[heptathorp]

> A logical explanation for the high volatility of Ether, relative to Bitcoin and common stock, is that Ether is transferred or traded in a way in which Bitcoin and stock are not. More specifically, Ethereum has contract accounts which can cause Ether to be transferred between accounts in an unpredictable manner. (While Bitcoin and common stock are also traded by algorithms, the distinction is that anyone - even someone writing a hello world program - can instantiate a contract account on Ethereum. Meanwhile, algorithmically trading Bitcoin or stock requires more technical sophistication.)

Can anyone clarify what the movement of Ether between contract addresses has to do with the price of Ether? Intuitively, the price of ETH would move when it is traded against other currencies, not when it is transferred between accounts on Ethereum. Yes, it's easy to write a contract that moves Ether. It's also trivial to create a Bitcoin transaction.

[anjc]

Presumably they're talking about the consumption of Ether as gas, to run contracts. Perhaps they're seeing that algorithmic trading of currency is more predictable than gas consumption by distributed apps, which may be highly and suddenly viral for some period - e.g. Cryptokitties. Viral use of the DApp in theory would increase the price of Ether due to increased demand.

[heptathorp]

That makes sense. It wasn't clear from the paper since they talk about how Ether is "transferred or traded" and comparing it to algo trading.