The article is a bit dramatic, but the funny part is that he spent so much time trying to prove that whales install buy and sell walls to manipulate the price. This is not news and happens with every cryptocurrency on every exchange. It is especially common and easy to spot with altcoins. The typical life cycle of an altcoin is similar to this:
1) Bitcoin code forked and slightly modified.
2) New coin announced on Bitcoin talk and the creators premine enough to control the price
3) attempt to hype the coin and gain interest
4) coin is added to exchanges and people begin buying it
5) buy walls are installed by the coin creator to prevent the price from crashing and they continue to hype the coin in trading chatrooms
6) price raises high enough and enough demand exists for the coin creator to remove the buy walls and sell off premined coins
7) the price crashes and the coin is abandoned
This is called pump and dump and it happens all the time. With more successful coins...the effect isn't as dramatic bc there are investors that believe in the value of the project, but the mechanics of the price manipulation is the same.
2. It undermines the credibility of one of the largest bitcoin exchanges and thus the currency itself.
3. It undermines claims of Bitcoin value which are based on prices set on this exchange.
4. He's claiming that Bitfinex are engaging in legally dubious schemes to appear solvent, which is important.
If you use any cryptocurrency like this you should be very worried about reports that it can so easily be gamed and the market manipulated with no consequences, and that larger players in the 'market' are dishonest and failing to regulate manipulation. For every obvious and crass attempt like this there will be a lot more insidious market manipulation by big players like exchanges or large exchange customers who operate with no oversight and can set the price and profit from it.
1. It's not regulated, so it's not illegal. This is not your mom's exchange.
2. So be it. This is what traders in this particular field chose. If you want boxing, go box, if you want no holds barred, go do that.
3. To the detriment of that particular exchange. So be it.
4. Dubious, but still, if you want centrally regulated assets, there are plenty of opportunities. Cryptocoin exchanges are what they are. The response to shenanigans is not "This is unfair. The government should step in!" but "We need a bigger bot."
1) Bitcoin code forked and slightly modified.
2) New coin announced on Bitcoin talk and the creators premine enough to control the price
3) attempt to hype the coin and gain interest
4) coin is added to exchanges and people begin buying it
5) buy walls are installed by the coin creator to prevent the price from crashing and they continue to hype the coin in trading chatrooms
6) price raises high enough and enough demand exists for the coin creator to remove the buy walls and sell off premined coins
7) the price crashes and the coin is abandoned
This is called pump and dump and it happens all the time. With more successful coins...the effect isn't as dramatic bc there are investors that believe in the value of the project, but the mechanics of the price manipulation is the same.