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take a look at the VIX graph i just posted today.
whether the volatility causes the market to go down or it's the market going down that causes volatility, we don't know. we do know that when volatility is going up, someone is losing money.
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if BTC holders and miners can be seduced to switch to the SC, full nodes might be expected to as well.
That is called an upgrade. The same thing happens today if you convince miners, nodes, and users to adopt a new version of the software. It has nothing to do with sidechains, except perhaps providing a more gradual method to migrate. it's also different from an upgrade b/c in that scenario, ppl don't have to crack open cold wallets. they just download software. what i'm describing is a market exploitation/transition that will cause huge volatility. ppl lose money when there's volatility. |
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- I cannot imagine how somebody can pump scBTC when exchanging them against BTC is 1:1 at the protocol level.
One example was specifically described: A nominally 1:1 side chain with a cap on the amount of BTC that can be moved to the side chain. Now imagine that the developer secretly grabs 90% of the cap before pumping the sidechain. The developer has a put that makes this a largely risk free (with my caveat about security risks). I imagine that once speculators and scammers get to work on coming up with their own variations there will be more such methods developed. Scammers are innovative when it comes to methods of scamming if nothing else. Would any sensible person put their BTC in such a capped sidechain? I don't see it. I'm also not sure how the developer could "secretly" grab 90% of the cap before pumping the sidechain. If 90% of the cap is held then I don't see any feasible way that you could create such a pump that would incite a BTC exodus. The numbers don't work. i agree. focus on my scenario. |
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if BTC holders and miners can be seduced to switch to the SC, full nodes might be expected to as well.
That is called an upgrade. The same thing happens today if you convince miners, nodes, and users to adopt a new version of the software. It has nothing to do with sidechains, except perhaps providing a more gradual method to migrate. no, no. read my first post about this above. initially, scBTC can be expected to trade below BTC, as it is new and MM'd. as brg444 concluded from my questioning days ago, if observers see a large #scBTC appearing on the SC a price rise will likely follow as it indicates there might be merit to the innovation. if other speculators start to smell an opportunity of the SC becoming the MC, they will follow in a self feeding cycle. BTC hodlers then have a problem; either they follow or not. if not, i say they risk losing value b/c there comes a tipping point where arbitrage won't keep the relative prices close together. who knows where that point is in the transition; 30, 40, 50%? but at some point, in the case where we have a truly innovative SC, miners will primarily mine the SC and start MM the MC. then, the MC becomes less secure and in danger of a 51% attack. that's where BTC become priced below scBTC. and that's where you'll get a run/stampede of BTC to scBTC. |
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- I cannot imagine how somebody can pump scBTC when exchanging them against BTC is 1:1 at the protocol level.
One example was specifically described: A nominally 1:1 side chain with a cap on the amount of BTC that can be moved to the side chain. Now imagine that the developer secretly grabs 90% of the cap before pumping the sidechain. The developer has a put that makes this a largely risk free (with my caveat about security risks). I imagine that once speculators and scammers get to work on coming up with their own variations there will be more such methods developed. Scammers are innovative when it comes to methods of scamming if nothing else. it's pretty clear that Sidescams are going to blossom. all they have to do is cause volatility to the Bitcoin ecosystem to have a negative effect. but, i have just described to you a SC situation that starts out with good intent and how a whale could exploit that situation with a speculative attack all b/c he has the economic equivalent of a risk free put with the 2 way peg. everyone knows the consequences of the Greenspan Put, do they not? |
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you touched on something i'm very worried with SC's the other day: a speculative attack.
assuming a SC failure is a long tail unlikely event as from a bug, the 2 way peg and scBTC is acting like a "risk free put". therefore a whale could pump large amts of BTC thru the peg driving up the #scBTC and eventually its price with a reasonable confidence that he won't be hurt as he could always reverse back into BTC. the problem is other BTC holders might be forced to follow for fear of the SC taking over as the mainchain and the merge mining % flipping. in other words, MM for Namecoin is about 70% that of Bitcoin currently. assuming a SC is initially MM'd, say at 60%, if a superior SC can flip this around by making Bitcoin 60% MM'd with the SC becoming the main chain, those left behind in BTC will lose value or may lose everything. the problem is that BTC holders may not be able to differentiate an unfolding superior SC from that of a Sidescam.
i see a very high likelihood of this attack that at the very least will cause volatility in the entire ecosystem. and that would be bad for the BTC and the scBTC price.
i also don't think this can be arbed away. it's reasonable to think scBTC would start off lower than BTC from being new and less secured with MM. if the whale can force this to flip with the price of scBTC rising faster than BTC at the very least this will cause volatility. some BTC holders and especially the speculators may be convinced the SC has a chance to take over and will follow encouraged by the risk free put. miners may then switch to the SC too and start MM BTC instead. yes, arb in the middle of a big picture transition can keep prices relatively equal. but if a true transition is really happening to the SC becoming dominant, the BTC price should start to drop below that of scBTC as realization sets in that BTC is going to lose and BTC itself becomes the 60% MM'd chain with the SC as the mainchain. so in essence, last out the door will lose. Just a note about this scenario. I don't believe miners switching over to the SC and MM BTC makes the SC the mainchain. Only a full exile of the nodes can do that. this is the follow on from me beating around the bush the other day, btw. if BTC holders and miners can be seduced to switch to the SC, full nodes might be expected to as well. |
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assuming a SC failure is a long tail unlikely event as from a bug, the 2 way peg and scBTC is acting like a "risk free put".
I don't think it is risk free since a failure of the sidechain could prevent unlocking on the BTC side, or conceivably cause the locked BTC to run out. i understand. but a chance of a bug in a well designed open sourced SC is probably no more than a bug in Bitcoin itself. especially if an attacker waits a good amount of time to prove stability of the SC before launching the speculative attack. given those circumstances, the 2 way peg IS a risk free put.i see a very high likelihood of this attack that at the very least will cause volatility in the entire ecosystem. and that would be bad for the BTC and the scBTC price.
This seems very plausible to me. a speculator loves to cause volatility and will love the risk free put nature of this situation. he will take advantage of it at the expense of less sophisticated investors. - I cannot imagine how somebody can pump scBTC when exchanging them against BTC is 1:1 at the protocol level. why not? we're talking about a whale pumping in a "large" #BTC thru the peg for scBTC. whether he is doing it b/c he truly believes the SC has merit or is doing it as a pump and dump, observers will never know. - I cannot imagine how keeping BTC in MixerBTC, HotWalletBTC or ExchangeBTC make in more valuable (if you do not use them for trading, fast-spending or mixing)
take my base case scenario and add in perfect anonymity as the innovation. if this SC actually works, the paper itself said that BTC holders could make a transition to the SC to take advantage of the innovation. the question is, do we all want to be making transitions to a new chain everytime an innovation comes along? |
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assuming a SC failure is a long tail unlikely event as from a bug, the 2 way peg and scBTC is acting like a "risk free put".
I don't think it is risk free since a failure of the sidechain could prevent unlocking on the BTC side, or conceivably cause the locked BTC to run out. i see a very high likelihood of this attack that at the very least will cause volatility in the entire ecosystem. and that would be bad for the BTC and the scBTC price.
This seems very plausible to me. remember that my base case for consideration is a simple Bitcoin fork with no sidecoin with one sell-able "innovation" added in. in this sense, an outright failure is not to be expected. |
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assuming a SC failure is a long tail unlikely event as from a bug, the 2 way peg and scBTC is acting like a "risk free put".
I don't think it is risk free since a failure of the sidechain could prevent unlocking on the BTC side, or conceivably cause the locked BTC to run out. i understand. but a chance of a bug in a well designed open sourced SC is probably no more than a bug in Bitcoin itself. especially if an attacker waits a good amount of time to prove stability of the SC before launching the speculative attack. given those circumstances, the 2 way peg IS a risk free put.i see a very high likelihood of this attack that at the very least will cause volatility in the entire ecosystem. and that would be bad for the BTC and the scBTC price.
This seems very plausible to me. a speculator loves to cause volatility and will love the risk free put nature of this situation. he will take advantage of it at the expense of less sophisticated investors. |
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shucks, my laptop with my charting program went dead.
looks like the gold reversal DOWN is well underway. from memory, both GDX and GDXJ, have broken below their consolidation points. that's not good. in retrospect, they were leading.
also, my prediction of a Dow Theory non-confirmation is looking good and is firmly on the table and in play as a major hint that we may be entering a period of severe volatility and perhaps recession as a bear cycle may be settling in. we'll see how the next few days behave.
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you touched on something i'm very worried with SC's the other day: a speculative attack.
assuming a SC failure is a long tail unlikely event as from a bug, the 2 way peg and scBTC is acting like a "risk free put". therefore a whale could pump large amts of BTC thru the peg driving up the #scBTC and eventually its price with a reasonable confidence that he won't be hurt as he could always reverse back into BTC. the problem is other BTC holders might be forced to follow for fear of the SC taking over as the mainchain and the merge mining % flipping. in other words, MM for Namecoin is about 70% that of Bitcoin currently. assuming a SC is initially MM'd, say at 60%, if a superior SC can flip this around by making Bitcoin 60% MM'd with the SC becoming the main chain, those left behind in BTC will lose value or may lose everything. the problem is that BTC holders may not be able to differentiate an unfolding superior SC from that of a Sidescam.
i see a very high likelihood of this attack that at the very least will cause volatility in the entire ecosystem. and that would be bad for the BTC and the scBTC price.
i also don't think this can be arbed away. it's reasonable to think scBTC would start off lower than BTC from being new and less secured with MM. if the whale can force this to flip with the price of scBTC rising faster than BTC at the very least this will cause volatility. some BTC holders and especially the speculators may be convinced the SC has a chance to take over and will follow encouraged by the risk free put. miners may then switch to the SC too and start MM BTC instead. yes, arb in the middle of a big picture transition can keep prices relatively equal. but if a true transition is really happening to the SC becoming dominant, the BTC price should start to drop below that of scBTC as realization sets in that BTC is going to lose and BTC itself becomes the 60% MM'd chain with the SC as the mainchain. so in essence, last out the door will lose. |
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Bitcoin Maximalism I, for one, welcome our new ScamChain overlords. Yes, to be sure many sidechains will be scams. And highly regarded and trustworthy 'overlords' lending credibility to the basic idea of sidechains will be very welcome to those intending to use the mechanism for scammery. It needs to be made very clear to users that just because something leverages the sidechains principles (or claims to) this is no reason to drop due-diligence and common sense. Use only sidechains which can be thoroughly analyzed and have a theoretical basis in the principle that the sidechains manager can at the very worst lose value...NOT take value. you touched on something i'm very worried with SC's the other day: a speculative attack. assuming a SC failure is a long tail unlikely event as from a bug, the 2 way peg and scBTC is acting like a "risk free put". therefore a whale could pump large amts of BTC thru the peg driving up the #scBTC and eventually its price with a reasonable confidence that he won't be hurt as he could always reverse back into BTC. the problem is other BTC holders might be forced to follow for fear of the SC taking over as the mainchain and the merge mining % flipping. in other words, MM for Namecoin is about 70% that of Bitcoin currently. assuming a SC is initially MM'd, say at 60%, if a superior SC can flip this around by making Bitcoin 60% MM'd with the SC becoming the main chain, those left behind in BTC will lose value or may lose everything. the problem is that BTC holders may not be able to differentiate an unfolding superior SC from that of a Sidescam. i see a very high likelihood of this attack that at the very least will cause volatility in the entire ecosystem. and that would be bad for the BTC and the scBTC price. |
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trendline well intact:  |
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if the $DJI pauses today, which it looks like it well, you'd better look the hell out tomorrow.
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Is there a transcript or synopsis? I really can't listen to economists. not that i'm aware of. but he admits that our current system has favored the 0.1% elite with assets due to the political influence they wield and that politicians favor creditors over savers. he validates Piketty's thesis. he also believes we haven't recovered from 2008 and wealth disparity has increased but offers no solutions except more of the same. |
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...
Gold is a good point, I agree.
Nice to hear someone else has a similar view as me:)
Still its kind of hard for me to see if what the next big bubble will be:( I am a long term believer, and long term holder, which is why I feel so stupid for not selling at the top, as I have past experience.
The 266 bubble was obvious it was coming, but tbh I didnt envision the 1200 bubble either (I thought the news bubble subsided), so maybe I am just over bearish and anxious about my position, if I did sell then the whole time price was going up I would be thinking it would go to the moon...
Eh, to an extent, I feel the same way about the last top, but it's really quite arrogant to think you can pick tops. Unless you're *actually* a very skilled trader (and not a lucky hindsight or small-sample-set biased one, like most), you've just got to go with the fundamentals analysis and wait. The 2011 base-to-peak was something like 30x, and spring 2013 was 20x. The top of the last peak could've been >$2000, or it could've stopped well under $1000. Getting the top right is a matter of luck. Either way, the long term picture remains unchanged. I think there are a few potential quick run-up catalysts out there as noted (and some we haven't noted: wall st, the right sort of financial crisis), but it doesn't really have to go in these bursts. Maybe it won't anymore. In any event, the market-cap of bitcoin in the $5B range is silly small compared to any relevant metric: various equities market caps, M2 money supplies of various nations and what level of GDP they support, precious metals markets, "off-shored" cash holdings, etc. I don't think we necessarily need to clearly see any bubble catalysts (these things are often unpredictable events anyway) to be content in long term positions, as long as bitcoin continues to garner interest and infrastructure development. if i'd tried to sell at the top of $1200, it would've been at gox as that's where i was registered. i also believed in Mark, which in retrospect, probably wasn't right. if i'd sold at 1200, there's a very high likelihood i would've never gotten the fiat. so in that sense, i don't feel bad at all. |
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Also Stupid trolls like falllling and co. have been right all along while smart people have been wrong. Something is off.
Calm yourself podyx. What is more likely, that this is a technical bear market following a 100x bull run being gamed by big players who are building large positions for the impending rise into the mainstream that half a billion dollars of VC funding, impending US regulation and an ETF about to be approved will bring. Or that in a sea of increasing adoption, rapidly growing infrastructure globally, growing merchant adoption, rising transactions and volumes bitcoin is suddenly dying and every single person on bitcointalk other than trolls, newbies who dont know better and technical bearish traders failed to get the memo. The trolls are just sockpuppet accounts for traders who are short trying to exaggerate downward momentum by manipulating emotions and encouraging selling. A few posters state that influencing sentiment on this forum has no effect upon the price. I would say that manipulating the price and also manipulating sentiment on this forum in a coordinated fashion will exaggerate price movements. If there are only 300,000 to 1 million users with double digit holdings of bitcoin and only 50,000 btc on the exchanges setting the price then convincing a few hundred people with weak hands to sell could make quite a difference to the orderbooks. This is the most viewed and visited bitcoin forum on the internet I believe. If you are getting emotional either partially or completely sell at a loss to reduce your anxiety, turn off the computer for three months or view this as a buying opportunity and purchase a greater % of the bitcoin network when you feel the price is bottoming. The reason the quote about buying when blood is in the streets is true, is that human emotion at price extremes like this (and it may get more extreme) makes a normal person want to sell and run, also known as the fight or flight emotional response, when if they thought rationally they should be heavily accumulating. It is that irrational feeling that the price could literally fall to zero you must control. It is no surprise that the trolls are loudly calling for double digit bitcoins and the price falling to $1. An interesting metric posted in the last few days is the top 100 bitcoin addresses and their balances. These real superwhales are not selling or reducing their coins, they are increasing them on this price weakness. Also bitcoin days destroyed have not spiked suggesting long term early adopter holdings are not being moved to exchanges or moved. Few bitcoin bulls or holders would have predicted the severity of this bear market but what the features and potential of bitcoin that made it attractive at 400 - 1166 have not changed. COI: Bitcoin long term holder. well said inca. can you update the graph of the top balances? |
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well, we got it in place now. let's see if it holds. if the $DJI fails to go up and make a new high and starts turning down over the intermed term, while the $DJT has made a new high, we'll get what i've warned to be a Dow Theory non-confirmation which has been seen at a majority of stock mkt tops over the last 100 yrs. i would be on high alert:  |
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I just had a thought. If you wanted to have a sidechain that itself used proof of work mining (peg a PoW altchain to Bitcoin), how could it really work? The miners would have to get paid, and they surely can't be paid in bitcoins so they would get newly issued altcoins. But those particular altcoins would not be convertible to bitcoins, in spite of any so-called 2-way peg, or if they were perfectly fungible you would still end up with whatever percentage of the coins that had been mined constituting an inconvertible set of coins.
Could the sc miners be paid in txes fee only? yes, of course. Forgot about that. |
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