Nearly 95% of all reported trading in bitcoin is artificially created by unregulated exchanges, a new study concludes, raising fresh doubts about the nascent market following a steep decline in prices over the past year.
Fuck paywalls...from what I can read it will end with some bullshit about "therefore regulation". Fuck these guys. Guess they're gonna push for the same feds who stole Silk road bitcoins and disappeared to be the only ones capable of regulating? Fuck these guys.
EDIT: This is a very slick presentation. The weakest point I saw was a bit of handwaving around the key signing ceremony, specifically about how sharded keys are distributed. It's odd that they go into such detail about how to provision a clean laptop but then just sort of say "well, take your private key and mask it into seven pieces".
The mention of 81 exchanges left me thinking: If none of the trading was fake, but then I created a single exchange literally named "ScamCo Faketrading Exchange" which claimed 1 petatrades per second were happening on its platform, then would this analysis say that >99% of all trades were fake?
I think it would.
I don't think any of the exchanges that I could have named off the top of my head were on their naughty list (paywall is keeping me from loading it again to check), ... so it seems to me that this report might be a bit overstated.
Seems like a good thing. Look at the volume for cryptocurrencies. It seems to be insane / ridiculous, as if the sum total of all coins for almost any given cryptocurrency are exchanging hands weekly (I know this is not exactly what volume means, but it's close enough).
Looking at bitcoin volume on coinmarketcap right now, it's about $9B 24h volume on a $71B market cap. In just 8 days the entire market cap of bitcoin will have 'exchanged hands' (again, I know this is not exactly what volume means). Meanwhile, most people are not using bitcoin as a medium of exchange. These numbers just seem absurd to me. There's no way that people are using bitcoin as a medium or exchange OR a speculative trade that frequently, unless these traders are fickle idiots.
That said, I know little about how currencies work, so maybe I'm making some invalid assumption. But I don't see how this data being faked is at all meaningful unless you're using this data to try to estimate the "value" of bitcoin, etc. If so, yeah this is bad news for you. But how did you not know that bitcoin, etc. aren't really being used to exchange value?