Mar 22, · Key Points Ninety-five percent of spot bitcoin trading volume is faked by unregulated exchanges, according to a study from Bitwise this week. The firm analyzed the top 81 crypto exchanges Author: Kate Rooney. The Truth about Bitcoin trading blockchain is a open book that records bitcoin transactions. It is implemented as a chain of blocks, each withhold containing type A hash of the previous block up to the genesis block of the building block. A material of communicating nodes running bitcoin software maintains the blockchain– Transactions. Bitcoin comes from coin and bit and is an online payment system that started as open-source software. It is a new type of cash and an innovative system whereby network codes are used to verify transactions. It is used worldwide and gained in popularity since it was first introduced in
Bitcoin trading truthSo you're thinking about investing in bitcoin? Don't | Bitcoin | The Guardian
An analysis published by Bitwise this week shows that 95 percent of bitcoin spot trading is faked by unregulated exchanges. The survey, first reported by The Wall Street Journal, echoes concerns by regulators that cryptocurrency markets are still ripe for manipulation. Bitwise, an asset manager in the process of trying to list the first-ever bitcoin exchange-traded fund, said it met with the Securities and Exchange Commission on Tuesday to discuss its application.
As a part of the process, it submitted analysis that could help regulators cut through the noise. The analysis showed that "substantially all of the volume" reported on 71 out of the 81 exchanges was wash trading, a term that describes a person simultaneously selling and buying the same stock, or bitcoin in this case, to create the appearance of activity in the market.
In other words, it's not real. Its median "spread," or difference between the price a seller wants and the price a buyer wants, for bitcoin was about 1 cent. That scenario passed Bitwise's test for having real volume. Exchanges may have an incentive to report fake volume. Bad actors may look to attract listings for new initial coin offerings, or ICOs, who want their cryptocurrency on an exchange where more trading goes on, Bitwise said.
But the paper also has some in-built ideology: the assumption that giving national governments the ability to monitor flows of money in the financial system and use it as a form of law enforcement is wrong. This financial libertarian streak is at the core of bitcoin. Government-issued currencies have value because they represent human trust and cooperation. There is no wealth and no trade without these two things, so you might as well go all in and trust people.
Bitcoin has none of these things, and even safely storing it is difficult. Bitcoin exchanges such as Mt Gox in Japan, Bitfinex and various other wallets and exchanges have been hacked. The second point is crucial. Bitcoin is only valuable if it truly becomes a critical world currency.
Right now, speculators are the only people driving up the price. A speculative cult currency like bitcoin is only valuable when you cash it out to a real currency, like the US dollar, and use it to buy something useful like a nice house or a business. When the supply of foolish speculators dries up the value evaporates — often very quickly.
A currency should also not be artificially sparse. It needs to expand with the supply of goods and services in the world, otherwise we end up with deflation and hoarding. It helps to have the Federal Reserve system and other central banks guiding the system. Full anonymity and government evasion will not be one of its features. The cryptocurrency bubble is really a repetition of the past.
This is a known bug in our operating system, and we have designed some parts of our society to protect us against it.
These days, stocks in the US are regulated by the Securities and Exchange Commission, precisely, because in the olden days, there were many stocks issued that were much like bitcoin, marketed to unsophisticated investors as a get-rich-quick scheme. A version of this post originally appeared on the blog mrmoneymustache. So you're thinking about investing in bitcoin?
An investment is something that has intrinsic value, not speculative value. Mr Money Mustache. Mon 15 Jan