Alright, I think it's safe to say now that the bears won in 2014.
Re-match begins tomorrow. The bulls are ready for some payback!
Yep... 2014... a good year for BTC bears. 2015 is another year, and only time will tell regarding results. I would be quite surprised if we get another bear year in 2015, but I would NOT be so surprised if 2015 has mixed results that tend towards bullish results. It would be nice, however, if 2015 could generate another bubble year - preferably in the first half of the year... yet us BTC enthusiasts should be prepared to wait out the totality of the year, if necessary and HODL, HODL, HODL.... and BUYDL, BUYDL, BUYDL.  Depends how you look at it. Through 2014 we managed to stay above the pre-November-bubble high and stayed well above what the value was for most of 2013. If you look at the 2 year chart on Bitcoinity, if anything we've been too high through 2014 and taking our time to get back to the proper level. We appear to be there now though and 2015 will be the real fight. I'm not saying it couldn't have been better and for many people, it was undoubtedly a bad year but for Bitcoin, it wasn't that bad. |
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Interesting... I thought about writing some experimental code for an exchange, but couldn't figure out an algorithm that would allow multithreaded operation. To execute a huge number of orders per second I guessed mutithreading would be useful. But each new order to execute depends on the results of the previously executed ones (for the price and available amounts). Doing inter-thread communication to sort this looks too hard for me (and may kill performance), so it's in the forgotten projects drawer.  I wouldn't go multi-threaded. I would have a small, tight inner process to execute the trades from a queue and hang parallel stuff off of that. Multi-threading is nice for some things but is actually less well suited for certain tasks than you'd think and adds complexity and the potential for some quite nasty bugs. |
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I've yet to see a Beanie Baby ATM!
That brings up some unfortunate images. |
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The issue with poor PSRNGs has noting to do with address generation, the only way poor randomness could be exploited with addresses is if you could reproduce the poor randomness yourself.
The issue is that poor PSRNGs conceivably could reuse or have insufficient entropy in "R" values in signing transactions, which allows an attacker looking at the transactions either in the blockchain or mempool to reverse ECDSA. This scenario is the real attack, because it doesn't necessarily require anything other than an understanding of the elliptic curve mathematics and scanning through transactions until you find a vulnerable public key.
This "Hash Hyena" is making the ridiculous claim that running vanitygen plus having a very large hard drive equals some kind of production of a collision database that produces non-trivial amounts of hits. That has no relevance to the issue of poor randomness, but I guess it sure sounds like it does!
The only thing here more ridiculous than Hash Hyena's claim about address security, is that pedantic P(security broken) formula, which at this point might as well be a laxative.
You are right, of course. Slipped my mind that that is what the issue was. I think Jorge knows it too since he has posted links to the actual issue before though. Address generation *could* be an issue but is somewhat less likely. |
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Many thanks for your comprehensive answer! It seems, as I've found in the last couple of hours, the use faulty PSRNG's might pose a threat, maybe significant enough to drive the price further down. The unfolding story is here: https://bitcointalk.org/index.php?topic=107172.msg8939173#msg8939173 I hope you'll find it interesting enough to consider including it in your great work (I'm closely following your posts) that you're doing on studying/documenting the whole ecosystem. Thanks for the link and the compliment! As I understood it, those Hyena guys claim that many wallet tools use PSRNGs that generate less than the required 2^160 bits of entropy. They claim that the entropy is low enough that the chance of a collision is not negligible; and they have set up a lot of disk and computing power to catch for such collisions. I doubt whether good PSRNGs, correctly implemented and used, have such a low entropy. However, the probability of coding errors makes the project more plausible. In conditional probability notation: P(security broken) = P(software is correct) * P(security broken IF software is correct) + P(software is buggy) * P(security broken IF software is buggy) A strong cryptographic method only ensures that the factor P(security broken IF software is correct) in the first term is astronomically small. However, the factors P(software is buggy) and P(security broken IF software is buggy) are large enough to matter. For bitcoin, empirically, the second term may be on the order of 1 in 10'000 or more, and is unlikely to decrease. (As time passes, the best implementations may get somewhat more secure; but the number of implementations will grow, so there will be fewer competent eyes checking each of them, and reports of coin theft will get less attention.) Thus, P(security broken) should be large enough to notice, and will not be improved by switching to 512 bit keys or whatever. For anyone really concerned, they may want to generate a private key with some dice. |
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What if I told you that the real monetary inflation for BTC is actually even higher than most people think? That's because a lot of BTCs from the early days are totally lost (so nobody owns the private keys anymore, it's like they never existed). 2 million BTCs (minimum) are very probably lost: http://onbitcoin.com/2013/12/07/bitcoin-spoilage-2-million-bitcoin-likely-lost-old-hard-drives/The supply of BTC in circulation is actually smaller than believed, that means that the inflation is actually higher. A reasonable point. But if you are using BTC in circulation, you almost have to cut out a lot of Bitcoins that are being kept off the market by holders also. Depending on what you are trying to measure I guess. It's just one of many reasons why market cap is actually pretty meaningless as well. It's also feasible to argue that there is no inflation at all, that since there will only ever be 21 million BTC, it's not inflating, they are just becoming accessible. Again, it is important to define what you are trying to measure. |
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Actually, that link isn't working at the moment. I need to send some more funds to the hosting service.
You could post the explanation on this forum (here, or as a new thread) and link to that post. Excellent idea. I'll do that shortly. Thanks. |
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I would be grateful if you write a few sentences about the chart I do not know much Thanks! It is auto posting. He can't answer you, Click in the more info(or something similar) to see more info Actually, that link isn't working at the moment. I need to send some more funds to the hosting service. |
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I was wondering which exchanges people around here focus on when watching BTC charts. The Chinese exchanges seem to have the most volume (OK Coin, Huobi).
for some reason people, including the chart buddy, looks for the bitcoinwisdom price. U know, chinese exchanges don't have dollar prices Chartbuddy gets his data directly from Bitstamp (though it seems to be screwed up a good percentage of the time these days) |
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You donīt get the point.
They anticipated $1000 by now.
This led to extreme over-investment in mining equipment.
Major bankruptcies are most likely imminent.
Interesting point, yes. Expected price rise leads to mining bubble, taking funds from BTC investment, stalling actual price rise. Agrees with what I've said previously about expected BTC bubble being diverted to mining bubble. Therefore, must be true |
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we know we are in sideways when people act like $10 variation in price is super significant
Hah. When I bought in, $10 *was* the price. |
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if i had a place to put them, i'd probably still be running my little block erupter farm. bout 50 units, something like 15 ghash... but if my math was right, it was like a lightbulb worth of electricity. why not, ya know? course keeping my pc running 24/7 is another subject, but i do that frequently enough as it is for downloads...
Last time I tried mining (at the beginning of the asic thing), my hashing didn't even register on the pool's radar and I got nothing. 50 BEs may still be enough but that was over a year ago. I'd be interested to hear the results. As to keeping your PC running, I believe you can use a R-Pi so that could cut down on power requirements pretty seriously. |
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Yeah, I see it often too & have as much faith as you in TA. Waiting for the reward halving* & watching 1/2 of the mining gear go offline. Ready-made 51% attack in the making  *If Bitcoin survives. Just one of the possible scenarios, but something to think about. I think we'll see a lot miners "hodling" on to their gear delusionally. OTOH, there will undoubtedly be a price rise which will mean that less than 50% of miners will need to switch off in order for the remainder to stay profitable. |
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The inelastic supply seems to be an issue then. If people demand less, we should be producing less instead of flooding the market so quickly? This must be what creates the volatile bubble-bust cycles. Just like silver
It really isn't all that critical as long as it's predictable. The point is it *is* critical--it is the basis of all modern economies. All. Hence Bitcoin. |
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Completely correct. This is important to remember for when the block reward goes away and miners come to rely on fees. It is the mining that will adapt. Though the block reward halving will affect bitcoin price as it will affect supply.
To an extent. Remember though that there are a fair number of irrational people out there, and the issue of the "dollar auction" is one to contend with. IE: If you go below Capital investment+electricity/rent/staff costs then you are losing money on your farm, but you're losing less than if you just turned it all off and tossed it in the trash. Negative return but still logical. If you go below elec/rent/staff and still mine then you are insane and need mental help. :-) Yep. Your sunk cost must be discounted. You plan and hope to recoup it when you set out but then the money is spent. I'm sure there are many miners out there caught in this trap. |
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...
No, it's called a negative feedback loop and should probably respond like any other damped oscillation.
... Not all negative feedback loops result in damped oscillation. Oscillators, for instance, are simply a negative feedback loop with a time delay. This is sorta important to remember, and the reason not everything should be modeled on pendulum of a run-down clock. Well, the time delay arises from the properties of the system. And it's true that not all negative feedbacks result in damped oscillations, those are unstable systems which has not been evidenced in either the price markets or the mining markets. There is also little evidence to suggest that damped oscillation model is useful in modeling markets or Bitcoin mining. *shrug*. I see it quite often. Usually those TA people like to call it triangles or somesuch but I am not a TA guy so I could not attest to how "useful" it is. But I am not arguing for its usefulness for modelling, merely making observations. |
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The inelastic supply seems to be an issue then. If people demand less, we should be producing less instead of flooding the market so quickly? This must be what creates the volatile bubble-bust cycles. Just like silver
It really isn't all that critical as long as it's predictable. |
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Mining difficulty adapts to bitcoin price. If price drops to $10, difficulty will drop too.
Is just simple offer and demand. If market don't want to pay more than $10, miners can't spend more than $10 to mine them. Otherwise they would be mining at a big loss.
But if market want to pay $10,000 and miners only spend $100, that's ok because they are doing it at a profit. Of course more miners would join mining because high profits and then, after time, mining each bitcoin would be near $10,000 each.
Hint: Remember bitcoin could be mined for nearly $0 each (if just 1 computer mining and no demand at all). It is just offer and demand (rising price and difficulty) the one who makes mining more expensive.
Completely correct. This is important to remember for when the block reward goes away and miners come to rely on fees. It is the mining that will adapt. Though the block reward halving will affect bitcoin price as it will affect supply. |
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...
No, it's called a negative feedback loop and should probably respond like any other damped oscillation.
... Not all negative feedback loops result in damped oscillation. Oscillators, for instance, are simply a negative feedback loop with a time delay. This is sorta important to remember, and the reason not everything should be modeled on pendulum of a run-down clock. Well, the time delay arises from the properties of the system. And it's true that not all negative feedbacks result in damped oscillations, those are unstable systems which has not been evidenced in either the price markets or the mining markets. |
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EDIT :: if we look at the graph assume that 1100 is the top and 270 is the bottom, can we safely assume that 350 is the desired price range  I wouldn't say that. 1100 was the result of many factors including unrestrained exuberance and MtGox shenanigans. It must also be remembered that that blue level moves quite often. |
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