Post
Topic
Board Economics
Re: Strategy for manipulating the exchange rate of Bitcoin
by
sunnankar
on 12/03/2014, 07:10:36 UTC
Ok so what would be a community counter to this ?

Bitcoin is a whole different animal and censorship resistant; including the pricing signal.

The pricing signal of gold to perform economic calculation has largely been censored by , as Dr. Greenspan testified twice before Congress, 'Central banks stand ready to lease gold should the price rise.' Central banks carry gold in the vault and gold out on loan as the same line item; in effect reporting cash and accounts receivables as the same thing. Additionally, the bullion banks have largely sold the physical gold into the market. Eventually this scheme to suppress the price of gold will fail to market forces which demand physical delivery and will be express through backwardation. One reason it does not happen faster is because it is difficult and costly to verify the quantity and quality of physical gold.

In contrast, the quantity and quality of bitcoins can be instantly determined for free be looking at the blockchain.

Consequently, the Bitcoin community's counter to any attempted price manipulation is pretty simple by standing for delivery; demand the bitcoins sent to an address where you solely hold the private key like in Armory.

And if courts allow naked short sellers to be unjustly enriched by delivering fiat instead of bitcoins then the market will simply remove that risk by shifting to collateralized options that settle in bitcoin like on Mpex.