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'' The self-regulatory organization FINRA and the North American Securities Administrators Association have both issued investor alarms about bitcoin.177178
An official investigation into bitcoin traders was reported in May 2018. The U.S. Justice Department launched an investigation into possible price manipulation, including the techniques of spoofing and scrub transactions.180181182 Traders in the U.S., the U.K, South Korea, and maybe other countries are being investigated. Brett Redfearn, head of the U.S.
The U.S. national investigation was prompted by concerns of possible manipulation during futures settlement dates. The final settlement price of CME bitcoin futures contract is determined by costs on four exchanges, Bitstamp, Coinbase, itBit and Kraken. Following the first delivery date in January 2018, the CME requested extensive detailed trading information but a few of those exchanges refused to supply it and afterwards provided only limited information.
State and provincial securities regulators, coordinated through the North American Securities Administrators Association, are investigating"bitcoin scams" and ICOs in 40 jurisdictions.185
Academic research published in the Journal of Monetary Economics concluded that price manipulation happened during the Mt Gox bitcoin theft and that the marketplace remains vulnerable to manipulation.186 The history of hacks, fraud and fraud involving bitcoin dates back to 2011.187
Research by John M. Griffin and Amin Shams in 2018 suggests that trading related to increases in the amount of the Tether cryptocurrency and related trading at the Bitfinex exchange account for about half of the purchase price increase in bitcoin in late 2017.188189
J.L. van der Velde, CEO of both Bitfinex and Tether, denied that the claims of price manipulation:"Bitfinex nor Tether is, or has ever, engaged in any kind of market or price manipulation. Tether issuances cannot be used to prop up the amount of bitcoin or any other coin/token on Bitfinex. "190
The Bank for International Settlements summarized several criticisms of bitcoin in Chapter V of their 2018 annual report. The criticisms include the absence of equilibrium in bitcoin's price, the high energy consumption, high and variable transactions costs, the poor security and fraud in cryptocurrency exchanges, vulnerability to debasement (from forking), and the influence of miners.191192193.
The Economist wrote in 2015 that these criticisms are unfair, predominantly because the shady image may compel users to overlook the capabilities of the blockchain technology, but also due to the fact that the volatility of bitcoin is changing in time.194
Bitcoin and other cryptocurrencies have been identified as economic bubbles by at least eight Nobel Memorial Prize in Economic Sciences laureates, including Robert Shiller,195 Joseph Stiglitz,196 and Richard Thaler.19713 Noted Keyensian economist Paul Krugman wrote in his New York Times column criticizing bitcoin, calling it a bubble and a fraud;198 and professor Nouriel Roubini of New York University called bitcoin the"mother of all bubbles. "199 Central bankers, including former Federal Reserve Chairman Alan Greenspan,200 investors like Warren Buffett,201202 and George Soros203 have stated similar views, as have business executives such as Jamie Dimon and Jack Ma.204.
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Bitcoin has been criticized for the navigate to this website amount of electricity consumed by mining. As of 2015update, The Economist estimated that even if all miners used modern amenities, the combined power consumption would be 166.7 megawatts (1.46 terawatt-hours annually ).133
In the end of 2017, the worldwide bitcoin mining activity was estimated to consume between one and four gigawatts of electricity.205 Politico noted that the even high-end estimates of bitcoin's overall consumption levels amount to only about 6 percent of the total energy consumed by the global banking industry, and even if bitcoin's consumption levels increased 100 fold from straight from the source the current degrees, bitcoin's consumption would still only amount to approximately 2% of international power consumption.206.
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To reduce the costs, bitcoin miners have set up in places like Iceland where geothermal energy is cheap and cooling Arctic air is free.207 Bitcoin miners are known to use hydroelectric power in Tibet, Quebec, see this site Washington (state), and Austria to decrease electricity prices.206208209210 Miners are attracted to suppliers like Hydro Quebec that have energy surpluses.211 According to a University of Cambridge study, much of bitcoin mining is done in China, where electricity is subsidized by the government.212213.
Various journalists,207214 economists,215216 and the central bank of Estonia217 have voiced concerns which bitcoin is a Ponzi scheme. In 2013, Eric Posner, a law professor at the University of Chicago, said that"a true Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion. "218 A 2014 report by the World Bank concluded that bitcoin was not a willful Ponzi scheme.219:7 The Swiss Federal Council220:21 examined the concerns which bitcoin may be a pyramid scheme; it concluded that,"Since in the example of bitcoin the typical promises of profits are lacking, it cannot be assumed that bitcoin is a pyramid scheme" In July 2017, billionaire Howard Marks called bitcoin as a pyramid scheme.221.