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721  Economy / Speculation / Re: Wall Observer - MtGoxUSD wall movement tracker - Hardcore on: August 20, 2013, 06:14:48 PM
Interesting... bitstamp and cbx rallying a couple percent while Gox flatter; stuck under 120 but no real wall until 125.  This is the opposite of the typical divergence where gox rallies and the others are flat.
722  Economy / Speculation / Re: Track Record Forum Members on: August 20, 2013, 05:49:24 PM
I'm beginning to think that your requirements are for a freakin' oracle.  Markets are fractal.  Nobody could predict that Apr 10 was going to be THE dump; in a mirror universe we could have topped at 150 or 500.  But it doesn't matter that that could not be predicted because anyone playing the "dip" made a lot on the dump -- or lost a lot less then they would have if they weren't playing the dip.  Sure they might have made MORE if the prediction had been "this is the dump".  But it remains good advice.  In other words, some people were noticing that we were in the stratosphere and advocating shaking loose some fiat for btc repurchase at a lower price and others -- rpietelia for the most extreme example --- were still pumping for a much higher price.  Which group do you think is the one making honest predictions and which is the one attempting to influence the market?

Stock prediction is complex and I think you are falling into the trap of simplifying it down to uselessness.  I know someone who back in '99 (during the internet investing bubble) entered a stock prediction challenge (it was promoting a stock opinion website) and actually won 10k.  Just to give you an idea of how he did it ... first step, pick a stock with incredibly low volatility.

But in the real world, its better to be partly right most of the time rather then being exactly right once.


Also, FYI price hit near $50 around 48 hours after the drop... the price was flying all over the place due to DDOS.  It then hit it again 6 days later on the 16th, which is the bottom that I think you keep referring to. http://www.bitcoincharts.com/charts/mtgoxUSD#rg180zig15-minzczsg2013-04-09zeg2013-04-16ztgSzm1g10zm2g25zv.

These 2, plus the recent $65 price form the "triple bottom" that has provided the confidence needed for the current run up.
723  Bitcoin / Bitcoin Discussion / Re: [absolved] Recalescence Coins being black mailed for #1 coin on: August 20, 2013, 02:01:48 AM
moral: buyers of collectable coins are freakin' NUTS!
724  Economy / Goods / Re: My Silver For Your Redeemed Casascius Coins [REALLY worth your time] on: August 19, 2013, 03:01:21 AM
do you use a new private key?
725  Economy / Speculation / Re: What would happen to the price with a bitcoin funded terrorist attack? on: August 18, 2013, 02:41:11 PM
Elwar is an idiot because he speculates about this on a public forum..... of course terrorist couldn't think if this themselves. Paranoid Yanks strike again...

Its a fascinating psychological phenomenon.  Many of these acts ARE copycat or inspired by media and literature.  Why are psychopaths not creative?  Someday brain analysis may tell us... of course it could simply be that most people are not creative so multiply the probabilities.  Also adding to that is that it is likely the environment is not conducive to technology...

Whatever the reason, as a society we are lucky that many of these people actually CAN'T think of it themselves.

726  Economy / Speculation / Re: Track Record Forum Members on: August 18, 2013, 02:29:49 PM
But its SOOO much more fun to make the call, have everybody ignore you and then laugh as you take their coinz!  Grin

Posted when BTC was 87...
Hope all you newbie doomsayers got back in!  Grin  If not, well welcome to bitcoin and thanks for your coins.  Trading here requires a steady hand; its not for the faint of heart.  You can choose low volatility and inflation (USD), or high volatility and deflation (BTC)  Grin



Good call indeed, price continued to go up from $87 to $111 by July 31st. Smiley

Added you to the list.


However, I checked your post history and found this call also made by you on April 10th:

Quote from: thezerg link=topic=85687.msg1797296#msg1797296

People, please keep in mind that a pullback is what the some investors are waiting for... to let exuberance pop.  The fundamental value and promise that underlies Bitcoin remains strong.  So hang onto your coins!

This was a bad call. Indeed price had swung widely that day from the all time high of $266 to $105, closing the day at $165. I'm guessing your call was around $130 when you gave the advice to hang onto your coins. However price dropped every day after that to a low of $50 by April 16th.  

Guess you didn't see that one coming   Smiley

No, all I didn't see was the magnitude.  If you look at the post just before that one, I called a DDOS drop BEFORE the crash and recommend that people put in bids.  It may be a little unclear out of context (if you weren't trading at that point), but that post means to put bids in significantly BELOW the market price.  If you had sold around when I posted (to prepare for a DDOS buyback) the price would have been $230+ ($230 had some stability -- 260 was a hard-to-hit peak).  I bought back too early (due to the incredible lag you just had to guess what the price was going to be 15 minutes later when your trade actually made it through the queue) at $150 giving a profit of only $80 per coin.  When you want to lock in a profit, you err on the high side... and actually, my buys were staggered to catch the "DDOS" so I didn't do that well on every coin...

And as you can see by the post I was replying to, the price was already below $106 (probably FAR below given the velocity at that time).  I was essentially suggesting that people think really hard before selling below $90-100 -- and as you can tell by the words "fundamental value and promise" this was meant to be long term advice.  Judging by the oscillations in the next 6 months that has not been bad advice.

You can't quote a locked forum so here's the relevant profile page:
https://bitcointalk.org/index.php?action=profile;u=55749;sa=showPosts;start=160


Let me raise you these (just quickly read the red and then you can go back and read the rest):

As many of us predicted  months ago, we seem to be in the lead-up to the halving where ask depth is drying up -- people are thinking "why not wait and see what happens?"   

So what will happen? 

Frankly, a lot of the volume on Gox seems to be due to short-term speculative action.  This is just the "fog of war"... but it cannot hide the fact that a much lower volume of long-term activity must be sequestering the 9600 BTC produced each day which is keeping the price stable above 10.  This long term activity is expected given the positive press and growing legitimacy of the currency.  So I believe that the blockchain halving is going to place a small but significant upwards pressure on the price, since there is clearly demand for 9600 a day but only half that many coins produced.

But its very possible that the lack of a pre-halving "breakout" will cause short-term speculators to dump some coins near the halving mark.  However, many of these speculators are going to be the sort that keeps fiat on gox for reinvestment.  So a dump near the halving is just $ that will be poured back into the next breakout. 

TL;DR; the bull breakout after the halving will be a big one... Tongue



I'm crossposting my analysis because I originally put it in a pretty obscure thread:

People know about it but are miners hoarding coins now waiting for the halving?  I don't think many are, its still too early.  They have bills to pay.  But if you were a miner, would you sell ANY coins 1 day before the drop?  Might as well wait to see what happens... how about 1 week before?  So expect no ask depth in the days leading up to the reward halving.

I keep reading on these forums that people think supply vs demand means a reward drop in half = a doubling of price.  But this assumes a linear x=y supply demand curve.  Depending on the flexibility of demand (i.e. gasoline is inflexible while M&Ms are very flexible) this could be very much not x=y, but x=100y or x=y/100.  To figure out what the curve really is, you have to ask yourself, how flexible is demand for BTC?


But the above argument is faulty.  It focuses on instantaneous supply.  But in fact the supply is not changing (well due to miners, it will change due to anticipatory hoarding), it is the RATE of supply increase that is changing (because bitcoins are not a consumable).  So a lack of supply on day 0 of reward halving cannot be fixed in the classical econ 101 manner by an increase in production tomorrow.  There will be a similar lack on day 1,2,3, etc.  The issue must be fixed by a reduction in demand. 

Given a constant economy, this reduction in demand can only be addressed by an increase in the price of BTC compared to other commodities.  In other words, until SR merchants, etc lower their prices in BTC to compensate for an increase in BTC price (or sell less product) we'll see a constant increase in price vs USD to meet existing demand.  And if the BTC economy is growing and currently balanced by the 50BTC reward, we'll see great pressure on the price due to lack of supply at 25BTC. 

The above is the normal negative feedback mechanism that keeps prices sane.  But if the BTC economy grows BECAUSE of an increase in BTC price (i.e. due to new interest from investors),  we could see an unsustainable positive feedback mechanism.  This will cause the hockey stick bitcoin price appreciation until the positive feedback switches back to negative (i.e. investors see BTC as overpriced).

So the block rate halving is more likely to affect (increase) the rate of long term appreciation of the value of a BTC, combined with a spike leading up to the reward halving could possibly (low chance) turn into a massive price appreciation event.  And then (regardless of whether we see a small spike or a big rise), we'll see a dump afterwards as the short term hoarding is sold.


A key question I asked here is why everyone thinks that the mining halving will result in only a 2x price appreciation?  Why do they think the supply demand curve was 45 degrees?  And it was not; it was more like 10x ($10 to $100) price appreciation.

Ok... all done patting myself on the back.  Glad I got that out of my system; it just bugs me that some guys get so much attention b/c they post a lot.  I won't be quoting myself any more. 

PS:  If you start following me, my own experience is that I am better at calling bottoms than tops -- that is, I don't call a top when I should.


727  Economy / Speculation / Re: What would happen to the price with a bitcoin funded terrorist attack? on: August 18, 2013, 01:35:36 PM
how about: every single organization and individual would be cooperative during the massive effort to backtrace the blockchain.  even anonymizers would fail because there would be enough resources to follow every path.  end result:  a complete sweepup of the terrorists AND its funding network.  but the damage to btc would be done...

yes Elwar you deserve the idiot award of the year.  9/11 first appeared in a tom clancy novel.  dont help these evil people in ANY way including doing their thinking for them by posting a possible soln to one of their problems in a public forum.  freedom requires responsibility.
728  Economy / Speculation / Re: Track Record Forum Members on: August 18, 2013, 02:09:54 AM
But its SOOO much more fun to make the call, have everybody ignore you and then laugh as you take their coinz!  Grin

Posted when BTC was 87...
Hope all you newbie doomsayers got back in!  Grin  If not, well welcome to bitcoin and thanks for your coins.  Trading here requires a steady hand; its not for the faint of heart.  You can choose low volatility and inflation (USD), or high volatility and deflation (BTC)  Grin

729  Economy / Speculation / Re: Wall Observer - MtGoxUSD wall movement tracker - Hardcore on: August 15, 2013, 06:43:08 PM
The point here is if you do a normal iTunes backup without encryption enabled, and then move to a new phone with a restored backup all your google auth tokens will be gone for good. Source: happened to me last month.

Actually it was scary easy just to email the services and ask them to remove 2 factor auth so I could login and re-enable. (CampBx, Coinbase, etc)

How they know you are not hacker ? !!!!

Don't you know that your email address is the keys to the kingdom in almost all security policies?

Don't you know how to write an email with any sender address ?

anyone (else) remember when that was the only way to post to the alt.hackers news group??
730  Bitcoin / Press / 2013-08-14 Bitcoins are a buy at $50, Richard Bove says on: August 14, 2013, 09:57:14 PM
http://blogs.marketwatch.com/thetell/2013/08/14/bitcoins-are-a-buy-at-50-richard-bove-says/?mod=MW_story_latest_news

its showing up in the "latest news" section (in the header) on the front page of marketwatch... click and drive it higher :-)
731  Economy / Speculation / Re: A rally is inevitable on: August 14, 2013, 01:32:58 PM
Yes, in order to protect the income of my ASICs, I will step into exchanges and purchase a lot of bitcoins Cheesy

I do actually believe you.

yes, a miner is more likely to buy coins and spend them.  And more likely to encourage others to do so.

Also, consider that there is very little "efficiencies of scale" involved in taking a black box plugging it into power and ethernet and turning it on.  So large miners do not have significant advantages over others.

ASICs are pretty cheap per unit once NRE is paid, so bitcoin miner device prices will crash.  Once that happens electricity costs become important.  At that point, people with cheap or free electricity or a use for the incidental byproduct (heat) will have a definite advantage over large miners. 

So I expect that as the ROI -> 0, mining will decentralize back into a "hobbiest" domain and be used to consume excess power (summertime personal solar cells for example) and provide supplemental heat for homes.  But of course this won't happen at the current mining rig premium.  The will happen once Moore's law stops being applicable.  As long as access to the latest ASICS lets you mine most of the coins centralization makes sense.

732  Economy / Speculation / Re: Gold collapsing. Bitcoin UP. on: August 14, 2013, 12:10:42 AM
i resisted 4 a long time because they dont coin DU.  but i give in.  DU has the amazing and I think unique property that it actually sharpens when it hits something.  Explains its use in armor and bunker piercing munitions.  its not about the USA throwing its poisonous trash out creatively...

I'd love to have a DU coin, or any chunk of the stuff to add to my collection of interesting items.  I doubt that DU has particularly special mechanical properties aside from being extraordinarily dense and thus good at carrying kinetic energy over space.  I'll bet you'll find tungsten as a component of most of these weapons to exploit it's unusual mechanical properties.  But I don't know either of these conjectures to be true.

U.S. Business interests have had a rich history of developing and exploiting revenue streams and for about a century have had a reputation for being adept at it.  Firstly they obtain vast sums of money extracting fissile material from nuclear waste, then fire the waste from that process at foreigners at probably hundreds of USD per round, and at thousands of round per minute.  You gotta admit that it is brilliant.  Disturbing yes, but also brilliant.

Take off your tinfoil hat and use google.  This isn't the wall observer thread where idiots talk trash.

http://en.wikipedia.org/wiki/Depleted_uranium
Quote
Depleted uranium is favored for the penetrator because it is self-sharpening and pyrophoric.[30] On impact with a hard target, such as an armored vehicle, the nose of the rod fractures in such a way that it remains sharp. The impact and subsequent release of heat energy causes it to disintegrate to dust and burn when it reaches air because of its pyrophoric properties.

There's a really informative Scientific American article about DU properties (sometime within the last 10yrs, I forget when) but that is probably pay-walled.  But I'm sure you can find other papers.

733  Economy / Speculation / Re: Gold collapsing. Bitcoin UP. on: August 13, 2013, 11:49:31 AM
i resisted 4 a long time because they dont coin DU.  but i give in.  DU has the amazing and I think unique property that it actually sharpens when it hits something.  Explains its use in armor and bunker piercing munitions.  its not about the USA throwing its poisonous trash out creatively...
734  Economy / Speculation / Re: This is a bubble, short it! on: August 07, 2013, 03:59:01 PM
I can't wait to laugh at the next breed of suckers. Mining with gpus was unprofitable during the capitulation, the same thing will happen this time.
Just this time it'll be first generation avalons, BFLs and those really, really dumb USB miners.

No, it was profitable. It was unprofitable, if you sold the mined BTC instead of hoarding them.

But less profitable than switching the miner off and buying the equivalent of the electricity cost at market price.
So it was unprofitable from an immediate perspective. (The only one that matters)

Someday you'll heat your house with waste generated from BTC (and other) computation.
735  Alternate cryptocurrencies / Altcoin Discussion / Re: OFFICIAL LAUNCH: New Protocol Layer Starting From “The Exodus Address” on: August 07, 2013, 01:58:04 AM
I've been thinking about the fundraising part, and I can concede that being able to eat and keep a roof over your head is equitable. I'm just concerned about the nature of fundraising when it is paired with:

 
Quote
"Get 'em now folks, before they're worth SO MUCH MORE."*(multiple caveats in fine print)

Upon further consideration, that is the real 'meat' of my argument, in addition to the overall blockchain impact - which I'm not very pleased about, since I have no way (at this time) to say "no thank you, I will not verify your data". Bitcoin being what it is, it should be opt-in - the same way it is for what version of client you choose to run (unless we fork so hard we have to select one).

That's another problem, isn't it, it takes off and then we're talking not only about multiples of bandwidth/storage, but the ability of the main bitcoin devs being able to pick up the pace for future expansion and improvement. And since I've never bought the early-stressor argument either, please don't try it, it isn't very convincing.


Yup. If MasterCoin is successful, it will add a lot of transactions to bitcoin, making the total size of the block chain even more painful.

You are right - there is simply no way to prevent people from trying crazy stuff like this on top of bitcoin. For someone like me, that's kind of cool. Other people may not be so excited about it Smiley

Sometimes when I read crazy ideas like these, I have to wonder if we're either on the precipice of something horrible - like two halves of plutonium banging together and going critical, or something great, like the birth of the internet. The main issue here is the risk taken in doing so. If your baby 'breaks' bitcoin (For whatever duration - either temporarily or permanently), will the usual sentiment I see from software engineers the world over - usually along the lines of "Well, if 'X' couldn't handle it, then 'X' is stupid and deserved to die." - going to be enough to placate the angry mob of now-bereft bitcoiners?

Of course, the flip side is supposed to be "well, if we didn't do new things no progress would be made" -- but I've yet to see anyone say "Lets test this idea out responsibly just in case we totally fuck something up." It's all SHOVE it into the live production network and see what chaos it causes - "Oopsie!, we're just trying new and crazy ideas guys, so sorry for screwing over the rest of the community."

There has to be a better way than working on the jet engine while at 30,000 feet in the air - just saying.



Several people have raised the issue of blockchain spam after I did and I think it is very valid.  Do we really need data streams (for example) permanently encoded in the bitcoin blockchain for all time?  Your use of bitcoin will likely drive txn fees much higher, which will cause large chilling effect on MasterCoin and a smaller one on bitcoin.  Let's try to keep the bitcoin txn fees low, because regardless of whether MC succeeds or not, it would be nice to protect our BTC stashes :-).  So I'm quoting my own suggested solution (massively reworked for clarity) because it was not responded to the 1st time:


You have done some amazing work in cramming this protocol entirely inside bitcoin.  I skimmed this but did not analyze.  But there seem to be clear issues with this such as data density (space efficiency), complexity (bugs), lack of control over the underlying Bitcoin protocol (as BitcoinX discovered with the "dust" patch), and possibly a perception of SatoshiDice-like spamming from the point of view of Bitcoin-only users.  At the same time the critical issue with alt chains is the lack of atomic exchange between BTC and the altcoin.

So, have you considered running a parallel chain for MasterCoin, but one that ALSO uses your research into overlay protocols to stick the minimum possible information into the bitcoin chain?  For example, when trading bitcoin for mastercoin (atomically) there would need to be a txn in bitcoin with overlay data that the Mastercoin chain can reference.  The Mastercoin side would be IN the Masterchain blockchain but would be invalid unless it finds the partner bitcoin txn.

Frankly, I think that that's it.  That's the ONLY time the bitcoin chain need be used.

MasterCoin clients would need access to both chains.  This would require no more data than an overlay protocol would use -- its just a different organization.  But that organization solves all the problems I described above.  And I think that with clever coding someone in the future could allow a "non-btc-validating" MasterCoin client that sees only the MasterCoin chain (and can only issue intra-MasterCoin transactions).  Basically, "btc-validating" miners (all MasterCoin miners would be btc-validating) would add something to the MC blockchain that "commits" the prior MC txn.   So non-btc-validating clients would look for that commit txn before validating the MC txn.
736  Alternate cryptocurrencies / Altcoin Discussion / Re: OFFICIAL LAUNCH: New Protocol Layer Starting From “The Exodus Address” on: August 07, 2013, 01:40:10 AM
I'm going offline until tomorrow, but you guys have my sincere thanks.

Ripper and vokain, I didn't officially set up a bounty, but I would like tip these two guys (maybe 3 BTC each) once I start tapping Exodus Address funds September 1st. Do you approve?

bytemaster needs a tip for his insane persistence, and d'aniel for actually describing the attack that bytemaster felt must exist.

After reading all bytemaster's posts:  Wow!  Bytemaster that 10BTC really was worth it you've really internalized what I was saying; and you're about to make 3 of it back!  As I learned, sometimes you have to attack the same idea from 50 different angles before the person understands the point.  I tried, but since dacoinminster accepted that his "GoldCoin" could fail but was willing to go forward I gave up.  I think he was thinking "years" while I was thinking "as soon as gold/mastercoin rises 5%"...  Kudos to d'aniel for finding that magic recipe.  

Ok to business: 1 attack, 1 issue:

Attack:
1. register goldstream
2. create goldcoin based on goldstream
3. Wait...Let people buy into it.
4. inject bad goldstream data indicating gold's price has crashed.
5. buy a huge amount for almost nothing (escrow will be minting like mad to match gold's supposed price)
6. resume with correct gold data.
7. "Failed" underwater currency gets closed out.  You get paid out of the escrow for your goldcoins -- essentially stealing the backing from the people who purchased goldcoins at real values.

(bytemaster, did you ever solve this "oracle" trust issue? -- point me to your latest spec)

Issue:

from "registering a data stream, point 5:"
Quote
Label = “Gold\0” (5 bytes) (if a second “Gold” is registered in this sub-category, it will be shown as “Gold-2”)

Two people could independently issue bitcoin txns to create a new currency into the same block and so inadvertently use the same label.









737  Alternate cryptocurrencies / Altcoin Discussion / Re: OFFICIAL LAUNCH: New Protocol Layer Starting From “The Exodus Address” on: August 06, 2013, 02:58:24 AM
You have a deep seated assumption based upon circular logic... that assumption is that the price will maintain parity naturally without respect to the backing and that the fund would be able to profit on this natural market correction.   However, if this were a natural market response the fund would be unnecessary.  Every action taken by the fund will be at a loss.

Bitcoin succeeds based on circular logic. It is a meme. A self-fulfilling prophecy.
This is Satoshi's real genius, not the technical solution to the double-spend problem.

From the early days - the main reason to buy bitcoins is because it will appreciate in value because other people will buy bitcoins. You can't get more circular than this.

Bitcoin is the proof that "circular logic" by itself is not just cause to disqualify a financial scheme.
MasterCoins's funds use circular logic, but that doesn't make them flawed.

No.   the main reason to buy bitcoins is because it will appreciate in value because other people will buy bitcoins to use them because they have extremely desirable properties as a currency.

Look, let's say we have 2 coins XxxCoin and YyyCoin.  X starts with 100 backing MasterCoins, Y starts with 1000 backing MasterCoins. Why would XxxCoin track the price of Silver and YyyCoin track the price of gold?

It'll only happen if the person (that you must trust) behind the escrow, issues and redeems xxx or yyy coins such that its supply vs demand creates a price that tracks gold and silver respectively.  First off, this requires you trust the escrow admin.  So its not a trustless coin.  Secondly, the escrow is gonna get drained or be so "full" it becomes more valuable than the commodity ... even just random walk math shows that eventually this will happen.  Deliberate speculator manipulation, profiting on the information asymmetry where they know how the other party (the escrow) will behave will make it happen sooner.

738  Alternate cryptocurrencies / Altcoin Discussion / Re: OFFICIAL LAUNCH: New Protocol Layer Starting From “The Exodus Address” on: August 06, 2013, 01:17:58 AM

I'm sorry to disappear for 3 days and then dredge this up, but I can see that you and I have a difference of opinion on the time frame here, and on the idea of the value of the "black swan" events in a commodity speculator's portfolio.  But even if you continue with these attempts at a trustless representational currency, let me very respectfully ask you to also include the ability for people to create their own (trust-required) exchangeable entities, with a reference to a signed legal document describing the entity in its genesis block.  These new "currencies" could be a mortgage, stock in a company, a commodity with real backing, etc.  That is, add "native" support for colored coins within your system.  Whether or not your trustless representational currencies work, these trust-backed currencies will be very valuable, will utilize most of the same software infrastructure as your trustless and would make MasterCoin still useful if your trust-backed currency system does not work.  PM me if you need some impl help maybe I can find some time...


That's a very interesting idea. I suppose we might as well support currencies that work like colored coins. It doesn't really add any complexity to the design, and it seems likely that people would use it.

That would also give people one way to "invest" in the success of coins which work like colored coins - by buying MasterCoins. Previously there was no way to do this.

The built in decentralized exchange between MasterCoins and the other backed currencies would support something like this with almost no modifications.

Now, why didn't I think of that??

Being able to fund your mortgage through something like this would be epic.  And I didn't want to say it but it might even be a subset of the functionality you'll have to implement for your trustless coin.

Of course many jurisdictions will have regulatory issues but it is essentially impossible to get the laws changed in advance.

Ok next: you have done some amazing work in cramming this protocol entirely inside bitcoin.  I skimmed this but did not analyze.  But there seem to be clear issues with this such as data density (space efficiency), complexity (bugs), lack of control over the underlying Bitcoin protocol (as BitcoinX discovered with the "dust" patch), and possibly a perception of SatoshiDice-like spamming from the point of view of Bitcoin-only users.  At the same time the critical issue with alt chains is the lack of atomic exchange between BTC and the altcoin.

So, have you considered running a parallel chain for MasterCoin, but one that ALSO uses your research into overlay protocols to stick the minimum possible information into the bitcoin chain?  For example, it would be possible to encode in your alt-chain a txn that enters the MasterCoin-chain but is only valid if and when a bitcoin txn enters the bitcoin blockchain.

MasterCoin clients would need access to both chains.  This would require no more data than an overlay protocol would use -- its just a different organization.  But that organization solves all the problems I described above.  And I think that with clever coding someone in the future could allow a "non-btc-validating" MasterCoin client that sees only the MasterCoin chain (and can only issue intra-MasterCoin transactions).


739  Alternate cryptocurrencies / Altcoin Discussion / Re: OFFICIAL LAUNCH: New Protocol Layer Starting From “The Exodus Address” on: August 06, 2013, 12:12:46 AM
I'm the guy who earned 10BTC convincing bytemaster that his original system would not track the underlying asset.

Look, let's state the problem theoretically.  Let us propose 2 independent entities "Digi", and "Commodity" which can be priced in a 3rd entity "fiat".   Now the task is to devise a system to create a 4th entity "DigiC", using exclusively Digi that reflects the value of Commodity.  

Since Digi and Commodity are independent variables, this is an impossible task.  Any escrow system that holds Digi and issues DigiC is promising 1 Commodity for every DigiC issued.  It is essentially SHORT Commodity.  So lets say everything starts at 1, so we have N DigiC backed by N Digi.  Now if Commodity goes to 10 fiat and Digi goes down .1fiat, the "expected" value of DigiC is 10*N, but the backing escrow is only worth .1*N.  A factor of 100 difference.  

This will happen in reality as well as theory.  

As Cyprus learned when it gave people CyprusEuro (DigiC) backed by loans (Digi).  When the value of those loans drops, the only solution is to give holders of CyprusEuro a "haircut".

If that doesn't convince you, look at the 7x appreciation of Gold 2000-2012.  Or imagine trying to create a "MasterBitcoin" with a 10x appreciation in 1 year!?  Or pretend that MasterCoin appreciates 10x like bitcoin did, while gold drops 20%.  Now you have the opposite problem your backing is worth SO much more then your coins.

And these aren't even "Black Swan" events (or Black Swans are the new normal).


I think you know that it won't track.  You use terms like "Given a reasonably stable MasterCoin".  But Bitcoin has shown that to be VERY unlikely.  Also, its not even a stable MasterCoin that matters, but a stable RATIO between MasterCoin and the commodity...


The sooner the powerful collective intelligence and creative force moves from this pipe dream to creating a system that simply allows identity-verifiable entities to back digital commodities with a legal framework to enable criminal prosecution if the digital commodity does not meet its contract (AKA no gold in the vault), the sooner we will have a workable system.  Also, look at how the Winkelvoss' (and other) ETFs work to see how multiple backers could exist for a single DigiC.

...You can gain respect for Satoshi's intelligence both by what he did AND by what he chose NOT to do...

Hi TheZerg!

I followed the posts on bytemaster's thread with great interest, since obviously I have similar goals.

You are quite right that some currencies will fail. For instance, if I define a currency that appreciates at 10% a day, it will definitely not be able to track that. In fact, I plan to create some currencies of that type, just to watch them die. I think we will learn a lot about how to tune the parameters for real currencies from their deaths.

The point is not to make currencies that never fail, but rather to make currencies that can conceivably track their target values for a very long time before finally degrading in a graceful and predictable fashion when nobody wants them anymore.


I'm sorry to disappear for 3 days and then dredge this up, but I can see that you and I have a difference of opinion on the time frame here, and on the idea of the value of the "black swan" events in a commodity speculator's portfolio.  But even if you continue with these attempts at a trustless representational currency, let me very respectfully ask you to also include the ability for people to create their own (trust-required) exchangeable entities, with a reference to a signed legal document describing the entity in its genesis block.  These new "currencies" could be a mortgage, stock in a company, a commodity with real backing, etc.  That is, add "native" support for colored coins within your system.  Whether or not your trustless representational currencies work, these trust-backed currencies will be very valuable, will utilize most of the same software infrastructure as your trustless and would make MasterCoin still useful if your trust-backed currency system does not work.  PM me if you need some impl help maybe I can find some time...




740  Bitcoin / Press / Re: 2013-08-05 The Observer: Area business accepting virtual money, AKA Bitcoin on: August 05, 2013, 05:27:09 PM
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Critics of the currency have pointed out the currency is entirely peer-to-peer and, just like gold, an unstable bubble with no actual real-world value.

Chew on that goldbugs!  Cheesy

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Yes, the controversial virtual currency that has speculators scratching their heads and geeks foaming at the mouth.

LOL, this guy has a real style...
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