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

[JorgeStolfi]

Indeed, [the current sorry state of health care in the US] was the creation of a government who traditionally considered health care not to be its concern, and therefore left it entirely to private enterprise.  As it always happens, left to its "self-regulation"  the health care market degenerated into an oligopoly, whose only concern is to maximize the revenue of their owners; who that maintains their dominance of the market by buying out the government. 

This statement shows an utter ignorance of the evolution of the current health care issues in the US.  Anyone can research this and see that the situation was going pretty damn well until the government decided to dive in to the health care market head first with Medicare.  I was a just a kid when Medicare became law, and the effect on health care costs was apparent pretty quickly thereafter, and has never let up since.

Medicare (and Obamacare, afaik) did not revoke that premise that health care should be left to private (profit-seeking, self-regulated) enterprise.  It merely helped private health care companies to charge even more from the public, by spreading out their inflated bills over all citizens and collecting them before the salary got to the employee.

So the US merely adopted one feature of public health care (healthy people are forced to share the cost of taking care of the sick) without adopting its goal (keeping the public healthy rather than maximizing the HMO owners' income).  With the wrong goal, that feature only made things worse, much worse.

We don't need to make hypotheses about the merits of private vs. (truly) public health care, there are plenty of examples of the latter around the world.

To keep the post within the topic: that is the way that the bitcoin mining network is going now.

By the way, I hope you are aware that the Government of the Distributed Libertopian Republic of Bitcoin, aka the Bitcoin Network, is currently supported entirely by the printing of new money, to the tune of ~4000 BTC/day; which means 10%/year inflation rate (in the strict sense).  As with any inflation tax, this one is taken from all those who own bitcoins.

And, by the way, it was with  those fiat bitcoins that KnC bought their Platinum membership in The Shrem Karpelès & Friends Foundation.  Can you see the pattern forming?

Your first paragraph started out by saying something sensible, and then you morphed into some stupid-ass FUD comments by making some kind of stretched analogy...

I understand that libertarians do not like to be told that  their new fantastic Non-Inflationary Currency is currently supported entirely by inflation tax, in the strict sense of the term.  But, unless you can point out some factual inaccuracy in what I wrote, I must assume that by FUD you mean "Facts U Dislike".

[ChartBuddy]

Explanation

[xyzzy099]

Medicare (and Obamacare, afaik) did not revoke that premise that health care should be left to private (profit-seeking, self-regulated) enterprise.  It merely helped private health care companies to charge even more from the public, by spreading out their inflated bills over all citizens and collecting them before the salary got to the employee.

So the US merely adopted one feature of public health care (healthy people are forced to share the cost of taking care of the sick) without adopting its goal (keeping the public healthy rather than maximizing the HMO owners' income).  With the wrong goal, that feature only made things worse, much worse.

We don't need to make hypotheses about the merits of private vs. (truly) public health care, there are plenty of examples of the latter around the world.

I think you missed the part where it was working FINE as a free market until the government forcibly took over a large percentage of the market, and distorted that market from Capitalism to pure cronyism.

To keep the post within the topic: that is the way that the bitcoin mining network is going now.

By the way, I hope you are aware that the Government of the Distributed Libertopian Republic of Bitcoin, aka the Bitcoin Network, is currently supported entirely by the printing of new money, to the tune of ~4000 BTC/day; which means 10%/year inflation rate (in the strict sense).  As with any inflation tax, this one is taken from all those who own bitcoins.

And, by the way, it was with  those fiat bitcoins that KnC bought their Platinum membership in The Shrem Karpelès & Friends Foundation.  Can you see the pattern forming?

Your first paragraph started out by saying something sensible, and then you morphed into some stupid-ass FUD comments by making some kind of stretched analogy...

I understand that libertarians do not like to be told that  their new fantastic Non-Inflationary Currency is currently supported entirely by inflation tax, in the strict sense of the term.  But, unless you can point out some factual inaccuracy in what I wrote, I must assume that by FUD you mean "Facts U Dislike".

I am gonna go out on a limb here and guess that JayJuanGee is NOT a libertarian in any sense of that word.

[Torque]

....Meanwhile in Gotham City.....bitcoin quietly creeping up.  Shorts getting nervous yet?  Wait until we get close to 529...

[JorgeStolfi]

Any of you market-smart guys want to comment on this?:

http://www.coindesk.com/citi-miners-merchants-keeping-bitcoin-prices-check/

Sounds pretty dire, at least for the short term.

My first comment is that some consultant must have earned a big check by copying some trivial observations, already made many times in this forum, and pasting them into a neatly formatted report with a nice plastic cover. 

The "flat transaction profile" that they mention must be this graph, of the total daily output volume E extracted from the blockchain (according to the site, excluding the outputs that appear to be back-change).

But I have a different explanation for why the E plot is basically "flat". (I don't recall whether I posted this already, sorry if I did).  Its current value, about 100'000 BTC/day (50 million USD/day), seems way too big to be actual payments (bitcoins changing hands).  Consider that Bitpay claims to have processed only 100 million USD in 2013, when the total E volume, eyeballing from that plot, was at least 3000 million USD.  While there must be a lot of BTC payment that does not use Bitpay, the
ratio >30:1 seems excessive.

My theory is that a large fraction  of the E volume -- maybe 90% or more -- is "fake", that is, bitcoins moving between addresses that belong to the same person.  These could be mixing, hotwallet/coldwallet movements, deposits and withdrawals from exchanges, software testing, etc..

This explanation for the flatness of the E plot may be good news, because it does not exclude the possibility that actual use may be indeed increasing.   If 90% of the E volume is fake,  even a 100% increase in real usage would be quite hard to see on the E plot.

On the other hand, this theory means that the current cost of the Bitcoin Network, in proportion to actual use, is quite large.   If the E volume were 100% actual payments, each payment would have a hidden 4% fee, currently paid by bitcoin holders (as inflation tax) rather than by the actual users.   If 90% of the E-volume is fake, that hidden processing fee is 40%.

Clearly, radical adjustments in the network and the nature of the blockchain traffic will have to occur while the protocol switches from block rewards to transaction fees, if bitcoin is to remain competitive with bank transfers and credit cards.

[thezerg]

I understand that libertarians do not like to be told that  their new fantastic Non-Inflationary Currency is currently supported entirely by inflation tax, in the strict sense of the term.  But, unless you can point out some factual inaccuracy in what I wrote, I must assume that by FUD you mean "Facts U Dislike".

Why do you do this?    You are smarter than this, it really gets tiresome.  

Clearly the hash rate is thousands or even millions of times higher than necessary.  Its quite possible that the inflation tax (block subsidy) is actually encouraging mining farms, i.e centralization and therefore to some degree undermining confidence in the currency right now.  But it is needed to distribute currency.

At this point if the block subsidy was zero and txn fees negligible, large holders and bitcoin companies would be mining to support their other business efforts.  Just like how many companies contribute to Linux.

[JayJuanGee]

Indeed, [the current sorry state of health care in the US] was the creation of a government who traditionally considered health care not to be its concern, and therefore left it entirely to private enterprise.  As it always happens, left to its "self-regulation"  the health care market degenerated into an oligopoly, whose only concern is to maximize the revenue of their owners; who that maintains their dominance of the market by buying out the government. 

This statement shows an utter ignorance of the evolution of the current health care issues in the US.  Anyone can research this and see that the situation was going pretty damn well until the government decided to dive in to the health care market head first with Medicare.  I was a just a kid when Medicare became law, and the effect on health care costs was apparent pretty quickly thereafter, and has never let up since.

Medicare (and Obamacare, afaik) did not revoke that premise that health care should be left to private (profit-seeking, self-regulated) enterprise.  It merely helped private health care companies to charge even more from the public, by spreading out their inflated bills over all citizens and collecting them before the salary got to the employee.

So the US merely adopted one feature of public health care (healthy people are forced to share the cost of taking care of the sick) without adopting its goal (keeping the public healthy rather than maximizing the HMO owners' income).  With the wrong goal, that feature only made things worse, much worse.

We don't need to make hypotheses about the merits of private vs. (truly) public health care, there are plenty of examples of the latter around the world.

This is a pretty good discussion, Jorge, and I imagine what you mean by examples of public health care systems around the world, you are suggesting and indicating that they are much less profit driven and much more health care driven and much more beneficial and meaningful to people.. as compared with the stupid ass profit driven american health care system.

In other words, I believe we agree here, and maybe you should stick with NON bitcoin commentary in order to meaningfully contribute to this thread and to the world in general.   

To keep the post within the topic: that is the way that the bitcoin mining network is going now.

By the way, I hope you are aware that the Government of the Distributed Libertopian Republic of Bitcoin, aka the Bitcoin Network, is currently supported entirely by the printing of new money, to the tune of ~4000 BTC/day; which means 10%/year inflation rate (in the strict sense).  As with any inflation tax, this one is taken from all those who own bitcoins.

And, by the way, it was with  those fiat bitcoins that KnC bought their Platinum membership in The Shrem Karpelès & Friends Foundation.  Can you see the pattern forming?

Your first paragraph started out by saying something sensible, and then you morphed into some stupid-ass FUD comments by making some kind of stretched analogy...

I understand that libertarians do not like to be told that  their new fantastic Non-Inflationary Currency is currently supported entirely by inflation tax, in the strict sense of the term.  But, unless you can point out some factual inaccuracy in what I wrote, I must assume that by FUD you mean "Facts U Dislike".

You edited out your paragraph, about which I was complimenting you... I was complimenting you b/c more or less you were saying something meaningful... then you devolved into your fear mongering talk about the doom and gloom of bitcoin... ..
and as you know, I use the term FUD in its traditional common parlance which is the spreading of Fear Uncertainty and Doubt... that is the purpose of most of your bitcoin talk and probably what you are being paid to do... by some sponsor.... or at least you believe your participation in bitcoin talks is good for your resume to show what side you are on... the side of fiat...   whatever...

[xyzzy099]

Any of you market-smart guys want to comment on this?:

http://www.coindesk.com/citi-miners-merchants-keeping-bitcoin-prices-check/

Sounds pretty dire, at least for the short term.

My first comment is that some consultant must have earned a big check by copying some trivial observations, already made many times in this forum, and pasting them into a neatly formatted report with a nice plastic cover. 

The "flat transaction profile" that they mention must be this graph, of the total daily output volume E extracted from the blockchain (according to the site, excluding the outputs that appear to be back-change).

But I have a different explanation for why the E plot is basically "flat". (I don't recall whether I posted this already, sorry if I did).  Its current value, about 100'000 BTC/day (50 million USD/day), seems way too big to be actual payments (bitcoins changing hands).  Consider that Bitpay claims to have processed only 100 million USD in 2013, when the total E volume, eyeballing from that plot, was at least 3000 million USD.  While there must be a lot of BTC payment that does not use Bitpay, the
ratio >30:1 seems excessive.

My theory is that a large fraction  of the E volume -- maybe 90% or more -- is "fake", that is, bitcoins moving between addresses that belong to the same person.  These could be mixing, hotwallet/coldwallet movements, deposits and withdrawals from exchanges, software testing, etc..

This explanation for the flatness of the E plot may be good news, because it does not exclude the possibility that actual use may be indeed increasing.   If 90% of the E volume is fake,  even a 100% increase in real usage would be quite hard to see on the E plot.

On the other hand, this theory means that the current cost of the Bitcoin Network, in proportion to actual use, is quite large.   If the E volume were 100% actual payments, each payment would have a hidden 4% fee, currently paid by bitcoin holders (as inflation tax) rather than by the actual users.   If 90% of the E-volume is fake, that hidden processing fee is 40%.

Clearly, radical adjustments in the network and the nature of the blockchain traffic will have to occur while the protocol switches from block rewards to transaction fees, if bitcoin is to remain competitive with bank transfers and credit cards.

Ok, well, if even JorgeStolfi is dismissing this report, then I have to say it must be total BS

On a totally unrelated tangent, Mr. Stolfi:  I read some where that you were involved in something to do with E-voting systems in Brazil.  What are your thoughts on the various blockchain-based voting systems, and the impact they may have on fair and honest elections?


One example:

http://www.bitcongress.org/

[ChartBuddy]

Explanation

[X7]

Explanation

Oh chart buddy... you are so reliable... nice to see you reporting through all this FUD 

[Sandia]

Any of you market-smart guys want to comment on this?:

http://www.coindesk.com/citi-miners-merchants-keeping-bitcoin-prices-check/

Sounds pretty dire, at least for the short term.

But I have a different explanation for why the E plot is basically "flat". (I don't recall whether I posted this already, sorry if I did).  Its current value, about 100'000 BTC/day (50 million USD/day), seems way too big to be actual payments (bitcoins changing hands).  Consider that Bitpay claims to have processed only 100 million USD in 2013, when the total E volume, eyeballing from that plot, was at least 3000 million USD.  While there must be a lot of BTC payment that does not use Bitpay, the
ratio >30:1 seems excessive.

Ok, well, if even JorgeStolfi is dismissing this report, then I have to say it must be total BS

Note that JS uses Bitpay figures from last year against today's volume.  Very misleading, since the number of available businesses has gone up by a magnitude or 2 this year.

Also, I have spent $8,000 using btc in the last few months.  As far as I can tell, none of the businesses used Bitpay (Expedia, for example, uses Coinbase).

[hdbuck]

Any of you market-smart guys want to comment on this?:

http://www.coindesk.com/citi-miners-merchants-keeping-bitcoin-prices-check/

Sounds pretty dire, at least for the short term.

But I have a different explanation for why the E plot is basically "flat". (I don't recall whether I posted this already, sorry if I did).  Its current value, about 100'000 BTC/day (50 million USD/day), seems way too big to be actual payments (bitcoins changing hands).  Consider that Bitpay claims to have processed only 100 million USD in 2013, when the total E volume, eyeballing from that plot, was at least 3000 million USD.  While there must be a lot of BTC payment that does not use Bitpay, the
ratio >30:1 seems excessive.

Ok, well, if even JorgeStolfi is dismissing this report, then I have to say it must be total BS

Note that JS uses Bitpay figures from last year against today's volume.  Very misleading, since the number of available businesses has gone up by a magnitude or 2 this year.

Also, I have spent $8,000 using btc in the last few months.  As far as I can tell, none of the businesses used Bitpay (Expedia, for example, uses Coinbase).

still, coindesk is BS.

[JorgeStolfi]

Any of you market-smart guys want to comment on this?:

http://www.coindesk.com/citi-miners-merchants-keeping-bitcoin-prices-check/

Sounds pretty dire, at least for the short term.

My first comment is that some consultant must have earned a big check by copying some trivial observations, already made many times in this forum, and pasting them into a neatly formatted report with a nice plastic cover.  

The "flat transaction profile" that they mention must be this graph, of the total daily output volume E extracted from the blockchain (according to the site, excluding the outputs that appear to be back-change).

But I have a different explanation for why the E plot is basically "flat". (I don't recall whether I posted this already, sorry if I did).  Its current value, about 100'000 BTC/day (50 million USD/day), seems way too big to be actual payments (bitcoins changing hands).  Consider that Bitpay claims to have processed only 100 million USD in 2013, when the total E volume, eyeballing from that plot, was at least 3000 million USD.  While there must be a lot of BTC payment that does not use Bitpay, the
ratio >30:1 seems excessive.

My theory is that a large fraction  of the E volume -- maybe 90% or more -- is "fake", that is, bitcoins moving between addresses that belong to the same person.  These could be mixing, hotwallet/coldwallet movements, deposits and withdrawals from exchanges, software testing, etc..

This explanation for the flatness of the E plot may be good news, because it does not exclude the possibility that actual use may be indeed increasing.   If 90% of the E volume is fake,  even a 100% increase in real usage would be quite hard to see on the E plot.

On the other hand, this theory means that the current cost of the Bitcoin Network, in proportion to actual use, is quite large.   If the E volume were 100% actual payments, each payment would have a hidden 4% fee, currently paid by bitcoin holders (as inflation tax) rather than by the actual users.   If 90% of the E-volume is fake, that hidden processing fee is 40%.

Clearly, radical adjustments in the network and the nature of the blockchain traffic will have to occur while the protocol switches from block rewards to transaction fees, if bitcoin is to remain competitive with bank transfers and credit cards.

Ok, well, if even JorgeStolfi is dismissing this report, then I have to say it must be total BS

Heh heh.  But I did not dismiss it as bullshit, quite the opposite.  It main points are that businesses adopting bitcoin through Bitpay/Coinbase is not real adoption, and that Bitpay/Coinbase encourage sale of old bitcoins more than adoption by non-users.  These observations are fairly trivial an have been made here by several bitcoiners, not just by me.

On a totally unrelated tangent, Mr. Stolfi:  I read some where that you were involved in something to do with E-voting systems in Brazil.  What are your thoughts on the various blockchain-based voting systems, and the impact they may have on fair and honest elections?  One example:

http://www.bitcongress.org/

I discussed that topic on reddit a couple of months ago:
Danish political party, Liberal Alliance, will be the first party to use the blockchain for voting internally!

Basically, the main problem of any totally-digital e-voting system is that at some point the voter's choice is stored only inside some piece of equipment, and there is no effective way to make sure that said equipment will not change the vote.   One may think of issuing a receipt that allows the voter to check whether his vote was counted, but there seems to be no practical way of (a) preventing the misuse of that receipt to coerce the voter, and (b) preventing the voter from falsely claiming that his vote was miscounted.

By the way, point (a) rules out voting-from-home right away, no matter how sophisticated the counting system.  Voting must be done in a special location, that is carefully designed and monitored to ensure that no one can see the voter's choice, not even if he wants to reveal it.   EDIT: For the same reason,  the voter must not be allowed to use his own equipment when voting. The equipment must be shared by many voters and must be such that it cannot know who is voting, and cannot leak any information other than the total,  not even the order in which votes were cast.

There may be fairly complicated ways of doing that [ secure paperless e-voting ] using cruptography.   If they can be proven to work, that would be great news.  However, I doubt that they will be better in practice than the proven medium-tech solution: besides the electronic counting, ensure a paper record of the vote, that the voter can check and the system cannot change afterwards; store that in a conventional ballot box; and count the paper ballots at the voting place, manually, at the end of voting day.  That is a solution that everybody understands and anyone can help to implement.  Cannot get more decentralized and voter-centric than that...

Moreover, I don't see why it would be a good idea to use the bitcoin protocol and blockchain, rather than a separate special-purpose protocol.   Using the bitcoin blockchain for voting sound like "how can we use a jet engine to make popcorn".  

[Raystonn]

So anyway, I'm observing a wall at 517...

[Richy_T]

It's a hard analogy, calling tax as robbery but it has some valid points, if we suppose that the violence aspect needed to fulfill robbery is the government and the consequences of denying to pay.

Absolutely. As Monty Python says, now you see the violence inherent in the system.

Speaking of a tax-free society, how to manage society and all their problems? I read a lot about robbery, theft, rape but not how to do it better. You won't tell me that pure ultra-capitalism would make us a better world.

Lots of assumptions there, not least that society needs to be managed and isn't a spontaneous system arising from the natural actions between individuals. There are several suggestions of how to do it better with varying degrees of agreement with each other. I wouldn't hope that you would ever be in total agreement with me, just that you might recognize the problems with the system as it is.

[Davyd05]

I discussed that topic on reddit a couple of months ago:
Danish political party, Liberal Alliance, will be the first party to use the blockchain for voting internally!

Basically, the main problem of any totally-digital e-voting system is that at some point the voter's choice is stored only inside some piece of equipment, and there is no effective way to make sure that said equipment will not change the vote.   One may think of issuing a receipt that allows the voter to check whether his vote was counted, but there seems to be no practical way of (a) preventing the misuse of that receipt to coerce the voter, and (b) preventing the voter from falsely claiming that his vote was miscounted.

By the way, point (a) rules out voting-from-home right away, no matter how sophisticated the counting system.  Voting must be done in a special location, that is carefully designed and monitored to ensure that no one can see the voter's choice, not even if he wants to reveal it.   EDIT: For the same reason,  the voter must not be allowed to use his own equipment when voting. The equipment must be shared by many voters and must be such that it cannot know who is voting, and cannot leak any information other than the total,  not even the order in which votes were cast.

There may be fairly complicated ways of doing that using cruptography.   If they can be proven to work, that would be great news.  However, I doubt that they will be better in practice than the proven medium-tech solution: besides the electronic counting, ensure a paper record of the vote, that the voter can check and the system cannot change afterwards; store that in a conventional ballot box; and count the paper ballots at the voting place, manually, at the end of voting day.  That is a solution that everybody understands and anyone can help to implement.  Cannot get more decentralized and voter-centric than that...

Moreover, I don't see why it would be a good idea to use the bitcoin protocol and blockchain, rather than a separate special-purpose protocol.   Using the bitcoin blockchain for voting sound like "how can we use a jet engine to make popcorn".  

You should ask the voters of Florida how that worked out...also the company DIEBOLD lied when it said you couldn't run a .exe on their tabulation machines...a Swedish computer scientist came to a court hearing for them and ran an .exe that changed the final votes...and still they didn't get a proper re count in Florida.

[ChartBuddy]

Explanation

[JorgeStolfi]

Note that JS uses Bitpay figures from last year against today's volume.  Very misleading, since the number of available businesses has gone up by a magnitude or 2 this year.

No, please read more carefully.   I used last year Bitpay figures with LAST YEAR total E-volume, eyeballed from the plot.

The whole point is whether increased "adoption" by e-businesses translates into more people using bitcoin.  The City report says "no evidence of that".  The E-plot (mostly flat in 2014) does not show that.

So, how much bitcoin is really being used for e-payment (excluding deposit and withdrawal on echanges)?  Where is the evidence that this amount is increasing? 

Also, I have spent $8,000 using btc in the last few months.  As far as I can tell, none of the businesses used Bitpay (Expedia, for example, uses Coinbase).

I don't recall, did Coinbase exist in 2013?

Coinbase and Bitpay are competitors, no reason to believe that having two choices will mean twice as much e-payment volume.  To a large extent, they will simply split the bitcoin-payment market.

I bet that you bought those ~150 BTC well before those purchases, not for paying for those purchases but for investment/speculation.  If so, your example only confirms the report's claim: those services are mostly being used byexisting bitcoin owners.

[Richy_T]

I have suggested that in theory the USA is a democracy, and accordingly people should be deciding NOT money. 
.

Democratic republic. Specifically designed to attempt to keep power devolved to the people as much as possible because of that whole "power corrupts" thing.

Capitalism itself just means the ability to accumulate the fruits of your labors. In itself, it's fairly innocuous and forms the basis of any society advanced beyond "sitting in the dirt, eating mud". It is not really even an "ism". It has been responsible for the most properous and generous societies ever in the history of the world. It has raised billions form misery and poverty.

Personally, there is an internal tension between democracy and capitalism, and people try to act as if they are nearly one of the same..

Some do. Those people are wrong. There is some link between the two however. When people are allowed to accumulate, they tend to prefer peace because war is bad for business. When that is broken, such as through central banking and inflation, the problems start. Hence, bitcoin.

I'm just suggesting that the people decide.. and that is NOT just my preference, and I am willing to live and accept when the people decide what they want, even if it does NOT make a lot of sense to me on an individual preference level... but that will NOT stop me from speaking or writing my input.. so long as free speech is allowed in this new or evolving system.

Democracy is two wolves and a sheep voting what to have for dinner

Democracy is the worst form of government except all the others that have been tried

[JorgeStolfi]

However, I doubt that they will be better in practice than the proven medium-tech solution: besides the electronic counting, ensure a paper record of the vote, that the voter can check and the system cannot change afterwards; store that in a conventional ballot box; and count the paper ballots at the voting place, manually, at the end of voting day.

You should ask the voters of Florida how that worked out...also the company DIEBOLD lied when it said you couldn't run a .exe on their tabulation machines...a Swedish computer scientist came to a court hearing for them and ran an .exe that changed the final votes...and still they didn't get a proper re count in Florida.

The old US voting machines did produce a material record of the vote, but in a form (punched card) that the voter could not check.  Thus votes with incompetely punched cards were miscounted, and it may be that even the manual recounters could not easily decide what the voter intended.    Who knows how many errors went undetected in other elections or other states.

The Brazilian e-voting machine is made by ETS, a US company which used to be the Diebold e-voting division until Diebold decided that it was splattering too much fertilizer on its brand.   There seem to be ob$cure rea$on$ why the all-powerful Supreme Electoral Court defends it with nails and teeth, against the better understanding of all experts and even of the majority of Congress.  But that is already way too off this threads topic...