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Article author actually makes a great point and it stands regardless of your ability to cash out within 1%. Big investors on current markets can whip out huge p

Article author actually makes a great point and it stands regardless of your ability to cash out within 1%. Big investors on current markets can whip out huge profits for themselves by using techniques such as front running, wash trades, willybot, spoofing etc. Exchanges are not even prohibited from doing their own secret trades and using their own internal database and full knowledge of all other players. If you are a trader with deep pockets, you should immediately realize all above established techniques (which is illegal on stock market) can generate you huge profits in no time in crypto market. Big players would literally have all the strings to play the market according to their will. Currently prices are 100X higher and 1% difference seems irrelevant but in mature markets 1% move is news worthy event. I think its also worth pointing out that less than 1000 entities owns 40% of the bitcoins. I wouldn't be surprised if set of entities are willing to burn short term cash to inflate the prices just to attract other large scale investors in the game. This is like burning tinder to start the fire. The end game usually is massive cash outs as soon as fire has started. Typically this would kill the fire but in some cases it may keep going. In any case, the bad news to small investors is that expect to get killed at any point in time when your big brother decides to cash out. Until then, party on.

runeks 9y ago
> Exchanges are not even prohibited from doing their own secret trades and using their own internal database and full knowledge of all other players. Are we sure about this? The two largest USD-exchanges are Coinbase/GDAX and Bitstamp, which operate out of California and London, respectively. If someone were to reveal that these exchanges were trading against their customers, are we sure that the authorities would be unwilling to press charges?
- deleted 9y ago
  [deleted]
- Gys 9y ago
  > If someone were to reveal that these exchanges were trading against their customers, are we sure that the authorities would be unwilling to press charges? Based on what ? Because some people might think that is immoral ? Trading in most things is not regulated. So there is no law to be broken, expect very basic ones (you have to deliver if you receive fiat money). If I have a trading platform in art, then I can still buy and sell for my private collection. Crypto coins are not different.
  - lagadu 9y ago
    The difference is that GDAX is part of Coinbase, which is registered as a regular exchange under the New York DFS which puts them under the same regulations as non-crytop exchanges.
  - lawlessone 9y ago
    >Because some people might think that is immoral ? No because they're actually laws and you can go to jail.
  - dmichulke 9y ago
    > are we sure that the authorities would be unwilling to press charges? > Based on what ? Fraud?
paps 9y ago
> I think its also worth pointing out that less than 1000 entities owns 40% of the bitcoins. This is FUD. 1000 wallets own 40% of BTC. See here https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses....
- sytelus 9y ago
  Not sure what your link proves. In reality, no one knows if this statement to be true because addresses and wallets can be shared. There was a Bloomberg article with lots of interviews on this topic with people in crypto business and no one seem to deny this: https://news.ycombinator.com/item?id=15877838 https://news.ycombinator.com/item?id=15877838
- g09980 9y ago
  Many of these wallets are actually exchange cold storage wallets, so they hold the BTC but not per se "own" it
  - Retric 9y ago
    In practical terms exchanges do own these bitcoins in that they a physically capable of trading them.
- workthrowaway27 9y ago
  You'd probably find that 40% of US equities are owned by fewer than 1000 asset managers as well, so I'm not sure that this is all that relevant. If Vanguard decided to liquidate their holdings overnight there would be pandemonium just as if these people decided to liquidate their BTC, but it's not going to happen in either case.
mitchellberry 9y ago
> worth pointing out that less than 1000 entities owns 40% of the bitcoins The fiat equivalent is saying 10 entities own most of the USD in the world. They are banks with liabilities holding money for others. Of all the bitcoin conspiracies it's provably false yet people somehow gravitate towards it. Do worry how easily people and especially journalists fall for this. Go click on the top 10 addresses in a chain explorer, please. They are all exchanges.
- prostoalex 9y ago
  There's a top-heavy concentration of ownership from the information that's been disclosed. * Satoshi Nakamoto's ownership is pegged at 1.5 mln bitcoins * Chamath Palihapitiya and Social Capital own "about 5% of all bitcoins out there", so 600,000 BTC as of today http://thisweekinstartups.com/chamath-palihapitiya-david-eun-scale/ http://thisweekinstartups.com/chamath-palihapitiya-david-eun... * Winklevoss twins have disclosed ownership of roughly 200,000 BTC when filing for a Bitcoin ETF https://www.coindesk.com/winklevoss-twins-plan-nasdaq-listing-for-bitcoin-etf-in-new-sec-filing/ https://www.coindesk.com/winklevoss-twins-plan-nasdaq-listin...
healsjnr1 9y ago
One thing in particular I dislike about this is that the author lumps all crypto currency into the same bucket. As the prime example of this, ethereum and Bitcoin could not be more different. Work done by groups such as 0x mean that these regulations can be enforced by public contacts. Sure, there is more work to be done, but the potential is to create decentralised exchanges that are safer and easier to regulate than existing Fiat exchanges. Bitcoin's recent price has been crazy even for crypto, but it is short sighted to lump all crypto currencies into the same bucket. This is a fast evolving field, lessons are being learned and better and better implementations are being built.
- ufo 9y ago
  Public contracts can't regulate USD trading though.
  - wheelerwj 9y ago
    yes they can. written properly and with the right data, a smart contract can be very effective.
    - ac29 9y ago
      It doesn't matter how well a contract is written, if it comes into violation of US securities laws or other rules and regulations, it will be a problem in the US. I'd expect the number of crypto-related prosecutions to rise exponentially in the US as crypto markets have heated up. The various regulatory and law enforcement agencies generally work slowly, but they do work.
- davidgerard 9y ago
  In practical terms, the main point of interest in Ethereum is the price of Ether. The prime "decentralised" exchange is EtherDelta, which is completely decentralised except the absolute decentralisation of the website (deployable only as 2MB of minified JavaScript with the original source unavailable). I wrote about how well this approach works: https://davidgerard.co.uk/blockchain/2017/09/28/etherdelta-hack-malicious-javascript-in-a-contract-name-stealing-the-users-key/ https://davidgerard.co.uk/blockchain/2017/09/28/etherdelta-h... How decentralised can you make your "decentralised" exchange? There's not much point to "a bit decentralised".
wegschmeiss 9y ago
> Until then, party on Indeed. Earlier this year, mid-summer, I got curious about all this, so I decided to start an experiment, uploaded $100 to an exchange and started trading and programming against their API. Today, I am running fully automated bots which are winning, got about $25k in exchanges and cashed out about $15 to my bank account (no problem cashing out btw). That's 40000% in 6 month. So all of this is absolutely crazy. I don't believe this can go on forever. But until then, yes, party on. (I am using a throwaway for this - not being any careful, moderators should be able to easily track my other account if they want. I just don't want to associate my other account with this post.)
- hellbanner 9y ago
  Care to share general outlines of how your bots work?
  - ceejayoz 9y ago
    "Buy Bitcoin, hold Bitcoin, buy some more Bitcoin." It'll work until it suddenly doesn't.
- ericcholis 9y ago
  Without knowing your algorithms, is Bitcoin's 2,000% increase this year a heavy factor in your "win" rate. Or, are you confident in your logic that you can grow with a slower market?
- dzjkb 9y ago
  I was thinking about doing something similar as an experiment, do you have any good resources to get started?
coding123 9y ago
Yes, this. Of all the times I watched the price of bitcoin for the past 5 months closely, more closely than I watched my cursor in VSCode suck my laptop battery away. At first I noted a trend, where at 6 AM PST I would be able to make a buy and get out by 10 AM. I kept telling myself that its the new yorkers that got OUT because they were worried about the Pacific coasters waking up. Then the time shifted the next day, and I lost my "daily" shirt (the max I would promise to lose that day). Over time I noticed these periods of a week or so where the price would then become a bear market. And it was so easy to blame it on Dimon or some other Wal street junkie that said Bitcoin was doomed. Then these stopped lining up. Then some ICOs got pumped. Ether tanked while Bitcoin blew up. I started to think how unglued it all became from anything that Coindesk was saying. Coindesk always ended their prediction with "But if it ends up less than X then Y will happen" Basically making it so that hey, there's a chance this will happen instead and this is the secret clue. But nothing was lining up, it started to feel like the perfect storm where you know extremely experienced investors could lure the masses into pushing tones of coin after a large drop. Even with 1000 people rushing in after a 15% drop in the price that day, the week before the 15% drop meant the price was going to rocket. Not this week, this time, the price is going to drop another 10% the next day. Finally 3 days later, an amount of time that didn't coincide with ANY news and the price finally rose. By now most of those 1000 people had already cut their loses, but it was too late, whoever was jacking the price around already took their gains. And who cares about those 1000 people - the price is rocketing again. So I left when BTC was around 4.5k. I should have listened that you have to be in the long game. But even so, I absolutely agree with this article - the price is being controlled by some group - some secret group of well placed investors that have a set of companies that run bots across all exchanges. They will continue to do this forever because unlike a stock, a government can never control a crypto currency. It would require all governments to coordinate and make the same set of rules. It can all be subverted if one exchange can live outside of those rules.

runeks 9y ago

> Exchanges are not even prohibited from doing their own secret trades and using their own internal database and full knowledge of all other players. Are we sure about this? The two largest USD-exchanges are Coinbase/GDAX and Bitstamp, which operate out of California and London, respectively. If someone were to reveal that these exchanges were trading against their customers, are we sure that the authorities would be unwilling to press charges?

deleted 9y ago
[deleted]
Gys 9y ago
> If someone were to reveal that these exchanges were trading against their customers, are we sure that the authorities would be unwilling to press charges? Based on what ? Because some people might think that is immoral ? Trading in most things is not regulated. So there is no law to be broken, expect very basic ones (you have to deliver if you receive fiat money). If I have a trading platform in art, then I can still buy and sell for my private collection. Crypto coins are not different.
- lagadu 9y ago
  The difference is that GDAX is part of Coinbase, which is registered as a regular exchange under the New York DFS which puts them under the same regulations as non-crytop exchanges.
- lawlessone 9y ago
  >Because some people might think that is immoral ? No because they're actually laws and you can go to jail.
- dmichulke 9y ago
  > are we sure that the authorities would be unwilling to press charges? > Based on what ? Fraud?

paps 9y ago

> I think its also worth pointing out that less than 1000 entities owns 40% of the bitcoins. This is FUD. 1000 wallets own 40% of BTC. See here https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses....

sytelus 9y ago
Not sure what your link proves. In reality, no one knows if this statement to be true because addresses and wallets can be shared. There was a Bloomberg article with lots of interviews on this topic with people in crypto business and no one seem to deny this: https://news.ycombinator.com/item?id=15877838 https://news.ycombinator.com/item?id=15877838
g09980 9y ago
Many of these wallets are actually exchange cold storage wallets, so they hold the BTC but not per se "own" it
- Retric 9y ago
  In practical terms exchanges do own these bitcoins in that they a physically capable of trading them.
workthrowaway27 9y ago
You'd probably find that 40% of US equities are owned by fewer than 1000 asset managers as well, so I'm not sure that this is all that relevant. If Vanguard decided to liquidate their holdings overnight there would be pandemonium just as if these people decided to liquidate their BTC, but it's not going to happen in either case.

mitchellberry 9y ago

> worth pointing out that less than 1000 entities owns 40% of the bitcoins The fiat equivalent is saying 10 entities own most of the USD in the world. They are banks with liabilities holding money for others. Of all the bitcoin conspiracies it's provably false yet people somehow gravitate towards it. Do worry how easily people and especially journalists fall for this. Go click on the top 10 addresses in a chain explorer, please. They are all exchanges.

prostoalex 9y ago
There's a top-heavy concentration of ownership from the information that's been disclosed. * Satoshi Nakamoto's ownership is pegged at 1.5 mln bitcoins * Chamath Palihapitiya and Social Capital own "about 5% of all bitcoins out there", so 600,000 BTC as of today http://thisweekinstartups.com/chamath-palihapitiya-david-eun-scale/ http://thisweekinstartups.com/chamath-palihapitiya-david-eun... * Winklevoss twins have disclosed ownership of roughly 200,000 BTC when filing for a Bitcoin ETF https://www.coindesk.com/winklevoss-twins-plan-nasdaq-listing-for-bitcoin-etf-in-new-sec-filing/ https://www.coindesk.com/winklevoss-twins-plan-nasdaq-listin...

healsjnr1 9y ago

One thing in particular I dislike about this is that the author lumps all crypto currency into the same bucket. As the prime example of this, ethereum and Bitcoin could not be more different. Work done by groups such as 0x mean that these regulations can be enforced by public contacts. Sure, there is more work to be done, but the potential is to create decentralised exchanges that are safer and easier to regulate than existing Fiat exchanges. Bitcoin's recent price has been crazy even for crypto, but it is short sighted to lump all crypto currencies into the same bucket. This is a fast evolving field, lessons are being learned and better and better implementations are being built.

ufo 9y ago
Public contracts can't regulate USD trading though.
- wheelerwj 9y ago
  yes they can. written properly and with the right data, a smart contract can be very effective.
  - ac29 9y ago
    It doesn't matter how well a contract is written, if it comes into violation of US securities laws or other rules and regulations, it will be a problem in the US. I'd expect the number of crypto-related prosecutions to rise exponentially in the US as crypto markets have heated up. The various regulatory and law enforcement agencies generally work slowly, but they do work.
davidgerard 9y ago
In practical terms, the main point of interest in Ethereum is the price of Ether. The prime "decentralised" exchange is EtherDelta, which is completely decentralised except the absolute decentralisation of the website (deployable only as 2MB of minified JavaScript with the original source unavailable). I wrote about how well this approach works: https://davidgerard.co.uk/blockchain/2017/09/28/etherdelta-hack-malicious-javascript-in-a-contract-name-stealing-the-users-key/ https://davidgerard.co.uk/blockchain/2017/09/28/etherdelta-h... How decentralised can you make your "decentralised" exchange? There's not much point to "a bit decentralised".

wegschmeiss 9y ago

> Until then, party on Indeed. Earlier this year, mid-summer, I got curious about all this, so I decided to start an experiment, uploaded $100 to an exchange and started trading and programming against their API. Today, I am running fully automated bots which are winning, got about $25k in exchanges and cashed out about $15 to my bank account (no problem cashing out btw). That's 40000% in 6 month. So all of this is absolutely crazy. I don't believe this can go on forever. But until then, yes, party on. (I am using a throwaway for this - not being any careful, moderators should be able to easily track my other account if they want. I just don't want to associate my other account with this post.)

hellbanner 9y ago
Care to share general outlines of how your bots work?
- ceejayoz 9y ago
  "Buy Bitcoin, hold Bitcoin, buy some more Bitcoin." It'll work until it suddenly doesn't.
ericcholis 9y ago
Without knowing your algorithms, is Bitcoin's 2,000% increase this year a heavy factor in your "win" rate. Or, are you confident in your logic that you can grow with a slower market?
dzjkb 9y ago
I was thinking about doing something similar as an experiment, do you have any good resources to get started?

coding123 9y ago

Yes, this. Of all the times I watched the price of bitcoin for the past 5 months closely, more closely than I watched my cursor in VSCode suck my laptop battery away. At first I noted a trend, where at 6 AM PST I would be able to make a buy and get out by 10 AM. I kept telling myself that its the new yorkers that got OUT because they were worried about the Pacific coasters waking up. Then the time shifted the next day, and I lost my "daily" shirt (the max I would promise to lose that day). Over time I noticed these periods of a week or so where the price would then become a bear market. And it was so easy to blame it on Dimon or some other Wal street junkie that said Bitcoin was doomed. Then these stopped lining up. Then some ICOs got pumped. Ether tanked while Bitcoin blew up. I started to think how unglued it all became from anything that Coindesk was saying. Coindesk always ended their prediction with "But if it ends up less than X then Y will happen" Basically making it so that hey, there's a chance this will happen instead and this is the secret clue. But nothing was lining up, it started to feel like the perfect storm where you know extremely experienced investors could lure the masses into pushing tones of coin after a large drop. Even with 1000 people rushing in after a 15% drop in the price that day, the week before the 15% drop meant the price was going to rocket. Not this week, this time, the price is going to drop another 10% the next day. Finally 3 days later, an amount of time that didn't coincide with ANY news and the price finally rose. By now most of those 1000 people had already cut their loses, but it was too late, whoever was jacking the price around already took their gains. And who cares about those 1000 people - the price is rocketing again. So I left when BTC was around 4.5k. I should have listened that you have to be in the long game. But even so, I absolutely agree with this article - the price is being controlled by some group - some secret group of well placed investors that have a set of companies that run bots across all exchanges. They will continue to do this forever because unlike a stock, a government can never control a crypto currency. It would require all governments to coordinate and make the same set of rules. It can all be subverted if one exchange can live outside of those rules.