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1041  Economy / Speculation / Re: Bitcoin Technical Analysis on: September 13, 2011, 12:46:17 AM


Oh, that makes sense. Except. No, it doesn't. How do they nullify these trades in real time? We'll bitch, of course, but if that's really what Mt. Gox has done, then Bravo!
1042  Economy / Economics / Re: Gold: I smell a trap on: September 12, 2011, 09:52:20 PM
I just learned that Peter Schiff is trying to make a debit card using Visa or Mastercard which interfaces with the gold backed bank he is forming (outside US due to legal reasons). That would be awesome and I hope the same happens with bitcoin. Purchasing anything with bitcoin using a debit card; it would be perfect. It would need yo interface with an existing technology such as Visa so it is pre-compatible.

That sounds really neat. Can he guarantee 100% backing? Isn't that kinda like GoldMoney? Or an EFT? Has Peter Schiff ever mentioned bitcoins before? Visa/MC might be a mainstream bootstrap, but it'd be better eventually transmitted via bitcoin.
1043  Economy / Speculation / Re: Bitcoin Technical Analysis on: September 12, 2011, 09:39:49 PM
If they happened I'd be a rich man. I'm still poor, so I'm sure they didn't happen.

Fortunately, we'll have another chance to collect coins on the cheap.
1044  Economy / Speculation / Re: $/BTC Time Series Analysis on: September 12, 2011, 09:19:55 PM




The $9 resistance on 8 August became the support on 12th (falling diagonal) similar to the $5.3 line on 10 September and I hope today.
1045  Bitcoin / Bitcoin Discussion / Re: The Legitimization and Inevitability of Bitcoin on: September 12, 2011, 07:09:27 AM
Smartcards displaying a balance on eInk, perhaps a keypad on the device itself. One can carry one or numerous smart cards and exchange the physical card itself without trace.
If the cards are disposible how would the smart card know that the transaction is valid for $1.35. The frigin card would be

I'm not sure if disposable means the same thing to you as to me. Gramma may use a smartcard at the grocery store just as she uses a debit card today. If she can't do that, she can't use bitcoin. The card accepts the pruned merkel tree, sends signed transactions, and displays the balance on the card itself. She can plug it into her grandson's laptop if it doesn't have some wireless interface.

I guess over time it could become something everybody can use but I think that's a long way off. Just like a Linux machine in every home is a long way off. In both cases (Linux & Bitcoin) the establishment is really big and it will take a very talented Samson to knock down either Goliath.

Momentum and fear of the unknown are powerful forces. The trick is to introduce technology so that people don't notice. I installed Ubuntu on my ex-girlfriends computer who uses a Mac at work. Granted, I did all the configs, backup, and security upgrades, but she used Ubuntu just about every day for two weeks and didn't realize it wasn't Windows. I think Android is a better example though. Linux is everywhere, you just don't see it. Bitcoin is rough today, but when people don't see the difference between a credit card and bitcoin is when it's mainstream. Within the year we'll have an app on a smartphone, a dialog window will pop up on screen and ask, "Purchase pack of gum .08 BTC from ABC Shop? [Send] [Cancel]" Will you use very often? Probably not yet. But the tech is already here today.
1046  Economy / Marketplace / Re: Show your firstbits - get 2 bitcents on: September 12, 2011, 04:55:17 AM
Hey FreeMoney, how do you prioritize addresses? Suppose 123456789a and 123456789b were first seen in the same block. Which takes nine characters and which takes ten? Alphabetically, ordered tx array, random luck?

1047  Bitcoin / Bitcoin Discussion / Re: The Legitimization and Inevitability of Bitcoin on: September 12, 2011, 04:40:43 AM
Smartcards displaying a balance on eInk, perhaps a keypad on the device itself. One can carry one or numerous smart cards and exchange the physical card itself without trace.

1048  Economy / Economics / Re: Gold: I smell a trap on: September 12, 2011, 04:28:54 AM
Thanks. I've given BIS a skim and it fills me with Rathenau's delirium of milliards. I'm looking for more long term ~200 year data.

Yes, our 'modern' economy is truly dizzying. Friends not long ago were more likely to believe we live among or are ruled by aliens than accept fractional reserve, much less swaps and other abstract derivatives But I think people are getting a hint that something is http://www.youtube.com/watch?v=31IYm0gQS_A&t=22s
1049  Economy / Speculation / Re: $/BTC Time Series Analysis on: September 12, 2011, 03:55:33 AM


I have learned that eye is quite treacherous when it comes to actually quantifying things like trend probabilities and buy/sell signals from charts.

I don't deny it. And even when things go exactly as planned, the mind changes strategies in fear or irrational exuberance. It's good to have cold calculus and perhaps an automated trade strategy, or so I imagine. Smiley

I feel the eye and mind are better at seeing patterns out of the box. Sure you can develop more sophisticated software at an enormous expense, but our inherent pattern recognition is quite fast, cheap, and programmable, if not reliable. The human can simultaneously see numerous timescales and visualize a future. On the other hand, he is forgetful, undisciplined, and has a wonderful imagination for better and worse.

In this particular case, I perfectly predicted the bounce point above $6 on the 7th, the rise above $7, and the fall to $4.5. Somehow I failed to make the expected killing, but that's a different issue I am working on. The rise back up is following a similar pattern, but gets trapped under exactly one of each of the previous half dozen support lines from August (and Mt. Gox is reporting dubious events that may or may not be happening).

Let us assume that those chart snippits are actually telling the same story, how do you turn that into an actionable trade? By deriving price targets?

Well, there's the rub. I set orders that either don't get filled or were too conservative and I lose terribly chasing the price. But how do you manage that with your probabilities? Set 5% of your wealth where there is 50% probability?

I believe the greatest value of analysis (such as your own, thank you) is in establishing calm confidence. Thanks for the June 13 tip. I've been looking at a few, but I'll give it special note. Cheers!
1050  Economy / Speculation / Re: Bitcoin Technical Analysis on: September 12, 2011, 03:04:41 AM

Is this chart speaking to anyone? Did any of that chaos at 3pm actually happen?
1051  Bitcoin / Bitcoin Discussion / Re: The Legitimization and Inevitability of Bitcoin on: September 12, 2011, 02:47:36 AM
Now, what was the OP about? Oh yes, an article about the legality of bitcoins. Well, the author defends the assertion that bitcoin is a liability that requires regulation to counter illegal acts. That will probably be the motive, but I'm not sure that is a good offense. Because that would impose more restrictions on the present commons. When I tip the waiter, give money to charity, a homeless individual, or give money in a congratulatory card, I would prefer not to have that transaction recorded. Studies have shown that even with the convenience of credit cards and the like, cash will never die because people demand it, and when it is not available they will make transactions by other means, whether by bananas or bitcoins.
1052  Bitcoin / Bitcoin Discussion / Re: The Legitimization and Inevitability of Bitcoin on: September 12, 2011, 02:29:23 AM
Surawit, when you lose an argument, it is customary to say, "I was mistaken" and carry on with the discussion or gracefully withdrawl.

As for intrinsic value, you know what I mean. In the sense e.g. like the dollar used to be backed by gold. Do I have to spell everything out?

Dollars once were certificates or promissory notes for a particular weight of gold or silver. Today, their only intrinsic value include paper crafts, burning for fuel, wall paper, and toilet paper. Perhaps their are a few other intrinsic values.

inĚtrinĚsic (adjective) belonging to a thing by its very nature: the intrinsic value of a gold ring.

If you want to be pedantic about it, yes, it fails the dictionary test for fiat currency. But the dictionary was written long before anyone could concieve of such a thing as bitcoin.

My friend, by your definition, my toe nail clippings are fiat currency.

Please read how Ben Bernanke, the Chairman of the Federal Reserve Bank, defines fiat. Or anyone else who has studied finance.


I think if bitcoin were to become ubitiquitous it would be functionally identical to fiat currency, and hence my statement that bitcoin is fiat by all useful definitions.

Is gold a fiat currency?
1053  Bitcoin / Bitcoin Discussion / Re: The Legitimization and Inevitability of Bitcoin on: September 12, 2011, 02:00:35 AM
I've heard Ben Bernanke knows a few things about fiat currency. Well one day he said:

Quote from: Ben Bernanke
"...Indeed, under a fiat (that is, paper) money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero. The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning.

If that were a definition, I'd say bitcoin is not fiat. He continues in the next paragraph:

Quote from: Ben Bernanke
"Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."
1054  Bitcoin / Bitcoin Discussion / Re: The Legitimization and Inevitability of Bitcoin on: September 12, 2011, 01:51:03 AM
Fiat is just a word and bitcoin hasn't yet been well defined in the internet, banking, legal vernacular. Yes, bitcoin has value 'by decree' of the people who verify and use it. By such a loose definition, gold is fiat money as well, and even kings have declared it's value and stamped their mugs on it. But the average guy on the street, should he have even heard the word, understands that fiat is an object that is generally useless and undesirable, if not for an authority's insistence upon its use to pay taxes and the community's acquiescence. Likewise for bitcoin which is also inherently worthless if not for its unique transactional function and the fact that people give it value.
1055  Bitcoin / Bitcoin Discussion / Re: The Legitimization and Inevitability of Bitcoin on: September 12, 2011, 01:38:16 AM
Bitcoin is cash. I am buying works of art with paper cash and can sell them across the world with as much finality and assurance as I bought the pieces. I make real personal exchanges based on trust with no intermediaries. I don't believe a bank will recreate this. A banking institution might create a slicker, faster, easier, insured and reversible transaction, and under such a system we can be happily unproductive consumers.
1056  Economy / Economics / Re: Gold: I smell a trap on: September 12, 2011, 12:41:00 AM
Maybe but it still took 8 years before it reached today's price/m2 level. Maybe that delay had something to do with Roosevelt?
1057  Economy / Economics / Re: Gold: I smell a trap on: September 11, 2011, 11:04:40 PM
I don't know how/what global numbers I could reference. Any specific suggestions?

Kjj were you referring to M2? Because I think gold's price does represent about 20% of M2 dollars. But how does that relate to the amount of reserves the central banks hold? And why do banks hold gold, as insurance against the apocalypse? (Ben hasn't answered that for us) Today's gold price in dollars is half of the 1980's peak adjusted for M2, but double the trend since before Nixon. Is that doubling in anticipation of future inflation or just the century old price of gold?

NB: I've corrected many of my $AU/M2 calculations above. Huh
1058  Economy / Speculation / Re: $/BTC Time Series Analysis on: September 11, 2011, 10:56:30 PM


I posted this earlier, (and just accidentally deleted the text rather than quoting) because I thought it was relevant to the time series theme. Wouldn't you agree this looks disturbingly familiar?


1059  Economy / Marketplace / Re: Show your firstbits - get 2 bitcents on: September 11, 2011, 04:03:55 PM
Out of curiosity, do you have any idea the longest minimal firstbit today?
Assuming you don't need anything meaningful, I'd say it's at 1+4 or even 1+3 if you're lucky.

I was thinking the other way around. Such as if there were both 123456789a and 123456789b, then the longest firsbits might be 1+9.

Even better, has anyone graphed the shortest/average/longest as a function of blocks (time) with predictions into the future?

Predicting it would be hard since it depends on the rate of transactions.

Yes, and that would be a fine independent variable, various min, max, averages per transaction. I could calculate it I had a dump of all addresses per block. Can the blk*.dat tell me that? I don't want to DoS blockexplorer with wget/curl requests.
1060  Economy / Economics / Re: Gold: I smell a trap on: September 11, 2011, 02:54:35 PM
So one of the going stories asserts that gold should hit infinity based on historical money supply. There's certainly a relationship, but it looks to me that prices between $500 and $5000 are equally good. The current price seems within a wide band of prices way back to 1934. Does anyone have an interpretation that I don't see?

Code:
Price per oz     Years       M2 Supply      $AU/M2
===============  ==========  =============  =======
$  20.58-20.72   1833-1932   (1.28-46.60)   0.44-16.188 ($21.32 1923, $17.06 1931)
$  26.33         1933        (32.22)        0.8171
$  33.85-35.27   1934-1967   (34.36-524.8)  0.065-1.026 ($31.69 1949)
$  35.94-41.09   1968-1971   (566.8-710.3)  0.051-0.072
$  58.16-97.32   1972-1973   (802-856)      0.068-0.121
$ 124.84-193.22  1974-1978   (902-1366.0)   0.091-0.214
$ 380.68         1979        (1474)         0.258
$ 612.56         1980        (1600)         0.383
$ 317.26-460.03  1981-1997   (1755-4033)    0.079-0.262
$ 271.04-294.24  1998-2001   (4377-5431)    0.049-0.067
$ 309.73-363.38  2002-2003   (5784-6071)    0.051-0.063
$ 409.72-444.74  2004-2005   (6412-6674)    0.061-0.069
$ 603.46-695.39  2006-2007   (7033-7438)    0.081-0.099
$ 871.96-972.35  2008-2009   (8153-8531)    0.102-0.119
$1224.53         2010        (8467-8814)    0.139-0.145
$1516.54-1900    2011        (8838-9314-?)  0.163-0.215

http://kitco.com
http://www.census.gov/prod/www/abs/statab.html
http://research.stlouisfed.org/fred2/data/M2SL.txt
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