yes Cypher hit the nail on the head with the prob with this thread which is why I stopped bothering.

if I recommended buy at 80, 70, 60, 50.5 during one of the crashes technically I'd be +1, -3 since price kept falling till the last.  but in practice I'd be way ahead. RS is looking for an oracle

cypher btw your math is fine... its when you compare % that things aren't straightforward

RS, I'd like to gently pull seniority on you here.  Sunnankar has been doing bullish posts since I joined early 2012, with BTC < $5.  He's been bullish the entire time, which is consistent with a financial advisor, BTW.  These guys and their clients are not day traders.

There's no "bad timing" here. There's no timing at all.  He's looking at a 5+ year horizon.

sunnankar is a professional investment advisor.  When BTC crashed (and who could have predicted it between 100 to 500) of course it becomes necessary to look at other things. If you are a painter sometimes you paint houses, sometimes bridges or boats.  But I did not hear sunnankar "dumping" bitcoin... he probably just had to do other stuff for awhile.  Whales make the same mistakes as the majority, following trends.

RS, start thinking rationally not emotionally here.  (sorry that you sold :-))  Put the post in its context.  This venue makes it extremely unlikely that it is a "pump" attempt, as compared to the broader media outlets that sunnankar has access to or even the wall observer thread.

I am glad to hear about a resumption of activity, esp. in the USA.  Clearly the effect of the Bitcoin Foundation's meeting was to ease some fundamental risk factor in some participants and their friends' minds.  Something fundamental and non-specific -- like maybe that BTC would be simply declared illegal in USA... 

Of course, everybody would be mining alt-coins until the payoff block.  So you'd have to put a mining reward on those empty blocks.  And why make them empty?  If a txn is there, might as well include it... that way people can choose their risk vs. wait time. 

Yes, maybe it does make sense to reduce the bitcoin difficulty adjustment (and reward of course).  After all, that's all litecoin has going for it.

Exactly!  The system should have its own parallel blockchain and cross-trade-validating clients can load both chains.  Total required space would be LESS then encoding it on top.  And most clients would not even need the bitcoin blockchain, if "validating" clients posted a subsequent block with a record that simply indicates whether the bitcoin txn happened.

I've mentioned this twice on the Mastercoin thread, with no response...

But I think that there's value in having a single chain that allows anyone to create a new currency or asset rather then have every company stock, mortgage, etc create its own blockchain.  That many chains would be madness :-).  It would be easy enough to have the "currency" be identified by a public key, and the currency genesis block contain a signed and in theory legally enforcable, message describing the "currency" and optionally identifying the issuer.

... to get out you've got to sell somewhere else.  Where are the dumps?  Other exchanges are following not diverging.  During whale-less days, BitStamp is seeing steady or slowly rising prices with > volume than Gox.  If whales are selling slowly, we'd be seeing these exchanges fall.  Bid depth too small, so whales wouldn't sell ANYTHING?  That's silly...

Volume is low during downtrends, higher during uptrends.

Keep beating your drum, you might be able to buy your 5 coins back soon :-)

  brilliant, after fees you make about $2.60 or 1.8% but open yourself to risk in a market that could be at 150 or 130 by then... the only trade that's worth those pennies is an arbitrage with no time risk.  Meanwhile walls placed above $120 buy ALL the coins.

After a lull, I'm seeing a decisive breakout in price and volume above the 2nd bounce high of $13x around Jun 1.  News is generally positive.  Volume is strong in bitstamp.  In fact, volume in bitstamp was significantly > mt. Gox during the lull.  This is telling me that the small investor is buying.  Previously in this rising market, volume has been strong during breakouts...

Speed of the rise is not a concern.  This is bitcoin.  My only concern is btcnCNY volume is not high.  But the timing (its around midnight there) and preceding low volume days probably has caught most traders there off guard.  Look for a strong run up to bitstamp's price on btcnCNY 4-8 hours from now to confirm this market motion.

Its a very interesting question whether this Gox money has been there all the time or not.  On the one hand, Gox price is higher, so why would new $ come in? On the other hand, a long term whale buyer (who is probably buying through a broker) will easily swallow 5%+ because:
0. Slippage is bigger than that anyway.
1. Not needing to be verified on the other exchanges (the broker needs to buy NOW)
2. Did the broker even bother to mention that other exchanges are lower? :-)
3. The broker makes his cut regardless.
4. Even with the situation with USA, Gox probably remains most trusted with large $
5. Its a buy, not a sell.

Exactly my point, and one of the key features of bitcoin (reasonable privacy) that regulators seem to dislike.

The lack of transparency is pretty embarrassing.  Every single individual in that room probably contained the means to record the entire thing in his/her pocket.  


I would have stood up and held up my phone and asked the regulators "what do you guys prefer?  That this be recorded and published on the internet or that we keep it casual?"  

And when they chose casual, I would have said "Why?  We aren't going to be breaking any laws here.  But I think i know why.  You just don't want to be seen by the world asking stupid questions.  And you don't want to seem for or against this technology before making an informed determination."

And then I would say, "That's called reasonable privacy and THAT's why we use bitcoin."

No, I've been going on and on about the trusted oracle problem from day 1.  Here's first post:


Actually, I wrote yet another big summary including all the issues (including the oracle issue) for this thread and then just lost heart, deleted it and posted the one liner.

Why did I give up?  Because none of the authors are looking at the system from a theoretical perspective.  What I mean is that they pick a specific algorithm and we refute it, and then they modify it.

But, given an anonymous, trustless system, ALL possible interactions can be defined.  There can be no "out-of-band" interactions -- like arresting someone for example -- because the players are anonymous.  All interactions are:
1. Buy from the "mint"
2. Sell to the "mint"
3. Holding
4. trade

This means that you can define classes of algorithms, and show that these classes cover all possible algorithms:
1. All algorithms that create > 100% backing (manipulation of 1 and 2)
2. All algorithms that use a fee to encourage/discourage minting/redemption based on the divergence between X and crypto-X
3. All algorithms that pay dividends, from funds gathered by 1 or 2
4. All algorithms that pay dividends by taxing, demurrage, or printing (mining) X

5. Any hybrid of the first 4.

"Normal" bitcoin volatility breaks all classes of algorithms unless such high safety margins are used that the margin becomes much larger than the pain of using the crypto currency directly.  And that assumes a perfect oracle.  An imperfect oracle can only act to destabilize the system...

this is a good summary of the criticism, but quite long.  Let me try a very succinct description.

The escrow fund sells a promise for X but keeps the money in Y.  It is therefore exactly like going "short" on a stock -- the short seller sells a promise to supply the stock (X) but instead holds USD (Y).  The dangers of shorting are well understood...

Its that simple.

Any system that adds a charge (like a mutual fund "load") to buying/selling can use that profit to create > 100% backing.  But it will still be vulnerable to large price swings and is therefore only useful for short term activity.  But the charge discourages short-term activity.  And for short term use, why not just use the backing crypto-currency directly?

Any system that uses dividends is either adding a charge (as above, just paid over time), OR moving value between the owners of the raw crypto-currency and the pool of crypto-X owners.  So owners of the crypto-currency are implicitly shorting crypto-Gold, crypto-Silver, etc against the crypto-Gold, crypto-Silver long.  This value transfer could be done (as in BitShares I think) by an uneven mining award -- essentially the coins created by inflation are applied unevenly.  But the end result is that inflation is causing an individual coin to be worth less.


I sincerely hope that the people creating these systems allow independently-minted currencies backed by a cryptographically signed documents (identifying the real-life owner for example).  This will at least allow "trust" based currencies, tracking commodities, or even stocks, bonds and mortgages.

And let me finish by also saying that these systems (BitShares and Mastercoins) seem to have a LOT of other great features.  I do not think they will live and die on these tracking currencies.  However, I wish BitShares would use some of Mastercoin's "embedded in bitcoin" technology to create atomic transactions between the Bitcoin blockchain.  And I hope Mastercoin moves the majority of its transactions to its own blockchain.  I think that if Mastercoin is successful, its transaction load will raise Bitcoin transaction fees which will in turn discourage Mastercoin transactions.  Right now transaction fees are so cheap they are mostly ignored, but that may not always be the case.

no, all these articles just mean awareness in economic finance trader subcultures...

What is interesting to me is that the time and pain may changed you from someone who was in it for a quick buck into someone who understands the value and potential.  Now that you are in it LT, you might actually end up ahead, as compared to buying in at 180 and selling at 300 (for example).

BTW, its a good strategy to trade in securities/commodities with good fundamentals.  That way if you get caught in a bull trap you can hold for the long term or even double down.

Don't be a purist, use the fork exactly once and trade those coins for a sound currency, i.e. bitcoin!  It'll drive the value of a coin on the fork to near 0.

Since you are worried about conversion, make the bid IN BITCOINS.  If its one of the upper bids, it will draw a lot more attention then bidding in USD with bitcoin backing...

Yes exactly.  The implicit (and sometimes explicit) contract of an exchange is to provide a level playing field where buyers and sellers all have an equal chance to make a trade.  This stops at the router leaving the exchange.  If you then rent a rack right next to that router and overclock it, more power to you!

At the same time, I think that exchanges should place all transactions -- buys, sells AND bid/ask adjustments -- in a single order-received queue.  So the owner of a big wall can't "see" a big buy eating through the asks in front of the wall and quickly remove the wall...

 

I think he may basically understand supply and demand but what he's saying is that the exchange could fake the order book (the list of buyers and sellers and what price they want). 

gravitate,  the options for the exchange to fake this are limited.  And we have many exchanges and lots of in-person trading.  The divergence between Mt. Gox and the rest is essentially proof that the markets are independent.

Why can't the exchange set the price?

Example: lets say the exchange wants to push the price up from 99 to 110.  And I wanted to sell 100 btc at 100 USD each.  Ok so I put up my 100btc for sale, and the exchange tries to drive the price from 99 to 110.  It can:

1. Buy my coins. (ok so that was a valid purchase.  The exchange paid me $ for the coins.  There's no manipulation here)
2. Ignore my sell order (but I would complain on forums like these so the manipulation would rapidly become obvious)


When people talk about exchanges manipulating the price to make $, they are talking about something a lot more subtle than that. 

Basically let's say the current price of BTC is 89, so there are sellers on the exchange willing to sell at prices between 90-110.  Now someone makes a big buy.  The exchange "sees" the big buy and knows it will drive the price to 105 so it quickly injects its own purchase to grab all coins for sale from 90-91 (for example).  Next, it lets the large buy through and so the price of BTC rises to 105.  Buyers see this move but they still want coins so they increase their bids up to 100.  So the exchange got coins at 90 and can now slowly unload them at around 100.  Or wait for a big seller and do the same thing in the other direction.  This is called "front-running" the market.

But as you can see the exchange is not really able to set or manipulate the price; it can only grab a bit of dishonest profit for themselves by reacting to early information about other people's buy/sell action.  Who loses?  Well, the buyer got cheated a little; he was expecting some coins at 90 but his lowest coin purchase was 91.

Does it even matter?  Sellers on Gox are either arbing or med/long term bulls.  The real money has got to be entering and leaving through the other exchanges.  You'd be crazy to buy on Gox's 10-20% premium, and if you actually WANT your $ you've got to sell somewhere else.  

Keep your eye on bitstamp, campbx (reflects US sentiment) and ESPECIALLY btcchina.  What I see is quite a rally on strong volume this past week (and similar past few weeks).  Also looks to me like % volume shifts heavily to those exchanges during rallies.  When nothing is happening, Gox takes a higher % volume (but lower overall volume) -- this is just trader/bot churn.  But with the action hits, its on the other exchanges as you can see by the lower % volume on Gox.  

Look to the other exchanges for the action that is defining this market.

May not matter; this move started on bitstamp & campbx (see quote below).  Makes sense... nobody in their right mind would send deposits to Gox to buy coin both due to the admitted delays in deposit AND the high premium.  But this is a key event in the breakaway of Gox as leader.

I think we may see cbx and bitstamp approach Gox -- as the other exchanges close the gap, more GoxUSD will buy BTC to get it out at a loss acceptable to each individual.  If cbx/bitstamp closes the gap entirely, it could get us to the strange situation where there is a LOT of buy orders on Gox, few BTC for sale, but no price movement.  In other words, Gox starts following cbx/bitstamp even though it has the largest order book.