. you as a buyer have benefited from the increase of the bitcoin value and can now buy 2 hits of LSD with your 1 bitcoin, instead of just 1 hit the day before.......... does it make sense now?
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This won't work, and here's why:
True, if you stop selling BTC now, you will create a shortage, which will drive up the price (in theory, anyway). But what happens 2 weeks from now, when the hoarding stops? All the sellers suddenly unloading 2 weeks worth of stored up BTC will create an OVERSUPPLY of BTC, which will drive DOWN the price of BTC BELOW what it was before the hoarding started. This is because the supply/demand ratio will be higher, because there will be a 2-week backlog worth of BTC that sellers will be unloading IN ADDITION to the BTC they will start selling again due to normal business activity.
Manipulating markets like this is always a zero-sum game; the only way one person can gain money from this, is if other people lose money.
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This won't work, and here's why:
True, if you stop selling BTC now, you will create a shortage, which will drive up the price (in theory, anyway). But what happens 2 weeks from now, when the hoarding stops? All the sellers suddenly unloading 2 weeks worth of stored up BTC will create an OVERSUPPLY of BTC, which will drive DOWN the price of BTC BELOW what it was before the hoarding started. This is because the supply/demand ratio will be higher, because there will be a 2-week backlog worth of BTC that sellers will be unloading IN ADDITION to the BTC they will start selling again due to normal business activity.
Manipulating markets like this is always a zero-sum game; the only way one person can gain money from this, is if other people lose money.
this is why the participating vendors would have to slowly sell the coins back to the market instead of dumping everything they have all at once. any vendor with half a brain already knows this is the best way to get the most money for their coins.
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mt.gox alone trades on average 100 000 BTC pr day.
Thats 1,4million coins in 14 days..
I don't have any references on how big SR is, but I assume you would have to save quite a few bitcoins in order to have an impact.
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This won't work, and here's why:
True, if you stop selling BTC now, you will create a shortage, which will drive up the price (in theory, anyway). But what happens 2 weeks from now, when the hoarding stops? All the sellers suddenly unloading 2 weeks worth of stored up BTC will create an OVERSUPPLY of BTC, which will drive DOWN the price of BTC BELOW what it was before the hoarding started. This is because the supply/demand ratio will be higher, because there will be a 2-week backlog worth of BTC that sellers will be unloading IN ADDITION to the BTC they will start selling again due to normal business activity.
Manipulating markets like this is always a zero-sum game; the only way one person can gain money from this, is if other people lose money.
this is why the participating vendors would have to slowly sell the coins back to the market instead of dumping everything they have all at once. any vendor with half a brain already knows this is the best way to get the most money for their coins.
Still won't work. Keep in mind that SR prices are adjusted based on BTC's value. So if BTC doubles in price, then every sale a vendor makes on SR gets them HALF as many BTC as before, thus negating the doubling in value of the BTC, and they end up with the exact same amount of "real" money as before.
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this would be cool if it would work, i always have a load of btc on hand.. im thinking it will go up in a few weeks or so. just waiting on that, im not sure haha. i could be totally wrong ::)
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BTC is still not stable or predictable, if you can't afford to lose all the value in your BTC you shouldn't be holding them.
As BenFrank111 said, your attempted manipulation will be a zero-sum game, some one must lose for you to win out of this. The last hording vendor to sell gets screwed. That's assuming that some other BTC hoarder doesn't screw you all when he sees it double, the BTC was trading for fractions of a cent not so long ago, it is possible that apart from the recent massive theft that some one is sitting on a pile of them.
Worse still, if you succeed you would be able to generate a proxy on the size of SR for LE and make BTC associated with SR in their minds even more strongly. Its really a bad idea.
Question: Is there any way to make leveraged bets on BTC exchange rates?
There was a digital gold currency some years ago that was shut down for being used in dodgy transactions... no ones got a refund yet and it wasn't a scam, the govt. shut it down. Could happen to BTC as well, don't you think? I'd love to be holding hundreds or thousands of BTC when the govt makes it illegal and fucks it up... I am no techie and for sure some one will say that it could never happen but I think the exchanges could be shut down and BTC -> REAL MONEY could easily be stopped, some one needs a bank account at some stage in the process... okay then people will start offering to exchange BTC for physical cash as is already happening but I think that is just going to be more hassle for vendors quite possibly make it too hard for most buyers to get hold of them.....
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BTC is still not stable or predictable, if you can't afford to lose all the value in your BTC you shouldn't be holding them.
As BenFrank111 said, your attempted manipulation will be a zero-sum game, some one must lose for you to win out of this. The last hording vendor to sell gets screwed. That's assuming that some other BTC hoarder doesn't screw you all when he sees it double, the BTC was trading for fractions of a cent not so long ago, it is possible that apart from the recent massive theft that some one is sitting on a pile of them.
Worse still, if you succeed you would be able to generate a proxy on the size of SR for LE and make BTC associated with SR in their minds even more strongly. Its really a bad idea.
Question: Is there any way to make leveraged bets on BTC exchange rates?
There was a digital gold currency some years ago that was shut down for being used in dodgy transactions... no ones got a refund yet and it wasn't a scam, the govt. shut it down. Could happen to BTC as well, don't you think? I'd love to be holding hundreds or thousands of BTC when the govt makes it illegal and fucks it up... I am no techie and for sure some one will say that it could never happen but I think the exchanges could be shut down and BTC -> REAL MONEY could easily be stopped, some one needs a bank account at some stage in the process... okay then people will start offering to exchange BTC for physical cash as is already happening but I think that is just going to be more hassle for vendors quite possibly make it too hard for most buyers to get hold of them.....
there is no way for governments to actually shut down BTC as it is 100% peer-to-peer. Exchangers would only be liable in anti-BTC jurisdictions (i.e. you could set up a digital currency exchange doing LR-BTC Pecunix-BTC, etc. in a non-extradition, non-reporting jurisdiction and nobody would be able to touch you).
What they will do, if it comes down to it, is make owning BTC illegal just like the gold seizures by FDR's leviathin in 1933. This will just drive the BTC markets further underground, but it cannot be shut down. The only thing that can shut BTC down is if most people lose faith in the currency and just stop using it, back-boning the network, etc. It's 100% P2P.
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coincidence or are we driving the value up?
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Forbes article, etc... has driven incredible interest. Wall Street has something in the works for the bitcoin market... capital influx, price drive, hard sell. To anyone who thinks i am stupid, they bid on pork belly futures in the midwest.
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Question: Is there any way to make leveraged bets on BTC exchange rates?
There was a digital gold currency some years ago that was shut down for being used in dodgy transactions... no ones got a refund yet and it wasn't a scam, the govt. shut it down. Could happen to BTC as well, don't you think? I'd love to be holding hundreds or thousands of BTC when the govt makes it illegal and fucks it up... I am no techie and for sure some one will say that it could never happen but I think the exchanges could be shut down and BTC -> REAL MONEY could easily be stopped, some one needs a bank account at some stage in the process... okay then people will start offering to exchange BTC for physical cash as is already happening but I think that is just going to be more hassle for vendors quite possibly make it too hard for most buyers to get hold of them.....
You should look at bitcoinica, I think they do something like you're talking about I know they do short selling or something, I'm not really into the stock traderish jargon to know exactly what they do. Hopefully bitcoin would survive the exchanges being shut down by direct trades but that relies on a web of trust.
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I first heard of BTC (and SR) at an occupy protest, some nut was spouting off to an economics student about how every one should switch to BTC because - in his words - it's not fiat money, it doesn't support bail outs and it's the future.
I think there is something kind neat about BTC's potential for masking transactions but it's no where near said nut's fantasy. Any currency, any medium of exchange has to exist in the real world and so it will be subject to myriad pressures from financial institutions. BTC, while it remains legal, is of small enough trade volume that it offers great opportunity for market manipulation, hi/lo spreads are quite significant with BTC, for sure some one is making money though provision of liquidity in the market and nothing else.
Reich: As a soon to be vendor I have to be honest and say that to some degree I am unnerved by how fragile BTC seems to be, but at the same time I am enthused that financial services are popping up around it, there are some smart hackers here on SR and Tor, I wonder if anyone has started to do the work of quants on their own, using statistical models to write automated trading programs, one could make a lot of money doing so but the risks from market moving events that are not quantifiable within said models is probably so high that you'd have to be mad to stake your life savings on it.