(^
...
^)

Twisting aside -- that some share of the crypto cake capitalization will go to chains with varying degrees of trust reliance is unavoidable, imo. Said as much before and still think it'll be the case, long term. Only, that doesn't change the simple economic insight that, once you're planning to clear / register / etc. among a broader group where your lack of trust in them times the capital on the line is greater than the cost of complying with creaky old BTC (fees and delays, warts and all), you have no good localized economic reason not to use the latter... So what's the big deal, exactly?<sup>*


*</sup> And that's not even accounting for the (orthogonal) incentive to be on a permissionless network.

^ Meh. Guess you know for sure the forum / population has changed when a (relative) newcomer account blocks (justified or not, doesn't matter) a bunch of posters that have been here from day one.

Pick any interpretation you like ^_^

Ah, good old wall observer on a Saturday evening... the memories!

I suddenly feel crypto old :/

^ Yes, that was my idea. Guess I interpreted the post I replied to a bit loosely... Sorry for the misunderstanding :)

Not saying I'm 100% agreeing to the hypothesis, but it's definitely one of the more plausible explanations I've seen (or thought of myself) so far. Thanks!

I like that. So, profit neutral bot trading locally, for nonlocal profits.

One problem I can see with this: Creating the impression of buying while unloading yourself, by my impression, is the less common strategy in this market. Much more likely, imo, to see a good old pump (and then, dump, for profit), i.e. start the pump on some good news, paint the book and place some strategic buys, then, when the enthusiasm runs dry, dump before other traders do. Which doesn't fit here (unloading while the trend is still intact)

I guess the strategy here could be the case of a whale who bought massively at the sub-200 bottom, but doesn't plan to hold on to it, unloading slowly now. That what you have in mind, roughly?

Been wondering about that one ever since [forgot who posted about it the last time in here] mentioned it a while ago...

In principle, I can think of the following explanations:

(a) Bot buying, outside motivation, i.e. automatic buying/selling based on 'external' (i.e. price independent) supply/demand. Could be operated by stamp itself, or by an external account.

(b) Bot buying, trading, i.e. some of the capital that operates bots and that so far was mainly active on finex or the CNY exchanges moved to stamp

(c) Bot buying, exchange internal, i.e. fraudulous, or at least highly dubious. In that case, it could be either to pump price (less likely, imo), or to create volume out of thin air to make stamp more attractive to traders (still morally bad, but not as bad as the first one). The latter might also cost the operators a bit of actual money, since the bot might not operate to create a profit, but only aims to create volume 'profit neutral' -- which, ultimately, might still be profitable via increased fees from new traders attracted by the volume.

Any additions? Did I forget an option?

Also, please don't tell me why "Clearly, option X is the *only* reasonable explanation", or "Option Y is ridiculous". From what I can tell, the three above are in principle possible, and compatible with what I observe myself.

And option (c) is rather speculative at the moment in my opinion, and I only mention it because it seems in principle /possible/, though I consider it /unlikely/, given how there's major outside investment in stamp, and they'd likely be liable if it would take place and came out at some point. Contrast stamp with mtgox, which seemed a lot more hermetically sealed off.

'Share' button, 'make it mine', iirc

You're completely skipping over the distinction I wanted to make, between 'worst case, in general' and 'worst case that is likely after breakout, in a sideways market', but okay...

Agreed that somewhere around [yellow box] or [orange box] was, approximately, the last time many traders would have concluded we have a breakdown?




That's more or less the scenario I'm describing above. Breakdown, on decent volume, followed by a bit of a disappointing 'fizzle'. And the difference between exiting with a profit or exiting with a loss is kind of narrow, but there's not much of a wipe out risk either.

If your point is that, in principle, you can always be wiped out in margin trading, the answer is: sure. Always a possible. But my point was, under the current (comparably docile) market conditions, a big swing in the opposite direction of a breakout seems less likely, reducing the risk to be wiped out.

Don't think that's entirely true. What's the worst, still likely scenarios for your leveraged position after a breakout/down in the current market? A rapid move in the opposite direction is unlikely if you entered on a volume supported breakout (and you have stops for the worst worst case anyway). So the worst likely case would be... that nothing much happens. As in, no decent move in any direction, but just more sideways (which, right now, I think is the most likely scenario anyway). Sure, if you don't time it right that could hurt your position, but not hugely so. If you compare it against the potential payoff in case the move doesn't fizzle, it might be worth it.

tl;dr Leveraged position, after a breakout, in a sideways market doesn't seem to be such a huge risk.


Disclaimer: I don't use leverage in my regular trading. Take the above with a large grain of salt ^_^

(aside)

I wrote a crude little extrapolation script on TV, i.e. takes an average definition, and, if set to a history length N that is beyond the available data a time instant n, it calculates the 'undefined' segment up to n by giving equal weight to the /available/ values at point n over length N (the extrapolation part), and from the point on when there is enough data for N, it shows the average in a different color to mark that the values are now based on sufficient data. I'll see if I can dig it up, might be helpful for cases like this.

Hey, not fair. With NotLambchop there was at least some style to his trolling.

I guess I was a bit sloppy in how I phrased it... I meant it is "less severe" in a certain (well defined) sense: the rate of decline is lower than the rate of decline of the previous one.

But of course, in absolute terms, it could be seen as "more severe", since it would mean that price might make a new LL if it turns out to hold.

Thanks for the update, luc. Much appreciated, as always.


One idea, related to your (log) trendlines... Previously during this bear market, I believe we went through a pair of "accelerating downtrends", as in: the downwards channel / upper trendline from Dec 2013 to June/July 2014 was replaced by a new, even sharper downtrend, that lasted from July 2014 to June 2015.

If that's an accurate way to look at it, it also makes me wonder if the way out this bear market is perhaps not by going straight to another upwards channel (unlikely anyway, as you said yourself, or even by going directly into an extended flat period, but whether perhaps the market first has to go through one more downwards trend, albeit, one that is this time less severe than the previous one.

Which, roughly, could look like this:



Yes, I know, not much points on the upper line so far. Like I said, I wonder if that *could* happen, not that the data already supports this *has* happened. Also, if you think the lower line looks like it's broken way too often, I consider this channel to be active from ~April only, so it's outside the date range.


Anyway, it's more of a idle thought than a prediction I'm much committed to. One thing: if this channel would be active, as severe as it looks (since it could take price to a new LL), it does actually have a lower rate of decline than the previous channel, from July to June, so it would fit the idea of being a "less sharp dowtrend replacing the previous, sharper one" (despite taking it to a new low).


(EDIT) Very sloppy illustration of what I mean by "one DT replacing another one"...



From #1 (yellow) to #2 (orange), which was sharper down, from #2 to #3 (red), which is less sharp down.

(screw my claim that I'm not writing again in here )

You're probably joking, but I'm not so sure that "on body safekeeping" is necessarily worse than traditional safekeeping by hiding, or placing things into vaults.

Now I wonder if there's any research into this, how "on body" compares to "hiding" compares to "vaulting"...

@jonald_fyookball

> We should note that when brute forcing seeds, none of the preceding letters are known.

You don't need to /know/ any actual element of the password. The speed up comes from knowing - for English - the conditional probabilities of certain lexical items or characters, so you don't have to run an exhaustive search over all combinations over the dictionary, or rather: you can try the more likely combinations first, then the slightly less likely ones, etc.


> It's like trying to brute force guess all the moves of billions of chess games played between relatively strong engines.

Not really. It's closer to having a slightly better algorithm for finding the optimal move in a chess game than the next best alternative algorithm. Which sounds exactly like something you'd want to use if you plan to win at chess.

---

I said it before, I'm not an expert on password cracking algorithms, and I can't say what speedup to expect in exact numbers. But I know enough about (statistical) language models to say that I'm pretty sure it could make quite a difference if implemented right, and if the assumption is correct that you try to find not a random sequence, but something generated by "English", or "close to English".

Now then, let's see what a quick Google search comes up with...

(1)


from: https://www.trustwave.com/Resources/SpiderLabs-Blog/Hashcat-Per-Position-Markov-Chains/

Which describes (from what I can tell) an application to password cracking of Shannon's insight mentioned above.


(2)


from: http://www.wired.co.uk/news/archive/2013-05/28/password-cracking/page/2

That one is not even based on any underlying "English grammar", but it's the same principle: there's a set of conditional probabilities they can work with given that the sequence hasn't been chosen at random.

In a sense, the "grammar" here is the "grammar of previously discovered passwords".

Super slick, by the way, must admit that.


(3)


from: https://www.ma.rhul.ac.uk/static/techrep/2013/MA-2013-07.pdf on page 38

This one's probably the closest to what I had in mind. Password cracking based on Markov Chains that encode some form of "English knowledge" to guide the search. And, who would have thought, it's faster than brute forcing.

---

Sorry if this comes across as rude, but that was the last message on this topic from me.

I've made the point I believe is the one that needs to be mentioned in the context of this discussion, and that this point itself is not matter of discussion, but a mathematical certainty:

Entropy of English or near English phrases is lower than that of randomly generated sequences.

Now, admittedly, whether you think the above is worth making it more difficult for users to remember their password is a different matter. But that's a 'weighing off' decisions then, between usability and (guaranteed) safety.

And all these things considered, I think that Thomas V found an excellent solution: by default, seed generation is random, because on average, humans suck at coming up with randomness.

If however you have shown that you have a modicum of technical knowledge, you can enter your own seed, and then it's your own responsibility to ensure it is good enough.

Think of it like a "You must be this tall to ride" sign at the entrance of a roller coaster, and even placing a pair of walking stilts next to it.

If you're sure you want to roll your own, you can already do so. I don't see any need to ask Thomas to invite everyone to come up with their own seed, because the likely result is that average seed quality would decrease.

---

(EDIT) One thing, to be clear: I agree with you guys that it's hard, if not impossible, for most people to memorize the random seed. That's why you should probably write it down or print it, and find a way to store it away.

Hell, if your funds warrant that level of security, put it into a sealed envelope and place that one into an insured bank vault. The same principles of storing anything physical of great value applies here, only that in our favor (a) you rarely if ever need to get the item (only to recover your keys), and (b) the item is small, so hiding it or renting some safety box is easier than having to do so for a larger object.

It's neither "paranoid", nor is the exact POS example I gave, and whether there can be exceptions, important. I just picked it as an example to make the problem more relatable.

To be clear: if your sequence of (dictionary) words is the output of a grammar, it is more predictable than a random sequence of dictionary items. See for example Shannon's classic paper on the entropy of English.

Note that Shannon makes no theoretical assumptions about which grammar underlies English. I'm not an expert in password cracking methods, so I can't give you any hard numbers, but I imagine that an n-gram based method (i.e. the classical SML model) would provide a relevant speed up in the search (under the assumption that the sequence is a grammatically valid sentence of English).

The problem with this is that it's a grammatically well-formed sentence, not a randomly chosen sequence of items. That probably makes it easier for you to remember, but it's also easier to predict what follows next. For example, after "I loved my little ...", the next word has to be an adjective or a noun (phrase), so a search can exclude (or at least, discount) inflected verbs, prepositions, etc.

(EDIT) And the problem with "original" words is that (a) you have no guarantee that they are original, and (b) they constitute a single point of failure, i.e. if the security of your (otherwise not so secure) passphrase rests on the originality of a single word, and you are wrong about it being original, you're screwed.

Yeah, probably makes sense to play a few rounds, as the factor against b&h can vary wildly until there's a bit more data, at least that was my experience.

100% agreed on the 'fast forward'. It makes it easier in a sense, because the (sometimes nerve-wrecking) time in between market moves can be shortened, but I also thought it was pretty 'educational' in a way, because it really seems to sharpen your senses on the patterns, without the emotions that inevitably interfere with your actual trading.




Glad you like it.

I'm still surprised how brutally a the bigger market context of the S&P (which is overall bullish since decades) seems to punish shorting. I made only comparably little profit by shorting a few obvious breakdowns, but then, over just a few charts, lost quite a bit of my total profits by not closing shorts early enough when the trend had turned.