4 ms·

Faking volume is an issue with exchanges, not Bitcoin. Exchanges are in the business of trading. They have incentives to transact Bitcoin. Bull market produces

Faking volume is an issue with exchanges, not Bitcoin. Exchanges are in the business of trading. They have incentives to transact Bitcoin. Bull market produces more volume. Bear market has less volume. I take this as most Bitcoin people now are HODLers. They actually see it as a Store of Value. With this research, the Bitcoin ETF group is telling SEC: Our ETF will better than other exchanges. Please approve.

bduerst 8y ago
True, but when 88% of the large ($1M+) exchanges and 95% of transactions are mostly fake volume, that's reflective of Bitcoin as a whole, wouldn't you say?
- aey 8y ago
  No, because these fake transactions occur of-chain, in a database managed by the exchange.
  - arcticbull 8y ago
    In part because there’s no capacity on chain. Off chain solutions are the thing y’all are into these days aren’t they?
    - aey 8y ago
      100%! There are on-chain scaling projects in the works though.
      - arcticbull 8y ago
        Such as? There’s no plan to increase block size and LN is off-chain. I haven’t heard of any other credible plans.
        aey 8y ago
        I am working on one https://github.com/solana-labs/solana https://github.com/solana-labs/solana But also take a look at the most promising sharding project: https://github.com/nearprotocol/nearcore https://github.com/nearprotocol/nearcore Two complete different approaches.
- coralreef 8y ago
  What does it say about Bitcoin or cryptocurrency? To me it shows that: 1) Anyone can start an exchange (unregulated market) 2) Some exchanges are shady and untrustworthy It's not that "most transactions are fake volume". Its that if you aggregate the data, you include a lot of bad data.
  - bduerst 8y ago
    Also true, but these are not long-tail new entry exchanges or even just "some" exchanges, they're the vast majority of major $1M+ exchanges. I think you misread/misquoted me. It's that 85% of the major exchanges are mostly fake volume, and that 95% of all transactions are fake volume. It's in the article.
    - coralreef 8y ago
      Can you cite the 85% figure? Was not able to see it here: https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...
    - kbody 8y ago
      Personally I consider major exchanges those that have had solid public presence for several years, with public executives and in general their actions. So, it's not 85% of the major exchanges, it's 85% of the exchanges top ranked by CMC's volume as reported by the exchanges themselves. Anyone could create an illusion of an exchange and do a fake-generated behemoth of an exchange within a couple months. The majority of the top-ranked CMC exchanges are just fake-volume generators making money from all those ICO tokens/altcoins that hope that getting listed will help their price, or most commonly just sell more of their tokens to more uninformed victims. For most of those exchanges you can't even find a single human name throughout their site. There was a big rise of using white-label crypto-exchange products, so you don't need much to get one of those online, they even provide "liquidity" network. It's a shitshow, but it's irrelevant or a useless detail to bitcoin's value and trading, most big firms like DRW/Cumberland etc. breath this things and I'm sure they have talked to their SEC buddies about it.
- ohbleek 8y ago
  If I may, let me apply your comment to something else: 50% of phone calls made each day in the US are fake robocalls, that’s reflective of the phone system as a whole, wouldn’t you say? The fake volume may be reflective of bitcoin price or the lack of regulation of bitcoin exchanges but I don’t think thenfake volume is reflective of bitcoin as a whole.
  - jsjohnst 8y ago
    > 50% of phone calls made each day in the US are fake robocalls, that’s reflective of the phone system as a whole, wouldn’t you say? Yes, it is reflective of the phone system. If the phone system had appropriate safe guards to prevent faking of ANI data and other abuse prevention mechanisms, robocalling wouldn’t be an issue. I’ll leave it to others to decide if you picked a bad analogy or if you just proved the point of GP, I’ve got no skin in that game and don’t care.
  - bduerst 8y ago
    >50% of phone calls made each day in the US are fake robocalls, that’s reflective of the phone system as a whole, wouldn’t you say? Yes, I would! I think that deregulation has enabled the phone system to become a terrible system. That's not a good analogy if you were trying to prove the opposite.
  - arcticbull 8y ago
    Oh absolutely. It’s because nobody uses phones anymore for calling each other, so the malicious use cases account for a massively disproportionate amount of network use. Just like Bitcoin. If the phone system keeps trending as it is, people will shut off service and it’ll eventually disappear.
arcticbull 8y ago
Store of whats left of its value. If AAPL shares went down to $8 or gold hit $120/oz nobody would be yelling about how great a store of value they are. Bitcoin holds its value about as well as an egg salad sandwich in the hot summer.
- easymodex 8y ago
  >Store of whats left of its value. It went down to 4k after going from 2k to 18k. Doesn't seem bad to me. Are you trying to imply gold price doesn't fluctuate like that? It has also had 90 drops from ath and back up and so on.

bduerst 8y ago

True, but when 88% of the large ($1M+) exchanges and 95% of transactions are mostly fake volume, that's reflective of Bitcoin as a whole, wouldn't you say?

aey 8y ago
No, because these fake transactions occur of-chain, in a database managed by the exchange.
- arcticbull 8y ago
  In part because there’s no capacity on chain. Off chain solutions are the thing y’all are into these days aren’t they?
  - aey 8y ago
    100%! There are on-chain scaling projects in the works though.
    - arcticbull 8y ago
      Such as? There’s no plan to increase block size and LN is off-chain. I haven’t heard of any other credible plans.
      - aey 8y ago
        I am working on one https://github.com/solana-labs/solana https://github.com/solana-labs/solana But also take a look at the most promising sharding project: https://github.com/nearprotocol/nearcore https://github.com/nearprotocol/nearcore Two complete different approaches.
coralreef 8y ago
What does it say about Bitcoin or cryptocurrency? To me it shows that: 1) Anyone can start an exchange (unregulated market) 2) Some exchanges are shady and untrustworthy It's not that "most transactions are fake volume". Its that if you aggregate the data, you include a lot of bad data.
- bduerst 8y ago
  Also true, but these are not long-tail new entry exchanges or even just "some" exchanges, they're the vast majority of major $1M+ exchanges. I think you misread/misquoted me. It's that 85% of the major exchanges are mostly fake volume, and that 95% of all transactions are fake volume. It's in the article.
  - coralreef 8y ago
    Can you cite the 85% figure? Was not able to see it here: https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...
  - kbody 8y ago
    Personally I consider major exchanges those that have had solid public presence for several years, with public executives and in general their actions. So, it's not 85% of the major exchanges, it's 85% of the exchanges top ranked by CMC's volume as reported by the exchanges themselves. Anyone could create an illusion of an exchange and do a fake-generated behemoth of an exchange within a couple months. The majority of the top-ranked CMC exchanges are just fake-volume generators making money from all those ICO tokens/altcoins that hope that getting listed will help their price, or most commonly just sell more of their tokens to more uninformed victims. For most of those exchanges you can't even find a single human name throughout their site. There was a big rise of using white-label crypto-exchange products, so you don't need much to get one of those online, they even provide "liquidity" network. It's a shitshow, but it's irrelevant or a useless detail to bitcoin's value and trading, most big firms like DRW/Cumberland etc. breath this things and I'm sure they have talked to their SEC buddies about it.
ohbleek 8y ago
If I may, let me apply your comment to something else: 50% of phone calls made each day in the US are fake robocalls, that’s reflective of the phone system as a whole, wouldn’t you say? The fake volume may be reflective of bitcoin price or the lack of regulation of bitcoin exchanges but I don’t think thenfake volume is reflective of bitcoin as a whole.
- jsjohnst 8y ago
  > 50% of phone calls made each day in the US are fake robocalls, that’s reflective of the phone system as a whole, wouldn’t you say? Yes, it is reflective of the phone system. If the phone system had appropriate safe guards to prevent faking of ANI data and other abuse prevention mechanisms, robocalling wouldn’t be an issue. I’ll leave it to others to decide if you picked a bad analogy or if you just proved the point of GP, I’ve got no skin in that game and don’t care.
- bduerst 8y ago
  >50% of phone calls made each day in the US are fake robocalls, that’s reflective of the phone system as a whole, wouldn’t you say? Yes, I would! I think that deregulation has enabled the phone system to become a terrible system. That's not a good analogy if you were trying to prove the opposite.
- arcticbull 8y ago
  Oh absolutely. It’s because nobody uses phones anymore for calling each other, so the malicious use cases account for a massively disproportionate amount of network use. Just like Bitcoin. If the phone system keeps trending as it is, people will shut off service and it’ll eventually disappear.

arcticbull 8y ago

Store of whats left of its value. If AAPL shares went down to $8 or gold hit $120/oz nobody would be yelling about how great a store of value they are. Bitcoin holds its value about as well as an egg salad sandwich in the hot summer.

easymodex 8y ago
>Store of whats left of its value. It went down to 4k after going from 2k to 18k. Doesn't seem bad to me. Are you trying to imply gold price doesn't fluctuate like that? It has also had 90 drops from ath and back up and so on.