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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 dealers has been reported in May 2018. The U.S. Justice Department launched an investigation into potential 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 potential 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 initial shipping date in January 2018, the CME requested extensive detailed trading information but a few of the exchanges refused to provide it and later provided only limited data.
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Academic research published in the Journal of Monetary Economics concluded that price manipulation occurred 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 at least 2011.187
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Research by John M. Griffin and Amin Shams in 2018 indicates that trading associated with increases in the amount of the Tether cryptocurrency and associated trading at the Bitfinex exchange account for roughly half of the price increase in bitcoin in late 2017.188189
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The Economist wrote in 2015 that these criticisms are unfair, visit homepage predominantly since the shady image may induce users to overlook the capacities of the blockchain technology, but also on account of the fact that the volatility of bitcoin is changing in time.194
Bitcoin and other cryptocurrencies have been identified as economic bubbles by 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 known as bitcoin that 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 opinions, as have business executives such as Jamie Dimon and Jack Ma.204.
Bitcoin has been criticized for the 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 per year).133
In the end of 2017, the worldwide bitcoin mining activity was estimated to consume between one and four gigawatts of power.205 Politico noted that the even high-end quotes of bitcoin's total consumption levels amount to only about 6 percent of the total energy consumed by the international banking sector, and even if bitcoin's consumption levels increased 100 fold from today's degrees, bitcoin's consumption would still only amount to approximately 2% of global power consumption.206.
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To lower the costs, bitcoin miners have set up in places like Iceland where geothermal energy is economical and cooling Arctic atmosphere is free.207 Bitcoin miners are known to use hydroelectric power in Tibet, Quebec, Washington (state), and Austria to reduce electricity costs.206208209210 Miners are attracted to suppliers like Hydro Quebec who have energy surpluses.211 According to a University of Cambridge study, a lot of bitcoin mining is done in China, where power has been subsidized by the government.212213.
A variety of journalists,207214 economists,215216 and the central bank of Estonia217 have voiced concerns that bitcoin is a Ponzi scheme. In 2013, Eric Posner, a law professor at the University of Chicago, stated that"a true Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion. "218 A 2014 report from the World Bank concluded that bitcoin More Info was not a willful Ponzi scheme.219:7 The Swiss Federal Council220:21 examined the concerns that bitcoin might be a pyramid scheme; it concluded that,"Since in the case of bitcoin the normal promises of gains are lacking, it cannot be assumed that bitcoin is a pyramid scheme." In July 2017, billionaire Howard Marks referred to bitcoin as a pyramid scheme.221.