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

[JorgeStolfi]

A contentious hard fork is incredibly destructive because it tells the minority that their opinions and interest do not manner. It is a use of force over persuasion. [ ... ] The Chinese miners with their 90% hash rate support requirement for a hard fork have the right idea. Even with 90% such a fork should be rolled out a slowly as possible with maximum possible outreach to the remaining 10%.

So it is much better if a minorty of 15% tells the 85% majority that their opinions and interests don't matter?   

Mankind has been struggling with the problem of collective decision-making for several thousand years, if not several million.   While it can be proved mathematically that there is no ideal solution (just as it was proved that there could be no distributed payment system), mankind has found over time that some solutions are worse than others, and identified some that are generally less bad than all the others.

Unfortunately, those solutions are generally based on the idea that it is better to have the majority of people happy and a minority unhappy, than the other way around; and that assumption does not go well with some people.

[rebuilder]

4c is high.

I'd say we don't know if it's high or not, and protocol decisions shouldn't be made based on opinions on market pricing. Low-fee transactions aren't any better a design goal than high-fee transactions if reaching that goal requires developers to start intervening in free price discovery.

What I'm getting at: Better efficiency is a great goal, and would lead to a lower unit price for transactions, obviously. Trying to fix prices outside the market is a bad goal.

[CuntChocula]

Longterm Bitcoin has to gather enough fees to survive, without fees no miners.

Or in your business language: We can give away our product for free, said no successful business ever.

edit: the fees will longterm lead 1:1 to Bitcoins security. the higher the gathered fees the higher the security of the network.

Without fees, no miners. So people will pay fees to keep their transactions getting on the blockchain and miners will select transactions which help pay for their business. This isn't rocket science.

The problem comes when someone comes along and interferes in this negotiation between customer and service provider and distorts the value proposition.

More explictly: by Greg's argument, the UN should impose a worldwide production limit of 1 million liters of soft drinks per day.  Otherwise, the manufacturers like Coke and Pepsi have to give way their products for free,  they would go broke, and there would not be enough soft drinks for everybody.  

BITCOIN: The world's future global value transmission system, secured by 1000 PH/s of mining power and by a developer team who would bankrupt a homemade lemonade stand on the first day.

To be fair, in your analogy, Coke/Pepsi are *required* to process (bottle and ship) 1 million liter bottles per day, between them. This number is set in stone -- they can't opt to make more or less.
They are currently paid 25BTC every ten minutes to do so, regardless of what they stick in the liter bottles -- Coke, Pepsi, or piss -- that's up to them.

Arguably, it's in their enlightened self-interest to put Coke/Pepsi in the bottles, because they could sell those. In practice, the extra revenue is negligible, and, at times, putting piss/absolutely nothing in the bottles makes better economic sense.

[Adrian-x]

Longterm Bitcoin has to gather enough fees to survive, without fees no miners.

Or in your business language: We can give away our product for free, said no successful business ever.

edit: the fees will longterm lead 1:1 to Bitcoins security. the higher the gathered fees the higher the security of the network.

Without fees, no miners. So people will pay fees to keep their transactions getting on the blockchain and miners will select transactions which help pay for their business. This isn't rocket science.

The problem comes when someone comes along and interferes in this negotiation between customer and service provider and distorts the value proposition.

More explictly: by Greg's argument, the UN should impose a worldwide production limit of 1 million liters of soft drinks per day.  Otherwise, the manufacturers like Coke and Pepsi have to give way their products for free,  they would go broke, and there would not be enough soft drinks for everybody.  

BITCOIN: The world's future global value transmission system, secured by 1000 PH/s of mining power and by a developer team who would bankrupt a homemade lemonade stand on the first day.

quoted for truth.

Well it's nice to see you rooting for bitcoin, I see you just dot promote investing in it.

[ChartBuddy]

Coin



Explanation

[Richy_T]

Richie..... I think to be objective, you gotta concede a bit on your rendition of the cost(s) of credit cards.  We cannot calculate costs from only one side of the transaction.... Credit card transactions are generally at least 2%... and frequently closer to 5% by the time you add all the various charges on merchants.

I'll happily concede. But when someone is comparing apples to oranges, forgive me if I wax lyrical on the properties of bananas.

Quite simply, you have to look at the system, what backs it, what kind of market it is (monopolistic, oligopolistic, competetive, peer-to-peer etc) , the respective costs and so forth. What, really, is a reasonable cost to process and store 250 bytes of data? Is that not between the miner and their customer?

Here is a Bitcoin transaction to give an idea:

Code:

0100000001f07dc78617ee497ce81d9c3024ba052f532c76dea9c7cba6479fdfbf803f9d76010000006b483045022100fc5af108513379925a1925ba287659303acac924158b271dbd49d7e0e70fee11022056ac8c66cac785a6bfd08863f4b4e846995afaa55662e86ec1275aba60bdd4e50121032328833755deab07f5aeacdd6ee25f5a4c4a864d874197cf5795ed1d9f6eb1dffeffffff02304b8400000000001976a914270a5f4d1e192551ca7dcc2d97242753d54ad39a88ace060bc02000000001976a914871e8e5104fab525293068a1f399defc4a69adb488ac08070600

Expanding the topic a bit into bank transfers:  In recent times, I have come across quite a few bank transfer services that are free between customers of the same bank or with minimal efforts to set up sending and/or receiving accounts.  However, really, are those services free?  Frequently, they can take 1-5 business days to clear, and also banks are rarely paying any meaningful interest rate on the money that they hold for you (as they had in the olden days).  In this regard, banks are providing some purportedly "free" services, but they are getting use of trillions (or at least billions) of dollars without paying any interest rates.

True. I would avoid any comparison with American banks because, quite frankly, their services are crap and still rooted in the 50s and 60s of the last century.

My point is that I think that we should really consider whether a transaction is free, such as using our credit cards..... when we are comparing the current and/or upcoming costs of using bitcoin.  

Yes. We should not be comparing with legacy services but with the modern, advanced systems of the world we are stepping into.

[Richy_T]

4c is high.

I'd say we don't know if it's high or not, and protocol decisions shouldn't be made based on opinions on market pricing. Low-fee transactions aren't any better a design goal than high-fee transactions if reaching that goal requires developers to start intervening in free price discovery.

What I'm getting at: Better efficiency is a great goal, and would lead to a lower unit price for transactions, obviously. Trying to fix prices outside the market is a bad goal.

Absolutely. My claim is based on what I believe the cost would be for the service provided in a competitive free market. It is up to that market to determine the actual value of the service though.

[Digitalbitcoin]

As per my observation on Price of BTC/USD totally depends on market. Because when market collapse it goes down and when in upward trend it rises. See History periodically you will notice.

[European Central Bank]

Woah, dude. That's one seriously deep comment. I guess it took you a while to formulate it. Nice job.

[BlindMayorBitcorn]

Longterm Bitcoin has to gather enough fees to survive, without fees no miners.

Or in your business language: We can give away our product for free, said no successful business ever.

edit: the fees will longterm lead 1:1 to Bitcoins security. the higher the gathered fees the higher the security of the network.

Without fees, no miners. So people will pay fees to keep their transactions getting on the blockchain and miners will select transactions which help pay for their business. This isn't rocket science.

The problem comes when someone comes along and interferes in this negotiation between customer and service provider and distorts the value proposition.

More explictly: by Greg's argument, the UN should impose a worldwide production limit of 1 million liters of soft drinks per day.  Otherwise, the manufacturers like Coke and Pepsi have to give way their products for free,  they would go broke, and there would not be enough soft drinks for everybody.  

BITCOIN: The world's future global value transmission system, secured by 1000 PH/s of mining power and by a developer team who would bankrupt a homemade lemonade stand on the first day.

quoted for truth.

Well it's nice to see you rooting for bitcoin, I see you just don't promote investing in it.

You took that for an endorsement?

How?

[bitebits]

BITCOIN: The world's future global value transmission system, secured by 1000 PH/s of mining power and by a developer team who would bankrupt a homemade lemonade stand on the first day.

I must admit that I like you better now you too have turned bullish Stolfi. The lemonade/blockstream thingy will be solved but apparently things need to hurt more first.

[ChartBuddy]

Coin



Explanation

[JayJuanGee]

4c is high.

I'd say we don't know if it's high or not, and protocol decisions shouldn't be made based on opinions on market pricing. Low-fee transactions aren't any better a design goal than high-fee transactions if reaching that goal requires developers to start intervening in free price discovery.

What I'm getting at: Better efficiency is a great goal, and would lead to a lower unit price for transactions, obviously. Trying to fix prices outside the market is a bad goal.

Absolutely. My claim is based on what I believe the cost would be for the service provided in a competitive free market. It is up to that market to determine the actual value of the service though.

I think I paid about .0002 BTC, which I believe was between $.07 and $.09 for each of two movements of 10BTC transactions in the past couple of months, and I was o.k. with that.  I am not sure if there is every completely a free and open market to establish prices, but more or less, I believe that I get your point that you are considering $.04 to be high... and maybe it is in some circumstances. 

Probably, there remains a few questions concerning the rate and that is at least:  1)  whether the rate is fair today, 2) whether the rate is going to be fair in the future and 3) whether systems in place (and those systems being debated) are going to affect whether the rate is fair in the future.  And, the question of fairness is not merely how much it costs users (like me and you), but also whether it creates sufficient incentives to maintain the infrastructure for those who are mining.  Surely, at this point, some of us, including yours truly, believe that the bitcoin mining infrastructure is overly built for the present price and for the present levels of transactions.  However, I am not really bothered by that overly built bitcoin mining infrastructure because in essence, I get the sense of being overly built causes sufficient security to support a btc priced around $20k or more, which is not a bad thing in my thinking.

So really, price needs to be considered both from the user's point of view, but also from the point of view of incentives for continued creation and maintenance of BTC mining infrastructure.

[AlexGR]

4c is high.

High? Are you high? Compared to any other alternative (banks, visa, mc, paypal, western union, swift) it's the lowest you can get. Even an sms will cost me 0.12 euro and if I send it globally it might cost me half a euro.

Mail -> Email
Visa -> Bitcoin.

Bitcoin is not technically superior in its storage/bandwidth/scaling parameters compared to visa because decentralization introduces p2p, which in turn introduces suboptimal ways of doing things.

A centralized system needs to have 1-2-5 copies of the same tx history. A decentralized system forces thousands of people to have a copy of the ledger in order to work. All the crypto-related bloat is also increasing the required space. The cost of running a secure decentralized system is far higher and more inefficient yet it is still cheaper.

Stamp->49c Email->marginal cost
Visa->0 cost to customer, BTC->?

The cost to the customer is paid when it is added by the merchant on the final price.

Can you sell me a 1 dollar coin for 1$ through visa or paypal? I'll come and pick it up from your home.

Paypal will charge you 0.35$ plus 1-4% on the 1$. So in order to be able to sell me the dollar, you'll have to sell it to me for at least 1.40$ to break even. If you are selling 1$ for 1$, you'll go bankrupt pretty soon.

How is 0.04$ expensive for first block inclusion? And you still have the choice of paying in an hour with 1cent. It's so cheap that it is exploitable by third parties and attackers.

Do the maths.

And comparing SMS? LOL, a horrendously overcharged item enabled by government granted monopoly... Are *you* high?

Where I live, they say they have "competition" between 3-4 mobile operators. They are a cartel but the government pretends not to notice anyway. Still an SMS is like 160 bytes, costs multiple times the cost of a bitcoin transaction and millions of SMSes are sent every day. On a global scale we'll lose count of how many are being sent. So all these people who are SMS'ing don't feel it is expensive, but they would feel that a money transfer with BTC is expensive at 4c for first block inclusion / 1-2c for a few blocks later, for a service that is very fast and which is way cheaper than all alternatives. Are we serious?

[JayJuanGee]

As per my observation on Price of BTC/USD totally depends on market. Because when market collapse it goes down and when in upward trend it rises. See History periodically you will notice.

I get the sense that what you are saying is not really true.


There may be times when bitcoin prices are correlated with the fiat market (and/or stock market); however, there are times when it is of opposite correlation. 


I think that you need to zoom out further in order to come to any definite conclusion, and really in the end you need to consider the value of BTC.. and even the fact that in 2013 it gained more than 100x value......


yes!!!!!!  What the fuck? That is really amazing!!!!!   


You cannot make any broad conclusions about bitcoin's correlation with the stock or fiat market without accounting for the context.. and then considering such context in terms of long term and short term trends... bitcoin continues to have considerable upside potential... and the extent to which Bitcoin's value is correlated with fiat/stock market prices is still to be seen.. because bitcoin is still a very immature innovation that is yet finding its price and finding its user bases and its investors and its infrastructure (all of these in seemingly a very much continuing and expanding way).

[AlexGR]

More explictly: by Greg's argument, the UN should impose a worldwide production limit of 1 million liters of soft drinks per day.  Otherwise, the manufacturers like Coke and Pepsi have to give way their products for free,  they would go broke, and there would not be enough soft drinks for everybody.  

In the EU, farmers are often getting paid to destroy their production if it exceeds specified quotas. Whether it is milk, cotton, peaches or grapes => they'll end up in some landfill.

There are even subsidies to cut down trees, kill your animals etc.

https://en.wikipedia.org/wiki/Common_Agricultural_Policy


Production quotas and 'set-aside' payments were introduced in an effort to prevent overproduction of some foods (for example, milk, grain, wine) that attracted subsidies well in excess of market prices. The need to store and dispose of excess produce was wasteful of resources and brought the CAP into disrepute. A secondary market evolved, especially in the sale of milk quotas, while some farmers made imaginative use of 'set-aside', for example, setting aside land that was difficult to farm.

[Andre#]

In the EU, farmers are often getting paid to destroy their production if it exceeds specified quotas. Whether it is milk, cotton, peaches or grapes => they'll end up in some landfill.

There are even subsidies to cut down trees, kill your animals etc.

https://en.wikipedia.org/wiki/Common_Agricultural_Policy


Production quotas and 'set-aside' payments were introduced in an effort to prevent overproduction of some foods (for example, milk, grain, wine) that attracted subsidies well in excess of market prices. The need to store and dispose of excess produce was wasteful of resources and brought the CAP into disrepute. A secondary market evolved, especially in the sale of milk quotas, while some farmers made imaginative use of 'set-aside', for example, setting aside land that was difficult to farm.

So what exactly do you find so appealing about the current blockspace production quota? Do you think miners need income protection like the EU diary farmers did? The EU has abolished the milk quota. Will Core abolish the blockspace quota?

[ChartBuddy]

Coin



Explanation

[CuntChocula]

[...]
https://i.imgur.com/zWm7QiF.png
https://i.imgur.com/EDloGrT.png
Explanation

@Rich_T, what are these http://s11.postimg.org/i9df5xtjz/Capture.png? Maybe update the "Explanation" link if you get a chance.
Thanks.

[AlexGR]

In the EU, farmers are often getting paid to destroy their production if it exceeds specified quotas. Whether it is milk, cotton, peaches or grapes => they'll end up in some landfill.

There are even subsidies to cut down trees, kill your animals etc.

https://en.wikipedia.org/wiki/Common_Agricultural_Policy


Production quotas and 'set-aside' payments were introduced in an effort to prevent overproduction of some foods (for example, milk, grain, wine) that attracted subsidies well in excess of market prices. The need to store and dispose of excess produce was wasteful of resources and brought the CAP into disrepute. A secondary market evolved, especially in the sale of milk quotas, while some farmers made imaginative use of 'set-aside', for example, setting aside land that was difficult to farm.

So what exactly do you find so appealing about the current blockspace production quota? Do you think miners need income protection like the EU diary farmers did? The EU has abolished the milk quota. Will Core abolish the blockspace quota?

Have the reasons that satoshi imposed the quota become invalid over time? Has a solution been found that I'm unaware of? Or is it just because "we are approaching the limit"?

I have not yet seen a single cryptocurrency that hasn't resorted to dev intervention under circumstances of bloat/flood attack. Whether it is about fees or block size, something has to give in order to stop it or restrain it.

Near-zero to zero fee txs equals near-zero to zero fee attacks. Attacks which do not have serious economic disincentives betray a broken underlying game theory.

Let's hope, once we get to 2mb, miners will be more selective with the trash txs.