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[–][deleted] 11 points12 points  (0 children)

pump and dump welcome to penny stock

[–][deleted]  (2 children)

[deleted]

    [–]marlath 6 points7 points  (1 child)

    My analysis: Someone who in real life had lots of money and trading experience simply did this: Instead of invest a large % of his wealth into BTC, where a) he doesn't know if it will go up, and b) isn't willing to put a big enough % of his wealth into BTC for it to be worth his while, instead, he buys some amount of BTC, then places huge walking bid walls using a serious chunk of his wealth (that he would never risk by actually buying BTC with it) and then sells his BTC holding once he has pushed the price up as much as he feels he can safely do in one short term rally. (short term = cheap cost to affect and good payout for time). Then he just sells his holding in one go, eating up the fools who bid above his target price to sell to. He keeps enough BTC based upon the market size to then amplify the PANIC caused by the large sell off. He amplifies it by placing walking ask walls. These obviously won't be as large as the bid walls since he would hurting the value of his such BTC he is asking with. This is what we have seen. Massive bid walls. Small ask walls comparatively. If pirate were doing this we would see huge ask walls after the sell off, but we do not. Once the price is as low as he can get it short term, he will buy another chunk of BTC for very cheap (price down below where it should be due to fear from massive sell off amplified by the ask walls) so that he can repeat the whole process. After he buys the coins at the low, he raises his massive bid walls, but also puts up massive ask walls to make it look balanced and organic. Then as he continues to raise the bid walls he starts dropping his asks to make it look like the sellers are drying up and moving higher. This really affects people into thinking the buyers are winning and they panic buy the price up to get what is left of the dwindling asks.

    [–]zooko 19 points20 points  (32 children)

    I would think if someone were in the business of performing such market manipulation, then they wouldn't talk about it in public. Right? Because that would make it harder to do it (again) successfully.

    But pirateat40 has another business quite apart from this alleged market manipulation -- he runs a High Yield Investment Program ¹ called "Bitcoin Savings and Trust". I've read that it offers 7% per month interest. A HYIP is a kind of Ponzi scheme, in which earlier subscribers are paid by taking the investment from later subscribers. Those require a continually increasing rate of new subscribers to stay in operation.

    If you're looking to attract attention from people in order to get them to subscribe to your scheme, it would make sense to publicly claim credit for moving the market, whether or not you actually had anything to do with it.

    ¹ https://en.wikipedia.org/wiki/High-yield_investment_program

    [–]ferroh 5 points6 points  (15 children)

    whether or not you actually had anything to do with it

    He said when he was going to start, and the market moved minutes later. He said he was going to bed, and the $8 bid wall disappeared minutes later.

    If it's not pirate, then whoever it is doesn't mind if it looks like it's pirate.

    Edit: As Marlath has so graciously pointed out for us: my data was behind. Apparently pirate made statements seconds after the move occurred, which doesn't tell us much either way about whether or not it was pirate. The large orders were still made by one person, whether it was pirate or not.

    [–]marlath 2 points3 points  (13 children)

    WRONG. It was not minutes after that it moved, but a full 10 seconds before.

    The bid wall dropped and the dump started at exactly 2:06:18 EST.

    He posted that 'good night' message at 2:06:28 EST. (http://pastebin.com/PthgrzDS)

    He had a full ten seconds to paste that message.

    This is how this pirate has conned everyone into thinking he is anything but BS. He has a websocket client that isn't lagged like the popular html5 ones are, and simply waits for the action on that to start and then announces that he caused it. Everyone using some browser based feed doesn't see the drop until after he saw it and announced it hoping people wouldn't notice that his announcement comes long after the actual move he claims credit for.

    reddit user zooko brings up the two reasons it is obvious he is bs:

    1) I would think if someone were in the business of performing such market manipulation, then they wouldn't talk about it in public. Right? Because that would make it harder to do it (again) successfully.

    2) If you're looking to attract attention from people in order to get them to subscribe to your (ponzi) scheme, it would make sense to publicly claim credit for moving the market, whether or not you actually had anything to do with it.

    [–][deleted]  (3 children)

    [deleted]

      [–]chrisrico -1 points0 points  (0 children)

      Think of it like quantitative easing back in the day of banks issuing their own currency.

      What does that even mean? What is the nature of quantitative easing without a central bank?

      [–][deleted]  (1 child)

      [deleted]

        [–]reeses 0 points1 point  (0 children)

        Which would be? If you're going to make claims separate from observations, I'm very interested in your evidence and reasoning.

        [–]ferroh 1 point2 points  (6 children)

        " WRONG. "

        Whoops.

        If pirate has access to data sooner than me, then this could explain the misunderstanding.

        This is how this pirate has conned everyone into thinking he is anything but BS.

        Pirate is running a ponzi. It is known that he has at least $250k worth of bitcoins (probably a lot more). He has the ability to place large MtGox orders, and he has incentive to do so, as has been pointed out by zooko (and for some reason, again by you, despite this agreeing with my point).

        Don't confuse me with someone who thinks pirate might place some large buy/sell orders with someone who thinks that said orders have something to do with a legitimate business that can generate the returns that his HYIP scheme promises.

        [–]marlath 0 points1 point  (1 child)

        Sorry. I corrected it to say wrong instead.

        [–]ferroh 0 points1 point  (0 children)

        Thanks, I'll make an edit as well.

        [–]Patrick5555 0 points1 point  (3 children)

        Is pyramining.com a ponzi scheme as well?

        [–]fishesfishesfishes 0 points1 point  (2 children)

        I don't know much about theese things, but I believe not. The name suggest so, but the name isnt all.

        It's your usual mining company where you instead of buying stocks from a stock exchange invest x btc and then get payouts from the hardware he buys with that money.

        [–]ferroh 0 points1 point  (1 child)

        You also get money through referrals like in a pyramid scheme, which explains the name.

        [–]fishesfishesfishes 0 points1 point  (0 children)

        exactalamente

        [–]79cps 0 points1 point  (0 children)

        reddit user zooko brings up the two reasons it is obvious he is bs:

        The first point only holds if he doesn't have conflicting motives, though... and here it seems that he does.

        And the second point doesn't really mean that on any given day he's full of it, it just suggests that we probably can't know either way. (It's like me consistently complimenting my mother-in-law's cooking, whether I enjoyed the food or not.)

        [–]thorvszeus 0 points1 point  (0 children)

        I remember seeing other posts months ago where he stated that the market was going to move minutes before it happened.

        [–]theymos 2 points3 points  (14 children)

        I've read that it offers 7% per month interest.

        It's 7% per week.

        And a lot of people argue that it's actually legitimate...

        [–]registeredatlast 8 points9 points  (6 children)

        How can anyone believe he would pay 7% interest a week AND be legitimate ? And he raised more 250k BTC with this ?

        Putain ! People are so dumb it makes me want to run my own ponzi and get filthy rich feeding off the gullible ...

        [–]avemo 0 points1 point  (0 children)

        yep, stupidity unlike bitcoin is indeed infinite

        [–]Eiii333 0 points1 point  (4 children)

        Yep. Some of the biggest bitcoin players are heavily invested with him too, from what I understand. People you'd expect to know better!

        [–]gwern 0 points1 point  (3 children)

        For all you know the big players have already withdrawn 100% of their original investment and are skimming profit as they laugh all the way to a trustworthy wallet. At 7% a week, this wouldn't take too long...

        [–]Eiii333 0 points1 point  (1 child)

        Heh, if he actually is running a ponzi scheme, the whole thing collapses when his biggest investors pull out! So either he's legit, or people still have way more invested with him than they should have.

        [–]gwern 0 points1 point  (0 children)

        I interpreted your 'biggest' as referring to prominence or fame, not necessarily 'majority of Pirate's deposits'; they could have invested early and be a small fraction now, with all the rest being lots of small fish who signed up in part because of the fame of the early adopters.

        [–]avemo 0 points1 point  (0 children)

        many of those big players became big by being co-conspirators and co-promoters of pitate's ponzi scheme i.e. running those "pirate pass through" funds. They might cease being "big players" and become pariah, once pirate's ponzi collapses.

        [–]Thorbinator 4 points5 points  (0 children)

        A lot of people are hopelessly delusional.

        [–][deleted] 2 points3 points  (1 child)

        For reference, 1.0752 > 33

        That is, he's offering over over 3200% yearly interest. If I were to offer you 3200% interest on your borrowed money, would you be all for it or think I'm a lunatic?

        [–]sebnow 0 points1 point  (0 children)

        As opposed to other companies (mostly mining) listed on GLBSE which give 1.5-3% weekly returns, or 215-465% yearly returns?

        Interest rates in the Bitcoin world are different to those in the real world. That's not to say BS&T interest rates aren't ridiculously high.

        [–]miscreanity -1 points0 points  (3 children)

        Bitcoin is growing at an average of 7% per week when taking into account all Gox data. That's external flow only, not taking into account the base unit inflation from block rewards.

        [–]sgornick 2 points3 points  (2 children)

        Ya, but that interest payment is denominated in bitcoins, not dollars. so 7% interest on bitcoins is over and above any increase in the exchange rate.

        That's only compounds the reasons to be suspicious.

        [–]miscreanity 0 points1 point  (1 child)

        Yes, and the rates are being lowered August 1st.

        [–]Fjordo 0 points1 point  (0 children)

        Just to be clear on this, this is to start to get people going to the "partner accounts" because pirate himself can't get enough people to join to maintain stability. So come August 1st, he is dropping his main account interest rates to 4% or less and making the pass through accounts 5% or more.

        [–]Jedimastert 0 points1 point  (0 children)

        You know, I was thinking about how a Ponzi scheme worked and how I would do it, and I ended up at this model. Weird.

        [–]Balmung 6 points7 points  (1 child)

        Well pirate is saying he is controlling the market. From what I understand it sounds like he puts in a large order and buys all coins from 8-8.5 which causes everybody else to panic buy making it go up to 9.5. Then he sells them all for 8.5 which causes panic selling and he makes money. Not sure if that's correct or not.

        [–]avemo 0 points1 point  (0 children)

        He likely was controlling the market by selling some part of booty around 5-6$.

        [–]runeks 2 points3 points  (1 child)

        Could someone throw out a quick explanation for us new people? This sort of thing makes bitcoin seem very bad.

        It seems someone has, at least partially, cornered the Bitcoin market on Mt. Gox [1]. Now bear in mind, this is possible for anyone to do currently with a relatively low amount of money. Bitcoin is a pretty small economy. As Bitcoin grows this will be harder and harder to do.

        In the 1950s two guys successfully cornered the onion futures market [2]. In other words, someone cornering a market doesn't mean the traded commodity has failed, it just means it has sufficiently low value for someone to enter into it and buy up enough of the assets to control it to a certain degree. Saying that Bitcoin has failed because someone has cornered the market is a bit like saying onions have failed because someone succeeded in cornering the onion futures market.

        [1] http://en.wikipedia.org/wiki/Cornering_the_market

        [2] http://en.wikipedia.org/wiki/Cornering_the_market#1950s:_The_onion_market

        [–]YJLTG[S] 1 point2 points  (0 children)

        Thanks for the response.

        [–][deleted] 0 points1 point  (1 child)

        somebody spent a lot of money to prove their dick was bigger than somebody else's

        [–]YJLTG[S] 1 point2 points  (0 children)

        MURICA

        [–]gamerandy 0 points1 point  (0 children)

        It's funny how conspiratorial this community can be. Bitcoin is a small, new market getting exposure in a variety of different ways - Small markets are volatile markets. Volatile markets often see big price swings since equilibrium is shaky at best.

        Not saying there aren't any plots, just saying not every move is because of one.

        [–][deleted]  (14 children)

        [deleted]

          [–]ferroh 6 points7 points  (13 children)

          You left out the primary factor that caused the volatility yesterday, which is that pirate someone intentionally changed the price by placing large bid/ask walls.

          In the regulated stock market, this is illegal, and it is called layering. Companies have been fined millions for doing it.

          [–][deleted]  (2 children)

          [deleted]

            [–]ferroh 2 points3 points  (1 child)

            can anyone prove this?

            Every time this happens, someone seems to feel that this is a subjective opinion and that there isn't evidence.

            There is very clear, concrete evidence. All you need to do is watch the market depth on MtGox while it happens.

            Look at this $400k (50k bitcoin) bid order that was there for only a few minutes:

            http://i.imgur.com/4URmi.png

            That $400k order is a single person, whether or not they intentionally are causing havoc, I suppose we could say is subjective -- but to me it's pretty clear what their intent is when they place and remove orders like this (both buy and sell orders) and leave them open for only a few minutes at a time.

            [–]marlath 1 point2 points  (0 children)

            I do agree with you here. That 400k order, and a previous one that day, were both one bid by one person.

            [–]hugolp 2 points3 points  (1 child)

            You are so naive. In a regulated stock market layering happens constantly and nobody does anything about it. The reason is the only difference between calling it removing an order you dont want any more or layering is a subjective opinion, therefore regulators can ignore as legal activity any operation of the traders they think should be allowed anything and punish other competition.

            Then you get some cases in the press and you believe the regulators are keeping the market safe.

            [–]ferroh 3 points4 points  (0 children)

            You are so naive. In a regulated stock market layering happens constantly and nobody does anything about it.

            I realize this, so what?

            My point was that it is well known that layering affects the price, and what we say today was layering.

            I never said that we should try to regulate the market or that layering is good or bad, or any other imaginary points that you seem to be arguing against :)

            Then you get some cases in the press and you believe the regulators are keeping the market safe.

            Maybe someone believes that, maybe I believe that, I don't know how you would know one way or the other from my post.

            [–]miscreanity 0 points1 point  (7 children)

            Illegality can be highly subjective. Right now, the Bitcoin market is still very small. As it grows, any such manipulations will only be possible within a smaller range relative to the entire market valuation.

            The goal for now is stability, which was degrading during the run-up above $9. If it weren't halted as it was, another 2011 bubble was in the making. Even without the security breaches, that crash was enormous. Another one could severely delay cryptocurrency adoption, potentially for years instead of six months.

            [–]ferroh 3 points4 points  (6 children)

            Illegality can be highly subjective.

            Here is an example of a fine for layering: This 8 million GBP fine is not subjective.

            Layering on the regulated stock market (i.e. not the bitcoin market) is against the rules. There's really nothing subjective about that.

            In the bitcoin market, layering is allowed, and the events of today are a good example of why the SEC doesn't allow (or tries not to allow) things like this in the stock market.

            [–]miscreanity 2 points3 points  (2 children)

            And a fine example regulation has been for stabilizing markets. Relying on regulation is an abandonment of adaptability and ingenuity. Not that this reliance has actually prevented any of the major firms from doing these things.

            Self-policing, self-responsibility, and self-reliance far exceed third-party delegation. This is especially true in a smaller environment. Without regulation, Pirate and other large players are forced to participate in the same way as everyone else - they cannot influence regulation efforts to insulate themselves.

            [–]ferroh 1 point2 points  (0 children)

            You are arguing with points that I haven't made.

            I didn't say that regulation works or doesn't work. In the context of this subreddit, I don't really care at the moment, because there is no (or very little) regulation in the bitcoin market.

            My point was only that layering is known to affect the price, and that is part of what has happened today.

            [–]reeses 1 point2 points  (0 children)

            Depending on the market, trading may or may not have been halted. (How's that for subjective? :-))

            [–]chrisrico 1 point2 points  (1 child)

            I'm a little surprised that MtGox doesn't enforce rules against this sort of thing. I suppose they have conflicting incentives... on the one hand frenzied trading leads to higher fees, on the other it makes them and bitcoin look bad.

            [–]ferroh 3 points4 points  (0 children)

            Many bitcoin users are against (and/or are scared of) regulations like that and may frown upon it.

            The way I imagine this would be managed would be to force users to lock in orders that are over a certain threshold for a certain period of time. For example, if you have $100k in orders, you would not be allowed to cancel your orders for an average of 1 hour. This would prevent market manipulation because it would be far riskier to leave an order open that you don't really intend to have filled.