[Bitfinex is a replica of MtGox]

Bitfinex is a replica of MtGox

Zerohedge just posted a story in mainstream news about what I've been talking about for years now:

http://www.zerohedge.com/news/2017-08-06/mysterious-trader-nearly-unlimited-bankroll-said-be-manipulating-bitcoin-price

I first wrote about how it appeared Bitfinex had someone with unlimited amounts of money that traded exactly the opposite way of anyone who would be trying to make a profit during the halving/brexit period.  My hypothesis was that Bitfinex owners were trading on their own exchange and got caught on the wrong side of the trade due to Brexit and rendered insolvent, so they then claimed they were "hacked" and lost all the bitcoins.

There's a link to my post and picture/commentary from over a year ago:



http://steemit.com/news/@r0achtheunsavory/bitfinex-is-lying-about-the-hack-and-i-can-tell-you-exactly-what-likely-happened

And another one of my posts from over a year ago right after they came back online:







https://steemit.com/money/@r0achtheunsavory/the-r0ach-report-vol-3-bitfinex-scamming-intensifies-and-more-on-the-silver-and-gold-markets

Spoetnik will not like it, Anonymint will not like it, but it's happening:

http://steemit.com/money/@r0achtheunsavory/the-r0ach-report-16-monero-chart-looks-good-right-now

and another:



These people are pure scum trying to get old, senile people to invest retirement money in this artificially propped up, R3 banking consortium scam.

I'm not really a huge fan of Ethereum so if the devs decide to bring it down like the Hindenburg it's not going to be a big deal to me, but I'm sure some people will mind.  In this post I explain in detail why proof of stake has no value, and of course neither does proof of work once ASIC are created:

http://steemit.com/steemit/@r0achtheunsavory/the-r0ach-report-14-defining-if-cryptocurrency-has-a-value-or-zero-value-from-a-fundamental-scientific-perspective

The problem with Bitcoin is that without a 2nd tier layer or block size increase you have a serious problem and I will describe that problem below.  I also have a lot of doubts about LN working due to probably needing to place all channel closings in a common, centralized queue.  The problem is Bitcoin's value is based around transaction flow and artificial block size scarcity as I explain here:

https://steemit.com/bitcoin/@r0achtheunsavory/the-r0ach-report-vol-7-bitcoin-is-not-an-actual-store-of-value-because-there-is-no-real-price-floor-or-inelastic-demand

This means Bitcoin doesn't really function as a store of value, yet it's small load bearing capability delegates it to only functioning as a settlement layer in which being a store of value is key.  Do you see the completely conflicting traits here?  Anything that functions only as a settlement layer HAS to function as a store of value, otherwise there's no point in using it as a settlement layer.  Speculators have given Bitcoin the illusion that it functions as a store of value, but I think this will break down once Bitcoin hits a growth wall.  

What will happen is, transaction fees will go sky high while the price per coin also increases at the same time.  This will make it so nearly everyone is booted off of the chain except for settlement purposes.  Now here is where you reach your problem.  Typically objects used in settlement (like gold) can sit in one place for a long time and never move.  They don't have to, but often times that is the case.  The invisible hand of the market will then decide that far better, more anti-fragile options exist to just sit in place to store value than Bitcoin (like gold).  

That is when the Bitcoin downward spiral begins and why Bitcoin is doomed without vastly increasing it's TPS.  I used to think ~50 TPS (8 MB + Schnorr sigs) would be enough to prevent this, but now I'm not too sure and you might require an order of magnitude or two above that.  So, as you can see, my current thesis is that Bitcoin is doomed without a functional Lightning Network, but I'm not super confident they can even make LN work in a decentralized manner.

The "wall" has not yet been reached, but I think it would likely occur somewhere around $10k per coin and 1 MB blocks.

It's claimed to be fake, but if you ever bother to read it solely for entertainment value alone, it's clearly up there in terms of literary competency, rivaling things like Machiavelli's The Prince or Art of War.  Why do I say this?  For example:

"12. Our right lies in force. The word "right" is an abstract thought and proved by nothing. The word means no more than: Give me what I want in order that thereby I may have a proof that I am stronger than you.Where does right begin? Where does it end?"

This thing is a hundred years old and claimed to be fake, but this is exactly how the world has played out ever since, with liberalism being used as a weapon to destabilize and take over nations:

"6. Political freedom is an idea but not a fact. This idea one must know how to apply whenever it appears necessary with this bait of an idea to attract the masses of the people to one's party for the purpose of crushing another who is in authority. This task is rendered easier if the opponent has himself been infected with the idea of freedom, SO-CALLED LIBERALISM, and, for the sake of an idea, is willing to yield some of his power. It is precisely here that the triumph of our theory appears; the slackened reins of government are immediately, by the law of life, caught up and gathered together by a new hand, because the blind might of the nation cannot for one single day exist without guidance, and the new authority merely fits into the place of the old already weakened by liberalism."


"14. In any State in which there is a bad organization of authority, an impersonality of laws and of the rulers who have lost their personality amid the flood of rights ever multiplying out of liberalism, I find a new right - to attack by the right of the strong, and to scatter to the winds all existing forces of order and regulation, to reconstruct all institutions and to become the sovereign lord of those who have left to us the rights of their power by laying them down voluntarily in their liberalism."


I think here you can see the dynamic of Bitcoin at play.  A nation cedes it's power to a supposed Nash equilibrium where instead of having a ruler, there's absolutely nobody in charge.  Forget the logistics of what happens if everyone on earth does such an action and concentrate only on the idea of:  does the Nash equilibrium actually exist or not?

If no Nash equilibrium even exists, then you're basically just blowing up your economy on purpose and ceding power to usurpers.  So, you be the judge.  Here is my take on - does any form of Nash equilibrium even exist in the first place?

You might be onto something if Bitcoin actually had some type of Nash equilibrium, otherwise it's the same thing as centrally issued fiat.  With the exception that as soon as someone tries to tamper with it or implement something like inflation, instead of getting inflation, half the people reject it and the other half accept it and you get a rough consensus attack like Ethereum and it just dies.

Next we will have Ethereum PoS vs Ethereum PoW vs Ethereum Classic PoW vs Ethereum Classic PoS.  

Not sure how this is considered anti-fragile.  It's only anti-fragile if the coin had a working Nash equilibrium the day it was released and never forked or altered afterwards.  Bitcoin was released as some type of experiment that almost works but not really.  Now people are trying to cover up the fact that it doesn't actually work with the cover story of:  "hey guys, it works and has a Nash equilibrium...it just requires a permanent team of technocrats who will forever be fiddling with levers in an arbitrary manner just like the Keynesians do...but we will pretend that's a Nash equilibrium"

So you have a winner take all paradigm on the mining side, and a permanent technocracy on the client side that operates similar to how politicians work where they advocate needing permanent change to justify their own existence as a change maker.  So you centralize terminally in two directions at the same time with a joint rule of technocrats and Chinese slumlords who rule over everyone else.

What is the endgame of all this?  Doesn't seem like there's any Nash equilibrium going on.  The mining side centralizes in a winner take all paradigm as one faction of power, then you have other factions who just kinda say, "we wrote the client so therefore we have a hand in the power structure even though the system wasn't actually designed like that".  Then the users...the users are just a diverse mob with no agreement on anything so they don't even matter.  In the end it's just kind of random chaos...destabilization...

Let me start off by telling a story.  At the height of peak-altcoin, a guy I know released some garbage coin with the sole purpose of trying to make money in a pump and dump.  I told him, hey, why are you making this stupid scamcoin?  His response was, "just what exactly are we trying to do here?"  (i.e. being involved in cryptocurrency in the first place).

Before you try to create or engineer something, you first have to actually identify the problem you're trying to solve.  The problem to solve is not decentralization, it's creating an alternative to rent seeking usury, aka slavery.

The current state of cryptocurrency consists of closed entropy systems like Peercoin, which are internalized proof of stake, and open entropy Bitcoin PoW systems, which are just externalized proof of stake in practice, not decentralized.  Both are stake based and stake based systems have the following attributes, they're designed around someone monopolizing a variable then practicing rent seeking usury on everyone else.

The internalized stake is basically world domination on cruise control and should be shunned by anyone who doesn't want to be a slave, while the open entropy system of Bitcoin tends to give you the same result when you're just externalizing your metaphorical stake into the Pareto principle of the real world.  This means cryptocurrency solves really nothing in it's current state, and things like physical silver coins as a currency would be vastly superior in terms of both decentralization and avoidance of usury or seigniorage fee.

Having said that, if you were to try and improve on cryptocurrency in some way, you would be required to remove the stake variable entirely.  A system where you can't gain capital by leveraging assets on cruise control with no human intervention or attendance required.  The only way to do that off the top of my head is either unprofitable PoW (which seems like it wouldn't work in practice) or by having all senders of transactions solve some type of decentralized captcha or other proof of work that cannot be put on cruise control for profit.

[The propaganda in the above article includes:]

http://www.coindesk.com/will-bitcoin-have-its-moment-in-the-trump-era/

The propaganda in the above article includes:

- Suggestion that we use cryptocurrency as world reserve currency, but then does a bait and switch and says, oh but not Bitcoin (likely a federated chain run by the state or central bankers) HAHA

- Mentions the Federal Reserve not only in a positive light, but that they should have dictatorial power over the monetary system to operate a debt based scam currency and anyone who opposes them is bad or unreasonable

- Mentions the IMF and World bank in a positive manner when they're just malevolent institutions like the fed

- Writer dismisses metals as useful (gold/silver).  Bankers despise serfs using metals because gold and silver circulated in native form as coins are the only known sound monetary systems.  Gold "backed" currency is useless because it's essentialy the same thing as fiat in practice.  

- Affiliation with MIT (where chain anchor came from to turn Bitcoin into a permissioned ledger run by the state)

- Writer is against letting nations control their borders.  Another red flag.  Bankers and shills like Soros are trying to flood every 1st world nation with 3rd world immigrants because only a homogenous population like Iceland can unite to throw the bankers out.  If you flood a nation with 3-4 warring factions, it's a divide and conquer strategy to keep them enslaved.

- Writer is against people who want to withdraw from globalization and forced entanglements, which the US founding fathers explicity warned against.  Calls anyone that doesn't want to have endless wars for foreign entities "isolationist"

- Writer pulls the race card when anyone that has a basic understanding of sociology knows multicultural civilizations are far more likely to collapse than homogenous ones like Japan or China.  Trying to force "diversity" onto civilizations is always a divide and conquer strategy for someone else's benefit (usually the central bankers to weaken the cohesion of society to prevent being overthrown)

- Demonizes Russia for no reason (we all know the real reason - threw out Soros and refused to bow down to the bankers)

- So, in summary, Coindesk puts out propaganda directly from Federal Reserve central banking shills now.

- Also, never trust anyone as far as you can throw them that claims Cryptocurency is a superior store of value to metals.  Cryptocurrency has uses, but it will never be a superior store of value.  You need to destroy the entire planet to black swan metals, while cryptocurrency is much easier to hijack or destroy.  Metals will always be the base of Exter's pyramid and there is no possible way for cryptocurrency to replace it.  The price of Bitcoin can still go up like 100x, but if the market cap of metals is not larger than crypto, you're in an irrational market and things are going to implode.

https://www.reddit.com/r/ethereum/comments/51zrhc/downside_of_bitcoin_a_ledger_that_cant_be/d7gh0i0

I'm not sure if this guy fabricated the entire story or not (it may be a fiction or non-fiction Spoetnik post?) but this will make you feel real normal, real fast:

https://steemit.com/introduceyourself/@proto/being-a-god-my-experience-with-psychosis

DecentralizeEconomics/2kool4skewel flipping out at the idea of Larimers making money somehow

They know this scam has got some life left in it yet and are going to exploit as many women as possible to line their filthy pockets.

There are two main ideas someone has to keep in mind when reading this:

1)  Mining is inherently just purchasing a futures contract

2)  The similarity of the security model of Bitcoin NG in relation to this one

I came up with this idea while trying to figure out if there was a simpler way of creating a second tier scaling system for Bitcoin like Lightning Network, except more closely integrated instead of being completely detached, while also not fundamentally altering the current consensus system.  The first thing that has to be done is change from a single coin protocol to one that utilizes two different coin units, each for different purposes.

The regular 21 million Bitcoin supply without inflation is untouched, but it rests on top as a second tier layer.  You have to proof of burn your Bitcoins into this system, you can't directly mine it.  The first tier layer that you do mine, "nodecoins", is mined solely to determine who becomes the block validators (think pools).  As you will see, separating the protocol into two different coins has huge benefits, one being that you can aggressively use proof of burn on the coin that isn't used as money and reap the rewards of that highly powerful but underutilized tool without affecting the actual economic system.

The protocol would use a fixed number of deterministic block validators like DPoS for it's 2nd tier layer (101, 501, 1001 or other number), and every 30 days the people who mine the first tier, base layer nodecoins would have to bid the coins they mine against each other in order to become one of these block validating nodes.  This is accomplished by each nodecoin miner locking their bids in a CLTV-like mechanism and every 4320 blocks (30 days), the top bids are burned and they become the block validators of the system for a 30 day time period.  

As you can see, it's a normal, open loop PoW system with a DPoS-like, deterministic system built on top of it.  Since the deterministic system is the second tier layer, it inherits the security model of the first tier layer, making it not a real fundamental change of how Bitcoin already works.

What is the purpose of becoming a block validator?  Each winning bidder whose mined coins are burned gets a share of the transaction fees (this is one part I'm not sure how to solve besides doing a flat rate per transaction).  The act of mining in order to proof of burn coins to become one of these block validators is essentially doing futures market speculation that the amount of transaction fees you receive will be worth more than how much you spent to do the mining.  It's very similar, in a Bitcoin-NG type of way, to the Bitcoin system that already exists.  It's just the second tier network is built into the protocol itself to expand capacity instead of being separate like LN.

One of the things that people claim prevents miners from acting up currently is the sunk cost on their equipment and not wanting to make it's value useless.  This same functionality can easily be mirrored in this system by just time locking the transaction fees they receive to not be spendable until 40 days later.  That means the transaction fees you receive on day one of becoming a block validator will become spendable 10 days after you no longer are one.

The fact that the nodecoins you have to bid to become block validators are burned, means it's also harder to monopolize block validation in this system.  If a big nodecoin miner wins two bids in a row, all of those coins are burned and the smaller miners catch up to him.  

They're apparently not storing their money in banks anymore, which causes the price to increase...but then might cause bank insolvency...which makes the price increase more:

https://www.youtube.com/watch?v=MK-NoHjSgF8

https://www.reddit.com/r/ethtrader/comments/4rbff1/what_will_happen_to_exchange_trading_duringpost/

Since Eth was just a banker backed scheme to try and co-opt Bitcoin and replace it with a premined, permissioned ledger, I'd say zero is too high of a price.

[If this guy is not the US govt spamming infinite amounts of fiat shorts on BitFinex, he's probably going to get short squeezed to hell and back]

He's been spamming shorts for hours and hours, millions of dollars.  He did them all the way down, more at the bottom, and just keeps spamming shorts non-stop on the way up.  Every hourly volume looks like this for probably the last 12 hours:



Every sane person on earth was taking out longs on the crash, but this guy was taking out shorts when the price is already rock bottom, just setting his money on fire on purpose.  I find it ironic this is occurring on the same day Coindesk has an article where the US govt says Bitcoin is a threat to banking interests:

"A major financial oversight body within the US government created in the wake of the financial crisis has identified bitcoin and distributed ledger systems in general as a potential systemic risk".

"The Financial Stability Oversight Committee (FSOC) said in the new report released yesterday that the technology represented an innovation that “appear poised for substantial near-term growth”"

http://www.coindesk.com/us-regulators-recommends-oversight-bitcoin-distributed-ledgers/

If this guy is not the US govt spamming infinite amounts of fiat shorts on BitFinex, he's probably going to get short squeezed to hell and back

[2015-11-05 07:43:39] *** welong (6da09e01@gateway/web/freenode/ip.***.***.***.*) joined
[2015-11-05 07:43:50] <welong> hello there
[2015-11-05 07:44:17] <r0ach> yo
[2015-11-05 07:45:01] <r0ach> I think BTC is going to test 415 which will make all alt holders shit themselves
[2015-11-05 07:45:19] <welong> lol
[2015-11-05 07:45:33] <r0ach> but you never know because people who shorted BTC at the top are trying to push it down right now
[2015-11-05 07:45:45] <r0ach> so it could be a day or two before they're forced to cover
[2015-11-05 07:46:05] <welong> agree
[2015-11-05 07:46:29] <welong> are in long/short on BTS?
[2015-11-05 07:46:45] <r0ach> there are enough people in here to move markets though, bidji was a nxt IPO person, realsolid has a billion btc, and I went all in btc at $230
[2015-11-05 07:46:52] <r0ach> and there's a few other people
[2015-11-05 07:47:14] <r0ach> I think BTS will just go sideways
[2015-11-05 07:48:37] <welong> nice, i trade mostly alts, i did x200 profit last year , hoepfully this year will be better for all of us
[2015-11-05 07:49:46] <r0ach> I've never lost money trading alts, but probably have not made x200 heh
[2015-11-05 07:51:17] <welong> haha awesome, good to know u guys
[2015-11-05 07:52:00] <r0ach> realsolid is supposedly opening a new exchange
[2015-11-05 07:52:03] <r0ach> "SUPPOSEDLY"
[2015-11-05 07:52:09] <welong> when
[2015-11-05 07:52:44] <r0ach> he ran mcxnow and is making a new one, whenever he stops watching TV I guess
[2015-11-05 07:52:45] <welong> well we need one, HALO exchange is launching at 2050 i think
[2015-11-05 07:54:26] <r0ach> gonna see if I can find fyrstikken and get him to come in here haha
[2015-11-05 07:58:52] <r0ach> sometime between now and 4 hours from now BTC should start more buy ins
[2015-11-05 07:58:56] <bidji> i needed some money euros, so i sold at 490$, pretty lucky hehe
[2015-11-05 08:02:29] <bidji> do you think the trend reversed for bitcoin, or is it just a minor correction to 1000$* and beyond
[2015-11-05 08:03:06] <r0ach> imo 415 will be the next resistance
[2015-11-05 08:25:01] <nOgAnOo> I love you, bidji
[2015-11-05 08:25:31] <r0ach> bidji is from france, it's normal for men to love each other there
[2015-11-05 08:25:40] <nOgAnOo> eww
[2015-11-05 08:26:01] <nOgAnOo> r0ach are you mega rich?
[2015-11-05 08:26:13] <bidji> he don't want to say
[2015-11-05 08:26:22] <nOgAnOo> I need some money to start trading
[2015-11-05 08:27:11] <bidji> You just have to suck one or two dick for that kind of money
[2015-11-05 11:17:44] <welong> what do u think on ETH, BTS, do u see any big rise in them or any other alt?
[2015-11-05 11:18:37] <r0ach> xmr after wallet
[2015-11-05 11:18:45] <r0ach> is the next big sure thing probably
[2015-11-05 11:19:10] <r0ach> they had to do a bunch of backend stuff to make the wallet not take up gigabytes of ram
[2015-11-05 11:19:15] <r0ach> and it's still not close yet
[2015-11-05 11:22:10] <r0ach> so basically just let XMR go down until it gets close to wallet time
[2015-11-05 11:24:13] <welong> hmm what's the wallet time
[2015-11-05 11:33:09] <r0ach> don't buy any yet because it could be months, but it should be big, they have an actual good cryptographer named Shen Noether now creating RingCT
[2015-11-05 11:33:50] <r0ach> basically equal to zerocash without the drawbacks of zerocash

You can probably guess who "welong" is...

There were buy walls up to $575 and someone sold 0.09 BTC for $561 instantly tanking price, skipping over all the buy side walls.

[Why proof of stake has no value]

It looks like he's just making shit up to try and save this $1 billion dollar fugazi now.  Why he's wrong:

Why proof of stake has no value:

Since Satoshi did not solve the Byzantine generals problem, this means confirmations are completely arbitrary.  So why are two confirmations more useful in Bitcoin (PoW) than one?  Because it's an open entropy system where over a period of time, it's either unlikely or statistically impossible for someone to maintain a monopoly on block validation when there's no upper limit to confirmations.

Recursive systems like proof of stake tend to permanently monopolize block validation by design, with no real fault or state recovery to fix it once it goes off the rails.  The act of introducing interest compounds this problem even more.  This makes a proof of stake confirmation essentially worthless due to being a bounded entropy system.

On top of being worthless, proof of stake is also a permissioned ledger.  The purpose of mining in Bitcoin is to create a permanent decentralized exchange peg, which thus results in a permissionless system.

Markets have just consolidated from the last rise in a sideways $535-540 channel with a strong $534 floor.  When a strong floor is in, the market tends to go up again shortly after.



People who are waiting for a lower price are going to be:



Get ready:

He had enough from these NXT scammers. It's really hurt crypto what the NXT scammers do by rolling out one ICO after another: NXT, Supernet, JINN, IOTA, WAVES (even the LISK scam was "advised" by the NXT scammers). They are cancer in crypto.

^Because this.  BTCE is where the Eastern Euros take their scamcoin profits denominated in BTC and dump them for fiat.  They're scamming people for so much money with these worthless IPO scams that have no future that it overwhelms the liquidity of the exchange.  Look at waves, a completely useless derivative of NXT and you gave them 29,000 BTC LOL.  Newsflash, Waves will be no more useful than NXT was.  They've found scamming so profitable that they're even launching multiple IPO scams at the same time now:  Waves, Lisk, & IOTA all at once to compete with the Eth IPO scam that already existed.  Look at the names affiliated with all four of those coins, all shady as fuck Russians.  They truly are a cancer on crypto.