$1B bitcoins on the move: MtGox vs SilkRoad origin and BTC price impact discussed
Preamble: it seems that my post was censored and removed on bitcoin... from now I will only publish my articles on btc and crosspost it. Freedom and freespeech matter to me. -- This is the 4th post of a series of articles dedicated to investigate $1B worth of bitcoins (111,114 BTC/BCH/... BXX) that were dormant since 2014 and started moving actively. The BTC coins were originally located at this address (1933phfhK3ZgFQNLGSDXvqCn32k2buXY8a).
The facts that part of this funds (>13%) have been transferred in the past month to Bitfinex, Binance and Bitmex exchanges is discussed here.
The origin of the bitcoins was originally discussed here.
A deep-dive into the wallet activity was discussed here.
Today I am writing a short update to discuss the origin of the funds and some events that could be related both to this wallet and yesterday's price crash. Wallet's origin This question has been discussed a lot by the crypto community in the past year. Here is a summary of the most probable hypothesis for the 1933p wallet's origin:
Wizsec, a prominent Bitcoin security expert, seems to be pretty sure that the wallet belongs to a MtGox hodler and early investor, who is not a DPR or a SilkRoad user, per his Twitter post: https://twitter.com/wizsecurity/status/1037030003068653569 Finally, Wizsec and I agree that this wallet is not CSW`'s wallet despite it is mentioned in several court documents. Wizsec spent a lot of time debunking CSW's ownership claims earlier this year: https://twitter.com/wizsecurity/status/968337084837781504 What do you think about this wallet origin? ` BTC price crash Also, I wanted to report some events that could be related to this 1933p wallet activity:
$100M USDT were transferred (reported by u/whalecheetah) while the 1933f wallet owner was in the process of transferring approximately the same amount to several exchanges.
10,000 BTC buy order was filed last night on Bitmex with 8,030 BTC transferred from a Bitfinex user wallet while the 1933p wallet owner transferred approximately the same amount of BTC to Bitfinex since August, 24th.
Mtgox trustee: "Seeing how bitcoin price dropped it might be better to sell."
Apart from what is written on the report, the trustee mentioned that large claims in assessment could make it difficult for civil rehabilitation to continue moving forward, and also mentions that seeing how bitcoin price dropped it might be better to sell. He asked people in the room at the end who was for selling BTC (0% responded "for", ~20% responded "against") but mentioned he wouldn't be bound by this and would act in the interest of creditors with approval of the court. Documents distributed during the creditors meeting are available from the MtGox.com website.
[Anno 2014]However, exchanges are able to create paper bitcoin and as demonstrated by the leaked MtGox data, non-existent fiat currency was created in MtGox's database and used to run up the price of Bitcoin before the MtGox collapse.
Quote: "Bitcoin has not developed an options or derivatives market yet. However, exchanges are able to create paper bitcoin and as demonstrated by the leaked MtGox data, non-existent fiat currency was created in MtGox's database and used to run up the price of Bitcoin before the MtGox collapse. Bitcoin will likely become subject to the same manipulations and worse." "An exchange can add a Litecoin to an account in a database and then a user can sell that Litecoin. The litecoin may not exist and the exchange may have to buy the litecoin, to cover a withdrawal. An exchange with withdrawal limits or withdrawal fees, engaged in heavy manipulation, may be solvent indefinitely. An exchange, suffering insolvency may silently and secretly haircut a fraction of users balances and there is no indication to the user that it even occurred. There is no way to prove that reports of stolen funds are real, instead of an anonymous attack on honest exchanges by dishonest competitors." ...A project from 2014 over at Bitcointalk wrote that. The same line could be used now, 4 years later just with Tether.
How do we remove MtGox as the default price quote for Bitcoin?
I know its impressive looking, but we at very least need some kind of system. Either stop using MtGox to quote the price or always add either "BTC-E" or "Stamp" after your price. It makes people batty or confused.
I emailed wolframalpha and they responded - mtgox no longer used for Bitcoin price there finally
From: [email protected] To: [email protected] Date: Tue, 4 Mar 2014 23:32:51 +0000 (UTC) Subject: Wolfram|Alpha Feedback We have received your feedback regarding Wolfram|Alpha. The issue you reported has been fixed and will appear on the live site with the next update. Thank you for helping us improve Wolfram|Alpha. Best wishes, Joshua The Wolfram|Alpha Team www.wolframalpha.com
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Mycelium devs; Please remove MtGox from your "Bitcoin Price" calculations
At least allow the user to select from a list which exchange(s) to use in the calculations. Right now my balance says the average is $390. I can't use the "send USD" functionality right now because it's not trustworthy.
The system is collapsing. This shows the premium between paper PM prices in the west, and actual physical markets in Shanghai. Note the growing premiums. Arbitrage is pulling what physical metal is left in the west, to the east where prices are higher. (similar Bitcoin action before MtGox collapse)
The bulk of bitcoins are held by about 1000 people. There is a huge self-interest to keep the bitcoin price high. Given the price stability after mtgox imploded, I believe that bitcoin is, in fact, a highly manipulated Ponzi scheme.
Posting anything negative on /bitcoin causes it to be immediately deleted.
Bitcoin price vs volume graph for 2011-2016 suggests: (1) MtGox/Willy made price overshoot in late 2013; (2) Blockstream is making price undershoot since late 2014. This is easy to test, by sticking with Satoshi's plan. Anyone who opposes this test is anti-science, anti-markets - and anti-investors!
Bitcoin price and volume have been tightly correlated for years;
Price vs volume (ie, the size of actual blocks) became uncorrelated on only two occasions:
MtGox/Willy (late 2013) - when the price overshot
Blocktream / Core's refusal to increase / remove the 1MB artificial limit on "max blocksize" (Blockstream launched in Nov. 2014) - when the price is now undershooting
If you look really close, you'll also be tempted to formulate a rough estimate that:
If the correlation in the graph had continued, we would be at around $40 billion market cap now - instead of merely $6 billion market cap.
So, if the correlation in this graph had continued (ie, if Blockstream / Core hadn't started attempting to artificially suppress the blocksize, since their launch in November 2014), then 1 BTC would equal over 2,000 USD now. You can shout "correlation isn't causation!!!" all you want. All I am saying is: let's test it out. Let's allow the actual blocksize to continue to increase like it has been doing for the past few years - un-impeded by any artficial blocksize limit. Let's follow Satoshi's plan (where the price increased with the volume) and not Core / Blockstream's plan (where the volume is rising and hitting an artificial limit, and the price has been stagnating). We can easily test hypothesis (2) in the title of the OP (the claim that "Core / Blockstream is suppressing the price by suppressing the blocksize"), by simply increasing (or removing) the temporary artificial blocksize limit, thus allowing the natural blocksize to continue to grow unrestrained - and observing whether price and volume continue to grow together. This is what Satoshi wanted. Since he was right about everything else, we should do what he wants now. Those who would deny us the chance to continue this experiment (Core / Blockchain) are anti-science, anti-markets - and anti-investors. Info on MtGox/Willy here: https://duckduckgo.com/?q=mtgox+willy Info on Satoshi's plan to increase / remove the temporary 1 MB "max blocksize" anti-spam kludge here:
"The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost. It never really hits a scale ceiling." - Satoshi Nakomoto
A scientist or economist who sees Satoshi's experiment running for these 7 years, with price and volume gradually increasing in remarkably tight correlation, would say: "This looks interesting and successful. Let's keep it running longer, unchanged, as-is."
Connecting the dots? - A possible connection between the raise in November, MtGox disaster and recent price drop (self.Bitcoin)
When I read this article (sorry pay wall) I suddenly saw a connection between the price raise in November - the MtGox crash and the recent price drop. The article is about an investigation of the Gox case. It says that hackers managed to create fake account on MtGox with a fiat currency balance. They used this (newly created) fiat money to buy Bitcoin and withdraw them. From the article: According to Mr Maurice, a 29-year-old native of Honolulu whose business card describes him as “chief hacking officer”, the most likely explanation for the disappearance of the bitcoins is a series of raids beginning last year, in which a hacker gained access to Mt Gox’s database of account holders, assigned himself new accounts with faked cash balances, then bought and withdrew the virtual currency at will. This information changes my view on the price increase from $150 to > $1000 drastically since it could be mainly driven my hackers spending "not existing" fiat. The recent price drop may be caused by people who realized this recently since it would mean that most of the demand that drove the price to its hight was not real. What does not fit to the story told on ft.com is that from all what we have heard about MtGox mainly Bitcoins has been missing in their books. If the reported version is true it should have been only fiat that was missing. However - I think the MtGox case is still very little understood by all of us but it should be to complete this chapter. This is the reason why coinsearcher (the guy how flew to Japan) and I set up some events on the Fairlay prediction market to try to get some reasonable numbers for the likelihood of some MtGox theories.
Die Geschichte der Bitcoin-Börse Mt.Gox hat in der Krypto-Welt einen Erdrutsch ausgelöst. Innerhalb kürzester Zeit ist die Plattform zur weltweit größten Krypto-Börse aufgestiegen – dann kam der Crash. Die Bilanz: verprellte Kunden, verschwundene Bitcoin, Insolvenzverfahren und viele offene Fragen. Wir zeichnen die unrühmliche Geschichte der Börse nach und fragen nach dem aktuellen ... Not sure how you got here, but mtgox is dead. This page only exists for those who wish to view some historical charts. If you want to check the current bitcoin price use some other exchange The chart below is the price change over time. The yellow line is the price [USD / BTC] at which actual trades were made. Green and red areas near the yellow line show you maximum and minimum price. Price ... Bitcoincharts provides real-time USD price data of the Mt. Gox exchange including charts, orderbook and more. In spite of the June 2011 hack, by 2013 Mt. Gox had established itself as the largest bitcoin exchange in the world, in part as a result of increased interest in bitcoin as the price of the coins increased rapidly (jumping from $13 dollars in January 2013 to a peak of more than $1,200).. However, behind the scenes all was not well. Mt Gox Trustee: $400 Million Sale Didn’t Drop Bitcoin Price The trustee overseeing the bankruptcy of the defunct Mt. Gox cryptocurrency exchange has denied being the cause of the decline in ...
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