The smart ones will never touch the principle, and only spend the investment income that is left over after a certain level of reinvestment required to keep investment income growing with (real) inflation. You actually need quite a bit of money to do this.
There will probably not be any investment income from holding bitcoins in the near future. The rate of deflation is simply too high for anyone to pay back a loan in bitcoins. This one way that Bitcoin upsets the old paradigm. You actually must spend part of the principal, if you are not earning bitcoin from rents or a salary. See the (SSS) - A Sane and Simple bitcoin Savings plan. |
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Here is a great comparison and prediction set of charts from reddit user lowstrife. The numeric labels are Elliott Wave counts. Heiken Ashi is a candle stick chart variation. What I get from these charts is a sense for a sideways price consolidation - the flat - which occurs before the super-exponential portion of the bubble. The blue bars in the June 2014 chart are a projection of what lowstrife believes is a bubble peak in late July . . .  |
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Summer 2014 Bitcoin Bubble - moral_agent's BubbleWatch from redditIn the Daily Discussion thread on Reddit BitcoinMarkes, moral_agent posts an album of charts titled Bubble-watch. Here is the explanation. Here is my favorite chart from his series, that scales the previous bubbles and aligns them by troughs. If the next bubble is indeed very similar in shape to the preceding two bubbles, then we could expect the Summer 2014 Bubble to peak in late July. 
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Prolexic advice on securing a re-engineered Bitcoin network. ProlexicDear Stephen, Thank you for your interest in Prolexic, the global leader in Distributed Denial of Service (DDoS) protection services. We are processing your request and will contact you within 24 hours. Prolexic represents the gold standard in DDoS monitoring and mitigation. We mitigate all attack types no matter how large or complex and we do it fast for one flat monthly fee -regardless of how many times you are attacked or how much bandwidth is consumed. Even better, this is supported by the industry’s first ever time-to-mitigate Service Level Agreement (SLA). If you are currently, or will be, evaluating DDoS protection providers, here are four facts about Prolexic to keep in mind: More than 10 of the world’s largest banks rely on Prolexic for DDoS protection every day Prolexic operates the world’s largest and most sophisticated cloud-based mitigation platform with over 1.8 Tbps of bandwidth (3x larger than our biggest competitor) In 2014, Prolexic mitigated the world’s largest attack (190 Gbps). Prolexic uses 20 distinct mitigation and analysis technologies where others use 3 or 4 You may also find the following documents useful: White Paper: 12 Questions to Ask a DDoS Mitigation ProviderEvaluation Worksheet: DDoS Mitigation ProvidersBrochure: Prolexic OverviewIf this an emergency call us at + 1 (888) 368 2923 (Toll Free in the U.S.) or + 1 (207) 608 6213 (Local/International) to be connected with a DDoS mitigation expert. Best Regards, Prolexic Sales Operations http://www.prolexic.com David from Akami, who acquired Prolexic phoned me to set up an appointment with a sales engineer. Their preferred solution involves an interface with routed network having BGP. This means that each Bitcoin full node would have its own router that guides message traffic to other full nodes. DDoS protection for the entire Bitcoin network would be $20-30K per month. Akami's other solution, the Proxy Solution, is designed for HTTP traffic, and thus works on ports 80 and 443. Not Bitcoin. The Bitcoin network would need to acquire a /24 autonomous system (AS) number.
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Here is the three-day resolution chart on Bitstamp showing the pause around $650 that some observers expected. When the rally penetrates this resistance, the next pause could be near $800. If it takes the rest of this month to do that, then I expect the bubble to get going in July and rapidly ascend beyond the all-time-high of $1163.  |
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It will be interesting to see what happens to Bitcoin once it actually becomes deflationary and there are no more mined coins. Something important to note is that if Bitcoin is on average increasing in value all members benefit every moment they hold Bitcoin. With PPC you need to wait 30 days, with Bitcoin you are gaining the second you hold Bitcoin. (assuming both coins have exhausted all PoW minting.)
My criticism was that it takes 30 days to start staking. If PPC made it 12 hours until being allowed to stake then I would have no criticism.
The 30 day wait is unjust.
Bring it down and my criticism of PPC disappears completely.
In the Bitcoin Cooperative Proof-of-Stake project I founded, I am listening for ideas regarding the proof-of-stake policy. I believe that all I need is to assure that stake is not double-voted. I believe that could be accomplished with a 30 minute hold time for the to-myself transaction. Less hold time would be better, because if my project achieves wide approval and is actually launched in January 2016, then once a week when the stakes are recorded, worldwide transactions would be greatly diminished. Note that CPoS does not need proof-of-stake to secure the blockchain. There is a single non-forking blockchain appended to by a single nomadic mint agent that makes double-spending impossible. Tens of thousands of paid full nodes merely replicate the blockchain - and verify the behavior of the trustless mint agent via tamper-evident logs as suggested by Nick Szabo years ago. Distributed consensus is easier to solve when full nodes identify themselves with public keys, sign all messages, and justify their behavior. I have shared ideas with three altcoin developer communities so far. If they pioneer some elements of CPoS, then that will help me convince the Bitcoin community during the year of public system testing in 2015. Currently the Bitcoin core developers believe that there is no good alternative to proof-of-work. |
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Advice on securing a re-engineered Bitcoin networkThis is the email message that I sent to Defense.net, Staminus Communications, Cloudflare, Black Lotus, and Incapsula. Hi, I founded a project to re-engineer the Bitcoin network. This project, if it achieves wide acceptance during a year of system testing in 2015, will launch in early 2016. The whitepaper describing this project is Bitcoin Cooperative Proof-of-Stake. The current Bitcoin network contains approximately 8,000 volunteer nodes. My plan would be to use a portion of the daily bitcoin block creation reward to fund an upgrade to robust Virtual Private Server instances, which would be dispersed and hosted at datacenters around the world. Currently the daily block creation rewards amount to $2.4 million. I seek your advice about protecting 10,000 or more such dispersed servers against large DDoS attacks. Each server will have at least one public IP address that could be attacked, and each shall use the public Internet for connectivity with other servers and with client software. Currently the Bitcoin network has no Network Operations Center. My plan provides for nomadic one, but it needs to be highly automated. How much would it cost to use your services to protect the Bitcoin network that I propose? I desire a scalable solution, and perhaps tiered pricing as the available funding depends upon the volatile price of bitcoin. As this is an open source and public project, I am posting this query and your response in the project's discussion thread. Because I need to keep a transcript of our conversation, I desire to converse by email if that is OK with your sales staff. I would be delighted to answer your questions, and will thoughtfully consider what you say. Note that I am sending a similar query to a few other vendors offering DDoS protection. Thanks! -Steve Stephen L. Reed Austin, Texas, USA 512.791.7860 Black LotusHello Stephen, Thank you for reaching out to Black Lotus. I understand you are interested in our Protection for Networks service. In order to qualify for this service, you must have an ASN, a network capable of BGP sessions, and at least a /24 to allocate for protection. Will you meet these requirements when you launch your project? If not, we have other solutions that will work for your needs as well. I have attached a PDF with some valuable information about Black Lotus and the protection we provide as well as a PDF with more specific information about Protection for Networks. I am also including a PDF about our Protection for Services that will specifically protect your site. Please feel free to let me know if you have any questions or would like a custom quote. Christine Gaylor Inside Sales Representative, Black Lotus Communications direct: (678) 608-2575 | mobile: (757) 536-0509 | gtalk: christigaylor@blacklotus.net | skype: christi.gaylor Hi Christine,
I believe that the Bitcoin network is not ready for an Autonomous System Network with our own routers. That should come in the years beyond the launch in 2016. In the meantime, I am interested in your Protection for Services product. Am I correct that the customer decides whether a server is under DDoS attack and if so, redirects its IP address to Black Lotus for traffic scrubbing? What are ways to automate this?
Note that I am talking about 10,000 dispersed VPS instances. Can you provide a quote?
Thanks!
-Steve
Hi Stephen, Thank you for this information. I am thinking a more custom solution is going to be a better option to meet your specific needs. Would you be open to a call to to discuss this in detail with my lead sales engineer? I have Friday at 3pm CDT / 1pm PDT available. Let me know, I will be happy to arrange it. Best Regards, Christine Gaylor Inside Sales Representative, Black Lotus Communications direct: (678) 608-2575 | mobile: (757) 536-0509 | gtalk: christine.gaylor@blacklotus.net | skype: christi.gaylor Christine, I regret that I am travelling that day to open my mountain home in Colorado. It will be great to escape the summer heat of Austin for a week. I can make the call anytime at your convenience from Colorado, Monday June 12 through Friday June 16. I will need to make a transcript of the conversation so that I can publish it on my open source project's discussion site. [ANNOUNCE] Bitcoin Cooperative Proof-of-Stake I look forward to speaking with a sales engineer who can give this project the technical guidance it needs. -Steve Stephen L. Reed Austin, Texas, USA 512.791.7860
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I'm still in LTC but don't like the chart. Your line coming down pierces the wicks yet starts on a wick. To keep it consistent I'd lay it across the top and then you can see it hasn't broken out yet.
Here is a line drawn by me on BitcoinWisdom with more care - that still suggests a LTC breakout from the downtrend . . .  Here is a line drawn using the tips of the candle wicks, that suggests LTC will breakout this week . . .  |
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The death of LTC is being slow and painful.
You can check the charts and watch his unstoppable hemorrhage.
It looks to me that Litecoin could follow Bitcoin in the next bubble. A rise from $11.253 to its previous peak at $48.48 would be a gain of 4.3x. Bitcoin in contrast is at $658 and a rise from here to its previous peak at $1163 would be a gain of 1.76x. Speculators understand that when Litecoin joins the rally, it can appreciate at a faster rate than Bitcoin. Probably the same circumstances hold for other altcoins. Here is the one-week resolution chart for Litecoin illustrating that its price has broken through the resistance trendline that I drew from the November peak . . .  |
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In another thread i have posted an image from a chart that seems to indicate the tops of the current growth (it has only very briefly broke the line upwards, right before the flashcrash back)
So far it has hit the line at least 10 times, I can't predict when or even if the line will be touched again, but it seems to indicate (at least for now) the points at which the price peaks.
For example if we have another small rally by the end of the day, the price should not go above $690. But if we have one by the 5th of June, the price would hit $700. And so on.
Interesting. I see the fibonacci fan lines tool on BitcoinWisdom but I have not used it. Here is an explanation I found Fibonacci Fans |
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the existence of nonlinear super-exponential growth ... now ya's are getting to it ... By nonlinear, super-exponential growth, the academic paper means that the growth rate of the asset bubble is itself growing, this is unsustainable and leads to the bubble peaking. We have seen this in each of the bitcoin bubbles and is very dramatic in the final week of such super-exponential growth. We may see prices, for example, double from $2700 to $5400 in a week or less, before collapsing back towards say $2700. |
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One of my favorite quotes ever posted on this forum is on page 1 from billyjoeallen: " I don't care about the busts. I am riding this pig wherever it takes me. If it tanks, I'll have a helluva story to tell. I'm sick of half measures. I'm swinging for the fences and If I strike out, so be it. I won't be some mediocre drone living a life of quiet desperation. I believe in bitcoin and I'm going for broke, knowing the risks." https://bitcointalk.org/index.php?topic=12156.msg169810#msg169810Awesome. Thanks for pointing that one out. |
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Communication with the BlackCoin FoundationBlackCoin is the number 8 cryptocurrency when ranked by market capitalization. Today I corresponded with Adam Krykow, from the BlackCoin Foundation. Hi Stephen, I am a member of the BlackCoin Foundation and I had called a week or so ago looking to talk about the article you posted about CPoS. Basically, I am looking to open up some dialogue with you to see if you have any interest in bringing some of your technical expertise to the altcoin realm. Here at BlackCoin we have been attempting to tackle the mining problem of bitcoin with a fast, decentralized, PoS system but it is quite a difficult process. We are still in the early stages of our development, relying on centralized checkpoints currently, but we have been discussing plans for a multinode network within our system. When we stumbled across your whitepaper, it was like reading a fully developed version of our internal discussions. I don’t know how far along you are with your current BitCoin startup, but at BlackCoin we can offer you a community of adopters and a real desire to perfect a system very similar (but not identical there are some differences of opinions to be hashed out) to your CPoS. Thanks for your time and your whitepaper. At the very least I believe we will be citing it frequently as we move forward! Adam Kryskow Public Relations Director for the Americas BlackCoin Foundation a.kryskow@blkfoundation.orgwww.blkfoundation.orgwww.blackcoin.coI responded . . . Hi Adam, I am excited about the opportunity to collaborate with your team. Indeed my focus is on Bitcoin, but my plan for 2015 involves demonstrating cooperating proof-of-stake agents with one or more Altcoins, before hard-forking Bitcoin in early 2016. Previously I was informally contacted by a Bytecoin developer who offered to run my code when ready. I have participated in a podcast with Dan Larimer's Delegated Proof-Of-Stake project, and will continue a periodic sharing of ideas. My design is evolving towards an agent based framework that can support multiple cryptocurrencies. Supposing that altcoins follow the Bitcoin coding convention of deploying an executable similar to bitcoind, then a full node in the CPoS system could operate multiple bitcoind instances, each belonging to a different cryptocurrency. The full node operator would be compensated by each such currency via their respective block creation reward policies. This leads to economies of scale, and significant benefits to lower capitalization altcoins. Message traffic on the CPoS network, e.g. transactions and blocks, would be tagged as to which cryptocurrency they belonged. See: Bitcoin Cooperating Agent illustrationI completed the CPoS whitepaper in May. I plan to complete the public high level design in June, and enough of the public message workflow specifications to begin open-source coding in July. I have bitcoind compiling in my C++ NetBeans IDE now. The agent message passing architecture will be adapted from a very similar one that I wrote in Java for my now-postponed AI project. My plan is to have significant elements of the CPoS architecture running in the late fall, with public system testing and altcoin deployment scheduled throughout 2015. My GitHub repository is currently a Bitcoin clone. I periodically synchronize it with the core developer's repository. For CPoS, I will establish a new public repository. The code that talks to the local bitcoind instances, I will adapt from existing core code. The networking code, the tamper-evident logs, and agent framework will be new code. As I mentioned, the agent framework will be a simplified version of Java code that I wrote some years ago. The agents will each extend a C++ class and provide specialized behavior. Each agent will be simply enough for its peers to easily verify. There may therefore be many agents in total to provide all the required behavior. A testing framework will be specified and completed that enables robust regression testing of the agent network. I look forward to continuing discussion with your group, especially regarding our respective development schedules and what components are needed first. -Steve Stephen L. Reed Austin, Texas, USA 512.791.7860
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Tracking the 2014 Bitcoin Bubble - First Doubling
I am tracking the number of days it takes the bitcoin price to double. This is a proven indicator for determining when a bubble is peaking. There is academic research that quantifies the super-exponential growth during an asset price bubble, but the math is much simpler when counting days-to-double. Historically, the bitcoin price peaks when prices are on a pace to double in about a week.
The first doubling leading up to the next bubble took 51 days, which is the difference between $340 on April 10 and $680 on May 31.
I will be watching for . . .
Second doubling - $1360 (perhaps July)
Third doubling - $2720 (perhaps July)
Fourth doubling - $5440 (I think the late July peak will be near this value)
Fifth doubling - $10880 (probably will not happen unless the peak is in the fall)
Those predictions would make this one hell of an exciting year! Do you have any good sources for the bubble peaking when doubling price is in 1 weeks time? Looking at the price records for the three previous bubbles, we see . . . June 9, 2011 peak at $32 - doubling from $16 in 4 days. April 10, 2013 peak at $260 - doubling from $130 in 7 days. November 29, 2013 peak at $1163 - doubling from $581 in 13 days. The November peak is interesting because the rally to $758 on November 18, doubled from $359 in 6 days. I therefore thought that $758 was the peak, but the correction down from $758 was only to $379 which did not appear deep enough to me and other observers that day. I suspect that the next bubble, being widely anticipated will have one or more dramatic pre-peak spikes that double in about a week. I will combine the doubling time indicator with a threshold from the Log10 Delta From Trend chart when predicting the next peak. |
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Tracking the 2014 Bitcoin Bubble - First DoublingI am tracking the number of days it takes the bitcoin price to double. This is a proven indicator for determining when a bubble is peaking. There is academic research that quantifies the super-exponential growth during an asset price bubble, but the math is much simpler when counting days-to-double. Historically, the bitcoin price peaks when prices are on a pace to double in about a week. The first doubling leading up to the next bubble took 51 days, which is the difference between $340 on April 10 and $680 on May 31. I will be watching for . . . Second doubling - $1360 (perhaps July) Third doubling - $2720 (perhaps July) Fourth doubling - $5440 (I think the late July peak will be near this value) Fifth doubling - $10880 (probably will not happen unless the peak is in the fall) The academic research is Fearless versus fearful speculative financial bubbles D Sornette, JV Andersen - International Journal of Modern Physics …, 2002 A significant quote from the highly cited paper . . . The feature that distinguishes it [the model] from ordinary bubble models is that the solutions may be at some times growing “super-exponentially,” i.e., with a growth rate growing itself with time. This is fundamentally different from previous bubble models based on exponential growth (with constant average growth rate). This suggests to qualify bubbles by testing for the existence of nonlinear super-exponential growth.
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This is the my most favorite thread of this forum...wish the predictions here come true
Thanks! The theme here is more observation than prediction. We can make a guess about the trend and figure out what the consequences are in advance, should our guess prove true. |
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At the current pace, the dramatic breakout rally will reach $800 in about a week. I and others expected a stall at $650 but that does not appear to be happening - yet. I keep track of the days to double as a bubble peak indicator. The first doubling from the April 10, 2014 low of $340 would be at $680. That price point could be tomorrow at this pace.  |
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Interesting that now Huboi is leading Bitstamp upwards today. BitcoinWisdom lists Bitstamp at $642 and Huobi at $651.66/4070.08. This rally has been very strong ever since the breakout from the months long downtrend. Here is the Huobi 3-day resolution chart . . .  |
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Did rpietila check out?
I heard rumors he is on a cruise. Not sure if that is true but I would love an update. I am curious if he thinks we are still looking at the new ATH for August or are we back to thinking it is going to be late July. I shall soon begin recording the price doubling times. In the past, bitcoin when the price doubles in a week or less, then the peak is very close. What I anticipate, based upon the June 2011, April 2013 and November 2013 bubbles . . . The low recorded in the collapse of the November 2013 bubble - $340 First doubling - $680 (June) Second doubling - $1360 (July) Third doubling - $2720 (July) Fourth doubling - $5440 (I think the late July peak will be near this value) Fifth doubling - $10880 (probably will not happen unless the peak is in the fall) |
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Currently, I suppose that the mining reward is mostly spent on new mining equipment and power. The equipment manufacturers may accept bitcoin payments. So a portion of the mining reward may stay in bitcoin and not be exchanged for fiat. In the summer of 2016 the block creation reward is scheduled to again halve to 12.6 bitcoins per mined block. My logistic model has a trend price of about $840,000 for July 1, 2017. So three years from now, 1800 daily block creation reward bitcoins would have a fiat value of $151 million. Even if converted entirely into fiat, I think that figure is achievable by worldwide investment.
A price of above $840,000 by July 1 2017 is one of the most optimistic predictions I have seen. In percentage terms, how likely do you think it is that that will happen? If we get to $269,000 by July 1, 2016 then I would say 50%. Otherwise who knows. The Metcalfe's Law model is compelling. |
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