I’m talking about making large transactions one way or the other to manipulate the psychology of normal investors en masse, causing them to move as a unit in a direction favorable to the whale.
Here are some links I found where they talk about it and largely admit it’s a problem:
I admittedly do not understand a lot of the nuances of how it is done, since I have only used it for anonymous purchases, but that is primarily because I do not find it a safe place to put money. Its fluctuations are based on the whims of people I have no way of knowing, rather than any real-world circumstances that can be studied and planned for with the proper experience and education.
Furthermore, an economy cannot function using such an unstable currency. Its valuation can change by several percent while I’m on my way to the store to spend it. It is more of a speculative “futures” asset than it is money. Even the ~8+% inflation over the past 5 years in the USA has had grievous global fallout. An 8% swing in crypto is just considered a Monday morning.
I’m not at all telling anyone not to use it. It’s fine; do what you want. Even I have. What I am saying is that it has certain intrinsic properties that make it not work well as the default regular money.
I would argue that your examples are about manipulation of people, not of the currency. Similar to the craziness of the GME (Gamestop) era, where it felt like everybody and their dog started buying GME stock. Or, say, a news outlet causing panic and a bank run. Though you’re right that since crypto still doesn’t have broad adoption, it’s easier to manipulate the smaller userbase.
Manipulation of the currency would be more like the government printing more money. This is not possible in crypto, where power is decentralized.
The instability is definitely unfortunate though. It’s a chicken and egg problem. If crypto had wider adoption, and was accepted in many stores, then it would become more stable. Just look at how much more stable the big crypto coins (bitcoin, eth) are compared to smaller altcoins. However, due to low adoption it’s still quite unstable, and that instability hurts adoption 🙃
I’m talking about making large transactions one way or the other to manipulate the psychology of normal investors en masse, causing them to move as a unit in a direction favorable to the whale.
Here are some links I found where they talk about it and largely admit it’s a problem:
I admittedly do not understand a lot of the nuances of how it is done, since I have only used it for anonymous purchases, but that is primarily because I do not find it a safe place to put money. Its fluctuations are based on the whims of people I have no way of knowing, rather than any real-world circumstances that can be studied and planned for with the proper experience and education.
Furthermore, an economy cannot function using such an unstable currency. Its valuation can change by several percent while I’m on my way to the store to spend it. It is more of a speculative “futures” asset than it is money. Even the ~8+% inflation over the past 5 years in the USA has had grievous global fallout. An 8% swing in crypto is just considered a Monday morning.
I’m not at all telling anyone not to use it. It’s fine; do what you want. Even I have. What I am saying is that it has certain intrinsic properties that make it not work well as the default regular money.
I would argue that your examples are about manipulation of people, not of the currency. Similar to the craziness of the GME (Gamestop) era, where it felt like everybody and their dog started buying GME stock. Or, say, a news outlet causing panic and a bank run. Though you’re right that since crypto still doesn’t have broad adoption, it’s easier to manipulate the smaller userbase.
Manipulation of the currency would be more like the government printing more money. This is not possible in crypto, where power is decentralized.
The instability is definitely unfortunate though. It’s a chicken and egg problem. If crypto had wider adoption, and was accepted in many stores, then it would become more stable. Just look at how much more stable the big crypto coins (bitcoin, eth) are compared to smaller altcoins. However, due to low adoption it’s still quite unstable, and that instability hurts adoption 🙃