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Comment by jpatokal | Hacker News Reader

I was about to ask you to explain that upward trend in the light of bitcoin transaction volume collapsing... but interestingly enough, it's been on a pronounced upward trend again for the past quarter:

https://www.blockchain.com/en/charts/n-transactions?timespan...

Yet trading volume is way down:

https://www.blockchain.com/charts/trade-volume?timespan=2yea...

And this is happening despite mainstream adoption for e-commerce etc having almost completely collapsed. Where is this volume coming from? Algorithmic trading, money laundering, something else?

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Money laundering, wash trading, tape painting and drugs. Rampant manipulation. It goes up 10% in minutes then falls back 10% a few days later, just enough time to wreck any leveraged short positions, and then wreck all the new leveraged long positions. The observers call it “barting” because the shape of all trading patterns looks like Bart’s head.

Sorry, what does tape paining mean in this context?

Painting the tape is exchanges or trading groups trading between themselves to create fake volume and make it look like there's a lot more activity than there actually is. It also helps the exchanges go up in the rankings on sites like CoinMarketCap.

A few exchanges (including a couple of South Korean ones) have been investigated recently by regulators and fined for faking literally hundreds of billions of dollars of volume over the last year or two.

Is this what you were referring to?

~$250 billion USD worth of wash trading leading to arrests at Upbit (https://thenews.asia/en/2018/12/21/upbit-accused-of-fraud-wi...)

Yes, one of them. Pretty sure there were a couple more charged, and plenty of plausible allegations that other exchanges are doing it too.

There's a good writeup here when it happened on GDAX at the end of 2017: https://medium.com/@bitfinexed/meet-picasso-the-painter-on-g...

> mainstream adoption for e-commerce etc having almost completely collapsed

The adoption was slow (and IS slow) but it never "collapsed." The same places I used BTC to order stuff from 9 months ago are the same places I use BTC to order stuff from now. And there are new ones popping up slowly but surely.

Stripe, Steam, Expedia and Microsoft all stopped accepting BTC last year. What new mainstream merchants replaced them?

Why must more merchants replace them for transaction volume to go up? Could there not be more transactions through the existing merchants that had order flow as the use of BTC spend grows organically?

If accepting BTC was raking in dough for some merchants, you would expect more merchants to start adopting it. However, it appears that many merchants who did accept BTC in the past no longer do.

Or put another way, can you point to some stats that show increased organic BTC spend for e-commerce?

It went from 5 major retailers to 3. That’s a 40% drop.

This implies the bulk of the traffic was at the major retailers. I am not sure the data would support that assertion.

BTC transaction volume is going to be kept fairly stable due to the existence of a dynamic transaction reward. If the cost per transaction goes down, this might imply that demand for "higher-value" uses of the BTC network is indeed collapsing, but by the same token this makes smaller-scale use more viable rather than less.

search 'tether scam' and you'll get all the answers you need. the price of bitcoin has been propped up for the entirety of its boom.

I'm the author of http://untether.space, so I'm well aware of that, but it's not clear to me what connection this has to increasing tx volumes?

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