I haven't switched up for quite some time: still running Ubuntu 11.04 with Cat 11.6 and SDK 2.4 with no problems for 69xx cards. There doesn't seem to be any real consensus on improvements in software platforms, although SDK 2.6 now appears to be the bane of mining.

Is there any definitive improvement with SDK 2.5 over v2.4, or any Catalyst driver version greater than 11.6?

Also, does anyone else use Arch for mining?

Exchanges are currently the weak links (for legal and other practical reasons) and will remain so until the Bitcoin system is large enough to function as its own economy without major support of capital flows from other (traditional) economies.

Overall, the primary obstacle to Bitcoin's continuation is awareness (leading to growth) - technical issues and hurdles are manageable or surmountable. System D (estimated to be a ~USD$10 trillion unofficial economy, behind only the US ~$14 trillion economy) is a very strong potential arena for Bitcoin's rise to a general monetary tool.

A very possible scenario is one in which Bitcoin (or a Bitcoin-like system) will eventually be used by the majority of the world (beginning with less recognized regions and societies), leaving heavily government-controlled economies isolated. That isolation would make it difficult for most traditional nation-states to thrive. In addition, any method of moving wealth from a restrictive economy to an open Bitcoin economy would be a mostly one-way affair - capital will not return to a hostile environment.

This is a process, not an instantaneous event. It might still occur rapidly, maybe over a period of several years. Established governments and forms of authority simply have no means of stifling Bitcoin or similar systems without either reinventing their socio-economic structures to become more like Bitcoin, or exhausting themselves through excessive expenditures to fight it directly and ultimately failing entirely.

Great analysis!

Assuming it'll take until 2033 to reach a maximum might be stretching it a bit when taking into account the amplifying effect of progress in general. Normal transitions from one paradigm to another are one thing. I think existing circumstances have the potential to push a somewhat more rapid shift. Facebook's growth exhibits a very similar pattern.

Bitcoin may propagate most rapidly through System D. That could hit within the 2-3 year mark as you suggest, and at an estimated $10 trillion it would boost Bitcoin several orders of magnitude in value.

Of course, System D also makes heavy use of Hawala-style networks, so alternate systems such as Ripple will compete (although more in a complementary fashion rather than adversarial). In that sense, Bitcoin could still become a reserve or focal point, with Hawala/Ripple replacing what we currently view as the bank credit system and only engaging in Bitcoin transactions when it is difficult or impractical to engage in transactions otherwise (e.g. a large volume or distance for a small number of transfers).

Ha! First for both. QE3 better not disappoint.

There is nothing preventing green address functionality from being implemented in clients, putting bank-style services in the hands of anyone using it. It's no different from allowing popups or saving known passwords for trusted sites using your browser.

A client used in a business setting can easily build a green/trusted list based off repeat transactions. For a franchise, this may include verification against all of the other locations' lists.

There remains room here for traditional 3rd-party banking services, but it is still a matter of choice rather than force as SgtSpike pointed out.

You've got the idea right, just reverse which is volatile. That's due to relative growth rates: if the core asset grows at 1% and the economy (and accompanying issued money supply) grows at 5%, there's going to be an increasing separation over time. The asset doesn't change much - the rest of the world does.

In earlier times (generally before industrial revolution & late colonialism), gold was recognized as being valuable, but often spent in exchange for productive goods. Today, it is held as savings mostly because many people now have living standards well above that of subsistence. Gold works better than anything else as a universal store of value.

Gold has experienced periods of rapid inflation, most recent and notably during the California gold rush in the mid-1800s. This would be similar to the present situation with Bitcoin. Since gold's historical inflation rate has been about 1.5% per year, Bitcoin should reach that point in about 8 years - late 2020.

Overall, gold is a measure of price, not something that is priced. Saying that gold is worth X dollars or Y Euros is backward in a practical sense. The fluctuation in gold's existing supply is minute compared to that of other forms of money.

Pricing of goods in terms of gold was not stable. Over time, the supply of gold expanding at only 1.5% was not enough to keep pace with a broader economy's expansion. Prices would begin to decrease, then plummet rapidly. This was a primary reason for other forms of money such as fiat paper (and why metal coins have been debased so often throughout history).

The US dollar today is a derivative of gold; it used to be representative of the metal. Where the US dollar can maintain price stability, it cannot also act as a store of wealth - that leads to a conflict known as Triffin's dilemma. A monetary unit can perform dual-duty for only so long before the separation is great enough to cause either widespread price instability or wealth dilution - one must be sacrificed for the other to remain viable.

Bitcoin partially solves this by allowing for decimal expansion, although the effect from resets (which should occur periodically every ~20 years) may be somewhat jarring. Still, that is preferred to arrival at a complete economic meltdown as the world is witnessing now. For comparison, the same situation could exist with gold by decreasing the size of gold coins. The problem is that anything less than ~1 gram is prone to practical complications.

If the Bitcoin protocol were amended to allow 16 decimals expansion instead of the present 8, it is conceivable that the system could provide growth capacity for at least a century - assuming system integrity remains in all other areas.

tl;dr Gold's value keeps rising due to relative supply during any era, so pricing things in gold only works for a short time - maybe a few decades.

And watch it crash soon after?

Now it's getting uncomfortable. If I weren't using weighted prices for analysis, I'd be ready to sell a good amount of my holdings. Instead, there's still plenty of room for a correction into stability by the end of the week. There's also a lot of air above us now; $30 seems to be beckoning.

Bitcoin may be exhibiting early signs of a giffen good. If so, it'll make gold's rise seem quaint by comparison (as if it hasn't already).

Major points to watch:

• Bit-pay showcasing at the CES
• Federal Reserve QE3 or "inflation targeting"
• Rapid succession of capital control implementation

There are others, but those could cause a magnitude 9.2 in the Bitcoin world - to the upside. A number of articles in major media hit during the last few months, which may be sparking another round of public interest. That would explain what seems to be continuing fresh capital inflow.

The CES spot isn't about merely buying Bitcoins, but about their potential benefits over existing payment methods. That speaks to businesses' bottom line in an environment where margins are being squeezed ever tighter. It will raise eyebrows for newcomers, particularly with the ease of use compared to acquiring a smartphone credit card reader and dealing with all the other hoops required for other methods.

It's time for amateurs to lock in stop-losses and halt further trading, and pros to get some hedging in place. The greater the flow, the wider the swings. Prepare your emesis bags: things are about to get bloody.

Already breached $7 on Intersango & BTCex.

Average growth since earliest pricing data for Mt. Gox from Bitcoin Charts is about 8.6% per week.

Reversion to the mean in relation to growth rates suggests a valuation of USD$28 per BTC. Even at a reduced 5% growth since the 2011 bubble puts the exchange rate at $10.

Nothing trades in a straight line; corrections will occur. With average inflow of ~$1.5mm per week and only ~$300k needed to maintain a stable price (the last time inflow was below $300k was in mid-April 2011, just before the bubble), a decline in price is extremely unlikely.

The reasons for Bitcoin adoption are not easily seen from within the system, but by looking outside at the declining incentives to hold other classes of assets. Currencies such as USD are overvalued and fundamentally unstable - for $300k/wk to flow into an alternative like Bitcoin hardly even registers.

It's good to acknowledge the data, but it must be applied in proper context: Bitcoin is not of a magnitude where capital flow is comparable to established economies; it is far more likely that a few drops from the global economy will send the exchange rates on a moonshot than current wealth be divested from the Bitcoin system.

USD$1B: 2012-05-01
1BTC=1gAu: 2012-04-01

This is like Yabusame with a moving target. Gold's price will fluctuate and the number of Bitcoins will continue to rise, not to mention the potential for exogenous shocks.


Bitcoin Days Destroyed is a measure of transaction volume, analogous to velocity. Being calculated per block, it shows that about 1/3rd of all Bitcoins are exchanged at a given time (unless my interpretation is mistaken). This has been holding steady since the bubble high in June, so it is easily within the realm of possibility that a great deal of nominal value has changed hands.

PayPal is not used as a currency trading platform; behind the scenes may be different. I think Bitcoin might be seeing high unit turnover because of algorithmic trading on exchanges in combination with new inflows. Some back-of-envelope calculations (i.e. inaccurate and probably flawed):

Assume a $10mm economy size with 1/3rd of Bitcoins exchanging hands (everything including exchanges, API trading and private transactions) every block:
10,000,000 x 0.33 = 3,300,000/block

Amount per hour:
3,300,000 x 6 = 19,800,000/hr

Amount per day:
19,800,000 x 24 = 475,200,000/day

Amount per year:
475,200,000 x 365 = 173,448,000,000/yr

So over $173 billion per year transacted with an economy at a static size of $10mm; a very active economy, much like existing forex markets. Even if the transaction volume ratio is actually 1%, that still puts the annual exchanged amount at over $5 billion, using the same assumptions as above. I would expect the ratio to decline somewhat as the economy increases in size, but being $50mm now, a drop to 10% would still be greater than in the example ($5mm vs. $3.3mm) for a total of $262.8 billion transacted per year.

It happened. He stole the pictures, too.

Yup.

A good practice is to scale in and scale out. For example: I closed 10% of my open positions today. On any significant declines, I'll probably add that back because my analysis suggests there's still room to rise. If I don't get the opportunity, I'll just continue to ride up with the other 90% of my holdings.

Trading is counterintuitive to your emotions. Learn to love the sinking pit in your gut when things don't move your way (then buy) and grow wary of the elated sensation upon doubling, tripling or hitting a 10-bagger (and sell).

If you keep at it, you'll develop your own trading style - short vs. long term, momentum chasing, etc. In general, you just have to heed and control your emotions.

Best!

Banks may form as management concerns. Bitcoin's transparency effectively limits (even negates) the banking institutions' ability to simply make off with assets... eventually.

A major reason for the success of frauds that occurred during the bubble was that the Bitcoin community, although largely self-policing, didn't (and still doesn't) have enough social exposure and credibility to effect legal repercussions. If most people knew what a Bitcoin was, it would've easy to make the issue a police or court matter.

As it stands now, Bitcoin-related crimes are still met with a blank stare, as though you've suggested that a three-toed Martian leper stole all your hair follicles to build a living string instrument and you want them back.

Growth is ~8.6% per week, even after the bubble. If this is reversion to that mean, we could see the previous highs met by February and the $50+ range by March. I'm not sure a swing high would see $100 this year, but the way the world is going it could happen.

I'm a little cautious with the dailies now that the weekly advance is >1 standard deviation above the prior week's, but the high $7 range is the real weekly danger zone. It'd be nice to see consolidation through the weekend above $5.40 and be able to nibble in the $4.80-5.40 area.



The system only needs USD inflow of ~$300,000 per week to maintain the current price level. Almost 10x that pouring in during the past week alone. From the November low, weekly USD inflows have averaged above $1mm, so a fairly stable price could realistically be in excess of $20/BTC. With the most recent week showing $2.5mm, that's reaching $50/BTC.

I'm just curious as to long these flows will be sustainable, and where they're coming from.

+1

And interesting stuff about the Mushroomized series. Is there a more formal name or description; not finding anything specific so far (have to start digging around Fermat's equations now)?

Nevermind, found your thread.

Growth in the Bitcoin economy exceeded two standard deviations from the mean during the bubble. It is currently less than one away right now and the capital inflows have been steadily rising. Overall, the general pace has resumed to what it was before the April-June bubble. The USD exchange rate would have to exceed $5.80 on the week to start being concerned, and $6.20 to trigger an immediate sell signal. Each time the price has jumped since November, it's built a stable base before continuing up.

It's also important to keep in mind that advances in science & technology are cumulative - they amplify prior improvements. Look at the comparison of bitcoin to gold - the former at a weekly level and the latter on a yearly level. That would effectively be about a 50:1 rate of growth just based on relative USD prices (the Bitcoin values are from mid-2010, not 2009).



It can be expected that adoption rates will remain accelerated simply because of how small the Bitcoin economy still is relative to the rest of the world. I've compared Bitcoin's growth to that of Facebook and the patterns are similar there as well. We're still in an early phase, and Bitcoin has a far wider usage potential.

Exactly - there is no provision for locking units in the protocol. It's a third-party dependent feature currently - in the example being used for this thread, Mt. Gox is policing its own environment within the greater Bitcoin economy.

If it's a direct transfer, there should be no issue. That means anything that isn't part of Mt. Gox. For there to even be a 'taint' problem, any complication would have to occur to a user within the exchange (which could be viewed as its jurisdiction).

So trouble might arise if funds were removed from MG, subsequently viewed by MG as 'tainted' and then the current owner of the funds attempted to make use of Mt. Gox afterward using those same funds. That would still only discourage use of Gox, not eliminate potential for transfer.

This comes down to a similar set of trade-offs as citizenship: if I have an account with Mt. Gox (passport from EU), my funds can be protected to an extent, but I have to submit to whatever the rules are within the exchange (or EU). If I don't have an account at the exchange, I forfeit the level of protection offered (safety from extradition, etc) but am free to conduct transactions however I choose.

Now a question might arise involving ownership of an account with Mt. Gox that has zero balance and experiencing a loss elsewhere. Is that the exchange's concern or not? Who decides? If that situation were honored, would it lead to witch-hunt style refusal of transactions through the exchange due to circumstantial reporting?

I think that would be a very dangerous precedent and hope it never becomes part of the protocol. Responsible asset management is far better in the long-run.

This, in spades.


That sounds like an arbitrary size payload for a decentralized wallet. The data volume would probably be unwieldy, though.

What I've noticed so far is a singular focus on monetary and technical aspects. That's all well and good, just somewhat limiting in regard to applicability of the whole concept.

The Bitcoin community seems to have finally come down from its honeymoon high and is regaining credibility. Awareness is the first hurdle, then a thorough understanding of what the blockchain is. Finally, the ideas start flying as to how it can be applied elsewhere. The real power, when abstracted to the blockchain's raw potential, is the system's capability of self-management.

I think innovation will come when either academia takes notice and/or when private, commercial interests pick up the ball and run with it (which seems to be the situation with maaku). That does seem to be picking up, two-guys-in-a-garage style, but still mostly focused on financial aspects. The concept can be made general, like the wheel - it just has to build up that gradually-accelerating adoption cycle.

Namecoin appears to be the most innovative so far, although there are plenty of applications involving resource management that could be handled by a blockchain system. I've been pushing the potential for blockchains effectively being applied as decision machines, similar to the threshold trigger of an action potential. That could form the foundation of a machine memory/intelligence at a larger scale and in a completely different class than existing paradigms. Difficulties in starting that lie with incentive for participation and logistic overhead - feasible at experimental scales but not workable in the global setting that Bitcoin can support yet (due to financial incentive).

The more freedoms and privacy are eradicated by central authorities, the greater the incentive to explore other options. It's only a matter of time before further dots are connected - 2012 will be more impressive than the last couple of years, I'm sure.

Wow, I missed a release - 2.0.8 was running for... a while; at least 10 days solid. I can't imagine how cgminer could be improved upon much further, so I was glad to see the latest update from the future!

"Version 2.1.0 - December 27, 2012" 

So far so good (still Ubuntu 11.04 with Cat/SDK 11.6/2.4 on 6950s). Latest git build and none of the problems anyone else has been having.