Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

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[billyjoeallen]

Strange, I saw quite a few articles about great Bitcoin adoption in Brazil. Not that that is anything great, it would be better if another country was named, instead of that shithole that's going down the drain.

Brazil currently has many big problems, but fortunately bitcoin still does not seem to be one of them.  Perhaps Brazilians are indeed smarter than the folks in your bithole.

I wonder if your opinion would change if there are bank depositor bail-ins and capital controls.   

[cbeast]

Mining profitability does not make mining less distributed because gold rush. If economies of scale concentrates industry then why is all industry not concentrated?

Industry does get concentrated.  For example, many car makers that were independent in the early 20th century got absorbed by the big ones -- Ford, GM, Chrysler in the US.  There are thousands of other examples. 

Customs barriers and national economic policies are one obstacle for the concetration of  traditional industries.  In some countries, anti-trust / fairi-competition laws also prevent total centralization.  Neither of these obstacles exists for bitcoin.

Bitcoin is permission-less. There is nothing stopping anyone from competing. There are some places where government subsidizes mining, but there are other places where energy is very cheap. Currently the subsidies are the biggest incentive for mining. There is no need to regulate that, but energy isn't the only resource needed for mining. Bandwidth is also needed to allow adoption. There isn't any adoption to concentrate at the moment.

Miners don't want to throw the baby out with the bathwater because they realize this is still low valuation. By the time it will be even possible to be worth cheating the system, it will be to strong to do so. They are better off just looking for other means to cheat the system, like politicking the politboro of governance.

Miners are not fools to kill their cash cow; but there are many things they can do to squeeze more milk out of it, that will not be bad enough to scare bitcoiners away.

Businesses milk their production to death all the time. It's an exit strategy. The Chinese miners could switch tomorrow to a pre-mined bank owned Chinacoin and spend billions marketing it. Bitcoin would be left with a sudden hashrate drop and the miners would be well rewarded by the Party.

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[Wary]

Sorry, I should have defined the difference between "new owners" and "current owners"...

- what I mean is that the "current owners" are incentivized by profit, hence their incentive to sell.

The "new owners" in this scenario, would be individuals or state-level actors that are not incentivized by profit. (Indeed, who would run unprofitable hardware except some "otherwise-incentivized" participant?)

These "new owners" would have no profit margin, no scenario in which they could turn a profit, thus their only motive now is to attack the network. Their only incentive for running this specialized hardware at a loss would be to harm the network.

Makes sense?

Yes, thanks. Although I think that if a state decide to kill bitcoin, it won't do it by purchasing secondhand mineries. It would use instruments it's more used to: police, legislation, banks etc.

How do you propose that the miners are incentivized to protect the security of the blockchain if there is no scarcity enforced on the size of the Blockchain?

I agree that scarcity is necessary for creating proper bitcoin infrastructure. However, I think the scarcity should be natural, rather than artificial one.

If the scarcity is artificial one, like the 1M limit, and is determined by political means, it would be handled by political methods as well. All efforts will go to political and bureaucratic struggle. This is a way to soviet-style economy.

If the scarcity is natural one, like propagation time and is caused by technical reasons, it would be handled by technical methods. All efforts will go to solving these technical obstacles. This is the way to the Moon

[Elwar]

who will bother to open an account with coinbase to buy bitcoins so they can buy stuff while paying a high fee ?? whats the point.. pay high fees.. instead use a debit card doesnt cost end user nothing to use a debit card and its easy.. no reason to use bitcoin that has multiples of issues that we all are aware of .. and if you are a gun owner and support the second amendment then you need to oppose the implementation of the "blockchain blacklists" code. i happen to be one of the "dwayne" brothers and i think your "blockchain blacklists" is a real cute trick. obviously there is only once choice.. cripple bitcoin with low bandwidth, slow payments with high fees ...... RIP XT or bitcoin make your choice.

about to get smacked down by the bear troll fud (i gotta get me one these cameras!) : https://www.youtube.com/watch?v=JIhCNbdIFT4

Indeed. What is the point of buying bitcoins to buy stuff? That is the question maybe you should ask yourself.

Did you consider maybe you did not have the right idea about what Bitcoin's real utility is?

Bitcoin's utility is using it to buy stuff online. And it is close to being to the point where you can drop your bank.

It is merely a currency, you switch to whatever currency is best for the situation. I live in Germany but work for the military so I have access to the military base. Everything on the military base requires dollars, everything else requires euros. I am used to going back and forth between currencies. I don't "buy dollars" and watch the value fluctuate. I convert some euros to dollars and get enough for things I might need for that week. I convert bitcoins to euros with enough currency to pay for things in the near future. My reserve currency is bitcoins because it is easier to store and travel with bitcoins than with cash and that is what I am paid in. I don't worry too much about the value fluctuation other than spending more when the price goes up a lot and holding off when the price drops.

[ChartBuddy]

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[shmadz]

Sorry, I should have defined the difference between "new owners" and "current owners"...

- what I mean is that the "current owners" are incentivized by profit, hence their incentive to sell.

The "new owners" in this scenario, would be individuals or state-level actors that are not incentivized by profit. (Indeed, who would run unprofitable hardware except some "otherwise-incentivized" participant?)

These "new owners" would have no profit margin, no scenario in which they could turn a profit, thus their only motive now is to attack the network. Their only incentive for running this specialized hardware at a loss would be to harm the network.

Makes sense?

Yes, thanks. Although I think that if a state decide to kill bitcoin, it won't do it by purchasing secondhand mineries. It would use instruments it's more used to: police, legislation, banks etc.

How do you propose that the miners are incentivized to protect the security of the blockchain if there is no scarcity enforced on the size of the Blockchain?

I agree that scarcity is necessary for creating proper bitcoin infrastructure. However, I think the scarcity should be natural, rather than artificial one.

If the scarcity is artificial one, like the 1M limit, and is determined by political means, it would be handled by political methods as well. All efforts will go to political and bureaucratic struggle. This is a way to soviet-style economy.

If the scarcity is natural one, like propagation time and is caused by technical reasons, it would be handled by technical methods. All efforts will go to solving these technical obstacles. This is the way to the Moon

If the 1M limit is artificial scarcity, what about the 21M limit? Is that not also artificial? Should we remove that artificial boundary as well?

[Andre#]

Are we nearly there yet?

As always we are here.

I used btc today.  Anybody else?

Yep, I paid my home delivered ribs with btc. Which is a) easier as I don't have to log into my bank account and b) saves me 1 euro of payment charges.

[Wary]

How do you propose that the miners are incentivized to protect the security of the blockchain if there is no scarcity enforced on the size of the Blockchain?

I agree that scarcity is necessary for creating proper bitcoin infrastructure. However, I think the scarcity should be natural, rather than artificial one.

If the scarcity is artificial one, like the 1M limit, and is determined by political means, it would be handled by political methods as well. All efforts will go to political and bureaucratic struggle. This is a way to soviet-style economy.

If the scarcity is natural one, like propagation time and is caused by technical reasons, it would be handled by technical methods. All efforts will go to solving these technical obstacles. This is the way to the Moon

If the 1M limit is artificial scarcity, what about the 21M limit? Is that not also artificial? Should we remove that artificial boundary as well?

Good answer. It's a pleasure to talk with you . However, I gave some reasons why natural limit is better than artificial, and if you try to apply these reasons to 21M, you will see why they won't apply.
 
The 21M limit's goal was to create money. It wasn't mean to be changed. That's why there is no political struggle around changing this limit and no resources are wasted on it.
The 1M limit's goal was not to create some blocksize money inside of bitcoin money. It was to resolve a technical problem, or, to be more precise, to postpone the need of resolving it. (The similar decision was to exclude "dust". It's another artificial limit and it have to be repelled and replaced by economic incentives too). Now, as a consequence of such solution, we can see a lot of smart people wasting their time and energy (and damaging Bitcoin's reputation, along the way) into political fight around this artificial boundary, instead of directing this energy into actually solving the technical problems that caused this limit in the first time. It's happening because the limit is artificial.

P.S. BTW, I have a post about free market applicability to bitcoin https://bitcointalk.org/index.php?topic=1166172.0

[ChartBuddy]

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[oda.krell]

It helps to think of it as a tragedy of the commons: absent of a blocksize it will eventually become in the miner's best interest to include as many transactions as possible in their blocks and consequently restricting access to governance of the network by way of bloating the blockchain.

'Yes' on the tragedy of the commons comparison at first, but 'no' if you think it through a bit more...

Only the biggest pools matter anyway, both in a vote and a self-enforced scenario I describe. Let's call them A, B, C. A vote to hard enforce scarcity will only succeed if A, B, C individually want scarcity anyway, so I'm allowed to make that assumption for my scenario as well.

Now, your objection (ToC) is valid in principle, that it is indeed in each of A, B, C's personal interest to include as much as possible contrary to the larger scarcity goal, but I point out that in this particular scenario, self governing is less likely to fail because (a) cooperation needs to be established only among a small group of actors (i.e. pool operators) that directly control the majority behavior, and are able to directly communicate with each other (as opposed to a large, amorphous population that usually underlies ToC type scenarios), and (b) because defection is publicly visible.

If, say, the two or three largest pools really want scarcity, they could try to cooperate, set a limit, and self-enforce it. (yes, free market lovers, that's a form of collusion). Blocksize is public, so cheating is possible but visible. If cooperation of the relevant majority fails (which I consider unlikely, as per the argument above), it makes sense to talk about voting processes and hard coded limits, but not before it has been established that this type of cooperation cannot be handled by individual actors.*


* Yes, that last one is an axiom of sorts, not an empirical claim. Something like, "don't solve with laws what possibly, in most cases, can be solved by individual rationality". I'd suspect most 'coiners are not entirely alien to the idea though.


(EDIT) Perhaps I should add that I am not going against some hard max value in principle. We have one now, we should keep one (only higher). What I'm trying to argue for is that miners only need this value for its originally intended purpose, to enforce a reasonable upper limit for technical reasons, i.e. as a measure against spam attacks. I reject however the notion that the economical aspect of that value needs to be included in the current debate, as any actual value below below the technical max has a good chance to emerge as a cooperation effort if there were an interest by the big miners to do so, as I argue above.

[macsga]

Strange, I saw quite a few articles about great Bitcoin adoption in Brazil. Not that that is anything great, it would be better if another country was named, instead of that shithole that's going down the drain.

Brazil currently has many big problems, but fortunately bitcoin still does not seem to be one of them.  Perhaps Brazilians are indeed smarter than the folks in your bithole.

Hmm. I think it's wise to leave this here:

According to a new report from the Jubilee Debt Campaign, there are currently 24 countries in the world that are facing a full-blown debt crisis…

■ Armenia
■ Belize
■ Costa Rica
■ Croatia
■ Cyprus
■ Dominican Republic
■ El Salvador
■ The Gambia
■ Greece
■ Grenada
■ Ireland
■ Jamaica
■ Lebanon
■ Macedonia
■ Marshall Islands
■ Montenegro
■ Portugal
■ Spain
■ Sri Lanka
■ St Vincent and the Grenadines
■ Tunisia
■ Ukraine
■ Sudan
■ Zimbabwe

And there are another 14 nations that are right on the verge of one…

■ Bhutan
■ Cape Verde
■ Dominica
■ Ethiopia
■ Ghana
■ Laos
■ Mauritania
■ Mongolia
■ Mozambique
■ Samoa
■ Sao Tome e Principe
■ Senegal
■ Tanzania
■ Uganda

So what should be done about this?

Source: http://theeconomiccollapseblog.com/archives/the-bankruptcy-of-the-planet-accelerates-24-nations-are-currently-facing-a-debt-crisis

Trying to solve unsolvable problems by re-implementing old recipes only has one outcome: Repetitive Failure.. I don't claim that BTC is perfect; but it's an alternative to the current monetary system turmoil, where the few 1% who are "bold enough" to claim (sometimes by force) more than what's theirs are becoming the rich ones, while the other 99% are just merely trying to push the day forward.

BTC doesn't have to be a worldwide implementation. It only has to be incorporated within a small infrastructure, big enough for someone to be able to do some real world comparison to the current system. Killer app for Bitcoin is yet to come; some say it's the government. Some others claim it's something we do not know yet; but given the possibility to rule out the biggest flaw of the current monetary system (the human greed) and replace it with random matrix equations, fits for me.

If you're smart enough to cheat, try finding the Jacobian.

[sAt0sHiFanClub]

It helps to think of it as a tragedy of the commons: absent of a blocksize it will eventually become in the miner's best interest to include as many transactions as possible in their blocks and consequently restricting access to governance of the network by way of bloating the blockchain.

'Yes' on the tragedy of the commons comparison at first, but 'no' if you think it through a bit more...

Only the biggest pools matter anyway, both in a vote and a self-enforced scenario I describe. Let's call them A, B, C. A vote to hard enforce scarcity will only succeed if A, B, C individually want scarcity anyway, so I'm allowed to make that assumption for my scenario as well.

Now, your objection (ToC) is valid in principle, that it is indeed in each of A, B, C's personal interest to include as much as possible contrary to the larger scarcity goal, but I point out that in this particular scenario, self governing is less likely to fail because (a) cooperation needs to be established only among a small group of actors (i.e. pool operators) that directly control the majority behavior, and are able to directly communicate with each other (as opposed to a large, amorphous population that usually underlies ToC type scenarios), and (b) because defection is publicly visible.

If, say, the two or three largest pools really want scarcity, they could try to cooperate, set a limit, and self-enforce it. (yes, free market lovers, that's a form of collusion). Blocksize is public, so cheating is possible but visible. If cooperation of the relevant majority fails (which I consider unlikely, as per the argument above), it makes sense to talk about voting processes and hard coded limits, but not before it has been established that this type of cooperation cannot be handled by individual actors.*


* Yes, that last one is an axiom of sorts, not an empirical claim. Something like, "don't solve with laws what possibly, in most cases, can be solved by individual rationality". I'd suspect most 'coiners are not entirely alien to the idea though.

What a great post. Lucid and precise. Thanks for taking the time to post it.

[Fatman3001]

who will bother to open an account with coinbase to buy bitcoins so they can buy stuff while paying a high fee ?? whats the point.. pay high fees.. instead use a debit card doesnt cost end user nothing to use a debit card and its easy.. no reason to use bitcoin that has multiples of issues that we all are aware of .. and if you are a gun owner and support the second amendment then you need to oppose the implementation of the "blockchain blacklists" code. i happen to be one of the "dwayne" brothers and i think your "blockchain blacklists" is a real cute trick. obviously there is only once choice.. cripple bitcoin with low bandwidth, slow payments with high fees ...... RIP XT or bitcoin make your choice.

about to get smacked down by the bear troll fud (i gotta get me one these cameras!) : https://www.youtube.com/watch?v=JIhCNbdIFT4

Indeed. What is the point of buying bitcoins to buy stuff? That is the question maybe you should ask yourself.

Did you consider maybe you did not have the right idea about what Bitcoin's real utility is?

Bitcoin's utility is using it to buy stuff online. And it is close to being to the point where you can drop your bank.

It is merely a currency, you switch to whatever currency is best for the situation. I live in Germany but work for the military so I have access to the military base. Everything on the military base requires dollars, everything else requires euros. I am used to going back and forth between currencies. I don't "buy dollars" and watch the value fluctuate. I convert some euros to dollars and get enough for things I might need for that week. I convert bitcoins to euros with enough currency to pay for things in the near future. My reserve currency is bitcoins because it is easier to store and travel with bitcoins than with cash and that is what I am paid in. I don't worry too much about the value fluctuation other than spending more when the price goes up a lot and holding off when the price drops.

Mind=Blown

You work for the military?

Isn't that the closest thing to living in a communist system in the west?

A miniature planned command economy?

Mind=Ultra Blown

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