Are you looking at BitcoinWisdom?

The USD equivalent of Chinese prices is computed using some currency exchange rate.  IIRC, BitcoinWisdom was obtaining the exchange rate from some standard site like Google or Yahoo.  However, BitcoinWisdom's owner seems to be rather absent of late: he hasn't logged on bitcointalk since 2015-08-27, and his most recent post was on 2015-07-14.  

So, maybe the CNY:USD exchange rate is out of date. The CNY was recently devaluated, so that may explain the apparent discrepancy between Chinese and Western prices.

According to his previous post, he seems to have succumbed to the Second Version Syndrome, a severe and often fatal occupational disease of software developers.


EDIT: according to this chart, the yuan dropped relative to the dollar from 1:6.21 to 1:6.40 between 2015-08-09 and 2015-08-13.  It then recovered a bit, gradually, to 1:6.35, and today had a sudden jump to 1:6.32.

A curious observation by a redditor:

https://np.reddit.com/r/Bitcoin/comments/3qupwd/what_is_this_huobi_volumes_go_dead_when_okcoin/


Could Huobi's volume drop be just natural reaction to that drop in price?

There must be efficient arbitrage between the two exchanges, possibly run by the exchanges themselves (who have the most up-to-date view of the order books).  Usually their prices match to within 1-2 yuan, but during this rally Huobi seemed to be leading by a good margin, so arbitrage was probably running at full capacity.  Could that explain the volume drop when OKCoin went offline?

Thanks for the links.  I don't like The Economist at all (I see it as the Hustler of bankers), but I may make an exception this time, for the sake of Science.

I didn't read the article, but this alleged quote was posted on another forum:

During rallies price does not increase as a pure exponential, like P(t) = A*B^(t-t0).  If it did, it would make a straight line on log-scale plots. 

The price does seem to grow exponentially during rallies, but starting on top of the previous base price: something like P(t) = A*B"(t-t0) + C.   The graph of that would still curve up like an exponential at first, even on a log-scale plot.  The log plot will begin to straighten out only after the first term gets much bigger than C.

In this case C is about $220, so the log-scale plot may straighten out only if and when the price hits $500 or so.

I remember that article: it is an example of the hopes that fueled the Jun-Aug bubble.  In fact it came out on 2015-08-18, just when the bubble had finished deflating. 

In this previous article from 2-15-07-01, that guy -- the owner of the only exchange in Greece -- claims that volume went up 400% in June and the number of users inceased 600%.  He does not give any absolute numbers, and there are no numbers at all in the second article.  So it is quite possible that his user base grew from 1 to 7 in June and did not grow much after that...

If those 1000 BTMs were indeed deployed, I wonder how many of them paid off the transportation cost...

The exchange is still active, but it was hardly mentioned on the net after that 2015-08-18 article.

I don't know much about international trade, but I believe that China still has a huge trade surplus -- it still exports more than it imports (including bitcoins).   Google tells me that the surplus dropped some 5-10% this year, but it is still hugely positive for China.  Isn't that so?  Then what controls would their government impose?

I don't think that the Chinese would invest in bitcoin as a way to escape a devaluation of the CNY, either.  What magnitude of devaluation is expected?

For one thing, bitcoin is not seen by non-bitcoiners as a solution for capital controls.   In Greece, there was zero interest in bitcoin during the crisis. 

I still find that the MMM ponzi (and copycats) is the most plausible explanation for the rise of the past few days.

But this current sprint seems to be too fast to be due to MMM alone.  

Perhaps some Chinese know something (true or false) that the rest of the world doesn't know yet.

It does not seem to be a repeat of the Jun-Aug Greek bubble -- that is, Westerners buying on the mistaken belief that the Chinese will rush to bitcoin as a hedge against some Chinese crisis.  The Chinese exchanges are leading this time.

But it may be simply a speculative frenzy: people buying like crazy just because they see the price shooting up, without knowing why, or caring to.

Where are you seeing that? At Bitfinex (Hong Kong)? At the Chinese echanges?

Apparently Mavrodi's ponzi (and Chinese copycats) are most popular in China.  (Recall the MyCoin ponzi in HK, earlier this year? There seems to be a rich "market" for such things there.)  Chinese victims are of course going to buy their bitcoins on Chinese exchanges, during Chinese day/evening time.


Of course this is not the first MMM mega-ponzi, but this time seems to be different because he is using bitcoin to make victims all over the world, without himself being established in any country.  This ponzi promises to be bigger, longer lived, and much more difficult to stop than the previous fiat-based ones.

Correct me if I am wrong, but I am assuming that the payouts too are in bitcoin (or in Mavros); and the victims are likely to keep or re-invest their payouts in the ponzi.  So I don't expect to see a "cash-out" any time soon.  There may be a big bitcoin sale after the ponzi collapses, if and when Mavrodi and his asssociates decide to cash out.


That is a possibilty, but only if the thing gets really big.  In the nov/2013 rally, the Chinese traders imported perhaps a billion USD worth of bitcoins, which would have meant putting that much CNY in foreign hands -- all without government knowledge, licenses, custom taxes, etc.  In retrospect, the dec/2013 decree was a natural reaction to that huge "contraband" activity.  

Mavrodi's ponzi may bring back that scenario.  However there are some differences: this time there are tons of bitcoins in the hands of Chinese citizens, so the cross-border flow of CNY may be smaller, since the Chinese victims will mostly buy their coins from Chinese holders.  Or may even be positive for China, if foreigners buy coins from the Chinese.

The MMM ponzi has pages in other languages and (thanks to bitcoin) can make victims everywhere, not just in one country.  OKCoin's CEO just confirmed that they are seeing buying pessure connected to MMM and several copycat ponzis in China.

Does he pay out in money? I would expect him to pay out in bitcoin too, for the same reason that he takes bitcoin.

Many of the victims will surely re-invest all their payouts in the scheme, and then add some more money.

Thus the net effect of the ponzi should be to lock up increasing amounts of bitcoin in (a) the members' accounts, (b) in transit, and (c) in Mavrodi's deep pockets.

The MtGOX bankruptcy trustee has been publishing his status reports, including expenses, at www.mtgox.com.  The PDF documents are in Japanese, but there is usually a good (but non-official) English translation at the end of each document. 

I would guess that he and the various experts will be quite happy with their fees, but even so the majority of the money and bitcoins that are left will be distributed.

As others have pointed out, the total claims filed by the victims far exceed what MtGOX ever held.  The original deadline for validating the claims has been postponed; the new date is somewhere in that website.

The trustee is still trying to recover money that Mark loaned to himself and his other companies.  He has requested their forced bankruptcy.  I don't expect there will be much juice left in those lemons, though.

The ~200'000 BTC are still in his possession. AFAIK he has not decided yet whether they will be distributed as BTC, or auctioned and distributed as JPY. (I suppose that Mark's $40'000 bed will be auctioned too, eventually.)

I think that the Enron bankruptcy was *much* more complicated than MtGOX's, because the company was much bigger and more diversified, with dozens of subsidiaries (and complicated fraudulent businesses between them).  So I expect that the legal and consultant fees for MtGOX will be a lot less than the 700 M$ of Enron's bankruptcy.

According to this post, the author has been occupied with a rewrite of the site, which seems to have stalled.  He hasn't logged to bitcointalk since August.

would you still say so after checking that "which is worse" has 12,900,000 google hits, while "which one is worse" gets only 330,000?

Thanks!  (I watched his Lord of the Rings, but not that one.)

Please, where was that image clipped from? Looks a bit like Moebius, but not quite...

(Sorry, but search-by-image does not work on the browser I am using now.)

The developers have been unable to raise the 1 MB limit. That's because the Blochstream folks, who have commit privileges to the Core implementation, think that keeping the 1 MB limit (and control over the protocol) will mean more money for them.  But it is very likely the limit will be raised before the network saturates, with or without their consensus: because making bitcoin less usable can only hurt its price, and that means less money for everyone else.

Lifting the 21 million limit will happen if the miners see it as being more profitable than the alternative. Oh, just by a little, and there will be plenty of rented experts to explain that the change is actually good for bitcoin...  (But we have been through this discussion before...)

Every government wants to have a strong and stable currency; but some of them end up printing lots of money to cover their expenses, even though that hurts the currency.  When the US government created the dollar, it promised to back each bill in gold or siver; but it eventually reneged on that promise. I don't see why the promises of the bitcoin protocol -- that were made by humans, and depend on humans honoring them -- will have a different fate.

which is worse, an immature poster or an over-ripe poster?

That is true.  When the bankers forced Italy to cut pensions, there were two or three pensioner suicides per day. And the same thing occurred in Greece, when it was their turn.

Many millions died in WW! and in WW!!. And many in the bubonic plague epidemics of the middle ages, and many of the Spanish infuenza. 

... So? Dos that make scams less obectionable?


Bitcoin makes the MMM scam global and more difficult to stop (and adds bitcoin's own pyramid on top of it). 

The Russian government was almost useless in stopping Sergei's previous Russian scam, but it did eventually put him in jail for a couple of years.  Now that he uses bitcoins, who is going to catch and prosecute him? How can his gains be confiscated and returned to the victims?


The tiny difference is that no one is trying to convince Brazilians to "invest" their money in reals; quite the opposite.  And no one is promising that the real will "go to the moon" -- like Andreessen, Silbert, the Winkles, and all other bitcoin peddlers are doing.


I don't know for how long he has been accepting bitcoin; but I only heard of it now.  From the pages that I have seen, the scam is now called "Republic of Bitcoin" and only uses bitcoin. 

If it has always been like that, Itshould have been mentioned in the forums before. Was it?

I did see mention of a South African pyramid scam that at some point told its members to send bitcoins to the organizers with some excuse.  (I don't know how it ended; an exit scam was expected), But I don't recall any mention of it being connected to Sergei.

As I noted, Sergei's previous scams moved 10 billion dollars, which is 2.5 times bitcoin's entire market cap; and that was actual money, whereas the market cap is only an accounting fiction.  At one point, the scam turned 50 million USD per day, or 50 times the bitcoin miners' revenue.  So, a ponzi on that scale, that requires people to buy bitcoin in order to play, could easily explain this rise, and more.

Bobby lee of BTC-China was the first to attribute the surge in Chinese trading volume to some pyramid scam that used bitcoin; although he did not refer to MMM specifically.