Wednesday, December 11, 2013

927 People Own Half Of All Bitcoins

Like I said, it is a classic pump and dump scheme. The pumpers control the overwhelming number of active bitcoins and they are now in the distribution phase.They are laying their bitcoins off during all the excitement that they have behid the scenes created.

Business Insider reports:
[A] assuming 12 million Bitcoins in circulation, here's the breakdown: 47 individuals own 28.9% of the approximately 12 million Bitcoins in existence so far. Another 880 own 21.5%, meaning 927 people control half of the entire market cap of the digital currency. Another 10,000 individuals control about a quarter. And the rest of us (around a million of us) get the crumbs (500,000 are out of circulation, whether through government seizure or people losing their passwords).



From Investopedia:

A scheme that attempts to boost the price of a stock through recommendations based on false, misleading or greatly exaggerated statements. The perpetrators of this scheme, who already have an established position in the company's stock, sell their positions after the hype has led to a higher share price[...]The victims of this scheme will often lose a considerable amount of their investment as the stock often falls back down after the process is complete.

50 comments:

  1. I think Bitcoin speculators know it's risky and they're just looking to make a quick buck. I'm not convinced it's a pump and dump. Bitcoin has been in the news.

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    1. Who do you think is putting it in the news? Every top notch pump and dump I have seen includes getting news out. And I called it that an analyst would come out with a report on Bitcoin. That report didn't happen by accident either. You rally need to learn how Wall Street works. Read 'How to Manipulate a Stock" by Marchand Sage.

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    2. Manipulation of the price of an asset does not change the underlying fundamentals of said asset.

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    3. Or: Manipulation of the price of an intangible asset does not change the underlying fundamentals of said intangible asset.

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    4. While your statement is true, and I agree (And I even get your point that intangible is more volatile)...the maxim still applies to tangible assets. Gold, real estate, stocks, etc...all kinds of real, tangible assets that are "manipulated" on a daily basis.

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  2. Replies
    1. sounds like you're bias against anyone that speaks ill of shitcoins. maybe you know that they're only headed down. crash and burn.

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  3. Wow...capital distribution not fair enough for you Robert? Using Wiesenthal's crew to try and bring down the Honey Badger of currency. You are so shameful these days. Not that you post my comments anymore anyways.

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  4. Wenzel, at this point you are demonstrating a heroic willingness to just make stuff up.

    You would think you have evidence that early adopters are pumping bitcoin, but of course you don't. If you even look into it you will find that nearly all the developers (who are the true early adopters) have been pleading with people not to invest more than they can afford to lose.

    "Public Service Announcement #2: Only invest time or money into Bitcoin that you can afford to lose." - Gavin Andersen, lead developer.

    This sentiment has been echoed repeatedly by other developers and early adopters. Neither did Satoshi pump bitcoin when he was around. Go read through his forum posts and point me to a post where he pumped bitcoin. I can't be done.

    You and Gary North are taking it to a new low.

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    1. You have no idea how a pump and dump is run. The point is that most of the Bitcoins are held in a very few hands, as in most pump and dumps. BUT most of those who hold large concentrations have no idea as to what is going on. I have talked to major shareholders in some spectacular pump and dumps and they never sold a share. It's the active operator among the large concentrations that is liquidating stocks/Bitcoins into the buying. He really doesn't want the other concentrated holders to be selling in competition with him. Don't worry, the early adopters are as clueless as you are. The pump and dump shall continue!

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    2. Yes, Bitcoin will be hyped - and for good reason. This will lead to many normal "mania's" and "corrections" on its way to become the new global reserve currency and the world's most demanded asset.

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    3. Robert: You are the one who does not understand a pump and dump. A pump and dump requires an ACTIVE particiapant who knows the underlying security is an illusion.

      If there is no active "pumper", then it is called a mania, not a pump and dump...and there is a difference.

      But you can keep coming up with stuff I guess. You've demonstrated that you will cling to anything that is Bitcoin negative, no matter how stupid.

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    4. Honey badger, care to make a bet on that? I will bet you 100 shitcoins for 100 ounces of gold. In exactly 1 year from now if shitcoins, if still even around, are the new world reserve currency I will give you 100 shitcoins, if it's not you give me 100 ounces of gold. You won't take that bet. I bet you.

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    5. -Honey Badger,

      and, if/when it finally becomes a replacement for the Dollar, governments and central banks will dumb billions and start wars to assert control over it, alter its fundamentals, and use it to enslave you just like the last they did with the Dollar.

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    6. @ Chris B December 11, 2013 at 8:30 PM

      I would take that bet but the physical limitations of your gold would not permit it. With bitcoins, you could place them in escrow outside of government reach. With gold, I couldn't place it in escrow anywhere due the fact that governments could veto our "bet". Find a jurisdiction that will allow such a transaction and I'll have gold on deposit to back up my bet faster than you can say "shitcoins".

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    7. @ Anonymous December 11, 2013 at 9:02 PM

      Honey Badger says, "bring it on."

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    8. so, essentially you're saying you won't make the bet. I didn't think so. shitcoins are exactly that...shit. and wait until the government shuts down your impenetrable shitcoins. it's true they won't get everyone when they do but when they do, and they will, those they do catch will be made examples of and everyone else will go right back to cash, gold, silver, etc. shitcoins will be gone in a year's time. mark these words and refer to this post. come see me when you grow a pair and take my bet.

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    9. "In exactly 1 year from now if shitcoins, if still even around, are the new world reserve currency. I will give you 100 shitcoins, if it's not you give me 100 ounces of gold."

      If you want to bet the relative worth of bitcoin vs ounces of gold one year from now, the simplest way is if one year from now he gives you the value of 100 ounces of gold AND you give him 100 bitcoins. So the more wrong each of you are, the more you'll end up losing, and vice versa. It's more elegant that way.

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    10. well its never to late to buy in,,, you dont wanna get left holding the fiat wheel barrel

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  5. Wenzel and North will prove correct. Period.

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    1. Nice emphatic statement. Call me when this happens.

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    2. ....just give me your number....
      Wanna wager?

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  6. The irony is that when you mention gold to a Bitcoin fanatic, they argue that the rich people will end up owning all the gold and that is why gold is a terrible money. Clearly, Bitcoin is immune to this problem.

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  7. "They are laying their bitcoins off during all the excitement that they have behid the scenes created." This is demonstrably a lie.

    The early miners who generated the first Bitcoin did not create them "behind the scenes" all Bitcoin mining and transactions are done in public. This is why you can create a pie chart showing who owns what percentage of the existing Bitcoins. Either you are lying, or you simply still do not know how Bitcoin works.

    On the one hand, you and North claim that Bitcoin is not private, but we note with satisfaction that you are unable to name any of the people who are in the Bitcoin rich list on your chart. If Bitcoin is not anonymous, why can you not name them? I know this is seeking an technical answer from someone who is not capable of providing any insight into this conundrum, but I ask it rhetorically for the benefit of the intelligent readers of this blog.

    The fact that everyone who enters Bitcoin knows how it works, and its workings are all public and under intense scrutiny shows that it cannot be classed as a pump and dump or as you previously falsely claimed but have now abandoned, a "Ponzi Scheme".

    The people behind Bitcoin and the early adopters and miners are not promoting it in any way. They are simply holding on to their Bitcoin and not spending it. Why should they? They are going to become the richest men on earth once the dollar collapses and Bitcoin is used every day by billions of people.

    You really must try and get to grips with Bitcoin, how it actually works in detail, and the reason why it was created before you write any more articles on it. Each time you launch one of these ignorance torpedoes, it turns 180 degrees and blows up your arguments, leaving them, and your reputation in pieces, sinking to the bottom of the sea of ignorance.

    Learn about Bitcoin, use it, install it on your iPhone consult with expert software developers who can explain it (dumb it down) for you, and stop painting yourself into a corner.

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    1. How can Bitcoin be anonymous if, as you say, "all Bitcoin mining and transactions are done in public"?

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    2. Also from wikipedia:

      "Bitcoin uses cryptography for digital signatures but not for encryption. Bitcoin is anonymous in that it's possible though difficult to associate Bitcoin transactions with real-life identities.[20] In addition, Bitcoin intermediaries such as exchanges are required by law in many jurisdictions to collect personal customer data."

      Possible. Though. Difficult. Infinite money might make it easier.

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    3. How can Bitcoin be anonymous if, as you say, "all Bitcoin mining and transactions are done in public"?

      What I find amazing is that you ask this question here, rather than using Google to find the answers you need. Why don't you do your homework and then try Bitcoin yourself? Its clients are free to download and use, and so you have no excuse.

      Bitcoin uses alphanumeric addresses (that means an address that is made of letters and numbers) for each "bank account". That means you can own an address and all the Bitcoin on it without having your name attached to the address.

      If you have an iPhone with $20,000 of Bitcoin on it, and you give that phone to a friend as a gift, he now owns those Bitcoins and you do not. The Bitcoin address stays the same, and your name is not attached to them.

      You can also create as many receiving addresses as you like with the Bitcoin software, so that one person can send you money to one address, and you never have to use that same address again. You can generate a receiving address for every transaction you receive, and all of them belong exclusively to you and no one else. Its not like having a bank account where the bank issues you with an account number that is locked to your name. With Bitcoin, you can have thousands of addresses, all on the same iPhone, and all belonging exclusively to you, all receiving Bitcoin for you.

      Do you understand now, why Bitcoin is almost anonymous? Your name is never attached to your account number, and you can generate account numbers in an ad hoc fashion as needed.

      Its detail like this that North and Wenzel do not understand that makes it hard for them to appreciate the genius of Bitcoin; this is because they have not used it personally and are incapable of understanding the written explanation of how it works.

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    4. "Do you understand now, why Bitcoin is almost anonymous?"

      Is this a joke?

      The IP address(es) from which the traffic accesses the transaction logged coin exchange in question are the full knowledge of "5-eyes," via their (no longer water cooled?_ can just use A/C ?) logging & sorting of backbone data, and (remember "use both ways") via their deals with the telcos that built out the structured "network" as we pay for it -- whatchu doin', fresh ubuntu instances only into TOR from public Wifi? Always?

      Ok then Mr., for the regular guy, a public transaction log with IP addresses it matters. It mattered for Mr. contract killa mushroom man. They see Tor traffic, flag it, monitor it at the source. Then run down the Wifi at the registered address on the registration with your ISP, that you pay for. Remember your MAC and hotlist that too (do you spoof that regularly at your local Tim Hortons Wifi?). Then go sniff that from the street, n see where it goes. The feds did a "great job" on that one, and I am free market as they come. The guy went down for trying to hurt people physically, that's not cool.

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    5. "North and Wenzel " both understand very well the fact that the "distributed ledger" can be co-opted, and as the Fed says "that calculation changes with unitary value."

      The oh-so-uber complex miners consolidate and collaborate over time as cost to produce rises, and the system, running in tandem with the dominant currency system, has outside resources to aid in this, in due time. Then reset the hash on the majority of verifiers, and valla! de-valuation.

      Further, this sets up a manner in which transactions from "blocked" IP's can be one-day ferreted out by newly discriminating verifier codes. And rogue miners defying the State fork, well, "their" coin isn't gunna verify or work on the other system, and will only be worth something in the then Balkanized portion of the system.

      Plus, the whole--lets not transact when the lights are off thing is stupid.

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  8. Save some space in the mid-term future where people can express gratitude to Bob and Gary for saving them from massive losses once the Bitcoin bubble pops.

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    1. amen. but honey badger will have become a trillionaire by then...or haven't you heard? it's always smart to invest in something that might lose it's value tonight. but don't buy gold because it's not recognized and hasn't been used for eons as "money." shitcoins is the future. YAWN

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    2. how do you buy something at 3am with gold?

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    3. Ask the seller who, ostensibly is awake, to accept it.

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  9. Hedge your bets. If BTC is the money of the future, then no big deal not getting in right now, they'll be paying us in it later. If it's a giant floperoo waiting to happen, tulips, pump & dump, Ponzi, mania, or whatever, then you'll lose everything in the bust and look foolish to boot.

    Personally, all I can see is a giant federal apparatus with lots of guns and an army of surly bureaucrats which has a vested interest in maintaining its monopoly over issuance of the imaginary currency. It seems unwise to bet against that, just now, when gold and silver are a much safer bet.

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  10. So WHAT? The fiat currencies of the world qualify as ponzies. The creators of the currencies fleece all of us until we discover the giant ripoff, at which point triggers a hyper inflation or default by the ponzi scheme owners. Bitcoin is no less a risk than the American dollar or US bond at this point.

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    1. Gold. Silver. ...and non-mercury light bulbs.

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    2. Bob is not advising anyone to buy or put their faith in fiat currencies either, quite the opposite. There are other choices than just bitcoin or fiat currency.

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    3. I don't disagree, but either way it's death by ponzi...so that's not a compelling argument for Bitcoin.

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    4. Are you making the case for Au/Ag? Well done.

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  11. If bitcoin privacy is an illusion, why not publish the names of the ten largest holders?

    All transactions are public, which of the largest holders are selling millions of $$ worth of bitcoins into this? Since every transfer is public, any concerted dumping of bitcoins by major players will be immediately evident.

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  12. >> The irony is that when you mention gold to a Bitcoin fanatic, they argue that the rich people will end up owning all the gold and that is why gold is a terrible money. Clearly, Bitcoin is immune to this problem.

    That's a stupid argument, and I've never heard anyone claim that.
    The advantages of bitcoin over gold are:
    1. You can't use gold for electronic transactions unless you entrust a third-party to hold your gold for you.
    2. They're easily divisible.
    3. Gold is heavily manipulated by central banks since they own most of it - about half of all bitcoins haven't even been generated yet and the way 'rethey distributed by the network is based on a sort of lottery system, so it's unlikely that any central bank can take control of it as they have done so with gold.

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    1. "it's unlikely that any central bank can take control of it" lmfao

      "[T]here have been a few instances of “forks,” moments when part of the network accepted one new block as valid while another part rejected it and accepted a different block.

      These incidents happened for accidental reasons, but a fork could someday be the result of malicious action.

      It is generally thought that it would be too expensive for a single malicious user (or group of malicious users) to take over more than half of the network; but if bitcoin were to grow significantly in value, this calculation could change." writes a central bankr WHO COMMENTS LIKE THIS WITH NO HW DONE??

      "Government can update the bitcoin supply by changing the code (on devalue day) for their ostensibly now majority-owned miner/verifiers ledger." writes Wealth Cycles

      Even the Financial Times commented twice on the subject:

      The aggregate operating cost of the mining pool is what protects the bitcoin system from an attack (it becomes vulnerable if someone controls >50% of mining resources)." HELLO IS THIS # 'UNLIKELY'

      However, unfortunately this is not the case in the actual implementation, and this is a well known vulnerability of the system.

      Once the mining profits will drop significantly (in about 5-10 years) there will be less miners protecting the system, and it will be more vulnerable to attacks.

      And the other work the Financial Times mentions, from Cornell, phys.org:

      The paper, "Majority is not Enough: Bitcoin Mining is Vulnerable," is by Ittay Eyal, a post doc member of the Computer Sciences department at Cornell and Emin Gun Sirer, associate professor at Cornell.

      According to the two researchers, "Empirical evidence shows that Bitcoin miners behave strategically and form pools.

      “Specifically, because rewards are distributed at infrequent, random intervals miners form mining pools in order to decrease the variance of their income rate.

      Within such pools, all members contribute to the solution of each cryptopuzzle, and share the rewards proportionally to their contributions. To the best of our knowledge, so far such pools have been benign and followed the protocol."

      The two researchers present an attack with which colluding miners obtain a revenue larger than their fair share.

      "This attack can have significant consequences for Bitcoin," they warned, where rational miners join selfish miners and the colluding group increases in size until it becomes a majority.

      At this point, they said, the Bitcoin system ceases to be a decentralized currency.” THAT"S A WRAP

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    2. "as they have done so with gold."

      nope. 99% in the ground, 10-15% above ground is banker's (who often are responsible to their sovereigns to simply hold it (such as to back the euro). Despite Greece using their gold to back the Troika deals, it isn't gone. It isn't sold. It's being used as collateral for euro loan extensions right now. Surely it could be lost, but the point is there, and in Cyprus, gold is used for the people (who oddly want to remain in the euro, and not their own currency, but that's a different point).

      If this isn't true, then why are they sellin' it so damn cheap, over all these years, plenty of opportunity to save at the suppressed prices if you are Chinese, American or Indian--the common man has benefited by banker gold policy, and they DO NOT (31,211mt) hold much relative to the 170,000 tons above ground.

      KTHXBI

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  13. somebody remember history of FB - or Facebook, and it's ownership. Just curious.

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  14. IIRC in the first few years of its life 99% of all twitter shares were owned by just 2 people.

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  15. What is to stop coercive forces from seizing control of bit coins?
    (IE "I'll stop torturing you for access to your bitcoin account")

    What is to stop hackers from fudging their accounts to make their money multiply?

    The account may not be linked to your name but you've made it electronically. Encrypted or not that can be tracked. You already know the NSA is watching everyone, along with other intelligence agencies around the world and the technology companies they're allied with. You seem to ignore that there is a monopoly of elite users who control the bulk of the 'money', which is no different than currency now. You're stupid to think that this is any different from cronyism/corporatism etc. If the current power structure doesn't seize bitcoin (They can, you're naive to think they can't. At least enough to tip the scales again towards them) then you will have only enshrined a new aristocracy that you know nothing about.

    You're trading manacles.

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  16. What's the difference between this and fiat? There are but a few that possess all of the USD here in the states. What's the difference (other than the limited amount of bitcoins in circulation)?

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  17. i dont think most of you understand bitcoin. it is a new technology that will change payment systems forever. it may not be bitcoins being used in the future, but the protocol cannot be un-invented.

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    1. This is closer to the mark, imo (-h).

      The idea of distributed ledger isn't okay in today's world, but "frictionless" clearing with low costs is closer to "1. You can't use gold for electronic transactions unless you entrust a third-party to hold your gold for you."

      Private institutions offering live video feeds, live tours, multiple 3rd party audits, quick shipping, and full public transparency could be found in competitors, seeking to offer the best service.

      How this melds with being "distributed," isn't the miner network (cause it wont be), it is the internet itself, the distributed network transition from structured--this is the liberty you seek.

      Imagine:

      No ISP registration, noo bills, no censors, free speech, free transactions, free to chose and convert between units -- accomplished with distributed networking-- "protocol" ideas should be focused on moving data over 3rd party devices securely in the background--where users of the network can opt-in, using any device to pass onward data requests. The distributed ledger in this case could be localized or regional, is truly anonymous (spare MAC address and device type), the function could be to update bandwidth capacities based on radio signal strength, to sort out routing efficiency.

      Free speech and press is the bitcoiner's pitch, but their system supports tyranny. Yaa need a re-do where the money foundation isn't a man-made construct that CAN change (and many would argue is time-bomb set to do so), as naturally, dynamically self-moderating supply proved historically superior..

      Do your nerd-front flips in mesh networking--become a digital steward for OTI. Develop routing protocols for free Wifi networks. Ask yourself this... if your cell phone/pad/whatever, can blast data over radio at that pace to some tower, why not device to device. Skip the censors -- yes hard links can connect soft, and it all integrates to where desired end-points reside today. But the greater the developments and resources in local ... then regional voluntary networks--- the closer you get to covering the globe in one-big-flashing-"net"

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  18. Does this graph and set of statistics take into account all of the "hot wallets", exchanges and "bitcoin banks" that hold vast amounts of money on behalf of their users? I'd imagine not, just more propaganda. The whole world is a pump and dump scheme for the 50 or so people that run it.

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