To the Conspiracy Theoreticians out there: could this be the reason for the fall in bitcoin's price?

http://www.psmag.com/navigation/business-economics/irss-taxation-ruling-means-bitcoin-digital-currencies-78588/

This Chinese article apparently tells the story of the bungled entry of Huobi in the Litecoin market, when the price fell from 100 yan to 1 yuan.  Unfortunately I cannot make much sense of Google Translate's output.

  莱特币玩家集体遭遇爆仓 火币网被疑坐庄
  http://www.nbd.com.cn/articles/2014-04-10/824628.html

("Wright" is actually "Lite" but the rest I cannot decipher...)

Sorry, it seems that I misinterpreted @okaynow's profile and got a totally wrong idea about his/her relation to the moolah.io site. 

@okaynow, I see from your profile that you own or operate a bitcoin-based intenet payment method in the UK.  I was going to write "like Bee", but right now that could be construed as libel or slander.  I am sure that Moolah is NOT like Bee.  Or would you say that it is? 

(Sorry to involve your company in this, but I hope that you realize that people may draw undesirable conclusions from your strident insistence that everything is fine with Neo and Bee, in spite of all the reports and testimonials, and the total absence of any positive information.  Why are you insulting people who find fault in the actions of Mr. Brewster?)

Of course I did not invest.   But I do not like scammers, and I would be very glad if my "shouting", here and elsewhere,  manages to prevent one person from investing in a losing or scammy business project  Apparently in bitcoinland that makes me a very evil person.   

Or simply that they did not have yet authorization to function as a bank? Did they? Usually one needs such a thing, a posh store and "opening" party is not enough.   Operating a bank without authorization would probably have put him and his staff in jail right away.


Running away without telling anyone is not "acting honestly and concientiously".  Stress is no excuse for failing to respond to his investors and staff for more than a week.

As for whether there was crime or not, the police will tell.  Failing is not a crime, but a manager paying himself dividends or benefits when the company is already insolvent is a crime in many countries.  It is effectively stealing from the creditors. 

Chinese Slumber Method prediction for Thursday April 10

Prediction valid for: Thursday 2014-04-09, 19:00--19:59 UTC (not before, not after)
Huobi's predicted price: 2717 CNY.
Bitstamp's predicted price: 441 USD.




Plot legend

This last Slumber data point was good (S = 0.0014, W = 0.963).  It was about 70 CNY below the preceding trend line, but, since the previous point was rather weak (W = 0.545), it still seems valid to use a straight line fitted by least squares to the last three points; namely, A + B*(d-d0), where d-d0 is the number of days since Apr/07, A = 2791.80, B = -24.92.

The Bitstamp prediction, as usual, is the Huobi prediction divided by the currency conversion factor R, which was assumed to be 6.16 CNY/USD (it was 6.16, 6.16, 6.15 at the last three Slumber Times).
 
Checking the previous prediction

Prediction was posted on: Wednesday 2014-04-09, 03:24 UTC
Prediction was valid for: Wednesday 2014-04-09, 19:00--19:59 UTC (~15 hours later)

A rather embarassing miss:

Huobi's predicted price: 2808 CNY.
Huobi's actual price (L+H)/2: 2734 CNY
Error: 74 CNY (~12 USD)

Bitstamp's predicted price: 456 USD.
Bitstamp's actual price (L+H)/2: 444 USD
Error: 12 USD
 
NOTE: "He uses statistics as a drunken man uses lamp posts -- for support rather than illumination." --Andrew Lang

Because there are also people who see your island only as a bone that still has some bits of meat in it.  And people like that are everywhere, even here in my country now, unfortunately.

Would it?

Let's suppose, just for argument, that the majority of the miners decided to raise the cap to 210 million BTC, and lower the difficulty so that mining became 10 times more productive in BTC terms.  What would happen?

Note that the total supply of bitcoins would not immediately increase, there would still be only 12 million BTC "in existence".  The flow of mined bitcoins would increase by some factor, but it would still be years before the remaining 9 million "old" BTC are mined and the "new" bitcoins start to be broken into.  The market value of bitcoin may drop somewhat, because of the loss of the "scarcity" aura (which was lost anyway when the altcoins sprung up); but it may also go up, because the future viability of mining would look less uncertain.  The utility of bitcoin as a medium of payment would not be affected (except perhaps momentarily by the change in market price); on the contrary, bitcoins would eventually be more evenly distributed, and a larger slice of the pie would go to those who are actually making bitcoin work.  And the increased "inflation" rate due to higher mining output would discourage hoarding.

Miners who chose to remain faithful to the "classical" protocol, with its cap and difficulty, would be making 1/10 of what their colleagues are doing; and will lose all their output if they fork and the other chain prevails.  Why would they do it?

You seem to be assuming that all miners are hoarders.  But they already must sell a large fraction of the BTC they mine in order to pay their energy bills and other expenses.  Many miners probably sell all their production, in order to have the profit in cash now rather than hope for the hypothetical future when one bitcoin may be worth a zillion dollars.  These miners do not care if the present BTC owners will own only 5% of all the money in that fantastic future, instead of 50% of it.

Note, I am not saying that this will happen, that its is likely to happen, or even that it would work in exactly those terms.  I am only pointing out that miners' greed (or simply their need to make ends meet) may well destroy bitcoin's supposed scarcity, rather than protect it.

No, you assumed that some "bad" miners would try do that in order to destroy bitcoin or whatever, and claimed that the "good" miners would not let them do that.  I am asking about your "good" miners.  is the 21 M BTC limit good for them?

Keep reading those 1500 posts and you may learn what I am doing there.

But if you are lazy: I have no doubts or interest in the technical aspects of bitcoin.  It is the economics aspects that I am extremely skeptical about.  And also its amazing capacity to attract and support all sorts of scams and crimes (although that is not its main problem).

Now what are YOU doing here?  It seems that you did not lose money with the collapse of Neo & Bee (otherwise you would not be trying to convince us that all is well).   Did you profit from it?

Not quite. Miners will do whatever gives more benefit to themselves.  Is the 21 million BTC cap good for them?

I think you have it backwards.  Once sold, shares are no longer the company's property.  The company has no right to stop shareholders from trading their shares.   And you should know that it is not the stock exchange that fixes the price of stocks traded there.

For all I know, someone from Neo & Bee warned Havelock of "susppicious activity" and Havelock decided to suspend trading for prudence.  But since there was no further information, they rightfully resumed trading.  The suspension, not the resumption, violated investor's rights.

Perhaps it helps to re-post here Mr. Brewster's response to the latest allegations published by the media (of salaries unpaid, employees quitting, bitcoins sold but not delivered, threats not having been reported to the police, etc.):


That seems to leave little room for doubt.

Thanks! 

Yes, they had an "opening" party for their store.  But did they ever start to operate as a bank - opening accounts, taking deposits, etc.?

If they had operated as a bank, there would be angry customers complaining loudly.  Unlike investors, such customers would not have intended to bet their money on Mr. Brewster's competence and integrity.  So it seems more likely that the bank never started operating (as I had gathered from other posts.)


You know what the "Q" means, and that it is the same shares.  So who is spreading false information?

You are most welcome, as long as you sell the bitcoins elsewhere and spend your real money here. 

Yeah, unfortunately the bitcoin scammers are now looking to Latin America as the only remaining sucker tank.   

But, did they get authorization from the Cyprus authorities to operate as a bank?  I thought that their collapse resulted from them being unable to open.  If that is true, a sale seems very unlikely.

Thanks!  I wonder whether that last bit is real information, or just their (possibly mistaken) deduction from forum posts?

Depends on the viewpoint... One could also say that he lost over 100 k€ when he bought in December, but may still recover some of it, by pushing some or all of his loss onto someone else...