rpietila Wall Observer - the Quality TA Thread ;)

[rpietila]

so what if Risto is more bullish than a large majority of us.  There are things about Risto that bother me, including his sometimes cock-sure way of expressing some of his predictions or even his past performance and some arrogance of attempting to distinguish himself from others, which sometimes results in denigrations of others.    Also, sometimes, I think he puts too much certainty in terms of mathematical models - and maybe a few other bragging aspects of his personality.  Nonetheless, Risto frequently provides really decent analysis and fairly decent explanations concerning why and how he is arriving at his prediction(s).

The problem is apparently with the interpretation. Despite that all his predictions are "clearly wrong in all possible ways", he himself is able to make money on them.

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[prophetx]

just going to post this here....

i think at this point in time bitcoin is a solution looking for a problem.

almost 24 months ago people though that bitcoin would revolutionize the business of international money transfers, people started working on designing ATMs, and fiat to bitcoin exchanges popped up in many jurisdictions. a solution to an old problem.

today we have some ATMs and a healthy number of exchanges, however both of these have very high regulatory costs.  as it turns out much of that "problem" is mostly the creation of various regulatory regimes, since we no longer generally ship around tons of gold on ships, that let us say are in place to allow incumbents to make money along with providing protocols that allow for reporting to governments primarily for reasons related to tax collection, but also the enforcement of embargoes, sanctions and the never ending hunt for organized crime (terror, drugs, etc).

frankly this is not what bitcoin, as one can plainly see, excels at.

one has to go back to the Satoshi Nakamoto white paper and re-read it occasionally to pull out new nuggets of insight based on what has transpired.

While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.
Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes.  The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible
services.

A few things to note here:

1. "the system works well enough for most transactions" means that Satoshi thought that "most transactions" concerning online commerce are handled well by the current system. therefor it is not likely that bitcoin applies to say the purchase of books on amazon.com.  Bitpay, circle and coinbase are sadly barking up the wrong tree.

2. so what is bitcoin perhaps good for?  there answer is right there in the first paragraph: "small casual transactions" and " non-reversible payments for nonreversible services".

What are interactions that may constitute say "small casual transactions"?

1. tipping - this has been relatively successful for reddit and doge it seems
2. online gambling - we can see that the dice sites appear to do decent business
3. ?
4. ??
5.

What are "nonreversible services"?

1. the time stamping of a digital document
2. the use of processing power
3. the use of data storage
4. the escrowing of something of value
5. the execution of a contract between some parties
6. the delivery of data
7.
8.
9.

Now ask yourselves, how many bitcoin services and business do you know which fall into some of these categories?

And then you, I think, shall understand why we are not yet at $10000/btc.

When folks on here can start naming popular services in a majority of these categories, and perhaps others, then we will see not only the foundation for more wide spread adoption but also price.

Most of the investments in the current space by VC are really throwing money into a fire. But I have full confidence that in time (say 2-3 years) other groups that are more nimble and not necessarily driven by rigid business plans will begin to execute on these.  Of course that is the reason why I really like projects like Ethereum, Counterparty and Storj.

[prophetx]

i would like comments and analysis, and of course you can tell me that i am a bag of horseshit, i won't take it personally 

[nakaone]

i would like comments and analysis, and of course you can tell me that i am a bag of horseshit, i won't take it personally 

you changed at least partly my view regarding bitcoin.

I would like to changetip you for that sad it is not (yet) implemented here on btt.

great analysis - the good thing on bear market is that the posts even get more polarized regarding quality - you probably hit a nail here for average joe usage.


nevertheless I think that one killer app of bitcoin is store of value - at least in the long term.

[jmw74]

i would like comments and analysis, and of course you can tell me that i am a bag of horseshit, i won't take it personally  

Here's how I see bitcoin's role.  It's the pressure release valve - when some authority is preventing you from doing business (either via threat of violence, exorbitant fees, whatever), bitcoin is your method of circumventing that authority.

Most transactions are already frictionless enough, that bitcoin offers no real benefit.  It may be cheaper in some circumstances but it's slower and less convenient.  The problem is that you never really know when some authority is going to block your path. So having bitcoin on hand is going to be a win for nearly everyone.  

How much you need really depends on your relationship to authorities. If your country has low inflation, your banks let you transfer money for free and don't ask a lot of questions, then your need for bitcoin is low.

However if you live in Venezuela and you need to send money and your only choice is paying 10% fee to Western Union, bitcoin is a godsend.  And obviously if you want to do anything outside of regulatory authority, like run an unlicensed taxi service, bitcoin is probably the only way to avoid censorship.  Otherwise you will simply be blocked at your bank account or payment processor.

Bitcoin's major contribution is competition. You will always be able to tell the authority "fuck off, I'll just use bitcoin", and they probably can't stop you. If they want to continue to make money, they'll have to convince you to stay somehow - lower fees, more relaxed policies etc.  The less the authority is willing to bend, the more bitcoin will simply eat their lunch.

[NotLambchop]

... And obviously if you want to do anything outside of regulatory authority, like run an unlicensed taxi service, bitcoin is probably the only way to avoid censorship...

This is a typical "Bitcoin is useful" scenario.

Overlooking facts that taxis are a typically a cash business [making the pseudonimity offered by Bitcoin a downgrade], you'll instantly lose 99% of your clientele--unless you feel we already have 100% Bitcoin adoption.

[molecular]

i would like comments and analysis, and of course you can tell me that i am a bag of horseshit, i won't take it personally  

In your previous post you critique Bitcoin as a payment system and I wont contest that. I would go as far as saying that bitcoin is quite a shitty payment system. The lack of consumer protection is one thing, lack of speed another.

I've always seen the monetary aspect of Bitcoin as more important (it's the reason why I'm still here). The 2 aspects (payment system and money) are interdependant, of course. The one cannot flourish without the other.

The fact that we have (for the first time) an easily (cheaply) and globally transactable 'commodity' with a known supply has implications. If anything it puts pressure on central banks and governments. They have to fear not only people running to gold, but also to the more transparent and more convenient (that is: cheaper to store/transact) Bitcoin. It puts a lid on things so to say, draws a line.

Bitcoin is a threat to the current monetary system and the state (those two are intertwined). It's an option for the people. It gives them freedom. Freedom of choice, freedom of speech. It is extremely important in a free society for the people to be able to speak freely to one another and make financial transactions freely. We can't have the government ordering payment processors to stop processing payments to political opposition in a free society just as we can't have government censoring the communications between groups of people.

EDIT: jmw74 put it well:

Bitcoin's major contribution is competition. You will always be able to tell the authority "fuck off, I'll just use bitcoin"

[JayJuanGee]

so what if Risto is more bullish than a large majority of us.  There are things about Risto that bother me, including his sometimes cock-sure way of expressing some of his predictions or even his past performance and some arrogance of attempting to distinguish himself from others, which sometimes results in denigrations of others.    Also, sometimes, I think he puts too much certainty in terms of mathematical models - and maybe a few other bragging aspects of his personality.  Nonetheless, Risto frequently provides really decent analysis and fairly decent explanations concerning why and how he is arriving at his prediction(s).

The problem is apparently with the interpretation. Despite that all his predictions are "clearly wrong in all possible ways", he himself is able to make money on them.

I take it that you are referring to yourself in the third person?    Anyhow, I am NOT the one that would assert that you have been wrong in all possible ways.. that certainly is NOT the tone of my commentary.  In essence, I think that you are missing part of my point, and surely there could be some credibility when investors are able to make money off of their various techniques.. but a better question may be whether people who they are advising are making money by following those techniques.. maybe so, and maybe not.. partly depending on timing and maybe even the extent to which advice is closely followed. 

Problematic to  give advice in public forums and also problematic to give advice if not knowing many particular financial circumstances, timeline and goals of each of the individuals.

[UnunoctiumTesticles]

Risto will get another bubble:

https://bitcointalk.org/index.php?topic=888883.msg9801250#msg9801250

All the ground work is being laid now so that grandmas can participate and lose their skirts.

Speculation is the only broad use case of Bitcoin:

https://bitcointalk.org/index.php?topic=888883.msg9801502#msg9801502

Risto is and will always be just a speculator. His other delusions are just that.

[rpietila]

Risto is and will always be just a speculator. His other delusions are just that.

According to definition, "speculation" is an act of foreseeing that an asset has a greater EV than PV+carry cost.

Being "just" a speculator is a decent income if you are even a little successful.

[coinits]

Risto is and will always be just a speculator. His other delusions are just that.

According to definition, "speculation" is an act of foreseeing that an asset has a greater EV than PV+carry cost.

Being "just" a speculator is a decent income if you are even a little successful.

I think oil will be a good investment. I would wait for a bottom of $45 USD and then buy buy buy. The games that the west is playing with Russia is the root cause of this supposed 'glut'. Fact is there is no more of a glut now then when the price was at its high. Some serious money to be made off of crude.

[BlindMayorBitcorn]

Risto is and will always be just a speculator. His other delusions are just that.

According to definition, "speculation" is an act of foreseeing that an asset has a greater EV than PV+carry cost.

Being "just" a speculator is a decent income if you are even a little successful.

How's your little role-playing game goin' there, bro? Building infrastructure, are you? Being civil and carrying on as a community and such?

[prophetx]

Risto is and will always be just a speculator. His other delusions are just that.

According to definition, "speculation" is an act of foreseeing that an asset has a greater EV than PV+carry cost.

Being "just" a speculator is a decent income if you are even a little successful.

I think oil will be a good investment. I would wait for a bottom of $45 USD and then buy buy buy. The games that the west is playing with Russia is the root cause of this supposed 'glut'. Fact is there is no more of a glut now then when the price was at its high. Some serious money to be made off of crude.

Depends on how much money we are talking about.  Do you have hundreds of millions sitting around?  If not there are better options.


Otherwise oil has about close to 0% probability of going to go up 10X or more in the next 12 months.

[prophetx]

i would like comments and analysis, and of course you can tell me that i am a bag of horseshit, i won't take it personally  

In your previous post you critique Bitcoin as a payment system and I wont contest that. I would go as far as saying that bitcoin is quite a shitty payment system. The lack of consumer protection is one thing, lack of speed another.

I've always seen the monetary aspect of Bitcoin as more important (it's the reason why I'm still here). The 2 aspects (payment system and money) are interdependant, of course. The one cannot flourish without the other.

The fact that we have (for the first time) an easily (cheaply) and globally transactable 'commodity' with a known supply has implications. If anything it puts pressure on central banks and governments. They have to fear not only people running to gold, but also to the more transparent and more convenient (that is: cheaper to store/transact) Bitcoin. It puts a lid on things so to say, draws a line.

Bitcoin is a threat to the current monetary system and the state (those two are intertwined). It's an option for the people. It gives them freedom. Freedom of choice, freedom of speech. It is extremely important in a free society for the people to be able to speak freely to one another and make financial transactions freely. We can't have the government ordering payment processors to stop processing payments to political opposition in a free society just as we can't have government censoring the communications between groups of people.

EDIT: jmw74 put it well:

Bitcoin's major contribution is competition. You will always be able to tell the authority "fuck off, I'll just use bitcoin"

Sure okay I agree with that, but doing that at scale is difficult.

btw anyone know any lawyers specializing in gaming/gambling?

also looking for a lawyer that specializes in setting up close ended investment funds in small european or Caribbean "nations" or islands.  we're (team of 3 - ex banker, techie, and me) interviewing a couple at the moment and really want to get the right fit.

[UnunoctiumTesticles]

I think oil will be a good investment. I would wait for a bottom of $45 USD and then buy buy buy. The games that the west is playing with Russia is the root cause of this supposed 'glut'. Fact is there is no more of a glut now then when the price was at its high. Some serious money to be made off of crude.

Global economy is collapsing. After Oct. 2015, this will accelerate. There is an excess of supply in everything. Massive deflation on the way.

[solex]

I think oil will be a good investment. I would wait for a bottom of $45 USD and then buy buy buy. The games that the west is playing with Russia is the root cause of this supposed 'glut'. Fact is there is no more of a glut now then when the price was at its high. Some serious money to be made off of crude.

Global economy is collapsing. After Oct. 2015, this will accelerate. There is an excess of supply in everything. Massive deflation on the way.

Yes. However governments will print enormous amounts of fiat to counteract that deflation, whatever it takes. Because they cannot allow their own sovereign debt  to increase in real terms or they will soon find 100% of tax revenue is needed for interest on their debt. They have shown time and again that they will print, stealth-taxing their fiat holding public, to service their own debt first. That is the only choice of default that governments take.

Collapse in fiat means Bitcoin, and gold, UP.

[UnunoctiumTesticles]

I think oil will be a good investment. I would wait for a bottom of $45 USD and then buy buy buy. The games that the west is playing with Russia is the root cause of this supposed 'glut'. Fact is there is no more of a glut now then when the price was at its high. Some serious money to be made off of crude.

Global economy is collapsing. After Oct. 2015, this will accelerate. There is an excess of supply in everything. Massive deflation on the way.

Yes. However governments will print enormous amounts of fiat to counteract that deflation, whatever it takes. Because they cannot allow their own sovereign debt  to increase in real terms or they will soon find 100% of tax revenue is needed for interest on their debt. They have shown time and again that they will print, stealth-taxing their fiat holding public, to service their own debt first. That is the only choice of default that governments take.

Collapse in fiat means Bitcoin, and gold, UP.

The States of the USA and the municipalities of Germany for example, by law can not print.

Europe is adopting a combination of austerity and monetary easing.

The plan is to confiscate all the pensions and savings to fund the socialism. This is massively deflationary.

Sorry the hyperinflation nonsense is so old. Haven't you guys caught up in your learning process by now? You are where I was at in 2006 in my understanding.

Gold and Bitcoin will go up because of a flight to private assets to escape confiscation, not because of monetary easing. But in the end game none of these will escape taxation. Maybe Gold will if you never sell it again for fiat, you can polish it daily for your ROI. Cash black markets will disappear because the new fiats will be all electronic. Electronic real-estate ownership databases will be created. The socialism will track down every asset.

There is no anonymity. The socialism is in control. Taxes will increase. Confiscation will increase. Down the abyss we go.

[marcus_of_augustus]

I think oil will be a good investment. I would wait for a bottom of $45 USD and then buy buy buy. The games that the west is playing with Russia is the root cause of this supposed 'glut'. Fact is there is no more of a glut now then when the price was at its high. Some serious money to be made off of crude.

Global economy is collapsing. After Oct. 2015, this will accelerate. There is an excess of supply in everything. Massive deflation on the way.

Yes. However governments will print enormous amounts of fiat to counteract that deflation, whatever it takes. Because they cannot allow their own sovereign debt  to increase in real terms or they will soon find 100% of tax revenue is needed for interest on their debt. They have shown time and again that they will print, stealth-taxing their fiat holding public, to service their own debt first. That is the only choice of default that governments take.

Collapse in fiat means Bitcoin, and gold, UP.

... the question with all this printing is where is the inflation?

It is in the cash assets of the top 1%. They held a lot of debt products that became worthless or went bad and then they got bailed out, in fact still are getting bailed out and then some. All those bad debts were monetised, i.e. swapped for fiat cash, net result being a huge misallocation of capital into incompetent hands, hyper-financialisation of the economy and an accelerating wealth disparity. Nothing at all to help economic performance, free market incentives, savings or productive enterprises.

When a little more than 10% of the top 1% lose confidence in their now huge fiat cash holdings it will be the end of the CONfidence game, the 'bank' run will be on.

[solex]

I think oil will be a good investment. I would wait for a bottom of $45 USD and then buy buy buy. The games that the west is playing with Russia is the root cause of this supposed 'glut'. Fact is there is no more of a glut now then when the price was at its high. Some serious money to be made off of crude.

Global economy is collapsing. After Oct. 2015, this will accelerate. There is an excess of supply in everything. Massive deflation on the way.

Yes. However governments will print enormous amounts of fiat to counteract that deflation, whatever it takes. Because they cannot allow their own sovereign debt  to increase in real terms or they will soon find 100% of tax revenue is needed for interest on their debt. They have shown time and again that they will print, stealth-taxing their fiat holding public, to service their own debt first. That is the only choice of default that governments take.

Collapse in fiat means Bitcoin, and gold, UP.

The States of the USA and the municipalities of Germany for example, by law can not print.

Europe is adopting a combination of austerity and monetary easing.

The plan is to confiscate all the pensions and savings to fund the socialism. This is massively deflationary.

Sorry the hyperinflation nonsense is so old. Haven't you guys caught up in your learning process by now? You are where I was at in 2006 in my understanding.

Gold and Bitcoin will go up because of a flight to private assets to escape confiscation, not because of monetary easing. But in the end game none of these will escape taxation. Maybe Gold will if you never sell it again for fiat, you can polish it daily for your ROI. Cash black markets will disappear because the new fiats will be all electronic. Electronic real-estate ownership databases will be created. The socialism will track down every asset.

There is no anonymity. The socialism is in control. Taxes will increase. Confiscation will increase. Down the abyss we go.

And you are where I was 3 years ago.

The fact is that sovereign governments cannot tolerate deflation unless they consistently run balanced budgets or make surpluses, and have low debt. Individual states and municipalities are irrelevant. Central banks will continually monetize government deficits.

This does not cause immediate price inflation for 2 reasons:
1. printed money is parked back at CBs by the bankrupt banks as excess reserves. There are few credit-worthy borrowers after Peak Debt, so banks try to eke out a fraction of a percent at CBs. Hence some CBs try the madness of negative rates. To force the banks to lend, but that is pushing on a wet string.
2. velocity of money falls in a recession, and this is probably the cause of the recent drop in the price of oil. Velocity falling at a global scale.

Eventually printing will overhaul 1 and 2 and cause Venezuela-like inflation.

... the question with all this printing is where is the inflation?

It is in the cash assets of the top 1%. They held a lot of debt products that became worthless or went bad and then they got bailed out, in fact still are getting bailed out and then some. All those bad debts were monetised, i.e. swapped for fiat cash, net result being a huge misallocation of capital into incompetent hands, hyper-financialisation of the economy and an accelerating wealth disparity. Nothing at all to help economic performance, free market incentives, savings or productive enterprises.

When a little more than 10% of the top 1% lose confidence in their now huge fiat cash holdings it will be the end of the CONfidence game, the 'bank' run will be on.

Correct. Printed money always lands in the hands of the banks and asset-rich first.

[wachtwoord]

Risto is and will always be just a speculator. His other delusions are just that.

According to definition, "speculation" is an act of foreseeing that an asset has a greater EV than PV+carry cost.

Being "just" a speculator is a decent income if you are even a little successful.

No, according to definition "speculation" is the act of foreseeing the price of something going up (or down) irrespective of underlying value and profiting from that.

|Foreseeing that an asset has a greater EV than PV+carry cost is called investing.