Reading this article made me wonder - how much of the bitcoin rally is due to counterparty risks?<p>If I remember correctly the last ramp up happened during Mt. Gox era. They were having USD withdrawal issues which resulted in BTC prices being very high on the exchange. But it din't deter them from publishing prices and making markets.<p>Now is the case of Bitfinex suffered from a hack like Mt. Gox and are trying to stay afloat. As per coinmarketcap, has nearly 15% of bitcoin volume which is pretty high to ensure market follows in-step to their market making. A quick search on Google turns up pages of people asking about Bitfinex withdrawals.<p>For people who are curious about this, there was an article yesterday about Zimbabwean Bitcoin soaring to 12k USD, which obviously hinges a lot on counterparty risks and resulting low liquidity:
<a href="https://news.ycombinator.com/item?id=15627608" rel="nofollow">https://news.ycombinator.com/item?id=15627608</a>
While I'd enjoy a good detective journalism, this article is just making claims out of thin air. And here is one:<p>> However, this doesn’t stop Bitfinex from tripping over their shoelaces to immediately list a fork which doesn’t exist, in order to make money off of suckers.<p>That is not correct. Bitfinex didn't list Bitcoin Gold. They listed a future contract of Bitcoin Gold (though the naming "token" is a bit confusing). You can create a future contract about anything, like the weather or soccer.<p>> Prior to publishing this post I was informed that Tethers are on the rise. Today, at the time of this post there has been another 25,000,000 USDT printed.<p>First, a new creation of Tether doesn't result in a pump. That would be too obvious for traders to arb the effect.<p>Second, Tether is not used by Bitfinex heavily. Tether biggest clients are Polonix and Bittrex. And there is <i>blockchain</i> proof for that: <a href="https://wallet.tether.to/richlist" rel="nofollow">https://wallet.tether.to/richlist</a>
This guy has been trying to spread doubt about bitfinex for a long time, but never has much to back it up. A few months ago he went on a big campaign against Tether (tokens associated with Bitfinex), claiming they were created out of thin air. Tether then completed and released an audit by a professional, accredited team of their bank balances (1). I don't personally use Bitfinex, and it's possible some of these accusations are at least partially true, but there's really no evidence to confirm that. Don't buy into this type of FUD without doing your own research.<p>Some of the claims he makes are disingenuous. Bitcoin Gold has nothing to do with Bitfinex, and is listed on a number of exchanges. It's definitely a pretty sketchy project, but it was a BTC fork and users tend to dislike when their exchange keeps forked tokens to themselves. EOS/IOTA are big projects with large market caps and real teams. Did some weird accounting happen after the Bitfinex hack? Maybe. Did most of the people end up getting their money back? Yes. Does it matter now? Not really. This is the largest BTC exchange (by volume) in the world. They generate tens of millions of revenue from exchange fees every month. There's no clear reason for them to engage in any weird, illegal money schemes at this point, they already have a money printing factory.<p><a href="https://tether.to/wp-content/uploads/2017/09/Final-Tether-Consulting-Report-9-15-17_Redacted.pdf" rel="nofollow">https://tether.to/wp-content/uploads/2017/09/Final-Tether-Co...</a>
Maybe I misunderstood this, but basically you got 1 bfx token for each dollar that was stolen due to the hack. As people sold bfx tokens at lower prices than $1, (in part, because the us announced this was not ok, in part due to varying confidence in bfx ability to repay,) bitfinex could rebuy some of those tokens at a discount, and clear them to itself at a fraction of the cost<p>There were also occasionally rolling rebuys of bfx tokens at the face value of $1.
> As Bitfinex has become more and more desperate, they have listed more and more crypto-currencies of questionable value, such as EOS/IOTA/ETP and so on.<p>As per coinmarketcap.com:<p>EOS is ranked 19, 442 million in marketcap<p>IOTA is ranked 11, 950 million in marketcap<p>ETP is ranked 70, 73 million in marketcap<p>Anyone can throw some light on what these coins really are?<p>Additionally, BTC markets:<p><a href="https://coinmarketcap.com/currencies/bitcoin/#markets" rel="nofollow">https://coinmarketcap.com/currencies/bitcoin/#markets</a><p>shows Bitfinex raking in over 15% of the current market volume. I wonder what will happen to the price if they go under.<p>While I agree to most of the article, specially the Tethers part, Debt to Equity swap is a real thing and not a Ponzi scheme:<p><a href="http://www.investopedia.com/terms/d/debtequityswap.asp" rel="nofollow">http://www.investopedia.com/terms/d/debtequityswap.asp</a><p>Though whether the equity shares are worth as much as Bitfinex is claiming them to be is an another question.
Bitfinex didn't force anyone to convert to equity. I was a bitfinex customer. I lost money in the hack. They certainly paid me back. These silly criticisms of them need to stop. They did the best they could with a bad situation. I wouldn't have wanted them to do anything differently than exactly what they did.<p>They allowed people to convert to equity as an <i>option</i>. A <i>choice</i>. They paid back everyone who didn't <i>choose</i> to do that, in full, and quite quickly. Bitfinex's response to that hack should be considered a model for any future company in that situation. Hopefully such a thing won't happen, but if it does, there's no better way to respond than <i>exactly</i> how Bitfinex did.
The 112k bitcoins stolen were worth $72 million at the time, they are now worth $856 million (!). The loss they caused their customers is only getting worse and worse.
Bitfinex has a big pie chunk of bitcoin trading volume
<a href="https://www.coingecko.com/en/coins/bitcoin/trading_exchanges" rel="nofollow">https://www.coingecko.com/en/coins/bitcoin/trading_exchanges</a><p>Not going to afford another mtgox are we?
Every exchange has their own "virtual dollars", i.e. the user deposits. How do you know they are real? Tether is just a way to securely transfer user deposits between exchanges, and it's not more or less trustworthy.
LOL<p>Even better than a Ponzi Scheme, let's just sell "shares" of this "company" (which by the way has a paper value of a very round and big ZERO) for cash<p>Toilet paper provides better value<p>Oh wait, he "buys low and sells high", that explains it.
> As Bitfinex has become more and more desperate, they have listed more and more crypto-currencies of questionable value, such as EOS/IOTA/ETP and so on.<p>EOS and IOTA are legit!
I really wish that HN had a rule where it would be mandatory for commenters to disclose their holdings in any cryptocurrency threads. This would make it easier to flag comments that look like they're just pumping a coin to improve its search engine status.<p>If you're praising Bitcoin, EOS, IOTA or whatever FooBarToken, please add a short note at the end to explain what you stand to gain. Either: "I'm long IOTA", or "I don't own IOTA and have no plans to initiate a position on the short term".<p>Similar rules apply at forums where penny stocks and other volatile traditional securities are discussed, so it's absolutely not an unreasonable thing to ask.
Lots of bullshit.<p>Just a few points:<p>A) Iota is a legit currency trying to do something new in the crypto space.<p>B) The listing Bitcoin gold did not 'create' 2 bn usd - if you tried to liquidate even a fraction of that, you would drive the price to 0. There was significant demand from trader and speculators for its listing (not that I agree with it, but anyway).<p>C) Saying that a company that generates 30 mil. usd in revenues each month is worthless is really laughable.<p>D) This author has had a bone to pick with bitfinex for a long time. I consider him a shill with an agenda, and it is surprising that he is given so much space (even on HN) to spew his BS.<p>edit: formatting