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Comment by cb18 | Hacker News Reader

For those speculating about what is going on here, what possible explanations hold the most weight in your mind?

It seems to me that if you have a person or persons in possession of a commodity and by using that commodity in a certain way, while expending just a very small fraction of their holdings they could potentially increase the market value of the commodity they are holding or perhaps just stem/slow the decline of its market value, that would seem to be something worthwhile to engage in, provided doing so did not require a large amount of time or resources that could be better spent.

In the case of bitcoin, creating a lot of dummy transactions to create an illusion of economic vitality in the interest of increasing the value of your stake in the economy requires little time, effort, or resources beyond the initial creation of a small program or two, and thus places it high on the list of explanations for what is going on here.

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That feels a little circular though. If creating dummy transactions can increase Bitcoin adoption and/or market price, then that increase doesn't feel "fake" or "an illusion" at all.

Dummy transactions do nothing to the price directly. The theory is that, if other people are fooled into thinking dummy tx are real tx representing real usage and starting using/investing into Bitcoin more, then this increase will be real.

I'm not sure I follow what you're saying exactly and you may have misinterpreted what I meant.

So you're saying if the ruse of creating dummy transactions is successful in attracting speculative interest[1] and driving up the price, that is no big deal because what attracted the speculative interest, the raw transaction count numbers, actually occurred in a kinda sorta way, if what those transaction numbers are often painted as, genuine utility, is not actually there, well then that's just like 'circular' man..., is that what you're saying?

Consider if a public company 'X,' conducted its finances in such a way that they set up a bunch of shell companies, transferred money to these companies in a non-visible way then had those shell companies send that money back to company X in exchange for some nominal goods or services. Then they repeated this process over and over such that the company's public filings showed a steady increase in revenue quarter after quarter, such an increase that they attracted considerable investor attention, resulting in a stock price that rose steadily on the back of these circular accounting tricks. As the stock continued to rise, the company's major stockholders cashed out their shares.

Would that be 'circular' or would that be illegal? Would that feel "fake" or feel like "an illusion" to you?

[1] Yes, we are talking speculative interest here, this is a metric that is more interesting to a speculative investor than a non-speculative user/'adopter,' a non-speculative user is just going to use it for what they are going to use it for if they have a genuine use beyond speculating.

What you describing here is dotcom IPO scheme.

Inflated revenues (instead of profits) were enough to be considered IPO-worthy.

"If creating dummy transactions can increase Bitcoin adoption and/or market price, then that increase doesn't feel "fake" or "an illusion" at all."

But it DOESN'T. That's why this is garbage. The "increased adoption" is based on spam transactions like these.

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