That report may have got the facts right, but the interpretation is quite likely wrong.  In both 2013 bubbles (March and November) the price surged in China, while MtGOX and the Western exchanges struggled to follow.  The plot below shows te ratio of prices of other exchanges relative to Bitstamp:



MtGOX's price was 10% higher than Bitstamp's between July and November 2013, when MtGOX was delaying fiat withdrawals already.  However, during the rallies (and also during the December crash) China was clearly leading.  "Ground reports" like this one also confirm a Chinese source for the rally.

That is from my recollection of the forum discussions at the time.  When the first auction was announced, people were quite worried.  The dates of the drop and recovery also matched the announcement and the revelation of the outcome, and there was no other plausible explanation for them.

When the third auction was announced, the price was halfway through a general rising trend from ~220, and that trend apparently just went on undisturbed.  Also there was much less discussion on the forums about that auction than about the previous two.

The announcement of the first USMS SR auction (2014-06-27; won by Tim Draper) apparently caused a drop in the price on 2015-06-11, from ~650 to ~590, that was reversed on 2014-06-30 when the result was revealed.

The second auction (2014-12-04; won by a SecondMarket syndicate and a small bid by Tim Draper) had no discernible effect on price, that remained pretty stable at ~375 for about a week before and a week after it.

Abut a week before before the third auction (2015-03-05; won by itBit), the price rose from ~240 to ~280, but probably for other causes.  It remained stable through the auction, and had another small rise a few days later.   

So it would seem that, after the first one, the market got used to the USMS auctions and ignores them (or "prices them in" well in advance).

This is the last USMS SR auction, but two more have been announced: the auction of ~24'500 BTC by the Australian government, and the auction or return of ~200'000 BTC by the MtGOX trustee, maybe by the end of the year.

My post is still unconfirmed; was it malleated?

Aw, it was a moment of rage at the news -- a notorious megascammer using bitcoin to prey on the poor.

Now that I calmed down, I think that a mildly severe sunburn in purgatory will be enough.

Given that only 822 of your 1664 posts were off-topic, how could he claim "majority"?

I have heard the argument "he is rich therefore he doesn't need more money" used to introduce a couple of egregious scammers and thieves.  Even in this context, it is a bogus argument: usually, rich people are rich because they always want to make more money that they already have.


KnC seems to be "selling" some of their mined coins in the form of the XBT Tracker One Electronically Traded Notes.  Those are issued through NASDAQ Sweden by a company somehow connected to them.   As I understand it, KnC keeps the bitcoins and sell IOUs that promise to pay the holder whatever the current BTC price will be at the time.  

The buyers of those notes may be a different population than the people who buy at the exchanges, so those "sales" may not impact the price immediately (as they would if KnC were to sell the BTC on the exchanges).  However, if many holders decide to redeem the notes, KnC may be forced to sell the BTC to raise the money for that.

The notes that they issued and sold so far correspond to ~16'000 BTC.  I am too lazy to compute how much that represents compared to their mining (~8% of the hashrate presently, which means ~12 × 25 BTC every day).


It would be perfectly logical to consider $400 a low price a year ago, and $230 a high price today... 

Anyway, miners have an obvious incentive to lie and hide their sales.  Whether they hold or sell immediately, they very much want everybody else to buy and hold.  

African? You mean someone from Guinea, Borneo, or somewhere in that region, right?

"South Africa" must include a many of the poorest and least educated people there.

Ah, bitcoin -- bringing First World financial ruin to the unbanked in the Third World...

May you all go broke, and burn in hell...

Sorry, I do not keep track of world economy news.  Your opinion is at least as good as mine. 


I don't think that many people would think of bitcoin as a hedge against economic turbulence.  It is basically a gamble, a lottery with unknown odds and prizes. 

The same... That story was aired and rehashed at length when he was elected to the board of the Shrem Karpelès & Friends Foundation (by action of KnC miners, it seems).  A couple dozen members left the Foundation in protest at the time. 

I think bitcoiners should be more concerned about what he did years later: he created a billion-dollar company (IGE) that cornered the global market of World of Warcraft game points ("platinum pieces").  He had subsidiary companies in China where semi-slave workers spent all day "mining" those game points.  The company collapsed only after ordinary players and/or the company sued it for ruining the game's experience.  There were two articles about him in Wired, maybe around 2008 or so.  I wonder what were his plans when he pushed his way into the Foundation...

IIRC, he also was involved with Sunlot, the company that tried to stop the liquidation of MtGOX and buy the 200'000 BTC for a pittance, promising a faster refund to the victims.

That is your guess, right? He is married and has a child, IIRC.  Not that one thing excludes the other, but...

It has been rebranded as Tether.  Don't know anything else about it myself.

Speaking of which, no one finds it weird that the president of the Bitcoin Foundation is CEO of a competing altcoin?

Or that two Bitcoin Core developers (BTCDrak and Peter Todd) are CEO and CTO of Viacoin, another altcoin that aims to replace bitcoin?

 

Arbitraging is profitable only if the price difference is greater than the tradeing fees.  That is one reason why the Chinese exchanges have such high volumes, and have very similar prices: one can do arbitrage even on tiny differences in price.

On the other hand, one does not need to actually move dollars or bitcoins instantaneously to do arbitrage between two exchanges.    To do arbitrage one should buy at A and sell at B when the price is lower at A, and do the reverse when the price is lower ar B.  If one has substantial BTC and dollar funds on both exchanges, one could alternate between these trades in such a way that the four accounts remain mostly balanced in the long run.  If they become unbalanced, one can transfer BTC and/or dollars to rebalance them, but those transfers can be slow.

Someone claimed that Bitcoin arbitragers may use Litecoin to transfer funds between exchanges, because of its faster confirmation time.

On the 1d-step Bitstamp chart I see a steady rising trend since 2015-09-22 (since 2015-09-14 at OKCoin).  There are some small $5 spikes on top of that trend, like the current one; but they have been short-lived. 

What is causing that trend?  Who knows...

There are several hypothetical attacks that could be called "spam attacks".

One type (1) is what we have seen since July this year: issue hundreds of MB of cheap transactions, to fill the queues and maybe crash the relay nodes (and generally cause trouble for software that deals with the queues.  That attack does not affeact transactions that pay fees higher than the attacker pays.  It will delay zero- and low-fee transactions.  The delay depends on the clearance C - T between the average capacity C of the network (currently ~0.80 MB/block) and the average non-spam incoming traffic T (currently ~0.45 MB/block).  Currently, with less than 50'000 USD anyone can launch an attack that clog the queues and delay low-fee transactions for 2-3 weeks or more.

Another type (2), that we have not seen yet, tries to delay some of the high-paying fee too.  To hold up 50% of the legitimate traffic, for example, an attacker of this type would keep issuing transactions with suitable fees to ensure that the top 0.80 MB of the queue always included at least 0.58 MB of his own transactions.  That is, he would have to issue C - T/2 transactions per block, with enough fees to keep the low half of the legitimate traffic perpetually out of the next block.  I don't know how much this attack would cost per hour; but I guess that an attacker with 50'000 USD budget would be able to keep it up for at least half a day.  

Yet another type (3) of attack may be a miner creating and solving a large bock to cause relay nodes and some clients to crash.   Rumor is that the 1 MB limit was introduced to prevent hypothetical type (3) attacks, or some similar one.    But there was no such attack during the 20 months or so in 2009 and 2010 that bitcoin operated with a 32 MB block size limit; and it is not clear whether such a rogue miner could do much damage except to himself.

On the other hand, presently it is the 1 MB limit that makes attacks of type (2) viable, and causes type (1) attacks to delay low-fee transactions by weeks.  

If the block size limit were to be raised to 8 MB, the effective capacity C would rise from 0.80 MB/block to maybe 6.00 MB/block .  The clearance C - T would then increase from 0.35 to 5.65 MB/block.  That would speed up the recovery after type (1) attacks some 15-fold, so a backlog that now takes 2 weeks to clear (like the one that exists now) would be cleared in 1 day.

If the block size limit were to be raised to 8 MB, a type (2) attacker who wanted to hold up 50% of the legitimate traffic would have to issue 5.77 MB of transactions per block, instead of 0.58 MB/block; but he would need to pay the same fees in order to keep the half of the traffic out.  Therefore the cost to the attacker, per hour, would be ~10 times larger.

Far from being an argument against a block size increase, spam attacks are one of the strongest reasons why the increase should be a no-brainer.  In fact, deterrence of and resilience against spam attacks demand a large increase rather than a small one.

The Australian government also has a bunch of seized coins (some 20'000?) that it plans to auction.  And the Mt. Gox trustee still hasn't defined whether he can return the ~200'000 BTC as BTC, or will have to aution them for JPY.

(In fact, the Mt. Gox trustee is still trying to determine which of the former victims' claims are valid and which ones are bogus.  It seems that some of them are quite outlandish...)

They are two distinct "attacks" going on now.  

One "attack" is just another "stress test" whereby some entity ("coinwallet.eu"?) issues a huge amount of spam transactions, so far paying very low fees.  It only affects some relay nodes (that have to hold all that spam in their queues) and clients who issue transactions with even lower fees.

The other is a "malleability attack" whereby someone else takes your transaction and issues an "evil twin" duplicate of it.  The duplicate moves the same coins to the same addresses, but if it gets confirmed instead of the original it may thoroughly confuse some wallets, including some popular ones.

OKCoin and Huobi do not charge fees for trading, only for deposit and/or withdrawal, and interest on leveraged trading. As I recall, the shadow book was meant to cater for clients who wanted to trade on the exchange, but did not want their large orders to affect the price against them. (I may have misunderstood, and I don't know whether that makes sense.)

I wish that those totally useless "bitcoin news" sites would investigate and report on this issue, if only by asking the exchange owners about those spikes.

On a couple of occasions, I have seen a huge sell order flash on the OKCoin order book, just at the top of the spread, only to be immediately and precisely eaten by a matching buy order.  They may be trades arranged in advance, set to happen at a predetermined price or time.

I seem to recall, several years ago, an announcement by some exchange that they were implementing "shadow" book orders, that are invisible to most ordinary clients.  Perhaps they just started showing shadow-book trades on the ordinary ticker, to boost their public volume numbers...