Bitcoin Is Organized Crime

I have explained in the past what is fundamentally wrong with Bitcoin and other cryptocurrencies: a currency is actually an expression of military and judicial might. A currency needs a state, or states, to back it up, and is a tool thereof: a state, or union of states, can exist without a currency, not reciprocally

Another problem with the concept of bitcoin is that crypto currencies rest on the the “blockchain”, a perfectly inefficient, energy devouring and thus ecologically criminal, idiotic technology… Which could be useful only if information and computation were ecologically free (instead I have proposed “AWE”… which is ultimate efficiency).

Indeed, the “blockchain” records all transactions everywhere, anytime… instead of some transactions by trusted actors. Bitcoin fanatics say they have a right to ravage the planet, because they don’t trust those “trusted” actors. Well, neither do I I say: make the actors (governments, and their agents, the banks) more trustworthy.

Bitcoiners have also insisted their activity was beyond any suspicion, it’s honest, it’s new age, it’s a new dawn, the geek world, better than anything the Greeks offered… Helpful bitcoiners sent me messages offering to educate me, in all sorts of ways. All this, in total violation of the simplest observation of the Bitcoin graph, which looks like a Tulip Mania. Just worse:

Market Capitalization of Cryptocurrencies dropped by ⅔, generating more than 200 billion dollars of losses.

And indeed, turning things on their heads, there is a new reason to criticize bitcoin and other cryptocurrencies: they are manipulated by organized crime. Bitcoin enthusiasts may counterpunch that central banks are organized crime; well, I agree, and wrote so for more than a decade; however, it’s not because Rome is on fire that one should start new fires! Bitcoin enthusiasts should go the way of Nero.

 

  • New research observes that at least half of the 2017 rise in bitcoin prices was due to coordinated price manipulation using another cryptocurrency called tether.
  • The 66-page paper says tether was used to buy bitcoin at carefully selected moments when it was declining, which helped “stabilize and manipulate” the cryptocurrency’s price.
  • In general I research things that are potentially illegal, and there’s a lot of rumors surrounding potential questionable activity in cryptocurrencies,” says University of Texas finance professor John Griffin, who has a decade-long track record of flagging fraud in financial markets.

Here is the paper’s abstract:

John M. Griffin

University of Texas at Austin – Department of Finance

Amin Shams

University of Texas at Austin – Department of Finance

Date Written: June 13, 2018

Abstract

This paper investigates whether Tether, a digital currency pegged to U.S. dollars, influences Bitcoin and other cryptocurrency prices during the recent boom. Using algorithms to analyze the blockchain data, we find that purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices. Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies. The flow clusters below round prices, induces asymmetric autocorrelations in Bitcoin, and suggests incomplete Tether backing before month-ends. These patterns cannot be explained by investor demand proxies but are most consistent with the supply-based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices.

Keywords: Blockchain, Cryptocurrencies, Bitcoin Prices, Tether

Suggested Citation:

Griffin, John M. and Shams, Amin, Is Bitcoin Really Un-Tethered? (June 13, 2018). Available at SSRN: https://ssrn.com/abstract=

***

Why was Bitcoin Organized geek Crime tolerated? Because those one bought, one owns! 

All this was long obvious. As it was that organized crime used Bitcoin (didn’t just manipulate it). A high level contractor of Google told me the government (under Obama) was perfectly aware, but let it run its course. That may look strange. But not so, once one has realized that the government knows that conventional banking is organized crime, a major engine of inequality, worldwide: bankers create money, and they create it, for their friends.

By letting Bitcoin run its perverse criminal course, many geeks made lots of money, getting ethically very dirty in the process, while growing in power and influence by leaps and bounds. Same general strategy as with holding the world economy hostage of monopolies (GAFA, FANG, etc.): all these dirty, wealthy people are now stakeholders in the engine of criminal inequality. Organized criminality got them there, and their now criminally confirmed minds make them most qualified to help run the world… as the little soldiers of dirt. They are all accomplices in crime, so they will shut up, cooperate, and subjugate. Thus geeks may as well implement the system, they are not just crucial to the system… They are it (or so they think, and thus will thereafter behave as the true holders of power want them to).

When Augustus seized the Roman Republic, and made it his personal thing, he was not alone: several millions stakeholders (mostly having to do with the Roman army, its suppliers, accomplices, etc.) were helping him out. He had cultivated them carefully. Same now.

 

Patrice Ayme

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3 Responses to “Bitcoin Is Organized Crime”

  1. Matthew Arnold Says:

    Link here, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066

    Like

  2. G Max Says:

    This is infuriating in the extreme. From what you say the sums involved are just as big as most countries GDP. If I understand well, big banks invested in it, and the money they created will be replenished by US government, while it went to bad actors… And nobody seems aware of that, certainly NOT THE MSM!

    Also the geek squad out there has been dismissive of common sense and talked as if they were the new dawn, an earthly paradise free of all what was bad before while they ran a PYRAMID SCHEME. That’s all what bitcoin is.

    What do you think of Comey, Clinton and FBI?

    Like

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