
Is Bitcoin surge driven by paid-publicity (similar to US election story)? - anudeep2011
Help me understand why this strategy would fail.<p>Let&#x27;s assume I got 100M$ with me.<p>Step 1: Purchase 70M$ worth of bitcoins.<p>Step 2: Spend 30M$ marketing bitcoins as the next big thing<p>Given that bitcoin is a pretty good product, the additional marketing would help convince people to invest in it.<p>Step 3: Convince 1000 other 100M$+ net-worth individuals to do this.<p>Step 4: Let it surge. Wait till the combined worth of 1000 investments above is &lt;30% of the market. Pull out.<p>At this point there is about 30B$ of marketing budget. 3 times of what Samsung spent on marketing in 2016.<p>Fake news, facebook &amp; twitter ads that influenced US elections proved that it&#x27;s possible to do something like this. At this point, it&#x27;s worth mentioning that &#x27;Bitcoin is a great product&#x27; unlike the former case.<p>Doing above is possible with any public stock but it&#x27;s probably illegal. With Bitcoin I am assuming there is no such check.<p>So what&#x27;s stopping people from doing this?<p>Anyone else thinks this is how it&#x27;s happening already?<p>Related article:<p>[1000 people own 40% of the market]<p>https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2017-12-08&#x2F;the-bitcoin-whales-1-000-people-who-own-40-percent-of-the-market
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dmschulman
Why pay for the marketing when every major news outlet in the country will
continually cover the story as the price continues to rise wildly and as major
financial institutions get invested?

I run multiple browser plugins to block ads on my browser, but has anyone
actually seen Facebook, et al ads for cryptocurrency?

~~~
geofft
> _Why pay for the marketing when every major news outlet in the country will
> continually cover the story_

Marketing includes convincing news outlets to actually run that story as
opposed to other stories:
[http://www.paulgraham.com/submarine.html](http://www.paulgraham.com/submarine.html)

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bufferoverflow
If you can convince 1000 people to invest $100M each with just $30M in
advertising, you're some kind of marketing Einstein of our generation.

~~~
anudeep2011
I actually did not mean to spend that 30M$ to get 1000 others. But yeah how do
I convince 1000 others to invest 100M$ into this is a valid question.

If I am the one with $100M, I will likely have enough connections to start the
ball rolling.

~~~
ghostbrainalpha
So you want to convince 1000 people to invest $100 million and spend 0
advertising on doing that.

That would be Einstein's Einstein. If you can convince 1000 people with 100
Million to do anything, you could accomplish ANYTHING.

Your plan is basically to create the ILLUMINATI, but instead of having it be a
small circle of individuals, it would be the size of an army.

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vivan
In financial markets this is called a pump and dump scheme. It is illegal for
regulated assets (see Wolf of Wall Street). However as Bitcoin is unregulated
there is nothing stopping this from happening (yet).

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brndnmtthws
You may want to just accept the fact that Bitcoin is valuable because of what
it offers as a store of value and system of trustless, censorship resistant
exchange of value.

~~~
aplummer
It’s definitely not all of those when >= 51% of the mining power is in the
PRC.

~~~
brndnmtthws
Miners actually have a lot less power than people realize. Anyone can run
their own fully-validating Bitcoin node. Miners do indeed mine the blocks, but
_all_ nodes perform verification. If miners try to mine invalid blocks,
Bitcoin nodes will simply reject them.

~~~
geofft
What do you mean by "invalid"? My impression is that if you control 51% of the
mining power and have at least some amount of control over the physical
network path to your victim (e.g., ability to inject RST packets), you can
execute double-spend attacks.

Are double-spend attacks not a concern?

If they are not a concern, why do we need so much computational capacity for
mining?

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kneel
For the majority of the population I'm willing to bet that immediately family
is the only place they'll take financial advise, thus the thanksgiving holiday
bump.

People went home for thanksgiving and told their families about the 700%+
gains that bitcoin made over the year. That's where the pump began, it's gone
viral since. Memes, trending, hashtags are raging over bitcoin.

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readhn
Fear and greed at work. They have driven many other other markets in the
stratosphere in the past. Study history and what happens after :)

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chatmasta
There is almost definitely rampant sockpuppetry in the bitcoin community.

One question I’ve been interested in: is there a way to trick algo traders
into buying an altcoin? Perhaps by spamming twitter and Reddit with positive
sentiment text about that altcoin?

~~~
anudeep2011
Those algos, ideally should weigh the twitter handle. Or else it's a stupid
algo.

One need to spam through authoritative handles.

Pretty much like tricking google ranking algorithm with site-farms and fake
backlinks. But hey, a lot of people were able to do this before Google started
to improve its algo.

~~~
chatmasta
Twitter can’t even tell the difference between an “authoritative” account and
whatever the opposite is.

If any bots are scraping twitter for altcoin signals, I would be pretty
surprised if there were any checks other than num followers / join date / etc.
Determining if a twitter account is a bot, even with minimal certainty, is NOT
an easy project. And many of these crypto traders are not exactly John Carmack
either.

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anilshanbhag
I have noticed this phenomenon called Sell the News. Once the future contracts
are out, there will be nothing new to look forward to and price will dip. That
is still a few days off, who knows what will happen till then.

~~~
leoplct
Why with futures there will be nothing new to look forward to?

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thisisit
Well the assumption here is that general public or the dumb money can actually
create a rally which increases in multiple of 1000s.

This is possible and does happen in penny stocks where stocks go from couple
of cents to couple of dollars or maybe in 100s. But, in 1k or even 10ks? I
seriously doubt it.....Unless there is a story behind the volume and there is
some _serious_ round trip trading going on:
[https://www.investopedia.com/terms/r/round-
triptrades.asp](https://www.investopedia.com/terms/r/round-triptrades.asp)

~~~
kkotak
It's called market making. Happens on all exchanges. Without them there won't
be liquidity.

~~~
brucephillips
Huh? OP is describing appreciation, which has nothing to do with market
making.

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paulus_magnus2
[https://qz.com/1149772/the-murky-relationship-between-
bitfin...](https://qz.com/1149772/the-murky-relationship-between-bitfinex-and-
tether-is-raising-suspicions/)

Tether is printed out of thin air and used to buy BTC. Right now nobody calls
to convert Tether back to USD so the con can continue. (to be confirmed
whether this is the major factor in the BTC bubble)

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synaesthesisx
The thing is 1000 people don't necessarily own 40% of the market - it's 1000
addresses. Many of those addresses likely belong to exchanges and hold
multiple users wallets.

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jaxn
At this point, I can’t imagine this isn’t a pump and dump. There are a lot of
people who have spent a lot of time trying to figure out how to do a pump and
dump without getting tripped up on regulation.

There may not be a single bad-actor, but rather a bad-actor friendly
environment making this inevitable.

When everyone else is greedy, be scared.

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atentaten
> Fake news, facebook & twitter ads that influenced US elections proved that
> it's possible to do something like this.

Why is it treated like some sort of revelation that the media influences
elections, Russians notwithstanding.

~~~
whamlastxmas
People are desperate for a scape goat after getting their egos thoroughly tied
up in a terrible election.

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deweller
People who are new to Bitcoin don't realize that there has been a growing
grass roots movement to promote Bitcoin all over the world for years.

I realize that it may seem to have come out of nowhere, but the recent
popularity is the culmination of years of hard work by people who are
genuinely excited about it.

------
VMG
also known as the bitcoin pump-and-pump

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dustingetz
bitcoin trended on r/all @ 10k, that's why the surge

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bellajbadr
dump and bump

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PeachPlum
> Fake news, facebook & twitter ads that influenced US elections proved that
> it's possible to do something like this.

but Hillary lost.

Facebook has identified $100,000 of ads that came from accounts associated
with Russia.

Clinton and Trump combined spent $81 million on Facebook. [1]

[1] [https://techcrunch.com/2017/11/01/russian-facebook-ad-
spend/](https://techcrunch.com/2017/11/01/russian-facebook-ad-spend/)

~~~
jbob2000
I think it's a mistake to equate ad spend with ad effectiveness.

Russia only needs to sow discord, they don't need to follow you through the
entire election season like Hillary does. A few targeted ads here and there
are all that's needed to compound their other efforts across the web.

~~~
colordrops
Signals and noise are coming from every direction at much greater orders of
magnitude during an election cycle. If her campaign was so weak that a little
"discord" killed it then she already lost on her own.

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Sevii
Why does crashing the market make sense if it’s a good product?

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rthomas6
A good product for what, exactly? Fast, decentralized, small monetary
transactions? Because right now BTC is pretty awful at that.

~~~
drcross
>A good product for what, exactly?

Since its inception it's an exceptionally good store of value over the medium
to long term.

~~~
wpietri
Not quite. Bitcoin has been an excellent bet. The economic notion of "store of
value" requires stability, but Bitcoin is definitely not stable. Just today it
fell 10%, and nobody would be surprised if it were to drastically exceed its
previous peak next week.

~~~
polynomial
> nobody would be surprised if it were to drastically exceed its previous peak
> next week.

Apparently CBOE would be somewhat to very surprised.

