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Author Topic: Beware of so-called "anonymous" coins (XMR, SDC, AEON and DASH)  (Read 7825 times)
The Pharmacist
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September 04, 2016, 03:16:52 AM
 #41

War?  It's more like a bunch of boys who dress up as girls and claw at each other in the sandbox.  I don't think there is anything to be one.  It's like a battle of fanboys--no one else in the world cares enough about anonymity.  If you can pay with your debit card or through your phone for a coffee at Starbucks, people don't care about this confusing new technology.  Plain and simple.  Bitcoin itself has enough problems getting adopted by the unwashed masses, so how do you expect Dash and all the others to get a foothold?



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September 04, 2016, 04:45:07 AM
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To the OP: *if* the main usage/goal/... of a crypto currency is to be a better's token between gamblers (eh, sorry, "investors" and "speculators") trying to smart out each other and strip off (fiat) money from "the other gambler" in this big zero-sum game, then honestly, "anonymity", "smart contracts", and even the existence of a block chain and code doesn't matter.  All what crypto has become is nothing else but casino tokens.   Unfortunately, my impression is that this *is* what makes 95% of the price of crypto, bitcoin included.

So I wouldn't know what it means "to be adopted by the masses".  Does it mean that Joe is now also invited to play in that token casino ?  Is that what we call "adoption", and is the OP warning and suggesting that we should "protect" ordinary Joe from playing the household money in the crypto token casino, because "whales" are smarter casino players ?  Buying tokens to hope to see them rise, and dumping them on a greater fool ?  Is that "crypto adoption" ?

Does "adoption" mean that there is this big reservoir of ordinary Joes that are still unexploited as bigger fools to get ripped off by the "early adopters", the "miners", the "devs" and (mainly) the exchanges, which are the true outlets of value in this zero-sum machine ?

Ordinary Joe is not buying Euros and then dumping them for dollars or yen.  Some do, but that's a very small minority of people, and it is not the people that buy and sell fiat to hope to see it rise or fall that makes the "adoption of fiat".  Adoption of fiat doesn't come from the fact that people buy and sell fiat on FX exchanges.  It means that they use it, to earn it and spend it.  Not that they are gambling on it.

I would suggest to ordinary Joe (and in fact to just anybody) to stay out of this token casino.  It is ripping one another off, without ANY value creation (except for making the casino holders - the centralized exchanges - rich).

However, if by "adoption" one means USING crypto to do what one is doing now with more classical means: buying stuff, earning wages, doing business, transferring wealth, and yes, why not one day, signing agreements ("smart contracts"), NOT for the sake of crypto itself and speculation on its price, but to really use it, then yes, THAT is true adoption, and then, anonymity is an absolute MUST, because the open ledger of bitcoin is a *nightmare* for everybody looking for a minimum of privacy, or more, as a defensive weapon against the criminal syndicate that is the state.

By the time that people would use *bitcoin* to buy a coffee at Star Bucks (they never will en masse because bitcoin cannot handle that on chain), one should hope that there is something like monero or even dash or another anonymous coin where you can hide all the details of your earnings and spendings.  But we are VERY REMOTE from that day.  

In the mean time, the very, very tiny real adoption that crypto has, is probably there were there's a genuine need to hide from the prying eyes of the criminal syndicate which is the state, and where one wants to live freely and exchange freely: dark markets. Even if this only concerns a very small part of the market, there is at least a real use case for crypto.  It is the only genuine adoption of crypto I know of, apart from a few online services (which are MY only use of crypto).

The reality of a block chain, and the reality of the cryptographic aspects of hiding history, only matter if one uses crypto.  When it are betting tokens, the technicality of the coin has no importance: they are mainly abstract IOU on exchanges' websites.  And if one uses crypto, the actual price of a coin doesn't really matter too much  (it shouldn't change too much between earning and spending of course).

I would have preferred by far a small but real "adoption" USING crypto, even by a very small minority of people, with a modest market cap sustaining that real usage, rather than this big token casino that attracts institutional players, lawmakers and all that and kills the freedom of crypto even before it even took off.

If the "anon coin" rise is due to token casino stuff, it will attract lawmaker's troubles before it even got used for real, simply because their equivalent abstract betting IOU on centralized exchanges are hyped by gamblers.
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September 04, 2016, 05:48:38 AM
 #43

Op is flawed saying that monero's price growth is purely speculation.

At least some of the price rise is due to actual vendors accepting it for payment.

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September 04, 2016, 06:32:51 AM
 #44

Op is flawed saying that monero's price growth is purely speculation.

At least some of the price rise is due to actual vendors accepting it for payment.


I would like to hope so, but I'm afraid that is not possible, if you look at Fisher's formula.  How long do you think that someone using it for payments is holding on its coins on average (between acquisition and usage in payment) ?  Do you think this is much longer than a month ?  If on average a coin is acquired and spend once a month, it means that a coin is, on average, bought and sold 12 times a year, which would mean that the total market cap of monero must be multiplied by 12 to know how much trade is actually done in monero.  That would be close to 2 billion dollars a year. 
In other words, to explain the current market cap of Monero, and assuming that on average a coin is held about 1 month between acquisition and spending, it would need to be buying a market of 2 billion dollars a year.  I would be surprised if that were true.  In as much as coins are acquired and spend quicker (say, you buy them on an exchange on Monday to spend them before Thursday), the total "business" done in Monero would climb to 15 billion dollars a year with the current market cap.  I wonder really whether that is true.
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September 04, 2016, 07:19:19 AM
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To the OP: *if* the main usage/goal/... of a crypto currency is to be a better's token between gamblers (eh, sorry, "investors" and "speculators") trying to smart out each other and strip off (fiat) money from "the other gambler" in this big zero-sum game, then honestly, "anonymity", "smart contracts", and even the existence of a block chain and code doesn't matter.  All what crypto has become is nothing else but casino tokens.   Unfortunately, my impression is that this *is* what makes 95% of the price of crypto, bitcoin included.

So I wouldn't know what it means "to be adopted by the masses".  Does it mean that Joe is now also invited to play in that token casino ?  Is that what we call "adoption", and is the OP warning and suggesting that we should "protect" ordinary Joe from playing the household money in the crypto token casino, because "whales" are smarter casino players ?  Buying tokens to hope to see them rise, and dumping them on a greater fool ?  Is that "crypto adoption" ?

Does "adoption" mean that there is this big reservoir of ordinary Joes that are still unexploited as bigger fools to get ripped off by the "early adopters", the "miners", the "devs" and (mainly) the exchanges, which are the true outlets of value in this zero-sum machine ?

Ordinary Joe is not buying Euros and then dumping them for dollars or yen.  Some do, but that's a very small minority of people, and it is not the people that buy and sell fiat to hope to see it rise or fall that makes the "adoption of fiat".  Adoption of fiat doesn't come from the fact that people buy and sell fiat on FX exchanges.  It means that they use it, to earn it and spend it.  Not that they are gambling on it.

I would suggest to ordinary Joe (and in fact to just anybody) to stay out of this token casino.  It is ripping one another off, without ANY value creation (except for making the casino holders - the centralized exchanges - rich).

However, if by "adoption" one means USING crypto to do what one is doing now with more classical means: buying stuff, earning wages, doing business, transferring wealth, and yes, why not one day, signing agreements ("smart contracts"), NOT for the sake of crypto itself and speculation on its price, but to really use it, then yes, THAT is true adoption, and then, anonymity is an absolute MUST, because the open ledger of bitcoin is a *nightmare* for everybody looking for a minimum of privacy, or more, as a defensive weapon against the criminal syndicate that is the state.

By the time that people would use *bitcoin* to buy a coffee at Star Bucks (they never will en masse because bitcoin cannot handle that on chain), one should hope that there is something like monero or even dash or another anonymous coin where you can hide all the details of your earnings and spendings.  But we are VERY REMOTE from that day.  

In the mean time, the very, very tiny real adoption that crypto has, is probably there were there's a genuine need to hide from the prying eyes of the criminal syndicate which is the state, and where one wants to live freely and exchange freely: dark markets. Even if this only concerns a very small part of the market, there is at least a real use case for crypto.  It is the only genuine adoption of crypto I know of, apart from a few online services (which are MY only use of crypto).

The reality of a block chain, and the reality of the cryptographic aspects of hiding history, only matter if one uses crypto.  When it are betting tokens, the technicality of the coin has no importance: they are mainly abstract IOU on exchanges' websites.  And if one uses crypto, the actual price of a coin doesn't really matter too much  (it shouldn't change too much between earning and spending of course).

I would have preferred by far a small but real "adoption" USING crypto, even by a very small minority of people, with a modest market cap sustaining that real usage, rather than this big token casino that attracts institutional players, lawmakers and all that and kills the freedom of crypto even before it even took off.

If the "anon coin" rise is due to token casino stuff, it will attract lawmaker's troubles before it even got used for real, simply because their equivalent abstract betting IOU on centralized exchanges are hyped by gamblers.

By adoption I always mean "average" Joe using it. Such pumps and dumps are not helping, because of the volatility. And why do you think that anonymity is a must? If the anon market becomes big enough, all the authorities need is to wave some badges and documents and screw it. They are not even obliged to say anything, except that is a matter of national security. How the americans ripped off Kim Dotcom for example? The guy even hasn't been in the USA.

We can reach certain privacy even with Bitcoin. There are a lot of people who has amounts of money for which even their closest friends are not aware of. How often do you tell to people how much you worth? You can even fool the banks if you use different accounts, so there is your privacy. History shows that a lot of smart people who knows how to protect themselves were caught. Why do you think yours/mine case would be different? Maybe in a later future part of the market could be anonymous, but currently its too tiny to begin such "wars". You don't go to a war with handful of people. And the situation can be compared with war, because once the authorities feels threatened, they are starting to use "techniques" which even Snowden could be scared to explain.

Bottom line. Currently we can somehow compare (though its not very accurate) cryptocurrencies with FX, but the average Joe does not trade. We should forgot for a moment about the gimmicks and focus on what really matters - to prove that Bitcoin (and others) are money, and that they can be used.


Op is flawed saying that monero's price growth is purely speculation.

At least some of the price rise is due to actual vendors accepting it for payment.

No, I'm not flawed, but looks like you are. I have asked a simple question:

What is the XMR volume on the DarkNet markets?

Because 99.7% of the current (shown) volume (~$65Mn)of XMR is on Poloniex and Bittrex. Se we have few scenarios:

1. People are buying Monero, because they have seen its usage on the DN markets (i.e. they actually saw it was heavily used).
2. People are "buying the news" of DN acceptance.
3. Number 2 + speculation.

Which one is it? 

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September 04, 2016, 07:39:22 AM
 #46

Quote
What is the XMR volume on the DarkNet markets?

Because 99.7% of the current (shown) volume (~$65Mn)of XMR is on Poloniex and Bittrex. Se we have few scenarios:

1. People are buying Monero, because they have seen its usage on the DN markets (i.e. they actually saw it was heavily used).
2. People are "buying the news" of DN acceptance.
3. Number 2 + speculation.

Which one is it?  
3
Darknet market isn't as big as we think (possibly due to lack of our knowledge and trust)
One thing to keep in mind is that, the users of most of the big exchanges like Poloniex, pump and dump manipulating markets for their own profit. And they don't trust in any other crypto except bitcoin.
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September 04, 2016, 07:41:27 AM
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By adoption I always mean "average" Joe using it. Such pumps and dumps are not helping, because of the volatility. And why do you think that anonymity is a must? If the anon market becomes big enough, all the authorities need is to wave some badges and documents and screw it. They are not even obliged to say anything, except that is a matter of national security. How the americans ripped off Kim Dotcom for example? The guy even hasn't been in the USA.

As anonymous as cash, because of course the aim for money is to be able to hide it from the state thieves syndicate, for two reasons: 1) not to have them steal it and 2) to be able to finance things they don't like ("illegal").

If you *don't* need/want to hide from state thieves, and if you *don't* want to do things that are against the wishes of the criminal syndicate that is the state and which is called "the law", then I don't see ANY utility of crypto.  Normal state-controlled banks and things like VISA are perfect for that.  Why would you go through the hassle of using crypto if you can do it with state-fiat and state-controlled banks ?

So adoption means when average Joe is fed up with his criminal syndicate and wants to gain his freedom again, and therefore you need anonymity.  Not much more than with cash.   Cash is good enough, but it is being outlawed.  You cannot buy a car or a house with cash any more.  You are even looked up weirdly if you try to buy an i-phone with cash.

Good old cash was anonymous enough, but it being outlawed, one needs something that can replace it for all those usages of cash where you don't want to do it with credit cards and bank accounts: THAT's the (only) user space of crypto.  THAT's where you can have adoption.  And that's about it.

To buy a perfectly legal and super-taxed coffee at Star Bucks, with your legally earned and super-taxed salary, and paying super-taxed VAT on it, there's no point in using crypto.  Use your VISA or your electronic cash wallet from your bank.  It is more private than using bitcoin.  It is safer.  It is less hassle.  And it will turn out to be just as cheap.

The only use of crypto is when the state syndicate and you are in disagreement over what you are allowed to do.  But then you better have some anonymity.

Quote
We can reach certain privacy even with Bitcoin. There are a lot of people who has amounts of money for which even their closest friends are not aware of.

That is because banks do provide privacy (as long as that privacy is allowed for by the state).  If you use bitcoin, if ever you pay some coins to one of your friends, if they want to, they do a chain analysis and will find out for themselves how much you own.  And if they cannot do that now, there will be tools on the market to do so 10 years from now.  They can't do that with your bank accounts (unless they have state power).

Quote
Bottom line. Currently we can somehow compare (though its not very accurate) cryptocurrencies with FX, but the average Joe does not trade. We should forgot for a moment about the gimmicks and focus on what really matters - to prove that Bitcoin (and others) are money, and that they can be used.

In order for people to use bitcoin as money, it has to bring them something that they can't have with the financial system they have now.   I don't see what bitcoin is bringing to the average Joe, if it weren't some form of "protection from the state".  If you are all in with the state, and are a "law abiding citizen" (you know, the kind of people that watch the neighbours and call the police if they suspect their neighbours might do something, oh god, against the law), then what use do you have with bitcoin, that you can't have with VISA and your bank ?

Why have all the hassle with bitcoin ?  The only thing one can think of, is speculation (my kids will have coins worth $10 000 when I die - I hope they will declare them and pay their due taxes to our beloved state).  I have never seen anything where you can use bitcoin, and where you can't use VISA, if it is perfectly "legal".

So the only real usage apart from speculation and greater fool theory, is when there is some friction with legality.  And then, bitcoin is outright dangerous, and you need anonymity.
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September 04, 2016, 07:57:47 AM
 #48

snip

Bitcoin (as it is now) is superior to fiat money, because it cannot be "printed" as they are. No need to make deep analyses, because there are lots of materials, which explains why fiat money are flawed. I guess you know what the banks are doing with your money while they are on "deposit"? They are "using it" (on paper) to fund loans and such. Your $1 becomes $10 to them and they are happy with that. It is one of the reasons to look at you as "a freak" if you decide to pay in cash.

Use simplicity, it is the main "weapon" to make people like the average Joe understand what is Bitcoin. And you are using the Greater fool theory in number of your comments. Do you know that it applies to banks as well? The housing bubble is just one of the examples.

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September 04, 2016, 09:15:18 AM
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Bitcoin (as it is now) is superior to fiat money, because it cannot be "printed" as they are. No need to make deep analyses, because there are lots of materials, which explains why fiat money are flawed.

Fiat money is not "flawed".  Fiat money is an IOU-based payment system.  IOU can be created at will.   What you mean is that fiat money is not a sound money system.  But bitcoin is not either.  Bitcoin is being printed (mined).  Yes, I know, one day it will stop.  But for the moment, bitcoin is inflationary, just as fiat is.

I think that what you mean, is that the problem with fiat is that there is seigniorage, while in bitcoin, seigniorage is burned in PoW.   I agree with that.  Bitcoin is a fairer system than fiat, where there is seigniorage when loans are made.

Creating loans in the fiat system is the equivalent of mining bitcoin, in as far as this is comparable.

However, the fiat "theft" by seigniorage is ridiculously small as compared to state theft through taxes.  Hell, people are worried about 'deflation'.   We're talking about percent-per-year level theft, while taxes are about HALF of production.

So what good is worrying about percent-level theft when, by abiding to law, you have to hand over half of your production any ways ?

It is not because of "inflation" that average Joe is going to use bitcoin (and for the moment, bitcoin still is inflationary, probably still more so than fiat).

Quote
I guess you know what the banks are doing with your money while they are on "deposit"? They are "using it" (on paper) to fund loans and such. Your $1 becomes $10 to them and they are happy with that. It is one of the reasons to look at you as "a freak" if you decide to pay in cash.

It is in fact much more funny than that.   Cash is FED money.  Bank accounts are bank money.  These are DIFFERENT TOKENS.  Banks can make you think that their tokens are "FED money" only because they promise you to exchange them willingly on a 1-1 ratio, but they only have very limited reserves to do so.

Within their reserves, they CREATE as many bank tokens (IOU) as they want - and there's nothing wrong with that, because that is what fiat money IS: an IOU system.  Everyone could in principle make promises, and give them out as money, except that most people are willing to use those of banks, and not those of Jack, exactly because in the end, banks promise to exchange them for "real" FED cash in a 1-1 ratio, and *most people believe those banks*.

Quote
Use simplicity, it is the main "weapon" to make people like the average Joe understand what is Bitcoin. And you are using the Greater fool theory in number of your comments. Do you know that it applies to banks as well? The housing bubble is just one of the examples.

I'm not making any publicity for the fiat system.  I'm fully aware of how it functions.  But my point is rather the following: the differential advantage for average Joe to use bitcoin over fiat, *while remaining a law-abiding citizen* are essentially zilch apart from speculation.

Because "being a law abiding citizen with bitcoin" is exposing you to about the same troubles that you would undergo with simple fiat, without the ease of use.   The taxes on "law abiding citizen's bitcoins" are going to eat more of your value than the difference in inflation between fiat and bitcoin for the moment.  The volatility of bitcoin is way, way, way more dangerous than the inflation of fiat.

Also, don't believe that, if the state/bank system is in trouble, like in Cyprus, they will ALLOW law-abiding bitcoin holders to escape any haircut.  It would be too easy.  If there's a haircut on bank accounts (like in Cyprus), and bitcoin is "mainstream", believe me that they will consider bitcoin as "bank accounts" and REQUIRE their law abiding bitcoin holder citizens to hand over the same haircut in bitcoin to the state.

Again: if you want to be law-abiding Joe Average, you have no use for crypto.  And if you don't want to remain law-abiding, you need anonymity to a certain degree in crypto.
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September 04, 2016, 09:43:19 AM
 #50

Monero broke number of records (price, trade volume), but it looks like many people believe that SDC and AEON will follow its trend. One can argue if the XMR growth can be called "organic", but my personal opinion is that this is a pure speculation. Both ShadowCash and Aeon have never reached such prices and volume (you can check their history) and I think that investing in them at this point could be called dangerous.  
If you believe that growth of any coin beside bitcoin can be called organic then you are a dreamer. Every Coin beside BTC was created with one in mind - to be pumped.
Only bitcoin had nearly ideal initial distribution. Now people actually - expect that every new coin will be valuable while backed by empty promises and hopes...
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September 04, 2016, 10:04:10 AM
 #51

If you believe that growth of any coin beside bitcoin can be called organic then you are a dreamer.

Bitcoin still does not have the "organic growth" we speak of. That is why it is currently impossible to do TA on BTC.

It's just that other currencies could be manipulated more easily. 

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September 04, 2016, 10:07:10 AM
 #52

Only bitcoin had nearly ideal initial distribution.

You call 10% of the final stash in the hands of the inventor, "nearly ideal initial distribution" ?

Bitcoin is just as much pumped as all the rest, people are mainly trading it as betting token (sorry, "investing" in it), not to use it to buy a pair of shoes with.  
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September 04, 2016, 10:13:24 AM
 #53

Op is flawed saying that monero's price growth is purely speculation.

At least some of the price rise is due to actual vendors accepting it for payment.


I do not think the growth will be purely from speculation in the long term but you have to admit the price rise is indeed too fast. That movement is mostly from the traders and speculators buying and selling. If there is actual vendors accepting XMR now, will the volume be in the millions right away? Maybe it will but I would like to see that if it was possible to see it in a block explorer.

For me the merchants in the darknet have not reached transactions in the millions yet per day because XMR is fairly new. In a year I will not be surprised if it is.

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September 04, 2016, 10:14:37 AM
 #54

Anyway, here's what I meant:



This is what happens when you are following the hype. It is a screenshot from a FB "virtual friend" who is "crying" on his timeline now. LBC is not mentioned in the thread, but can be included in the current hyped projects as well. What happened with others since I started the thread? Monero is down by ~20%, SDC passed $2.01, but it is now $1.27 and AEON lost 30% of its value.

Organic growth my ass.

P.S. Don't tell me it is a "price correction", please...  

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September 04, 2016, 10:44:05 AM
 #55

Anyway, here's what I meant:



This is what happens when you are following the hype. It is a screenshot from a FB "virtual friend" who is "crying" on his timeline now. LBC is not mentioned in the thread, but can be included in the current hyped projects as well. What happened with others since I started the thread? Monero is down by ~20%, SDC passed $2.01, but it is now $1.27 and AEON lost 30% of its value.

Organic growth my ass.

P.S. Don't tell me it is a "price correction", please...  
This is exactly what I too wanted to point out.
On 31st August, I noticed a pattern in XMR pump and dump but no one seems to have noticed my post. Here it is:
I've noticed a pattern in Pump and Dump trend of XMR for 2 days.
Apart from regular short/long trading, prices start going down at about 3:00-3:30 and trend continues till 11:00-13:00 when it reaches minimum ~0.0126-ish and starts rising again.. Rise takes a while as lot of cheap coins are in circulation for quite some time but by 19:00-21:00 it reaches 0.014-ish. (all time ref. - IST[GMT+5.5])
My speculations may not apply correctly for future trades. This is based on my 2 days of trading experience.
If my speculations are correct price should drop to 0.014 or below within 8(+/-1) hours from now.
This is not a trading advice please study the market carefully before investing.
It didn't drop that night because it was already September 1st although price dropped to 0.0148.
This pattern is a proof of pump and dump in itself.
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September 04, 2016, 01:19:58 PM
 #56

If you believe that growth of any coin beside bitcoin can be called organic then you are a dreamer.

Bitcoin still does not have the "organic growth" we speak of. That is why it is currently impossible to do TA on BTC.

It's just that other currencies could be manipulated more easily. 
At this moment basically every open cryptocurrency can be manipulated, pumped & dumped, nothing is immune to speculation anymore.
When money is at stake it is nothing strange.

You call 10% of the final stash in the hands of the inventor, "nearly ideal initial distribution" ?

Bitcoin is just as much pumped as all the rest, people are mainly trading it as betting token (sorry, "investing" in it), not to use it to buy a pair of shoes with. 
Satoshi's stash is a side effect. We have no idea if it will ever be a problem.

As for "initial distribution" I am talking about fact that bitcoin initially was worthless. And you basically could earn thousands of BTC in the early years.
But people noticed its value and potential and it become valuable - that is ideal initial distribution, when dirt become gold on its own.

Unfortunately now BTC is being used as money making tool for whales and speculators. And it is not something that can be stopped.
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September 04, 2016, 01:37:45 PM
 #57

Unfortunately now BTC is being used as money making tool for whales and speculators. And it is not something that can be stopped.

Of course it can be stopped. If the market becomes bigger, then the true whales may show up. And by saying whales, I mean people like Warren Buffett. They can easily corner the market to consolidate their positions and allow steady growth.

EDIT: Or turn Bitcoin into something like USDT is at the moment.

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September 04, 2016, 06:54:18 PM
 #58

Satoshi's stash is a side effect. We have no idea if it will ever be a problem.

The problem is exactly the "we have no idea".

Quote
As for "initial distribution" I am talking about fact that bitcoin initially was worthless. And you basically could earn thousands of BTC in the early years.
But people noticed its value and potential and it become valuable - that is ideal initial distribution, when dirt become gold on its own.

Not really.  I agree that it is better than a limited oligarchy reaping in all the seigniorage, but in fact, the "sound money" part of bitcoin is exactly also the problem of another type of seigniorage: the increase in value which makes early adopters extremely rich in return for no production.  It is another form of seigniorage: the value upramping of a monetary asset.

Usually seigniorage has a more limited meaning, namely the gain you have when you create monetary tokens.  Ideally, a monetary system is nothing else but tokens that STORE value ; that is, they are a tool to translate value in time.  They should ideally allow you to obtain them against production/delivery of goods and services, and you can trade them against price-equivalent goods and services in the future.  The sound money doctrine comes from the idea that if someone can CREATE new tokens, he obtains "value for nothing" and that value is obtained by an inflationary tax on all previous token holders.  This is why the sound money doctrine says that the "amount of monetary tokens should be a constant".

Great.  But this makes the implicit assumption that the tokens came from "minus infinity": that we are already in "steady state", that the tokens already HAVE their monetary value, and that this has been going on since so long that we don't have to worry about how this value came into existence.  In fact, the sound money theory applies perfectly to GOLD, which has been valuable historically.  Of course, the sound money doctrine accepts that the price of a money token changes: it changes for two reasons:
1) the economy changes (expands: a token can buy more ; decreases: a token can buy less)
2) the market of offer and demand for "store of value".  At certain periods, people want to store more value (and tokens can buy more), at other periods, people want to use stored value (and tokens can buy less).

But on average, in the long run, the idea is that tokens can buy a given portion of the whole economic production.

This is in a nutshell, the "sound money doctrine".  It tells you that one shouldn't allow for "token creation seigniorage", because that is fundamentally unfair.

However, when creating a new monetary system, you face 2 problems:
1) you have to create the tokens in any case
2) these tokens have to "ramp up" in value.

BOTH of these aspects are a form of seigniorage (although usually one only uses this term for the first).  BOTH are seen as problematic, because you "get value for nothing".  You will be able to obtain goods and services, without having produced goods and services. 

Now, bitcoin has achieved the feat of having solved the seigniorage unfairness of coin creation by PoW: the miner essentially has to BURN the value of his coin creation providing "useless" PoW, which serves to secure the chain (a "public service").  So in fact, COIN CREATION in bitcoin is inflationary, but FAIR.

But what remains is value appreciation, which is fundamentally UNFAIR.  There is no reason why simply holding a token for which you didn't have to deliver much or any value in the form of goods and services, would allow you to buy HUGE amounts of goods and services afterwards.  The "risk taking" is not to be compared to genuine investment.  With a genuine investment, you invest in the *production* of new goods and services.  That production can work out or can fail.  If it works out, you've CONTRIBUTED to economic growth, and your risk taking and the fact that it worked out is the reward for having contributed to *economic growth*.  But "holding initially worthless tokens" doesn't contribute in any way to "economic growth".  There is no risk taking in the sense of trying to improve economic growth (spending on capital, and losing it if no growth, and winning if growth).

So "having your initial bitcoin stash appreciate value" is another form of unfair seigniorage, which is in fact exacerbated by the "sound money doctrine".   Ideally, given that the unfairness of coin creation seigniorage is solved with PoW, there should be MUCH MORE inflationary depreciation in order to avoid the coin price to rise much.  It should of course rise somewhat, but ideally, the coin emission should compensate essentially for the market cap increase, so that the individual coin value remains more or less constant.  THAT would result in *ideal distribution*.  Nobody would get rich because of early adopter.  Nobody would "keep coins" and hodl, because a stash of coins wouldn't appreciate much.
So ideally, the emission curve should follow the market cap.  I know that technically that's impossible, but the way many coins are programmed, is THE OPPOSITE, which is exactly what makes all this speculation happen.
Coins should emit FEW coins in the beginning, and more and more when they 'catch on' and get used in the market (as CURRENCY), in such a way that the individual coin price should remain constant and relatively low.

Quote
Unfortunately now BTC is being used as money making tool for whales and speculators. And it is not something that can be stopped.

This is a consequence of a bad application of the sound money doctrine which cannot apply to a "new" monetary asset, and whose theory didn't take into account that one could destroy creation seigniorage.  It exacerbates "value appreciation seigniorage" which turns the coin into a speculator's item, and not into a currency.

Sound money doctrine is good for a historical thing like gold.  It is not applicable to new monetary systems.  This is a fundamental error in bitcoin, and in most cryptocurrencies. 
Tail emission softens but doesn't solve the problem.  The main problem is that the largest emission happens BEFORE value appreciation, implying a huge potential for "value appreciation seigniorage", which is what drives most coin speculators, and makes that the coin will have difficulties becoming a currency.  It implies for instance the huge (speculative) volatility which is a problem for currency adoption.

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September 04, 2016, 08:51:30 PM
 #59

There is currently just to much hype around these coins for me to feel comfortable investing much money in them.  These other "anonymous coins" like shadow has a broken coding system that doesn't even work.  The price of Monero as of right now is all just speculation.  Something frightening about Moreno is about how this coin does not scale.
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September 05, 2016, 01:47:12 AM
 #60

You just need to look at Monero block decline, see that GPU vs CPU is tied battle, first they promoted scam dash as anon coin now Monero, as it being primary CPU mined, like 90% is in hold of botnet mafia which rule the dark market, its not strange that thay gona pump something they hold
They invested zero $$ in mining it, so you can say its coin used for illegal stuff and the way its produces is also for main parties by using bot net viruses and stolen resources

I would never buy and hold this kind if CRAP, dev should fork it make it GPU or invent CPU con which could not be mined by assholes owning botnets

Say no to thieves say no to Monero!

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