"Sentiment" and "the sucker supply" are roughly the same thing. 

The idea is to pin it only temporarily until it is established well enough to stand on its own merits.  To that end a USD+EUR basket is adequate, but honestly, the specific basket doesn't matter: ANY reserve currency is a couple orders of magnitude more stable than Bitcoin has been.

The strength of pinning will be adjusted as the number of coins in circulation increases.  For example, it will aggressively pin until the market cap is $1B; become gradually more conservative with adjustments from there; tapering down to zero pinning once the coin supply reaches $1T.  After that it gets to float.


Miners may use any source they wish for their quotes.  Blocks that do not have a reasonable quote will not be accepted by the other miners, and are therefore orphaned.


Take a look at any fiat currency.  People trust them pretty well even when central banks are fooling around with them.

Who's going to trust Bitcoin when it can't hold value within an order of magnitude for 6 months at a time?


The same way as when miners don't agree on a transaction: each faction mines the hell out of whichever version of the truth they believe in; whoever has more hashrate wins.  There can also be auditing by the network: invalid quotes are not relayed, the same as invalid transactions are not relayed.

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Edit: It is also possible to adapt the monetary policy (for instance, changing the basket weighting) by extending this technique to create a "decentral bank", but it's more complicated.  I'm planning to write that whole idea up in another post after it cooks in my mind a bit longer.

My idea: miners add the current exchange rate to every block.  Anyone cheating will simply create orphans, so you don't have to enforce a specific quote source; each new miner just has to agree that your quote was fair +/- a little bit (just like they agree now that the transactions you signed were accurate).  From there you just apply a smoothing algorithm to it (perhaps a mere SMA, but I have more sophisticated methods in mind) and adjust inflation / demurrage to compensate.  I can think of similar methods to handle other aspects of monetary policy in a decentralized way, but I don't want to get too far off the subject here.

If this is debunked, can you link me to where I can read more?

Why?  I think right now far more people see it as a pyramid scheme (it's not, but there's a similarity: everyone's trying to push for wider adoption because it'll grow their own value; and if people quit buying in they lose value) and that's incentive to stay away.

If NewFairCoin has a fairly stable value, is readily exchangeable to fiat, and inherits BC's anonymity and decentralization, I think people would adopt it.  Perhaps slowly (you won't see a mad rush like earlier this year), but who cares in the long run?

Possibly never.  Even if all coins were redistributed evenly among all current users, if the userbase expands 10x, then we will be the Early Adopters With An Unfair Advantage.  Then the next 10x growth causes those users to be the Early Adopters.  If it ever becomes a major world currency it might put an end to it, but I'm afraid this problem will prevent BC from ever achieving that kind of widespread success.

The solution I'm considering is dynamic inflation: adjust mining rewards to pin the price to a currency basket, at least until it's an established and stable currency.  That doesn't prevent devaluation so you'd have to be conservative with the adjustments, but it would prevent the "early adopters" problem.

This probably won't happen with Bitcoin since everyone wants to get rich quick, but an alternate cryptocurrency might do it and succeed because of it.

Note that most of the volatility was during the bull market.  I worry that everyone's just holding their breath waiting for the slide to end, and once they believe it has, they're going to send it off into another speculative bubble.  I hope that it will go low enough to finish breaking the spirits of even the biggest fools, but I'm not counting on it.

I agree with everything you're saying (clearly, anyone involved in a market will affect the market), but that's not what's usually meant by "miners influencing price".  It's usually said in the context of whether an influx of miners will raise or lower the price (there is no direct effect).

The sum of fresh BTC dumped on the market by all miners combined is always about the same: there are 300BTC generated per hour regardless of the number of miners.  If miners are evenly split between dumping 50% and hoarding 50%, there will be 150BTC dumped on the market per hour whether there is 1 miner or a million.  All that changes is the amount of return you'll earn on a given power investment.

Yes, they "influence" the price, but it's a fixed influence that the miners themselves don't control in scale, other than choosing to sell or not (the same as anyone holding BTC does).

This video does a good job explaining how it works.  0:20 through 2:55:

http://www.youtube.com/watch?v=mzJmTCYmo9g

Choose whichever is cheapest and has the lowest idle power draw, because it's going to be 99% idle.

Heat rises in air.  In metal it just spreads, and with heat pipes it very much moves toward the heat sinks.

The external fan is probably squeezing some air through the cracks which subsequently blows out the back of the card.

That's why I'm still here even though I have serious doubts about Bitcoin's future as a currency.  It's still a great and immensely educational project. 

It mostly depends on a fast computer when it's verifying the block chain.  The speed of your net connection doesn't matter unless it's really really slow.

Memory doesn't matter at all for mining.  The entire program runs in cache.  Clock rate, number of stream processors / cores, and adequate cooling are what you should look for.  Basically all 5870s will be the same except for minor clock rate differences.

If you're in this to make money that's a poor strategy.  You'll miss out on large market orders that would have given you a favorable price.

People trading for profit do just the opposite: limit orders spread out to either side of the current trade, then gradually withdrawing them as the price moves; the idea is to only take large market orders rather than standing in the way of price movements.

They're "market depth over time" charts.  Red for bids, green for asks.  X is time, linear.  Y is price, linear.  The brightness is the number of coins bid/asked at a given price on a log scale.  The black band in the middle is the spread.

Some common patterns:

Bright lines that don't care if they're in red or green: round (psychological) numbers.

Bright lines in a dim area:  Bid/ask walls.  The brighter, the bigger the wall, and the more likely it is to limit the spread-cut of a large market order.

The spread cuts out vertically terminating a bunch of lines, then gradually fills back in: Someone executed a market order (IE, bought or sold into the market depth), and buyers and sellers move in to fill the spread.  Where they decide to meet in the middle determines the new price.

A bunch of lines all suddenly terminate without being cut by a market order: a moderate to large player had a stagger, then pulled out.

Bright random dots inside of a mostly-dark peak: panic selling/buying.

Bright evenly-spaced dots in a mostly-dark peak: Stupid bot losing money.

Static outside and after a peak: the market jockeying for position after some high volume trading.

My way:  Listen to what they have to say with an open mind.  Give them some honest consideration.  Show them the facts the way I see them.  Give them a chance to show how their theory works.  We all get a chance to consider the merit of our ideas, and perhaps some opinions change.

Your way:  Tell them they're wrong.  State your opinion in all caps, but don't bother actually backing up your opinions with facts or data.  Become increasingly condescending in your tone, culminating in calling them idiots.  Finally act surprised that no one listens to you.

Jixtreme, please read the OP and GTFO?  Your opinion has been well covered in other threads, and we'd like to get back to our discussion.

I personally don't believe in The Manipulator as presented (using bid/ask walls to corral the market), since all I've seen there is evidence of a market being a market.  However, I'd like to dig into why some people do.  That's why I'm bringing out my charts: people are making lots of guesses at things they're seeing in the market depth, but I think it's mostly just from an incomplete picture.  I'm interested if people still see it when they're looking at the whole progression over time.

I do have an interesting manipulation theory of my own, but I want to finish hearing this one out first.

I was referring to the previous one with the dramatic lighting... The one that actually was you.

I flood the exchanges.    Snapshotting through the JSON API once a minute won't make a mark on Gox's servers.  I'll bet there are a hundred bots that pull once a second.  The data is trivial to compute, and they can cache it for a second at a time if it ever becomes a burden.

I did write support for the WebSockets streaming API, but at the time it was too flaky...  Lots of random disconnects and outages.  It might be better now, but I dropped it since the markets aren't moving fast enough for it to matter.