The company that did the analysis (Bitwise) tweeted out a lot of their slides and more details here: https://threadreaderapp.com/thread/1109114656944209921.html
While the 95% of false trading seems to be true, the overall market cap of bitcoin appears to be healthy at the same time. Problems with arbitrage and a lack of regulation have improved...
While the 95% of false trading seems to be true, the overall market cap of bitcoin appears to be healthy at the same time. Problems with arbitrage and a lack of regulation have improved significantly. 9 of the top 10 exchanges are regulated by FinCEN and other well regarded regulatory systems. These 10 exchanges are the only exchanges that deal in real volume (over $1M real daily volume) and half of these have employed market manipulation tools to prevent it. Source
With Bitcoin coming into the world with only a place like MtGox as an exchange compared to this report Bitcoin is actually in so much a better position. With how young the cryptocurrency is and its global adoption being such a surprise, the fact is that so many exchanges are working in unity against this sort of wash trading that has been with the currency since the start. Basically, it's now harder than ever to continue to wash trade and these articles that are coming out exposing it are really one of Bitcoin's final global adoption hurdles.
everything is good for crypto (and especially bitcoin), even if it makes crypto environmentally ruinous, incredibly easy to con people in a number of novel (and not so novel) ways, and so unstable...
everything is good for crypto (and especially bitcoin), even if it makes crypto environmentally ruinous, incredibly easy to con people in a number of novel (and not so novel) ways, and so unstable that it's useless as a currency without regulation that would render it essentially the same as fiat currency
I'm right there with you. It's been ten years since bitcoin launched. This technology has not even come close to bearing the fruit that was promised. I'm quite sure someday that tree will bear...
I'm right there with you. It's been ten years since bitcoin launched. This technology has not even come close to bearing the fruit that was promised. I'm quite sure someday that tree will bear fruit, and I'd be willing to bet that once we're off the dollar as the world reserve currency it's successor will be some kind of cryptocurrency.
That said, Bitcoin ain't it, or at least, BTC as it is today ain't it. It can evolve, if one could get all of the cryptocrazies to stop arguing about implementations and start making progress, but I'm not holding out much hope of that happening.
I'll be shocked if bitcoin manages to get past $16k/coin again. That seems like the peak to me. Crypto has lost the 'new hotness' shine. Now it's just another boring fact-of-life internet technology. Perhaps the people who own most of it can manage to manufacture another oh so predictable boom/bust cycle. I don't have much hope for it building into a legit marketplace.
First one through the wall always gets bloody, and usually fails. We did get a proven, reliable distributed trust mechanism out of it, though. Someday I think that's going to become part of daily life for most people. It has applications far beyond currency. That's the real horse here, not bitcoin. We do need to work on the power costs, though.
The distributed trust concept is definitely the interesting part, but a lot of people and companies are also just jumping on the hype train and trying to apply it in cases where it's not necessary...
The distributed trust concept is definitely the interesting part, but a lot of people and companies are also just jumping on the hype train and trying to apply it in cases where it's not necessary or doesn't really work. I thought this was a pretty good article from last month about common cases where it's mis-applied: You Do Not Need Blockchain: Eight Popular Use Cases And Why They Do Not Work
I think the flowchart at the bottom of the first case for deciding whether you should be using blockchain or not is especially good.
I've had this conversation with a lot of people. It turns out most people don't know that asymmetric encryption has been around for almost fifty years, and that digital signatures exist. The use...
I've had this conversation with a lot of people. It turns out most people don't know that asymmetric encryption has been around for almost fifty years, and that digital signatures exist.
The use cases brought up for blockchains are usually something like "I can send you something, and you can be sure it came from me!". We've been doing that with SSL/TLS for 25 years now. It's the whole reason eCommerce exists. I think 99% of the use cases that people have told me would be perfect for blockchains could be solved more easily, cheaply, and efficiently with some form of digital signatures.
While you are focusing on the headline and something that is a true issue the very same article that broke the story stated the actual market cap of bitcoin is still good despite the wash trading....
While you are focusing on the headline and something that is a true issue the very same article that broke the story stated the actual market cap of bitcoin is still good despite the wash trading. I'm not saying wash trading is "good for bitcoin." I'm saying the findings of the study still show bitcoin is strong despite the wash trading.
If someone really wants to buy and sell currency to artificially inflate volume, they will end up losing transaction fees, which are generally something like 0.1% per trade.
If someone really wants to buy and sell currency to artificially inflate volume, they will end up losing transaction fees, which are generally something like 0.1% per trade.
I wonder if any of this washing is actually attempting to obfuscate the movement of coins over artificially inflating trade. My understanding is you can trace coins through the ledger but with...
I wonder if any of this washing is actually attempting to obfuscate the movement of coins over artificially inflating trade. My understanding is you can trace coins through the ledger but with enough moves it would certainly make it more tedious.
I don’t think that’s what happening here; when you trade on an exchange, the coins aren’t moved to a different wallet for each transaction. The only thing you would be able to trace on the ledger...
I don’t think that’s what happening here; when you trade on an exchange, the coins aren’t moved to a different wallet for each transaction. The only thing you would be able to trace on the ledger is when coins are deposited or withdrawn from the exchange.
The issue with Crypto Currencies is that the only "problems" it solves aren't actual problems. They're just ideological problems to anarcho capitalists, not practical problems. Like, why would the...
The issue with Crypto Currencies is that the only "problems" it solves aren't actual problems. They're just ideological problems to anarcho capitalists, not practical problems.
Like, why would the average person care that a currency is controlled by a central authority? Central banks can back up the value of their currency with the power of their government, they can investigate fraud, and they can take steps the ensure inflation is at a healthy rate.
With crypto, might makes right. Everyone thought that anti-authoritarian punks would somehow control the crypto market, but it turns out, capital is capital, and the same people who control literally every other market ended up controlling the crypto market, because duh. The only difference with crypto is that no one has any true regulatory power to limit their abuse.
It's yet again, a technological solution failing to solve a social problem (concentration of wealth).
probably the most apt point about cryptocurrency i have ever heard spoken is that it's really just one giant exercise in libertarians and anarcho-capitalists learning why we regulate financial...
probably the most apt point about cryptocurrency i have ever heard spoken is that it's really just one giant exercise in libertarians and anarcho-capitalists learning why we regulate financial institutions.
You might be dramatically overestimating the use of the exchanges that are doing this shit. Coinbase and Gemini are considered the gold standard in the US, and they're not was trading. I can just...
You might be dramatically overestimating the use of the exchanges that are doing this shit. Coinbase and Gemini are considered the gold standard in the US, and they're not was trading. I can just make a website and claim all this trade volume but that doesn't mean that anyone in the community is accepting me or my website.
$273 million in trading volume daily is pretty solid in the grand scheme of things. This whole article seems like a lot of hoopla to me. Any conversation about the meta of crypto like trading volume or price is kind of just a silly conversation. The technology is interesting and the better conversation is will it lead to useful applications or not, imo.
Right, so what my point is, is that this CNBC article is taking one fact from that report and making it seem like a bigger deal than it is. The average reader sees wash trading like that and...
Right, so what my point is, is that this CNBC article is taking one fact from that report and making it seem like a bigger deal than it is. The average reader sees wash trading like that and (opinion incoming) mentally equates these exchanges to like the NYSE in terms of there being a "crypto market". But if you look at coinmarketcap for volume info, you'd see that all of those crazy wash trading exchanges are measured in BTC/USDT. Almost anyone in the community will tell you that tether is a scam or scam adjacent, and that these exchanges are all scams. So the "in the know" crypto users already know that only CB and Gemini are trustworthy, with the other "10 trustworthy exchanges" from the report also being usable in certain circumstances. But the "out of the know" CNBC reader doesn't even know that those 10 exchanges were endorsed by this report, which was done by an obviously pro-crypto firm.
Your analysis:
At levels like this, I would expect this should cripple the crypto market, but it seems like those still on board are so heavily invested at this point that they will continue ignoring evidence like this.
(opinion incoming) exemplifies this "out of the know" reader, in that you're making judgement about people that are "still on board" without realizing that those people would never use these exchanges, and don't take their reported volume into account for anything. I am claiming that this article only serves to make non-investors in bitcoin feel good about their non-investment by very selectively covering a more responsible report done by Bitwise.
The company that did the analysis (Bitwise) tweeted out a lot of their slides and more details here: https://threadreaderapp.com/thread/1109114656944209921.html
While the 95% of false trading seems to be true, the overall market cap of bitcoin appears to be healthy at the same time. Problems with arbitrage and a lack of regulation have improved significantly. 9 of the top 10 exchanges are regulated by FinCEN and other well regarded regulatory systems. These 10 exchanges are the only exchanges that deal in real volume (over $1M real daily volume) and half of these have employed market manipulation tools to prevent it. Source
With Bitcoin coming into the world with only a place like MtGox as an exchange compared to this report Bitcoin is actually in so much a better position. With how young the cryptocurrency is and its global adoption being such a surprise, the fact is that so many exchanges are working in unity against this sort of wash trading that has been with the currency since the start. Basically, it's now harder than ever to continue to wash trade and these articles that are coming out exposing it are really one of Bitcoin's final global adoption hurdles.
Saying "95% fake activity is actually good for bitcoin" is quite the stretch.
everything is good for crypto (and especially bitcoin), even if it makes crypto environmentally ruinous, incredibly easy to con people in a number of novel (and not so novel) ways, and so unstable that it's useless as a currency without regulation that would render it essentially the same as fiat currency
I'm right there with you. It's been ten years since bitcoin launched. This technology has not even come close to bearing the fruit that was promised. I'm quite sure someday that tree will bear fruit, and I'd be willing to bet that once we're off the dollar as the world reserve currency it's successor will be some kind of cryptocurrency.
That said, Bitcoin ain't it, or at least, BTC as it is today ain't it. It can evolve, if one could get all of the cryptocrazies to stop arguing about implementations and start making progress, but I'm not holding out much hope of that happening.
I'll be shocked if bitcoin manages to get past $16k/coin again. That seems like the peak to me. Crypto has lost the 'new hotness' shine. Now it's just another boring fact-of-life internet technology. Perhaps the people who own most of it can manage to manufacture another oh so predictable boom/bust cycle. I don't have much hope for it building into a legit marketplace.
First one through the wall always gets bloody, and usually fails. We did get a proven, reliable distributed trust mechanism out of it, though. Someday I think that's going to become part of daily life for most people. It has applications far beyond currency. That's the real horse here, not bitcoin. We do need to work on the power costs, though.
The distributed trust concept is definitely the interesting part, but a lot of people and companies are also just jumping on the hype train and trying to apply it in cases where it's not necessary or doesn't really work. I thought this was a pretty good article from last month about common cases where it's mis-applied: You Do Not Need Blockchain: Eight Popular Use Cases And Why They Do Not Work
I think the flowchart at the bottom of the first case for deciding whether you should be using blockchain or not is especially good.
I've had this conversation with a lot of people. It turns out most people don't know that asymmetric encryption has been around for almost fifty years, and that digital signatures exist.
The use cases brought up for blockchains are usually something like "I can send you something, and you can be sure it came from me!". We've been doing that with SSL/TLS for 25 years now. It's the whole reason eCommerce exists. I think 99% of the use cases that people have told me would be perfect for blockchains could be solved more easily, cheaply, and efficiently with some form of digital signatures.
While you are focusing on the headline and something that is a true issue the very same article that broke the story stated the actual market cap of bitcoin is still good despite the wash trading. I'm not saying wash trading is "good for bitcoin." I'm saying the findings of the study still show bitcoin is strong despite the wash trading.
So how would they even go about fixing this issue?
If someone really wants to buy and sell currency to artificially inflate volume, they will end up losing transaction fees, which are generally something like 0.1% per trade.
I wonder if any of this washing is actually attempting to obfuscate the movement of coins over artificially inflating trade. My understanding is you can trace coins through the ledger but with enough moves it would certainly make it more tedious.
I don’t think that’s what happening here; when you trade on an exchange, the coins aren’t moved to a different wallet for each transaction. The only thing you would be able to trace on the ledger is when coins are deposited or withdrawn from the exchange.
The issue with Crypto Currencies is that the only "problems" it solves aren't actual problems. They're just ideological problems to anarcho capitalists, not practical problems.
Like, why would the average person care that a currency is controlled by a central authority? Central banks can back up the value of their currency with the power of their government, they can investigate fraud, and they can take steps the ensure inflation is at a healthy rate.
With crypto, might makes right. Everyone thought that anti-authoritarian punks would somehow control the crypto market, but it turns out, capital is capital, and the same people who control literally every other market ended up controlling the crypto market, because duh. The only difference with crypto is that no one has any true regulatory power to limit their abuse.
It's yet again, a technological solution failing to solve a social problem (concentration of wealth).
probably the most apt point about cryptocurrency i have ever heard spoken is that it's really just one giant exercise in libertarians and anarcho-capitalists learning why we regulate financial institutions.
You might be dramatically overestimating the use of the exchanges that are doing this shit. Coinbase and Gemini are considered the gold standard in the US, and they're not was trading. I can just make a website and claim all this trade volume but that doesn't mean that anyone in the community is accepting me or my website.
$273 million in trading volume daily is pretty solid in the grand scheme of things. This whole article seems like a lot of hoopla to me. Any conversation about the meta of crypto like trading volume or price is kind of just a silly conversation. The technology is interesting and the better conversation is will it lead to useful applications or not, imo.
Right, so what my point is, is that this CNBC article is taking one fact from that report and making it seem like a bigger deal than it is. The average reader sees wash trading like that and (opinion incoming) mentally equates these exchanges to like the NYSE in terms of there being a "crypto market". But if you look at coinmarketcap for volume info, you'd see that all of those crazy wash trading exchanges are measured in BTC/USDT. Almost anyone in the community will tell you that tether is a scam or scam adjacent, and that these exchanges are all scams. So the "in the know" crypto users already know that only CB and Gemini are trustworthy, with the other "10 trustworthy exchanges" from the report also being usable in certain circumstances. But the "out of the know" CNBC reader doesn't even know that those 10 exchanges were endorsed by this report, which was done by an obviously pro-crypto firm.
Your analysis:
(opinion incoming) exemplifies this "out of the know" reader, in that you're making judgement about people that are "still on board" without realizing that those people would never use these exchanges, and don't take their reported volume into account for anything. I am claiming that this article only serves to make non-investors in bitcoin feel good about their non-investment by very selectively covering a more responsible report done by Bitwise.