Re:Using Benford’s Law to Detect Bitcoin Manipulation
by fungizid on Sunday July 25, 2021 @11:02AM
(#27949647)
With a fixed exchange rate, the choice of currency does not matter for Benford’s law.
Benfords’s law states that for many real-life numbers x, log(x) is uniform.
Converting to another currency using exchange rate E, so that y = E*x, yields log(y) = log(E) + log(x). This corresponds to a shift of the distribution of log(x) and does not change how uniform the distribution is.
However, if the exchange rate varies with prices, then it will matter.
Benfords’s law states that for many real-life numbers x, log(x) is uniform.
Converting to another currency using exchange rate E, so that y = E*x, yields log(y) = log(E) + log(x). This corresponds to a shift of the distribution of log(x) and does not change how uniform the distribution is.
However, if the exchange rate varies with prices, then it will matter.