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It's about having the ability to run a one-time-only unit test against Bitcoin. Yes, there's all sorts of ways to cash out, that's fine. I want to run a specifi

It's about having the ability to run a one-time-only unit test against Bitcoin. Yes, there's all sorts of ways to cash out, that's fine. I want to run a specific at-scale load test, a resilience challenge, to be run against Bitcoin. Can one person succeed at a serious and dedicated effort to withdraw twelve billion dollars USD from Bitcoin at once? If it succeeds, cool. If it fails, it'll be spectacular. Let's do it. (To me, success is "they get a few billion dollars USD out and bitcoin doesn't crash".)

gruez 5y ago
>Can one person succeed at a serious and dedicated effort to withdraw thirty billion dollars USD from Bitcoin at once? This seems pretty easy to test. Just go through all the exchanges and sum up their orderbooks. No need to actually test with 259684 BTC and lose a bunch of money through slippage.
- olliepop 5y ago
  Assuming those order-books are legitimate. @Bitfinexed (https://twitter.com/Bitfinexed https://twitter.com/Bitfinexed) would argue that order books based on USDT (Tether) are not, and either the rug would be pulled or you will quickly find that you're holding ~2% of filled value (actual backed Tether)
  - askmike 5y ago
    There are many big trading firms trading billions a day willing to do the tether leg for you if you don't trust it yourself (they will take the risk), but a sale like this wouldn't happen at once anyway.
- askmike 5y ago
  Most money in the orderbooks is from HFT MMs, if you start selling on Binance the bids on Huobi/OKEx/etc will dissappear, most likely before you can buy (correction: sell) all. If you want to sell this much you really do not do it on screen (and definitely not at once). You get a big OTC desk to sell in tranches.
ganafagol 5y ago
Not sure this is meaningful. It's similar to asking "I wonder if the stock market could cope with Elon Musk dumping all his Tesla shares at once. Do it!" Of course the stock would crash. Of course it would create a panic among not just Tesla shareholders but investors across the board. Of course the FTC would go and try countermeasures. And similarly, of course BTC would crash, at least temporarily. It's still a market with human actors in it.
- floatingatoll 5y ago
  Correct! But unlike the Tesla example, Bitcoin doesn’t have an FTC, with market-stabilizing abilities and procedures and tripwires. What does that mean in reality for large asset holders, for market stability, for relative safety of investment? What would Ethereum do in this scenario that Bitcoin cannot do? Is it irrelevant that Bitcoin can’t regulate these things and everything would be fine?
porknubbins 5y ago
Ok, but that would just nuke every order book to 0 and tell us nothing about Bitcoin since trading to USD is completely external to Bitcoin the protocol. Do you understand how markets normally work and just want to see the world burn? Or in the words of Steve Zissou “what would be the scientific purpose of killing it?” “…revenge”
- floatingatoll 5y ago
  If Bitcoin crashes when any single person sells a billion dollars of bitcoin at once, then what is the true valuation of their ownings after the 'this is too large to cash out' problems take their cut? What is the true value of anyone's holdings? This is often not a problem for fiat currencies, they have an entire financial sector dedicated to buying and selling a billion dollars at a time. They are slightly demanding from a regulatory perspective, relative to Bitcoin, but they also do usually try not to crash the currency and they do sometimes get it done. So I consider that ability to cash out a billion dollars at once a direct spot-check measure of Bitcoin's financial maturity. If this is actually possible to transact at all, then it proves something competitive and positive about Bitcoin, even if it's as much about currency exchange and financial instrumentation businesses as it is the blockchain. I think it is unavoidable that we'll evaluate this through a real-world event, what with one of those exchanges having IPO'd recently. I'd just like it to be an intentional test rather than a surprise, from someone who isn't trying to destroy the world, but does require detailed financial records and a written declaration of insolvency in order to forgive payment.
  - porknubbins 5y ago
    I’m not quite clear what other fiat market you’re comparing BTC to but lets say there are at least some with extremely deep liquidity like USD/EUR where you can do 1B trades all day without crushing the order book. I’m not sure its a knock against BTC that it doesn’t behave the same. For example I think you definitely would need some finesse to sell 1B gold without major slippage, but this is just the nature of markets for anything. You can never just dump a significant percentage of anything, even USD without distorting price. On the other hand I have no doubt you could realize nearly all of 1B in BTC using proper trading strategies/algorithms over days or weeks, so I don’t see what would be learned from the test except “how deep is BTC liquidity currently” which is kind of what the market is trying to determine all the time anyway.
ohyes 5y ago
That’s not how the smart money sells a large amount of any asset. There’s plenty of proof that this will either temporarily crater the market (if selling it all by filling any open orders) or take an eternity to execute. That’s just how things traded on exchanges work and it tells us nothing about Bitcoin itself.

gruez 5y ago

>Can one person succeed at a serious and dedicated effort to withdraw thirty billion dollars USD from Bitcoin at once? This seems pretty easy to test. Just go through all the exchanges and sum up their orderbooks. No need to actually test with 259684 BTC and lose a bunch of money through slippage.

olliepop 5y ago
Assuming those order-books are legitimate. @Bitfinexed (https://twitter.com/Bitfinexed https://twitter.com/Bitfinexed) would argue that order books based on USDT (Tether) are not, and either the rug would be pulled or you will quickly find that you're holding ~2% of filled value (actual backed Tether)
- askmike 5y ago
  There are many big trading firms trading billions a day willing to do the tether leg for you if you don't trust it yourself (they will take the risk), but a sale like this wouldn't happen at once anyway.
askmike 5y ago
Most money in the orderbooks is from HFT MMs, if you start selling on Binance the bids on Huobi/OKEx/etc will dissappear, most likely before you can buy (correction: sell) all. If you want to sell this much you really do not do it on screen (and definitely not at once). You get a big OTC desk to sell in tranches.

ganafagol 5y ago

Not sure this is meaningful. It's similar to asking "I wonder if the stock market could cope with Elon Musk dumping all his Tesla shares at once. Do it!" Of course the stock would crash. Of course it would create a panic among not just Tesla shareholders but investors across the board. Of course the FTC would go and try countermeasures. And similarly, of course BTC would crash, at least temporarily. It's still a market with human actors in it.

floatingatoll 5y ago
Correct! But unlike the Tesla example, Bitcoin doesn’t have an FTC, with market-stabilizing abilities and procedures and tripwires. What does that mean in reality for large asset holders, for market stability, for relative safety of investment? What would Ethereum do in this scenario that Bitcoin cannot do? Is it irrelevant that Bitcoin can’t regulate these things and everything would be fine?

porknubbins 5y ago

Ok, but that would just nuke every order book to 0 and tell us nothing about Bitcoin since trading to USD is completely external to Bitcoin the protocol. Do you understand how markets normally work and just want to see the world burn? Or in the words of Steve Zissou “what would be the scientific purpose of killing it?” “…revenge”

floatingatoll 5y ago
If Bitcoin crashes when any single person sells a billion dollars of bitcoin at once, then what is the true valuation of their ownings after the 'this is too large to cash out' problems take their cut? What is the true value of anyone's holdings? This is often not a problem for fiat currencies, they have an entire financial sector dedicated to buying and selling a billion dollars at a time. They are slightly demanding from a regulatory perspective, relative to Bitcoin, but they also do usually try not to crash the currency and they do sometimes get it done. So I consider that ability to cash out a billion dollars at once a direct spot-check measure of Bitcoin's financial maturity. If this is actually possible to transact at all, then it proves something competitive and positive about Bitcoin, even if it's as much about currency exchange and financial instrumentation businesses as it is the blockchain. I think it is unavoidable that we'll evaluate this through a real-world event, what with one of those exchanges having IPO'd recently. I'd just like it to be an intentional test rather than a surprise, from someone who isn't trying to destroy the world, but does require detailed financial records and a written declaration of insolvency in order to forgive payment.
- porknubbins 5y ago
  I’m not quite clear what other fiat market you’re comparing BTC to but lets say there are at least some with extremely deep liquidity like USD/EUR where you can do 1B trades all day without crushing the order book. I’m not sure its a knock against BTC that it doesn’t behave the same. For example I think you definitely would need some finesse to sell 1B gold without major slippage, but this is just the nature of markets for anything. You can never just dump a significant percentage of anything, even USD without distorting price. On the other hand I have no doubt you could realize nearly all of 1B in BTC using proper trading strategies/algorithms over days or weeks, so I don’t see what would be learned from the test except “how deep is BTC liquidity currently” which is kind of what the market is trying to determine all the time anyway.

ohyes 5y ago

That’s not how the smart money sells a large amount of any asset. There’s plenty of proof that this will either temporarily crater the market (if selling it all by filling any open orders) or take an eternity to execute. That’s just how things traded on exchanges work and it tells us nothing about Bitcoin itself.