
A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes - thisisit
https://www.wsj.com/articles/a-crypto-website-changes-its-data-and-100-billion-in-market-value-vanishes-1515443100?mod=ITP_businessandfinance_7&tesla=y
======
lallysingh
To be fair, I would expect the same if a well-respected regular-stock website
changed its data and suddenly shifted its reported values.

Now, if the % change is more or less, I guess that indicates how many market
participants have their own value estimates of each currency.

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Klathmon
CoinMarketCap is in a tough position here.

I can obviously understand not wanting to list massive outliers in an average,
but at the same time there isn't realistically a way for them to "safely"
adjust which exchanges they include in the averages.

No matter what, it's either going to cause big sudden jumps in either
direction, or they can "smear" it across some time, which (in my opinion)
would look really bad as it would imply sustained increase or decrease.

Giving advance notice should be expected of them, but I honestly don't know if
they gave one or not, and I don't really think that many people would have
read it if they did.

~~~
agotterer
I visit CoinMarketCap every single day and I don't recall ever seeing a notice
or message about a change to the exchange listing.

~~~
Klathmon
Yeah that's really the only thing I can fault them on here. They really should
have given some advanced notice that they would be changing how they calculate
the averages.

Especially since they have a widely used API that many people use, and I'm
assuming some trading bots as well.

~~~
tomkarlo
The problem with giving advance notice is the impact would just be felt at the
time of the notice (bc smart traders will just determine the adjustment
immediately.) I think the suggestion above to make the change immediate, but
re-calc the historicals so the % change is still right, is probably not bad.

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sluggg
I am deeply surprised by how few people are mentioning bots. This is no doubt
directly related to trading bots that are polling coinmarketcap and then
buying/selling through some API like the one bittrex offers. The number of
bots that are actively trading is unknown, but if you do some digging the
amount of resources and interest there is around trading bots leads me to
believe that the pool of bots must be massive. I would love to be able to
quantify the number of trading bots that are running wild, but my feeble brain
can't come up with anything, maybe if I worked at an exchange I would be able
to. Any thoughts?

~~~
tobltobs
Have a look at
[http://http://www.dancingbots.com](http://http://www.dancingbots.com) which
visualizes Orderbook positions. Most of the action (95%?) close to current
price looks like positions from bots.

Compare the orderbooks of exchanges which have no fees for maker orders (like
gdax, bitfinex) and are preferred by bots to those exchanges who do ask for a
fee.

~~~
sluggg
HEY! this site is amazing and is just what I am looking for. BUT the link you
provided is missing a colon after "http" and I thought the site was down for a
second. I am sure if others see this they will have similar issues. Please fix
your link :)

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eddyg
Archived link: [http://archive.is/l1kc7](http://archive.is/l1kc7)

~~~
nkkollaw
Thanks.

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kanzure
Market cap isn't as interesting as people think: [https://blog.sia.tech/want-
to-deflate-the-token-bubble-fix-t...](https://blog.sia.tech/want-to-deflate-
the-token-bubble-fix-the-market-cap-indicator-d50f7f1e1ec4)

~~~
bitcoinusername
Yep, given that practically all altcoins are priced in bitcoin, market cap
artificially rises extremely, or lowers extremely due to the inertness of the
open trades.

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skyisblue
Possibly intentional market manipulation? They are in the top 200 most visited
sites in the world and supply api data to hundreds if not thousands of
cryptocurrency price apps. Surely they knew their change would impact the
market.

~~~
djsumdog
I really think there is a considerable amount of market manipulation going on
with crypto-currencies in general. There was an earlier thread to a blog post
that got voted up quite a bit, but the comments all brought up that the author
was just speculating and tried to pass it off as fact.

There was also a pastebin up earlier that showed how someone had found wallets
on the blockchain that used their own hashes as passwords, and were
potentially being used to funnel money around (security holes in exchanges
potentially?) It was removed from HN; found it on Lobsters.

The trouble is that no one has really presented hard evidence, but a number of
people I talked to who are developers in the regular financial sector do think
it's highly probably that there is intentional manipulation. And with the
blockchain being all hashes, numbers and mathematics, it also seems plausible
that it's a system that can be gamed; or at least more easily gamed than
regular fiat currency.

------
tim333
They removed data from the Korean exchanges which have always had higher
prices due to Korean exchange controls - once you've changed money to bitcoin
you've got it out of the country. That data should always not really have been
included if you wanted a fair idea of value.

------
vijayr
Does anyone know where CMC gets the circulation numbers?

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ratsimihah
But can I do Dollar Cost Average with BTC?

~~~
cwkoss
Yes, Coinbase allows you to configure repeated buys or sells of a specified
dollar amount.

~~~
ratsimihah
Ohh thanks I should look into that. Aren’t the transaction fees huge though?

~~~
cwkoss
I think they are a bit over 1% right now. Not the cheapest way to get bitcoin,
but not horrible.

~~~
ctchocula
If you use GDAX (the underlying exchange technology behind Coinbase and also
owned by Coinbase) as a maker (meaning you use a limit order), you pay 0%
fees. If you use GDAX as a taker (market order), you pay 0.25% fees.

~~~
dragonwriter
That's not what the maker/taker distinction means—a taker is an order to the
extent it is filled because it matches a pre-existing order when it hits the
sysyem; a limit order can be a taker if there's a matching order on the book
when it hits the system. GDAX supports marking a limit order as “Post Only”,
which cancels it if any part would fill as a taker order, but that's optional.

------
gumby
Admins, could you correct the headline to say “crypto currency website”?

~~~
iak8god
"cryptocurrency" is a bit of a mouthful, so I at least understand the urge to
shorten it, but I wish we could agree to at least shorten it to "cryptos," as
in: "A Cryptos Website Changes Its Data..."

~~~
tomrod
Crypto means cryptography. Cryptocurrency should be shortened another way.
Perhaps "Cryptotoken."

~~~
gumby
Cryptocash perhaps

~~~
Y_Y
What about "crash"?

~~~
tomrod
<3

------
vthallam
Well that definitely contributed, but that alone didn't cause the crash. There
was irrational price rise in the last few weeks for certain
cryptocurrencies(Ripple, Tron) and this is part of the correction.

Also, The market as a whole should get away with global averages and depending
on one website to track everything. I wrote an article on it if someone is
interested - [http://coinsocial.io/2018/01/09/its-time-for-
cryptocurrency-...](http://coinsocial.io/2018/01/09/its-time-for-
cryptocurrency-investors-to-dump-global-average-prices-and-embrace-local-
exchange-prices/)

~~~
frgtpsswrdlame
>There was irrational price rise in the last few weeks for certain
cryptocurrencies(Ripple, Tron) and this is part of the correction.

What makes their increase 'irrational'?

~~~
nrhk
They were irrational because if you analyzed all the coins in the top 100-200
you'll realize that it was primarily cheaply priced coins that were making the
outsized gains and a lot of it can be attributed to market psychology.

It feels better to own 200 of something you don't understand than 0.00159. But
at the end of the day returns are returns and it makes no difference if you
have 200 of a coin or 0.00159.

~~~
frgtpsswrdlame
Isn't the worth of any crypto-currency down to market psychology though? By
that metric any price movement is irrational.

~~~
TheSpiceIsLife
Economics _is a social science_. It could be argued very few things have
intrinsic value. It could be argued all markets are down to purely human
psychology.

Birds, for example, don't really care how much you paid for those 3000 tonnes
of wheat, only that there's a hole in one of the train carriages transporting
it.

------
brndnmtthws
It's facetious (and bad 'journalism') to claim $100B vanished. It was never
there to begin with: market cap isn't something you can cash in on. It's
merely the result of price multiplied by supply. If you owned a significant
portion of all the coins in the world, and tried to sell them all at once, you
wouldn't end up with number_of_coins * price, it would (realistically) be a
smaller number given the market slippage.

~~~
frgtpsswrdlame
>It's facetious (and bad 'journalism') to claim $100B vanished.

It's certainly not bad journalism, this is how all sorts of assets are
reported on. Market Cap isn't a perfect metric but it's pretty good and keeps
us from saying things like "AMZN is down 50%" when they do a stock split.

In the sense that yesterday if you summed up what all the individual holders
saw when they checked their accounts you'd get $200b and today if you did the
same you'd get $100b then $100b did vanish.

~~~
runeks
It’s not black and white either, though.

If 10% of stock holders are able to cash out without changing the price
significantly, market cap would be an inaccurate measure, but not _that_ far
off.

If, on the other hand, only 0.1% of holders of some token are able to cash out
without significantly affecting the price, the value they think they have just
isn’t there (to a much larger extent than the case above).

To use an extreme example: if I issue 2^100 tokens, and manage to get a couple
of orders in an order book with a mid (and “last trade”) price of 0.1 cent,
and this price goes to zero, did 1.268^27 dollars of market value just vanish,
or were the holders of this token misinformed?

The inherent inaccuracy of market cap value is inversely proportional to
liquidity: the less liquid the asset, the further away from reality market cap
value is. And these tiny tokens are some of the least liquid assets in
existence.

------
dboreham
I'm beginning to see how delusional it is to think you can make money by
producing something useful or of value in people's lives. That's for lusers.
Instead mess with the neural pathways of a large population such that they
just give you their money.

~~~
noncoml
Depends on what you want in life. If all you care about is money, then yes,
your post makes sense.

~~~
kfriede
Caring solely about money often has the side effect of making others' lives
better. Amazon gainfully employs over 500k [1] people, giving them means to
put food on the table. Not saying that wouldn't happen without Amazon, but
more job availability is always better than less. Bezos just became the
richest man ever recorded [2].

[1]:
[http://money.cnn.com/2017/10/26/technology/business/amazon-e...](http://money.cnn.com/2017/10/26/technology/business/amazon-
earnings/index.html)

[2]:
[https://news.ycombinator.com/item?id=16108295](https://news.ycombinator.com/item?id=16108295)

~~~
ACow_Adonis
Reminds me of:

"Oh, Father. You're so wrong. Let me explain.

[Puts and empty water glass on his desk]

Life, which you so nobly serve, comes from destruction, disorder and chaos.
Now take this empty glass. Here it is: peaceful, serene, boring. But if it is
destroyed

[Pushes the glass off the table. It shatters on the floor, and several small
machines come out to clean it up]

Look at all these little things! So busy now! Notice how each one is useful. A
lovely ballet ensues, so full of form and color. Now, think about all those
people that created them. Technicians, engineers, hundreds of people, who will
be able to feed their children tonight, so those children can grow up big and
strong and have little teeny children of their own, and so on and so forth.
Thus, adding to the great chain of life. You see, father, by causing a little
destruction, I am in fact encouraging life. In reality, you and I are in the
same business.

~~~
digitaltrees
Fifth element. That’s a Deep cut.

~~~
djsumdog
I don't remember this scene. I might have to watch it again.

~~~
celticninja
When Gary oldman is talking to the priest, then he chokes on a cherry and none
of his machines can save him.

