rpietila Wall Observer - the Quality TA Thread ;)

[JayJuanGee]

In Casino, the games of chance are also games of -EV. Now imagine that you could play a simple dice with the following payout table, but the play is limited to one round:

4-6: pay back 10:1
2-3: no effect
1: lose your bet.

How much would you bet?

How often can I play?

Everything!

It is better to split cash (1/3..6) and do as much tries as possible.

If many tries are possible a gambler would probably do martingale. In the end that doesn't change much regarding odds, though,... mostly the time it takes to finish. That's why I said: bet it all on first go and be done with it. As long as one has a means of earning income and not much funds, this makes the most sense imo.

If you're old and already have enough money, why gamble at all?

In other words, whether you gamble all of your financial resources or none should be considered on a continuum, depending on the "gambler's" particular circumstances.

I find this all or NONE viewpoint that Molecular seem to be framing to be quite nerve racking for my own personal tastes.  In this regard, out of my personal inclinations, I have to consider the various nuances, rather than thinking about it as all or none b/c in my thinking if gamblers are considering these various risks  as all or nothing, then sooner or later the all or NONE gamblers are going to end up on the street living out of a cardboard box (even though they may have some years of considerable luck and opulence)... and that kind of yo-yo living is too much stress for me.  

Personally, I would rather consider the amount in my investment pool and consider the amount that I have in the high risk, the medium risk and the low risk categories.  Certainly, I may consider gambling 100% of the high risk allocated amount, and if I am feeling particularly confident about the odds of any particular bet, I might also dedicate some additional percentage of my medium risk funds towards the risky venture... but in the end, all or nothing investment (or gambling) practices remain too extreme for my personal risk tolerances and my own sense of financial security.

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[fudge]

Monero have been the highest trading volume pair for a long time over at exchange poloniex, it is very easy to understand why it is so fundamentally good, XMR could very well be the coin that gets used a lot in countries where BTC is forbidden or made illegal, XMR could shine in russia for example if BTC is going to be banned in russia by 2014 and it has attracted a lot of early bitcoiners as well, and by this I mean core developers who have taken a look at other coins with the underlying technology and chosen Monero over a lot of others.

Do you actually think that in such case Russian will ban only BTC? 

They will probably ban everything, but MRO ban is harder to enforce.

They can ban all crypto. At once.

[JustBetweenUs]

Personally, I would rather consider the amount in my investment pool and consider the amount that I have in the high risk, the medium risk and the low risk categories.  Certainly, I may consider gambling 100% of the high risk allocated amount, and if I am feeling particularly confident about the odds of any particular bet, I might also dedicate some additional percentage of my medium risk funds towards the risky venture... but in the end, all or nothing investment (or gambling) practices remain too extreme for my personal risk tolerances and my own sense of financial security.

So you are basically saying that you are a pussy. Anyone reading this thread with any kind of regularity already knew that.

I'm a professional poker player and I can assure you, most good poker players or gamblers would be very close to all-in on such a bet. They would, at the very least, bet the absolute maximum they can "afford" to lose.

[Wary]

Monero have been the highest trading volume pair for a long time over at exchange poloniex, it is very easy to understand why it is so fundamentally good, XMR could very well be the coin that gets used a lot in countries where BTC is forbidden or made illegal, XMR could shine in russia for example if BTC is going to be banned in russia by 2014 and it has attracted a lot of early bitcoiners as well, and by this I mean core developers who have taken a look at other coins with the underlying technology and chosen Monero over a lot of others.

Do you actually think that in such case Russian will ban only BTC? 

They will probably ban everything, but MRO ban is harder to enforce.

They can ban all crypto. At once.

There is an easy way to get rid of crime: to ban it.

[JayJuanGee]

Personally, I would rather consider the amount in my investment pool and consider the amount that I have in the high risk, the medium risk and the low risk categories.  Certainly, I may consider gambling 100% of the high risk allocated amount, and if I am feeling particularly confident about the odds of any particular bet, I might also dedicate some additional percentage of my medium risk funds towards the risky venture... but in the end, all or nothing investment (or gambling) practices remain too extreme for my personal risk tolerances and my own sense of financial security.

So you are basically saying that you are a pussy. Anyone reading this thread with any kind of regularity already knew that.

I'm a professional poker player and I can assure you, most good poker players or gamblers would be very close to all-in on such a bet. They would, at the very least, bet the absolute maximum they can "afford" to lose.

Yes!!!  I can tell from your robust and unequaled reasoning that you have very sophisticated skills, truly professional in their very subtlety and deftness.    

Surely, i must have been mistaken regarding any attempt to describe moderation and any attempt at describing any strategy going forth as other than 100% in....   Accordingly, YOU, ole wise one, have allowed me to see the light and to recognize that balls to the walls should have been the preferred methodology in these circumstances.   

[JayJuanGee]

Monero have been the highest trading volume pair for a long time over at exchange poloniex, it is very easy to understand why it is so fundamentally good, XMR could very well be the coin that gets used a lot in countries where BTC is forbidden or made illegal, XMR could shine in russia for example if BTC is going to be banned in russia by 2014 and it has attracted a lot of early bitcoiners as well, and by this I mean core developers who have taken a look at other coins with the underlying technology and chosen Monero over a lot of others.

Do you actually think that in such case Russian will ban only BTC? 

They will probably ban everything, but MRO ban is harder to enforce.

They can ban all crypto. At once.

There is an easy way to get rid of crime: to ban it.

Even better.  Ban it AND make it illegal!!!

[log2exp]

Monero have been the highest trading volume pair for a long time over at exchange poloniex, it is very easy to understand why it is so fundamentally good, XMR could very well be the coin that gets used a lot in countries where BTC is forbidden or made illegal, XMR could shine in russia for example if BTC is going to be banned in russia by 2014 and it has attracted a lot of early bitcoiners as well, and by this I mean core developers who have taken a look at other coins with the underlying technology and chosen Monero over a lot of others.

Hmm, what if developers create an enhanced variant based on Monero source, with better features, development of alt coins is endless.

[Hunyadi]

All people I know being crypto virgins are not interested in investing bitcoin.
They think a) bitcoin is already a train that they have been left behind and b) bitcoin is most likely not the ultimate cryptocurrency because usually the first mover will not be the one that lasts until the end in technology.

Those two arguments I keep hearing from non-bitcoiners all the time.
Therefore I am tending to loose my faith in bitcoin, too. If there is no more adoption coming, then the coin is going to die and it is time jump out the train before it is too late - many has been buying bitcoins when they were at dollars or even cents - so why not hedge those bitcoins in the best altcoin (obviously Monero).

Monero's advantages are very high liquidity, anonymity and of course the opportunity to leverage your wealth since the coin is now just taking its infant steps.

I believe that most of the innovators/early adopters who bought for single dollars or even cents have already sold, traded or gambled most of their bitcoin...



Furthermore, You are right that there are a lot of examples of first movers who have been surpassed by others along the way,  e.g. myspace verus facebook or netscape versus internet explorer... And there are many more...

However; with bitcoin it is a little bit different...

First of all the exponentially growing crypto-currency ecosystem is still very much bitcoin centered...

Second of all, and even more important, the bitcoin users have a vested financial interest in the success of bitcoin...
With the previous examples the lock in effect was mainly limited to the knowledge of using the software and in case of social media, to your personal historical profile and your connections...
These are still very strong lock effects...

However; the financial connection to bitcoin from it's current users is, in my opinion, the strongest lock in effect you can have in any new technology... Users who hold a certain amount of bitcoin as a long term investment are very much determined to stay and make the technology a success...
And this strong financial lock in effect will give bitcoin a big first mover advantage, turning bitcoin into the most likely winning crypto-currency...

Very good post Souspeed! Still, IMO it might be feasible to hedge (very) small part of your crypto portfolio in the "best" alts. I have around 95% BTC and 5% alts.

[rpietila]

However; the financial connection to bitcoin from it's current users is, in my opinion, the strongest lock in effect you can have in any new technology... Users who hold a certain amount of bitcoin as a long term investment are very much determined to stay and make the technology a success...

I have seen many bitcoin defectors in the phase of the last 6 weeks or so. The process goes as such:

- Realize that the final # of BTC (21M) is about the same as the final number of XMR (18M).
- Realize that by buying equal number of XMR, you are actually slightly ahead if it gains vs. BTC
- Realize that 1 XMR = 0.004 BTC
- Realize that hedge buying costs you essentially nothing except your pride of having never invested in an alt before
- Start to follow community
- Realize that many good guys are there
- Start to participate
- Realize that people there are on average actually cooler than just Bitcoin proponents
- Let that sink in
- Realize that it's possible to increase your financial position in the event that XMR succeeds vs. BTC, by buying more XMR
- Buy more XMR
- Realize that there is nothing BTC does better than XMR (once certain infrastructure is built to the latter)
- Realize things that should not be written in a Bitcoin forum
- Buy more XMR

The defection is completed when you start to feel that the world would be better without Bitcoin, with only XMR. Then you make the commitment to dump your BTC (that is still 50%-95% of your crypto) once the critical moment comes. When it does, XMR may go up 100x-1000x in a single year, and become so big that even BTC's value will be affected.

The defection payoff is currently about 250:1 (the difference in their price). You should understand that you may choose any level of defection, you can even defect with a 2.5:1 payoff by risking only 1% of your BTC, which is no defection at all, rather a hedge as discussed previously. This is starting to look like the similar kind of self-reinforcing mechanism that I posited for Bitcoin in early 2013, and prior to that, silver (which also rose 6x during the time of my all-in investment).

[Hunyadi]

- Realize that by buying equal number of XMR, you are actually slightly ahead if it gains vs. BTC
- Realize that many good guys are there

I completely agree with these points. Actually, the only thing why I take monero seriously, is that there are quite many btc early adopters involved.

- Realize that there is nothing BTC does better than XMR (once certain infrastructure is built to the latter)

There is too much to do. According to anonymity and coding guru Peter Todd,
"The Cryptonote/Bytecoin codebase #XMR is based on is atrociously bad, orders of magnitude worse than #Bitcoin. "

Also, bitcoin's infrastruction is going forward faster than moneros. I don't see this changing unless there is some fatal problem with bitcoin.

[marcus_of_augustus]

Bitcoin tx data is basically useless as a metric because it costs near 0 to send a tx. If there is no cost to something, then it can done with repetition, e.g. Coinbase has a feature to send BTC to friend in email and you can send any tiny amount you want.

The data you claim is useless is highly correlated with bitcoin market cap and seems to obey Metcalfe's Law: V ~ N² .

Have you done an update on the last 6 months data Peter R?

[Odalv]

However; the financial connection to bitcoin from it's current users is, in my opinion, the strongest lock in effect you can have in any new technology... Users who hold a certain amount of bitcoin as a long term investment are very much determined to stay and make the technology a success...

I have seen many bitcoin defectors in the phase of the last 6 weeks or so. The process goes as such:

- Realize that the final # of BTC (21M) is about the same as the final number of XMR (18M).
- Realize that by buying equal number of XMR, you are actually slightly ahead if it gains vs. BTC
- Realize that 1 XMR = 0.004 BTC
- Realize that hedge buying costs you essentially nothing except your pride of having never invested in an alt before
- Start to follow community
- Realize that many good guys are there
- Start to participate
- Realize that people there are on average actually cooler than just Bitcoin proponents
- Let that sink in
- Realize that it's possible to increase your financial position in the event that XMR succeeds vs. BTC, by buying more XMR
- Buy more XMR
- Realize that there is nothing BTC does better than XMR (once certain infrastructure is built to the latter)
- Realize things that should not be written in a Bitcoin forum
- Buy more XMR

The defection is completed when you start to feel that the world would be better without Bitcoin, with only XMR. Then you make the commitment to dump your BTC (that is still 50%-95% of your crypto) once the critical moment comes. When it does, XMR may go up 100x-1000x in a single year, and become so big that even BTC's value will be affected.

The defection payoff is currently about 250:1 (the difference in their price). You should understand that you may choose any level of defection, you can even defect with a 2.5:1 payoff by risking only 1% of your BTC, which is no defection at all, rather a hedge as discussed previously. This is starting to look like the similar kind of self-reinforcing mechanism that I posited for Bitcoin in early 2013, and prior to that, silver (which also rose 6x during the time of my all-in investment).

if another coin even gets close (same order of mag) to bitcoin in terms of market cap, it seriously erodes the "scarcity" feature/argument of bitcoin, which is one of the most critical arguments for putting any wealth/mindshare/time/effort into bitcoin (and by extension, any crypto). Guys like Schiff and Rickards would be proven right, and no one would be comfortable putting any wealth into any crypto for a long long time. Thus, everyone would lose. Humanity would not see the benefits that decentralized money can bring for many years/decades longer than if bitcoin simply becomes the obvious-to-everyone non-dethronable crypto store of value.

To be clear, I think there's niche value in some alts, and some of the experimentation is valuable. But you guys who think that many coins can live side by side with similar monetizations are missing the key point that if that happened, we'd all be sitting side-by-side at *trivial* market-caps, not big ones.

[Odalv]

Ring signature

One of the security properties of a ring signature is that it should be difficult to determine which of the group members' keys was used to produce the signature.

1. Good thing for hacker(one member of group) to wipe out your wallet by modifying orginal transaction and send all your XMR to his address.

2. How can you guarantee, there is no miner or passive listener who is building unobscured private blockchain and sell this data ? (why not to store internal data unobscured when it takes 6 times less space than monero blockchain)

3. How you can prove that you really paid or even did not want to pay.to hacker :-)

Risto, it looks to me that you bet on bad horse.

Edit:

Ring signatures are similar to group signatures but differ in two key ways: first, there is no way to revoke the anonymity of an individual signature, and second, any group of users can be used as a group without additional setup.

Once I know your PUBLIC key I can add you to my GROUP (adding my and your public key together). Then create ring signature and no one knows who signed message you or me. Then I can fork blockchain !!!  (maybe even from genesis block)

[fluffypony]

1. Good thing for hacker(one member of group) to wipe out your wallet by modifying orginal transaction and send all your XMR to his address.

Not possible. Once a transaction is mined its permanent. If you mean after broadcast and before its mined, then you need to follow the maths in the whitepaper. Individual *inputs* are ring-signed, not the whole tx. You can't change an input without mucking up the signature for the whole transaction.

2. How can you guarantee, there is no miner or passive listener who is building unobscured private blockchain and sell this data ? (why not to store internal data unobscured when it takes 6 times less space than monero blockchain)

How? In order for them to do this they'd need to own a massive portion of the utxoset. Maybe you need to read our research bulletin on chain reactions and traceability in the CryptoNote protocol, as it explains exactly why this is impossible without a huge amount of utxos under your private control: http://lab.monero.cc/pubs/MRL-0001.pdf

3. How you can prove that you really paid or even did not want to pay.to hacker :-)

Because even though the inputs are ring signed (and thus you can (ostensibly) never know if an input was genuine or merely part of a group signature) the outputs are signed by you and you alone. Thus, verification is trivial - you merely need to reveal the one-time key for that transaction to verify it.

Once I know your PUBLIC key I can add you to my GROUP (adding my and your public key together). Then create ring signature and no one knows who signed message you or me. Then I can fork blockchain !!!  (maybe even from genesis block)

Again, you're conflating ring-signed inputs with individually-signed outputs. The trick here is the combination of stealth addresses and ring signatures, not one or the other. I'd suggest you start with the whitepaper and fully grok the maths behind it as a first step towards understanding.

[RAJSALLIN]

Anyone notice that the number of transactions per day broke to the upside today? If Peter R is correct with the correlation between transactions and price either the correlation is starting to break or price is lagging and we will see a shot for $500 soon.

Also the hash rate is looking very healthy.

Either way I wouldn't be shorting atm.

[sammy007]

Anyone notice that the number of transactions per day broke to the upside today? If Peter R is correct with the correlation between transactions and price either the correlation is starting to break or price is lagging and we will see a shot for $500 soon.

Either way I wouldn't be shorting atm.

XMR will be 500 USD? I proudly hodl small stash for zombie apocalypse case.

[RAJSALLIN]

Anyone notice that the number of transactions per day broke to the upside today? If Peter R is correct with the correlation between transactions and price either the correlation is starting to break or price is lagging and we will see a shot for $500 soon.

Either way I wouldn't be shorting atm.

XMR will be 500 USD? I proudly hodl small stash for zombie apocalypse case.

I'm of course speaking of btc. THis thread is a btc thread after all. Or are all or Risto's threads now Monero only since it is his new favourite pet?

[sammy007]

Anyone notice that the number of transactions per day broke to the upside today? If Peter R is correct with the correlation between transactions and price either the correlation is starting to break or price is lagging and we will see a shot for $500 soon.

Either way I wouldn't be shorting atm.

XMR will be 500 USD? I proudly hodl small stash for zombie apocalypse case.

I'm of course speaking of btc. THis thread is a btc thread after all. Or are all or Risto's threads now Monero only since it is his new favourite pet?

Man, just mixed up all tabs. BTW want to believe.

[SlipperySlope]

Here is the chart of adjusted number of bitcoin transactions. I chose a two-year duration, with seven day smoothing, and with a log scale. Note that the current value is now higher than all but a few days at the November 2013 peak. Should this trend in transaction volume continue, I expect that bitcoin prices will rise also.

[Odalv]

1. Good thing for hacker(one member of group) to wipe out your wallet by modifying orginal transaction and send all your XMR to his address.

Not possible. Once a transaction is mined its permanent. If you mean after broadcast and before its mined, then you need to follow the maths in the whitepaper. Individual *inputs* are ring-signed, not the whole tx. You can't change an input without mucking up the signature for the whole transaction.

2. How can you guarantee, there is no miner or passive listener who is building unobscured private blockchain and sell this data ? (why not to store internal data unobscured when it takes 6 times less space than monero blockchain)

How? In order for them to do this they'd need to own a massive portion of the utxoset. Maybe you need to read our research bulletin on chain reactions and traceability in the CryptoNote protocol, as it explains exactly why this is impossible without a huge amount of utxos under your private control: http://lab.monero.cc/pubs/MRL-0001.pdf

3. How you can prove that you really paid or even did not want to pay.to hacker :-)

Because even though the inputs are ring signed (and thus you can (ostensibly) never know if an input was genuine or merely part of a group signature) the outputs are signed by you and you alone. Thus, verification is trivial - you merely need to reveal the one-time key for that transaction to verify it.

Once I know your PUBLIC key I can add you to my GROUP (adding my and your public key together). Then create ring signature and no one knows who signed message you or me. Then I can fork blockchain !!!  (maybe even from genesis block)

Again, you're conflating ring-signed inputs with individually-signed outputs. The trick here is the combination of stealth addresses and ring signatures, not one or the other. I'd suggest you start with the whitepaper and fully grok the maths behind it as a first step towards understanding.

lol, I still don't get it.
Who or what prevents me from ring-signing your input and send your money to my address(output).