Bitcoin Cash deals frozen as insider trading is probed
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Roger Ver (one of the people behind bcash) has said repeatedly that he believes that his fork deserves the name "Bitcoin" and that it is the "real" bitcoin. It seems obvious that the intent here is to confuse people.
This, to me, seems like blatant fraud. It is concerning to me that coinbase would continue to allow this market confusion to build by listing this under the name "bitcoin cash". Things like this make me long for better regulation in this space.
Full disclosure: I say this as somebody who holds both bitcoin and bcash in nearly equal amounts. I mean to say that I don't really have a dog in this fight.
Bitcoin has a continuity in price, in name, in code, in software, all the way back to when people first started talking about it in 2009.
The idea that bcash is and always has been bitcoin is betrayed by the simple fact that there isn't a continuity in price back to the genesis.
The sum of XBT+BCH price on exchanges fluctuated less than either coin alone.
That's just absolutely absurd.
If you run a website and your database gets pwned by hackers, do you just give up and say oh well, I guess the pwned version is the real version now? No, you restore from a backup, and if that involves recreating some of your integrations with third-party providers then so be it.
People are trying to move their coins out of storage onto exchanges, and seeing about an hour before they even get 1 confirmation.
Also, Bitcoin Cash supporters have a habit of... well, frankly, outright lying sometimes. They were still pushing the idea it was faster than Bitcoin back when it was running at hours per block most of the time, and the usual response to people who discovered this was to tell them that the block time varied and was as low as a minute per block. This was technically true - in fact, often an equal number of blocks were produced at the minutes per block and hours per block rate, in alternating 144 block chunks of each. Can you perhaps see the problem here?
Then they can just implement Segwit. I'm not really seeing the problem here. One version of Bitcoin works today, the other doesn't. It's not really that complicated.
Him & a vocal community (/r/btc) appears to believe in that. What gives BTC (and /r/bitcoin) the right to the name Bitcoin considering both are forks from the original chain?
You're mixing up soft fork with a hard fork and implying that soft fork is somewhat better, when in reality it is just technical concept and has nothing to do with it.
Actually in current situation we already have example, the soft fork (SegWit) implements a complex mechanism to add segregation witness feature and allow for off-chain transactions.
The change in Bitcoin Cash is simply raising the block limit to 8MB. In fact initially bitcoin had no limit for the block size and the limit was added to prevent DDoS.
That limit was meant to be increased as there would be higher demand.
That said I personally don't believe that the name will make a difference in this battle.
What happened on block 494782 was also a fork in some respects, there was well telegraphed plans to change the consensus rules on that block, but no one mined/accepted blocks with those rules.
You own your Bitcoins in the full meaning of the word. You fully control them, by way of your private key, but you also trust that the rules of Bitcoin won't change. The former ownership is technical but the latter is social.
There is an implicit social contract towards anyone who buys Bitcoin to be able to spend them any time in the future, under the same rules as today. That includes not having to upgrade to another ruleset with arbitrary changes.
For this reason it was important that the block size increase was made opt-in, and that any hard forking fundamental changes that are required in the future are trivial or have pretty much unanimous support.
But as it were I'm not suggesting that the majority are calling it anything other than "Bitcoin Cash" for months now. I'm just pointing out that when Bitcoin ABC was new members of /r/btc were pointing out how that name was confusing and that is where BitCash and BCash were originally coined. Go to /r/btc and look at the posts from back then if you don't believe me, people were posting about coming up with a better name. Those posts weren't just some Bitcoin Project conspiracy, they were from members of the community that wanted a better name. Personally, I don't care what they want to do. They are free to come up with whatever cryptocurrency floats their boat and it doesn't bother me in the slightest. However, the fact that it annoys Roger Ver makes me really want to refer to it as BCash.
Seems a little extreme to me but it is what it is, I guess.
It's like saying that the People's Front of Judea is fraudulent because they don't really represent Judeans like the Judean People's Front.
As to whether it merits having "Bitcoin" in the name, both are close enough that one could be considered a small variant of the other. That might be enough for the other one to merit being called "Bitcoin something".
I don't hold any bitcoin or bitcoin cash...I say this as just a general consumer. The "bitcoin" name has brand value, and having "bitcoin" cash is going to inflate the market value of the it and confuse consumers into thinking some coins are more trustworthy. Especially as this goes more mainstream and your Aunt and Grandma can buy BCH on Coinbase. Or whatever new altcoin comes up that tags on the words "bitcoin."
Vs a store of value that just racks up transaction fees.
If you were right, we would have seen many successful copycat forks since then, but we haven't.
At the time it suspended it, the company was quoting a price of about $8,500.
Trade of Bitcoin Cash was frozen just four minutes after it began on the firm's Global Digital Asset Exchange (Gdax) and existing orders were cancelled.
So the prices more than doubled in just 4 minutes. It might not even be a case of insider trading rather very, very thin order book.
That is why this happened:
> Update - All BCH markets will remain cleared and offline until 9am PST 12/20/17. At that time, BCH markets will enter post-only mode for a minimum of one hour to allow liquidity to be established.
That is to say no matching orders allowed of any kind - limit or market which can suck the liquidity and cause a huge price jump.
One might think that Coinbase/GDAX understand liquidity and market making after so many years. But no. Makes you wonder what kind of stuff is going on in other exchanges.
All of the exchanges are repeating mistakes already learned by the financial industry.
It's why they'll always be amateurs until an actual major financial institution devotes serious time/effort/money to it.
Coinbase had said they would add BCH to their exchange before the end of the year months ago. And people had noted BCH appearing in their API a day or two ago, and then the trading pages were up for an hour or two before the official announcement, with some very large orders being placed in advance of trading going live, with the price already set at $1000 dollars higher than any other exchange was offering.
Add to this the fact that anyone who held BTC on Coinbase in August receiving BCH, plenty of people still holding BCH from the last time the price spiked, and the exceptionally deep pockets of certain people/groups who are supporting BCH.
You didn't need to be a Coinbase employee to know this was coming, and that it would, at least short term, have a significant effect on the price. Crypto traders live on big news and swings like this, and it was inevitable that it would be a big event.
If I scroll to a week ago between 13th and 14th there is an identical pattern. There is accumulation and then a pump followed by sell: https://imgur.com/a/Hysfc
Is this also related to Coinbase?
Ps: I don't trade, I'm a hodleur
I don't know if that makes it special, but it does mean it's something different from, say, Bitcoin Diamond or Bitcoin Gold.
Buy|Sell
1000@5|100@5.1 <-- top of the book/best price
1000@4.9|100@5.5
..
..
..
100000@1|1000000@10000 <--- bottom of the book, worst price - this is "sucker catcher". If someone clown with more money than brains throws a marker order with the quantity higher than posted by everyone above, it will catch the bottom of the book.
At this point no trades are happening because no one is offering to buy at a price that someone else is willing to sell.
A market order is an order that does not specify the price. Only action and qualities. This is the only type of an "immediate" order because as long as there is anyone on the other side willing to sell or buy a quantity, it will be executed against the most eligible entry ( top ) of the book.
What happens when you do a limit order? The limit order "Buy 5@4.95" will be inserted into the book based on the price so with this order the book will look:
1000@5|100@5.1
5@4.95|100@5.5
1000@4.9|
..
..
..
100000@1|1000000@10000
As you can see still nothing is trading because there's still a spread.
What happens if someone does "sell 5000@5" against the book above:
1000@5|5000@5 <--- locked market
5@4.95|100@5.1
1000@4.9|100@5.5
..
..
..
100000@1|1000000@10000
The market is now locked - there's someone who wants to buy @5 and someone who wants to sell @5. Result of this is automatic market unlock:
5@4.95|4000@5 <--- unlocked market
1000@4.9|100@5.1
..
..
..
100000@1|1000000@10000
with a single 1000@5 traded so the "new price" of the asset is now @5
What happens when trading is suspended and market "ran away" i.e. significantly moved. Nothing special actually. All non-canceled orders are entered into a queue in an order of entry and are executed based on the book replay as if there was no suspension at all.
Do you mind giving some context to this statement? What I know of the ECNs you mentioned is from reading the book 'Dark Pools'. It would be great to get some insight into the innovations that were developed in all three projects, that have become a mainstay in 'fintech'.
ECNs were f!cking amazing and when Datek started routing limit orders to Island (genius play) from retail investors the days of crazy spreads, slippage and free money became history. Some of them also allowed you to do cross-exchange routing - I think BRUT was first to do it - so you could send your order via BRUT to a specific exchange. This killed NYSE/PHL/AMEX arbitrage (AMEX and PHL were slower than NYSE so it was possible to do a trade on NYSE and take offsetting position on PHL/AMEX immediately locking the spread)
Since ECNs would self-cross at the NBB and NBA even if the market had no action because the likes of NITE and GSCO were slowing down just to get better money on the order flow, the trading simply moved to Island and Instinet forcing regular market makers to play ball.
The effect of ECNs in trading was equivalent of introducing Ansible and Puppet management in server management. Crypto-exchanges now act the same way as the who who say "We only manage our servers using Vt100 terminals using vi"
NBB is "national best bid" and NBA is "national best ask"
In a way, it's interesting to see this sort of recapitulation take place.
The user mukiwa2 said "Bitcoin Cash coming in the next few days!!" 2 days back in that thread and he even joked saying he knew an employee in Coinbase.
That response has since been deleted. I was just talking to my friend about this. Here is the snapshot: https://imgur.com/a/cLlp7
Do Coinbase employees have to disclose their external crypto-currency trading accounts (as well as for immediate family members) to the internal compliance dept?
Is Coinbase employee crypto trading activity subject to pre-approval prior to trade execution?
What is their policy regarding disclosure of material non-public information of pending changes/additions to their own exchange?
Basically it will be too much bandwidth for most users to bother running their own core, meaning increased centralization for BCH and easy way to kill it in the future through some government action or bug.
In reality, you would have to be insane to store bitcoins with a C++ program permanently connected to and broadcasting your IP address to a p2p network.
Now, it may be that many bitcoin nodes are run by insane people who do exactly that, but if the foundation of Bitcoin's security is that its users have no understanding of computer security, then the whole thing is doomed to failure anyway.
You run the node and connect your light wallet to it, so that you don't need to trust someone else's node to tell you what is going on. I run mine on an old netbook.
Some people might store their private keys on the nodes themselves, they shouldn't.
So the whole staff new about this move, from which it is to be expected to move the market when published?
Charitably put, that's naive.
An email to everyone, a press release, a blog post stating this new feature will be available to everyone in x days at time T. That would be fair game.
It would only then be fair game if that email goes out at the same time as when the information is publicly available.
I'm not talking about a new iPhone here. But information, which moves the market. For example: A planned merger to which very few people are really privy.
I've worked in several investment firms and banks, and in all cases I had to use a special employee trading account, often at higher cost btw. What happens on such systems are brownouts / blackouts of transactions for certain stocks. It happened to me more than once in the past that, even if I already have a position, I was barred from even selling the security since it was on one of the several lists that they keep. Some of these lists are private, and they won't tell you when it's coming off the list. That's probably part of the protection against insider knowledge, too.
Like another commenter said, these coin outlets have a lot more to re-live in terms of wheels that have been invented long ago. Someone talked about currency itself, and Roman experiments, but similar lessons will need to be learned with regards to insider trading, exchanges, securities markets and so forth.
That response has since been deleted. I was just talking to my friend about this. Here is the snapshot: https://imgur.com/a/cLlp7
People could place orders before trading started. I was watching BCH/USD and BCH/BTC which had a fixed price, $3100 USD and 3.00 BTC respectively.
BCH/USD had a huge amount of buy pressure (people buying BCH with cash); BCH/BTC had a huge amount of sell pressure (people dumping the airdrop).
Only BCH/USD went live; BCH/BTC remained paused. (That was weird, I thought it looked like a human somewhere hit enter too soon, but apparently it was intended)
Once trading started (BCH/USD only), people couldn't place new sell orders. The unlimited buys cleared, including the guy on reddit whose order was "Buy $100000 USD of BTC at market price", which was filled at 6k and then he was unable to place a sell at 9k. Apparently placing buys without limits is common because unlimited buys are filled before limited ones are.
Since you couldn't place a new sell; the price was not bounded; the book cleared and everything was stuck at 9.5k for a couple minutes. There was a little bit of trades, not sure if it was only people with existing orders that were glitched or if maybe some people weren't glitched, maybe all the activity was orders placed before trading opened.
They realized the issue and paused trading; orders began to accumulate again roughly around here; here's a screenshot of the orders accumulating https://i.imgur.com/0NTyYXx.png There is incredible sell pressure here, the price was obviously out of whack with actual supply/demand.
(MY SPECULATION) Since there was never a functioning market I'd expect Coinbase to rewind all the trades which is what it looks like they are doing.
I might have gotten some of the details wrong, I am just a detached layperson learning about finance who happened to see this go down.
Sorry reddit, no consipiracy here. But none of those posts in r/bitcoin are actual humans anyway, it's all fake bots and a couple poor suckers who don't realize they're arguing with a content farm. Here's some required reading about the bitcoin information manipulation shitshow. https://np.reddit.com/r/BitcoinMarkets/comments/6rxw7k/infor... TLDR: Nothing is real, everything is fake news, you think it can't possibly be that bad? it's actually worse than that.
I tried to buy it last night and this morning for the ~3K price, and I was blocked by Coinbase. Now it's past the 4K point.
Maybe there's no grand conspiracy, but there's something plasticy about the price movement combined with blocking of new buys at the lower prices (on Coinbase).
Indirect evidence is them erasing this blip from their tickers
Obviously also there are some really angry customers who lost large amounts of cash
EDIT: And theymos's reply with the other side of the story https://np.reddit.com/r/BitcoinMarkets/comments/6rxw7k/infor...
I will note however that people are paid by Roger Ver himself to make comments like this. eg: https://np.reddit.com/r/BitcoinMarkets/comments/6rxw7k/infor...
What possible legal action can he take? Breach of contract, maybe?
There's no laws regarding cryptocurrency insider trading or manipulation as far as I know.
And it's not a leap to suggest that these cryptocurrencies are going to be treated like securities by regulatory bodies. If the SEC argues successfully (which they seem to be leaning towards) that they're securities, a slew of regulations will begin to apply.
Simply put, you don't need a law that's SPECIFIC to cryptocurrencies in 2017.
That's what makes regulating bitcoin hard. It soon becomes a diplomatic problem.
And there's nothing that these agencies can do to stop the actual wallet-to-wallet transfer short of nuking all miners or knee-capping and getting your private key. So even if you were found guilty, you could conceivably flee the country along with a ton of currency.
Regulation is meaningless without the actual threat of enforcement. It means all exchanges can pick up and move to more friendly countries.
Source: https://gemini24.zendesk.com/hc/en-us/articles/204734485-Is-...
I hope Coinbase and their employees' activities are properly investigated at some point. I think they'll find a lot of "interesting" activity going back very far, assuming Coinbase hasn't "lost" or modified records to hide those activities by now.
That seems to be a theme in the last day or two by the BCH proponents.
https://www.reddit.com/r/BitcoinMarkets/comments/6rxw7k/info...
What I got out of it: several groups of humans splintered. One side is accused of trying to sabotage the other. The other side denies it.
I didn't pick up much of BTH's ramifactions from reading that, though. I guess you posted it to suggest that the increased blocksize isn't in Blockstream's best interests, and perhaps they played a role in militating against it.
So Bitcoin Cash and Blockstream are politically opposed.
I also think it's funny that people are complaining about this. Isn't this part of the appeal of crypto trading? That the government doesn't 'level' the playing field?
Surely if there is wrongdoing it is not the work of one employee.
1.) It's just like dollar! Shoot, coinbase won't allow me to trade it for 3 months! Every country is banning it? It went up 20% then dropped 50% today?!
2.) It's just like Visa!! Damn it costs me $500 to send $500
3.) It's just like gold! So rare....oh wait, another crytocurrency just came out with 100M unit of supplies.
4.) It's just like the bank!! Damn another exchange got shut down/frozen. The insiders made out like bandits
Oh well, who cares. It's for gambling!!!!
Money is whatever people believe it to be. You may value the USD, and that's entirely your right to do so. I choose value Bitcoin. Everyone is free to use whatever medium of exchange they believe in.
You'd have to be incredibly naive or willfully ignorant not to see the same corruption and manipulation happening right before your eyes in cryptocurrency markets.
The only difference is you can fork and run on your own.
Sure. If you think the only function of a bank is to maintain a ledger and transfer money.
I too, like to live dangerously. I run a mail server. A web server. Damn, I was tempted to (partially) host my DNS.
But running my own bank? Hell no. Those who ever had to touch things like PCI compliance or seem actual money transaction requirements will want to stay far, far away from being their own bank, so good luck there, you'll need it.
> It allows me to save my money outside of the global financial system
No, at this point in time, it really doesn't. It would, if it was accepted to be exchanged for things, which is any currency OR asset is, in theory, only good for. If you can't buy (exchange) food with it, it's worthless.
EDIT: yes, you can, in theory, exchange it to USD and some other real currencies - with a big 'if' the exchange you want to use has the means to cover it, you pay taxes on gain, and, if you're really lucky, your bank won't freeze your account when an unprecedented amount of cash flows in.
> Money is whatever people believe it to be.
Money is whatever people _agree_ on. It's not a belief.
Please get some history books out and read about money. Read about ancient Rome and what problems rose when mad emperors decided to replace money with new coins out of the blue. Read about why and how the US dollar is not based on gold any more. Read about hyperinflation after WWII. Money is regulated to protect us from ourselves.
Now take a look at the war between BTC and BTH, at how the majority of miners are not willing to overcome technical issues and work together, the incredibly waste of energy and hardware, computing the nothing, and tell me: do you honestly think it's not history, repeating itself, just in another light?
Of course, there are always some who don't care, "get rich or die trying". I'm not one of these believers.
The incredible energy for digging out gold just to keep it in locked boxes, same for all precious metals, diamonds.
> no Emperor can replace it, no changes can be done without widespread conses.
When was the last time humans were capable of agreeing and working together for long term? The blockchain thinks it's got rid of the mad emperor problem, where in reality the BTC/BTH, ETC/ETH hard forking an existing blockchain is very similar, and introduced a whole new spectrum of problems humanity tried for centuries to solve, without success: reaching consensus.
When the US constitution was born, I don't know, democracy? BTC/BTH, ETC/ETH, crypto is even more democratic as the other side can go on their separate ways, as oposite to countries.
countries go their separate ways. Sometimes peacefully sometimes with horrible violence.
Do you not see massive issues with that happening with currency? Some dev gets pissed one day and fractures the currency market?
As a tangent, what is that? Didn't find it on google (thought I wanted the wikipedia on caligula).
I think it was a reference to one of the previous comments in the chain.
Except (2), but that's being worked out right now.
Furthermore, it's way too early to compare crypto to established finance. Just because crypto awareness has gone mainstream, doesn't mean it's ready to compete just yet.
It's still technology for early-adopters. Those who don't understand that will get screwed...as it happens with every other early technology.
I'm glad my knowledge of Bitcoin will prevent the price from fluctuating.
> 1.) It's just like dollar! Shoot, coinbase won't allow me to trade it for 3 months! Every country is banning it? It went up 20% then dropped 50% today?!
Note the last sentence.
Considering that basic BTC opsec is to move your coins around regularly, this is painful unless you have insane amounts of money to throw around.
Why? For tumbling/obfuscation purposes?