[kilo_bravo_3]

I like how cryptocurrencies were launched as an alternative to central banking, wresting control of money away from the government and big banks. An open and level playing field that would democratize how people transact financially with each other.

And then the first thing the early adopters did was recreate the flawed financial institutions that surround "real" money so that they could pretend to be Gordon Gekko and throw around words like "arbitraaaaage".

Is there data on what percentage of cryptocurrency transactions are "Real, actual, humans buying and selling real, actual, things or compensating each other for their ideas and thoughts" and what percentage consists of "traders shouting at each other in the echo chamber"?

[nostrademons]

Haven't run the analysis myself (yet - it's awfully tempting), but it seems like you could get rough numbers of this by computing the volume of on-chain transactions (excluding transactions to known exchange wallets) vs. the volume on all exchanges. The idea is that if you're just trading crypto for price increases, it's much more convenient to do this on an exchange where you receive either another cryptocurrency or fiat, while if you're exchanging it for goods & services, there's really no way to do that other than a wallet app. On-chain transactions would also capture the OTC market (where traders make direct arrangements to transact with each other), but you could perhaps avoid that by filtering out large transactions.

Actually, it's pretty easy to run these numbers for a rough ballpark. About $2.1B of Ethereum (22.7M ETH @ $94) was traded across all exchanges in the last 24h. 3 ETH is mined every 10sec or so, so that's about 26K from mining, probably not a large contributor. I don't have good numbers for how much ETH is traded per day, but it's 5.7 TPS, so about 490K on-chain transactions per day. A quick glance at recent transactions shows maybe an average of 0.2-0.3 ETH per transactions (heavily skewed - the vast majority are for 0.01 ETH, and then maybe 1 out of 50 will be a 10 ETH transaction), so that's about 100K ETH/day. The figure of roughly 99% unbridled speculation and 1% actual technology sounds about right.

[module0000]

The CME started trading futures contracts for BTC in December of last year. Since then, it's been a downward spiral in terms of price. With the CME involved, it means banks(let that sink in) are trading against you. Their pain threshold exceeds yours(and all of ours), and you will lose every time betting against them.

[dharma1]

I don't think CME is the reason prices have plummeted... My hypothesis is that there was no particular reason for the crash except simply lack of new buyers (everyone and their dog already heard about crypto), and lots of people selling. The drop looks steep but so did the rally before it. People can't agree on the value, it's all driven by sentiment and new blood (or lack of it).

You can't call the bottom on something you can't value, Novogratz thought it was at 6000 but made the wrong bet (for now, let's see what happens on a 1-2 year timeline). He's been doing the roadshow this year saying institutional money is coming in (I had a brief chat with him in London) but I don't see any pension funds touching something this volatile with a barge pole. Not until real value is starting to emerge

[apo]

Is there data on what percentage of cryptocurrency transactions are "Real, actual, humans buying and selling real, actual, things or compensating each other for their ideas and thoughts" and what percentage consists of "traders shouting at each other in the echo chamber"?

Exchanges use off-chain transactions. When you see a transaction on the block chain, it's very unlikely to be a settlement between two exchange customers because it's far more efficient for the exchange to settle on its own private ledger.

On-chain Bitcoin transactions incur fees. Aside from a group launching an attack on Bitcoin, there's little return for the cost of spamming the block chain.

[Filligree]

All you have to do is look at the buy/sell curves. Crypto is 80% market manipulation, 19% traders and maybe 1% genuine use.

[mancerayder]

This isn't Reddit, do you have something to back any of that up with?

Manipulation can be 100% or 10%, who the hell knows?

[apo]

Assuming you mean order book (=buy/sell curve), how do you arrive at 80% market manipulation numerically?

[JumpCrisscross]

> All you have to do is look at the buy/sell curves

What the hell are buy/sell curves?

[orbifold]

How the orders are distributed in the order book.

[module0000]

This is incorrect. Orders and their distribution in the order book is called liquidity. Alone, they have very little meaning, and are often manipulated in the securities and commodities market(ie: you see a 5,000 bid, and place your own 5,000 ask - suddenly the bid is gone, and your ask gets rolled by huge buy orders). "Buy/sell curve" has no meaning, the closest term would be "yield curve", such as US interest rates. As the rate climbs and falls, there are inverse effects on financial instruments.

[goalieca]

and 100% a threat towards worsening global warming.

[tim333]

It depends how you view things - is buying ICO tokens compensating the founders for their ideas and thoughts?

Apparently Silk Road had sales of $1.2bn which gives you an idea of the amount of drugs traded and the turnover of Bitcoin on exchanges was about $2000 bn over the last year. So sales of goods as a percent of speculative transactions are probably <1%. Not that that means that much - FX speculation is larger than real trade for fiat also.

[village-idiot]

Turns out those middlemen served a legitimate purpose, and most of the people advocating for their removal had absolutely no idea what they were talking about.