It was originally happening in the public channel #dogecoin-market on Freenode but was then moved to the private channel #marketmakers, which seems to have spurred people to start sharing it everywhere since now it's private.
Wolong is the guy who brought the Dogecoin price to where it is now by investing a ton of money into it, and due to that and some charisma he's attracted a cult following. He's now using that cult following to have them do pump/dump ops for him (with their money).
Here's his manifesto: http://pastebin.com/RdRAULtT
It's entertaining, I'm waiting for someone to do a solid article on the story.
Bear in mind that cryptocurrencies are currently an unregulated wild west, where activities like these are both common and legal. Do not invest anything you are not prepared to lose.
edit: just for further corroboration, here's logs from a few days ago: http://pastebin.com/1NTTBCXM
You can check the charts at http://bitcoinwisdom.com/markets/cryptsy/dogebtc and see how that was responsible for a drop to 212. From memory they were using about 36million dogecoins, which comes out to approximately 78btc or $65,000.
My pet theory is that wolong is just building trust at this point so he can eventually have his army of followers buy all his dogecoins at inflated prices, but who knows. No matter what happens, it's very entertaining to watch develop.
As the supply diminished, they become difficult to catch, and villagers returned to their farms. The man announced that he would pay $20. The villagers renewed their efforts and caught 1,000 more monkeys.
The supply quickly diminished, but before they returned to their farms the man increased his offer to $40 each. Monkeys became so rare that it was difficult to even see a monkey let alone catch it. But they caught 500.
The man now announced that he would buy monkeys at $100 each! However, since he had to go to the city on some business his assistant would now buy for the man. The man departed.
Then the assistant told the villagers, “Look at all these monkeys the man has in that big cage. I will sell them to you at $50 each. When the man comes back you can sell the monkey’s back to him for $100.”
The villagers gathered up all their saving to buy the monkeys. The assistant took their money. They never saw either the man or his assistant again.
Which leads to an interesting thought: has someone figured out how to judge when an emerging crypto currency gains enough traction to start attracting sharks to the pond of early adopters?
Understatement of the year and it's only January. ;) That's pretty much everything of crypto coins right now, especially alt-coins(any coin that isn't bitcoin). The inexperienced people prone to fear-driven reaction are getting fleeced.
Let me fix that for you:
> Do not gamble anything you are not prepared to lose.
My statement was from the angle that if you get ripped off in a situation like this, there is no recourse for you, and not legal advice that you cannot get in trouble for participating in these activities.
It's perfectly legal if it's not specifically regulated as a financial market. Tons of firms do things quite like this - over-the-counter derivatives are rife with various market manipulations.
There's so many people trying to pump these different coins that I can't see any efforts being too successful.
Sounds from the pastebin content that they weren't really managing to coordinate even a small group?
Ultimately, there are two kinds of people that these con artists make money off of, and both have this overconfidence that they can outsmart the market:
1. Collaborators: these are the people who think that they are in on Fontas or Wolong's plan, but aren't. Ultimately, some of these people will make money some of the time, but most will lose money.
2. Manic-or-panic day traders: these people fall prey to a these market manipulations because they are at the wrong place at the wrong time. If they're paying attention when the market spikes, they start buying high thinking it will rise further, and if they're paying attention when the market drops they sell low thinking it will fall further. It may actually be worse to be this kind of trader, because often the only person conning such people is themselves. Their emotional approach to investing causes them to fall prey to every market fluctuation, even ones that aren't caused by any manipulation.
The kicker here is that I believe most day-traders fall into that second group. A lot of them are still making money on cryptocurrencies simply because cryptocurrencies have been growing so rapidly, leading them to believe that their strategies have worked, but the vast majority would make more by simply investing their money and sitting on it. My theory is backed up by how people tend to invest on wall street, which has been well-researched at this point.
What I'm trying to say to anyone reading this is that if you're trading day-to-day, unless you have a very thoroughly proven mathematical model, you're likely in the second group. Don't let overconfidence and greed make you a mark. You aren't likely to outsmart the market. Besides, this market is doing pretty well anyway.
Ah, no, it's not legal. Regulators just don't care (yet) to enforce the rules.
With Dogecoin however, barely any exchanges, and most of the circulation from their insanely steep on-ramp is in the hands of a handful of people... gonna be a lot of milking going on there.
from the manifesto: "there are always trolls that add absolutely zero value to the community" -- you said it Wolong.
The best part is that people are going to essentially hand wallets over to him to manage this, in both BTC and DOGE.
He's not going to come out behind, no matter how it goes .
While this market manipulation is blatantly unethical and possibly illegal, in the long run it's going to be larger economic factors that determine the success or failure of the currency.
Blocks per day: 60 * 24 = 1440 (https://bitcointalk.org/index.php?topic=361813.0)
Current block reward: ~500,000 doge (https://bitcointalk.org/index.php?topic=361813.0)
Total block rewards per day: 1440 * 500,000 = 720,000,000 doge
Current exchange rate: 1 doge = US$0.0017 (http://dogecoin.com/)
Total block rewards in USD per day: 720,000,000 * 0.0017 = $1,224,000
The entire point of the fucking market is to amass enough capital that you're not 'picking' stocks, if you're trading without an edge I really don't know what to tell you.
This is interesting. It shows an attitude about laws as being just suggestions that you can also compare against your morality. I certainly agree on many points, for example people who do things on a small scale that are technically illegal (e.g. sodomy where it was illegal, etc). The context and morality does matter.
But in this particular case, the laws exist for quite an important and good reason. Do you know why? It seems to be for the exact case that's happening here. Ignoring the laws shielding the public, because you don't see anything unethical in it, seems, well, akin to ignoring fraud laws because you don't see anything wrong with committing fraud.
For example, why shouldn't I be able to print money (on an inkjet printer) - it might be technically illegal, but is it immoral? It's immoral because you make money from people accepting something that is worthless, and devalues people's faith in the real thing.
Pump and dump schemes have a similar effect on real investment markets, and are illegal for this reason.
They may be hard to maintain, but they do spring up and may exert power while alive.
1) There is a scientific basis for the 10.000 hours, the "greatest" achievement generally attributed to Phoebus[1]:
> For a supply voltage V near the rated voltage of the lamp:
Light output is approximately proportional to V 3.4
Power consumption is approximately proportional to V 1.6
Lifetime is approximately proportional to V −16
Color temperature is approximately proportional to V 0.42[88]
> In the late 1920s a Swedish-Danish-Norwegian union of companies
(the North European Luma Co-op Society) began planning an independent
manufacturing centre. Economic and legal threats by Phoebus did not
achieve the desired effect, and in 1931 the Scandinavians produced and
sold lamps at a considerably lower price than Phoebus.
http://ftalphaville.ft.com/2014/01/24/1750472/why-its-tough-...
-- Edit --
More logs got leaked at http://pastebin.com/7itGzitH. I have not read them yet, so cannot tell you if there is anything of value in there.
The character started insisting 10k doge tips for him to answer questions on irc, then moved to a private channel where to get an invite you basically have to prove you at least have 10 BTC and are willing to let him ultimately execute trades on your behalf. There are lots of fools in that channel who will soon find themselves parted with their money.
Nothing sweeter than the tears of someone who lost money truing to manipulate other people into losing money ...
Presumably the hidden information you have from being part of a cabal means it's different than just changing your risk distribution like a Martingale betting strategy does.
This relies on the large wall not being an attractive offer for someone who has the purchasing power to obliterate it, which is where it occasionally fails. Generally, if the market starts to move against it with any force, it's pulled or moved further back behind other orders.
Another way this can be used is by putting up a wall on the opposite side of your real order to drive demand - i.e. in the scenario above, you might be trying to buy at 220. If you put up a huge wall at 224, people will be more willing to fill your order at 220 than if the orderbook was much thinner.
It seems this is called spoofing in the financial world.
Pushing the price "down" to 224 from 220 is very confusing and caused me to have to read your post several times to make sure I understood correctly.
(and Dogecoin is for lulz anyway!)
http://dealbook.nytimes.com/2013/12/05/in-the-murky-world-of...
> Wolong To Launch A Forum
> The plan is to make the forum private and tight-knit; thereby locking out trolls. According to him, the entrance fee will be between $25-$30 USD
If you trade with out an edge you're a moron. I really hope no one trades actual markets believing they can 'pick' equities.
I do and make a lot of money doing it. It's not about picking equities per se, it's about finding good trading opportunities - every equity provides good and bad trades, depending on a multitude of factors. You can play any stock both long and short....
http://www.reddit.com/r/dogecoin/comments/1w7otj/dogecoin_ma...
When the capitalization of the market is so low and a small number of people control a large amount of the currency/commodity there really isn't much you can do about it.
[1] http://irc.netsplit.de/channels/details.php?net=freenode&roo...
In that context, this is a much tamer "conspiracy" than I expected.