6 ms·

Before crying wolf, understand that bitcoin exchanges are unfortunately not battle hardened internet businesses. Two of the largest exchanges MtGox and bitstamp

by ashray 14y ago

Before crying wolf, understand that bitcoin exchanges are unfortunately not battle hardened internet businesses. Two of the largest exchanges MtGox and bitstamp are both under DDOS. This may be an attempt by someone to make a large buy at a cheaper price. Due to lack of trading, prices are going downward. However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one region in the world. Yes, the exchanges need to toughen up and it's sad that someone can manipulate prices so easily but bitcoin is still very geek centric and as long as geeks understand and hold their BTCs this can't succeed. Of course, now that regular people are jumping on the bandwagon it'll be interesting to see how events unfold..

ljlolel 14y ago
Agreed, it is geek centric both in terms of early adopters, people who will support this even under attacks, and people who build it: https://news.ycombinator.com/item?id=5526118 https://news.ycombinator.com/item?id=5526118
caissy 14y ago
I have been following BTC China along side MtGox, and it seems that BTC China is starting to fall also. Price was ¥1700 ($274) 15 minutes ago, and now it runs at ¥1,386.00 ($223). I'm still not sure if this is due to MtGox being DDOS or people panicking and selling everything.
- metachris 14y ago
  Other exchanges tend to tail MtGox.
pc86 14y ago
Is it possible to buy from MtGox at $200 and sell in BTC China shortly thereafter at $275? I know nothing about BTC.
- ashray 14y ago
  If you do have a verified account at both, yes, it should be fairly simple. As of now though it's unlikely that your trades will go through. Also, the price has started falling on BTC China as well.
  - SODaniel 14y ago
    Yeah but you need to perform the sales with matching funds on both trading platforms. Selling here and transferring BTC/USD to another trading platform is not the method due to the swings and time for verification.
- Jtsummers 14y ago
  Once the transaction is processed and you have your BTC, then yes. I don't know how fast MtGox releases BTC from the wallets they control though (or similarly, how long it takes BTC China to give you access via their controlled wallets).
- ihsw 14y ago
  As others have stated due to the DDOS your trades will have low likelihood of going through (in fact some people may be doing this as we speak).
- suhastech 14y ago
  In theory, yes. It happens even in the real world. http://en.wikipedia.org/wiki/Arbitrage http://en.wikipedia.org/wiki/Arbitrage
- quinndupont 14y ago
  Yup, the arbitrage opportunities are real. Just yesterday the Canadian exchange (cavirtex) was trading $40CAD/BTC higher than MtGox (CAD); if you had an account with both, and free money to spare, you could take a handsome profit (minus fees, usually around 3% each, so 6% roundtrip)
  - pbhjpbhj 14y ago
    Doesn't that cause the currency to collapse - only limited by the transaction rate? With no transaction limit you can pump for infinite BTC. If I can do one transaction per minute for an hour at 6% return that's 10 BTC -> 370 BTC using standard compound interest formula. In 10 hours you're a quadrillionaire. Edit: of course it's limited by the trades available ...
vader1 14y ago
It's not just MtGox and bitstamp. Pretty much every other exchange, as well as bitcointalk.org and trackers like bitcoinity are under attack simultaneously. It's a pretty obvious attempt at manipulating the market by causing widespread panic, so that the attackers can buy in at a conveniently low price the moment the attack is halted.
- knowaveragejoe 14y ago
  How can you confirm this?
- gruseom 14y ago
  A genuine crash in which everyone was trying to sell at once might look like a DDoS. How do you know this is not that? (No opinion, just curious.)
  - ashray 14y ago
    All bitcoin sites, whether they are forums or exchanges went down. It was a widespread DDOS on pretty much anything bitcoin related. For example: bitcointalk.org was also down.
    - knowaveragejoe 14y ago
      That still does not verify beyond a reasonable doubt that there was a widespread DDoS on "pretty much anything bitcoin related". Can you please explain why such attackers would bother spreading their DDoS volume across such a wide range of sites instead of focusing it on the one site that handles 80% of btc <-> usd conversions?
      - ashray 14y ago
        What exactly causes reasonable doubt here ? If 80% of bitcoin sites unrelated to each other are down at once, there's obviously some sort of attack going on. Several unrelated sites (but sharing a common theme) don't normally go down ... unless there's an Amazon outage :P (which there wasn't..). The question was, whether the DDOS was caused by a large volume of trades. The answer is, no, because there wasn't a larger than normal volume of trades occurring, it wasn't possible due to the lag on the exchanges. I don't know why all those bitcoin sites were down, but the fact is that the largest bitcoin sites were all down for at least a few minutes each. The intention though was probably to trigger a market reaction to buy in at lower prices. It appears to have worked temporarily.
chollida1 14y ago
> However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one region in the world. Bitcoin does have alot of advantages over existing currencies it, but this isn't one of them. I can buy and sell USD/CAD/AUE/GBP in many markets around the world
- ashray 14y ago
  Yes, but that's because those governments have allowed their currencies to be free float currencies or something like that. Buying and selling an Indian Rupee for example is quite heavily restricted. Probably to prevent instability caused from speculation. BTC never had that from the start because it's pretty much unregulated from the get go.
  - tatsuke95 14y ago
    >"However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one region in the world." This is a flaw, not a benefit. I want to know what the value of my BTC are. Not what they are here, vs China, vs Canada, vs Australia... >"Buying and selling an Indian Rupee for example is quite heavily restricted. " What do you mean, "quite heavily restricted"? It's far harder for me to buy BTC, especially with these ongoing issues, than it is to buy Rupees in my forex account.
    - ashray 14y ago
      The Indian rupee is not a free float currency. That means that the reserve bank of India tries to make sure it doesn't fluctuate too much in value. While India is trying to move the currency towards free float, it isn't done yet. Basically, if anyone tries to speculate large amounts in rupees, the reserve bank will try to prevent fluctuations by speculating as well, or placing some sort of controls. This happened last year when the rupee started crashing and lost about 20%. http://en.wikipedia.org/wiki/List_of_countries_with_floating_currencies http://en.wikipedia.org/wiki/List_of_countries_with_floating... In that respect BTC is similar to the USD/Euro/etc. Also, Indian citizens are pretty heavily restricted from selling large amounts of rupees for dollars, etc. You need a lot of permissions and clearances for large amounts. (>$1M equivalent, earlier the limit used to be $1000!!)
deleted 14y ago
[deleted]
smrtinsert 14y ago
Those people who converted their USD to BTC yesterday just got screwed. If only there were a central authority to regulate bitcoins volatility. oh wait...
- Cthulhu_ 14y ago
  Those that cashed in, though, are in the money. Even if they bought a few days ago, they still made a 33% markup. And the real winner is the exchange, who takes a certain percentage for each transaction.
- frabcus 14y ago
  Not necessarily. They might have bought to hold - expecting BTC to be worth more in a year. Not caring about day-to-day fluctuations. That will depend on fundamentals - is it being used as a trading currency or store of value currency by millions of people for a long period, or not?
jvm 14y ago
> However, BTC China is still trading at above $275 Spreads for fungible commodities are generally not good. They mean that either a) somebody is getting massively screwed by paying a price that's way off the mark, or b) nobody's actually trading, which means the asset is illiquid. That is, unless there is some real reason why a BTC should be worth double in China what it is in the US.
- crgt 14y ago
  Perhaps a pseudoanonymous currency's value is correlated with the oppressiveness of the local govt? I can imagine circumstances where someone might be willing to pay a premium for BTC solely based on their desire for the privacy of their transactions.
  - jvm 14y ago
    But even if they are willing to pay a premium, at a $100 spread there should be a lot of traders willing to jump into the market which would close the gap, unless they are prevented from doing so. If there are capital controls they are surely on USD not BTC, so if anything USD should be more valuable within China.

by ashray 14y ago

ljlolel 14y ago

Agreed, it is geek centric both in terms of early adopters, people who will support this even under attacks, and people who build it: https://news.ycombinator.com/item?id=5526118 https://news.ycombinator.com/item?id=5526118

caissy 14y ago

I have been following BTC China along side MtGox, and it seems that BTC China is starting to fall also. Price was ¥1700 ($274) 15 minutes ago, and now it runs at ¥1,386.00 ($223). I'm still not sure if this is due to MtGox being DDOS or people panicking and selling everything.

metachris 14y ago
Other exchanges tend to tail MtGox.

pc86 14y ago

Is it possible to buy from MtGox at $200 and sell in BTC China shortly thereafter at $275? I know nothing about BTC.

ashray 14y ago
If you do have a verified account at both, yes, it should be fairly simple. As of now though it's unlikely that your trades will go through. Also, the price has started falling on BTC China as well.
- SODaniel 14y ago
  Yeah but you need to perform the sales with matching funds on both trading platforms. Selling here and transferring BTC/USD to another trading platform is not the method due to the swings and time for verification.
Jtsummers 14y ago
Once the transaction is processed and you have your BTC, then yes. I don't know how fast MtGox releases BTC from the wallets they control though (or similarly, how long it takes BTC China to give you access via their controlled wallets).
ihsw 14y ago
As others have stated due to the DDOS your trades will have low likelihood of going through (in fact some people may be doing this as we speak).
suhastech 14y ago
In theory, yes. It happens even in the real world. http://en.wikipedia.org/wiki/Arbitrage http://en.wikipedia.org/wiki/Arbitrage
quinndupont 14y ago
Yup, the arbitrage opportunities are real. Just yesterday the Canadian exchange (cavirtex) was trading $40CAD/BTC higher than MtGox (CAD); if you had an account with both, and free money to spare, you could take a handsome profit (minus fees, usually around 3% each, so 6% roundtrip)
- pbhjpbhj 14y ago
  Doesn't that cause the currency to collapse - only limited by the transaction rate? With no transaction limit you can pump for infinite BTC. If I can do one transaction per minute for an hour at 6% return that's 10 BTC -> 370 BTC using standard compound interest formula. In 10 hours you're a quadrillionaire. Edit: of course it's limited by the trades available ...

vader1 14y ago

It's not just MtGox and bitstamp. Pretty much every other exchange, as well as bitcointalk.org and trackers like bitcoinity are under attack simultaneously. It's a pretty obvious attempt at manipulating the market by causing widespread panic, so that the attackers can buy in at a conveniently low price the moment the attack is halted.

knowaveragejoe 14y ago
How can you confirm this?
gruseom 14y ago
A genuine crash in which everyone was trying to sell at once might look like a DDoS. How do you know this is not that? (No opinion, just curious.)
- ashray 14y ago
  All bitcoin sites, whether they are forums or exchanges went down. It was a widespread DDOS on pretty much anything bitcoin related. For example: bitcointalk.org was also down.
  - knowaveragejoe 14y ago
    That still does not verify beyond a reasonable doubt that there was a widespread DDoS on "pretty much anything bitcoin related". Can you please explain why such attackers would bother spreading their DDoS volume across such a wide range of sites instead of focusing it on the one site that handles 80% of btc <-> usd conversions?
    - ashray 14y ago
      What exactly causes reasonable doubt here ? If 80% of bitcoin sites unrelated to each other are down at once, there's obviously some sort of attack going on. Several unrelated sites (but sharing a common theme) don't normally go down ... unless there's an Amazon outage :P (which there wasn't..). The question was, whether the DDOS was caused by a large volume of trades. The answer is, no, because there wasn't a larger than normal volume of trades occurring, it wasn't possible due to the lag on the exchanges. I don't know why all those bitcoin sites were down, but the fact is that the largest bitcoin sites were all down for at least a few minutes each. The intention though was probably to trigger a market reaction to buy in at lower prices. It appears to have worked temporarily.

chollida1 14y ago

> However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one region in the world. Bitcoin does have alot of advantages over existing currencies it, but this isn't one of them. I can buy and sell USD/CAD/AUE/GBP in many markets around the world

ashray 14y ago
Yes, but that's because those governments have allowed their currencies to be free float currencies or something like that. Buying and selling an Indian Rupee for example is quite heavily restricted. Probably to prevent instability caused from speculation. BTC never had that from the start because it's pretty much unregulated from the get go.
- tatsuke95 14y ago
  >"However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one region in the world." This is a flaw, not a benefit. I want to know what the value of my BTC are. Not what they are here, vs China, vs Canada, vs Australia... >"Buying and selling an Indian Rupee for example is quite heavily restricted. " What do you mean, "quite heavily restricted"? It's far harder for me to buy BTC, especially with these ongoing issues, than it is to buy Rupees in my forex account.
  - ashray 14y ago
    The Indian rupee is not a free float currency. That means that the reserve bank of India tries to make sure it doesn't fluctuate too much in value. While India is trying to move the currency towards free float, it isn't done yet. Basically, if anyone tries to speculate large amounts in rupees, the reserve bank will try to prevent fluctuations by speculating as well, or placing some sort of controls. This happened last year when the rupee started crashing and lost about 20%. http://en.wikipedia.org/wiki/List_of_countries_with_floating_currencies http://en.wikipedia.org/wiki/List_of_countries_with_floating... In that respect BTC is similar to the USD/Euro/etc. Also, Indian citizens are pretty heavily restricted from selling large amounts of rupees for dollars, etc. You need a lot of permissions and clearances for large amounts. (>$1M equivalent, earlier the limit used to be $1000!!)

deleted 14y ago

[deleted]

smrtinsert 14y ago

Those people who converted their USD to BTC yesterday just got screwed. If only there were a central authority to regulate bitcoins volatility. oh wait...

Cthulhu_ 14y ago
Those that cashed in, though, are in the money. Even if they bought a few days ago, they still made a 33% markup. And the real winner is the exchange, who takes a certain percentage for each transaction.
frabcus 14y ago
Not necessarily. They might have bought to hold - expecting BTC to be worth more in a year. Not caring about day-to-day fluctuations. That will depend on fundamentals - is it being used as a trading currency or store of value currency by millions of people for a long period, or not?

jvm 14y ago

> However, BTC China is still trading at above $275 Spreads for fungible commodities are generally not good. They mean that either a) somebody is getting massively screwed by paying a price that's way off the mark, or b) nobody's actually trading, which means the asset is illiquid. That is, unless there is some real reason why a BTC should be worth double in China what it is in the US.

crgt 14y ago
Perhaps a pseudoanonymous currency's value is correlated with the oppressiveness of the local govt? I can imagine circumstances where someone might be willing to pay a premium for BTC solely based on their desire for the privacy of their transactions.
- jvm 14y ago
  But even if they are willing to pay a premium, at a $100 spread there should be a lot of traders willing to jump into the market which would close the gap, unless they are prevented from doing so. If there are capital controls they are surely on USD not BTC, so if anything USD should be more valuable within China.