rpietila Wall Observer - the Quality TA Thread ;)

[nicked]

I thought this was a TA thread? Maybe I clicked the wrong one.

Don't overlook that it was the thread owner who initiated it.

In general it might be good to read the OP so you know what's it about and what's not (hint: a smiley in the topic modifies both attributes)

I've been reading this thread for a year. I used to think I knew what it was about.

[1714004104]

1714004104

[rpietila]

I thought this was a TA thread? Maybe I clicked the wrong one.

Don't overlook that it was the thread owner who initiated it.

In general it might be good to read the OP so you know what's it about and what's not (hint: a smiley in the topic modifies both attributes)

I've been reading this thread for a year. I used to think I knew what it was about.

Okay good. So everybody continue doing the good work

[Chef Ramsay]

This thread is showing symptoms of the wall street observer thread, just w/o the main troll, the socks and stolfi.

[rpietila]

This thread is showing symptoms of the wall street observer thread, just w/o the main troll, the socks and stolfi.

Considering that this was founded to be a parody of that one ...

[Chef Ramsay]

This thread is showing symptoms of the wall street observer thread, just w/o the main troll, the socks and stolfi.

Considering that this was founded to be a parody of that one ...

Oh, this is news to me and predates my arrival on the scene by quite some time. Sorry for my comment then.

[gotmilk_]

Risto, what do you think about current market situation? Shorts are at ATH on Bitfinex, longs also at high level. Stamp ask side is more or less empty. Hard to do some TA lately since market was doing some crazy moves.

Any predictions? 

[aminorex]

Monkey thinks we're at a daily bottom in BTC, but does not see a longer-term upturn until June.  Monkey says: Surpassing 237 on the daily would make 296 the next resistance.  Otherwise, weak-ish support possible at 180.

Monkey continues to like BTC for the coming 7 days.

[rpietila]

I spent 2 days in developing a model for Monero price scenarios.

The idea was to construct a scenario tree with the following point-estimates:

- Price in 31.12.2015
- Price in 31.12.2016 on the condition that the previous price was X
- Price in 31.12.2017 on the condition that the previous price was X.

As prices were grouped in multiples of 10 only, it yielded a reasonably practical model that prompted to make 10 point-estimates and required the calculation of 145 scenario trees.

The results might be of interest here as well, tldr: in 61% probability you lose all, yet the average gain is 3700% in 32 months due to the presence of very positive scenarios in low probabilities.

This methodology might interest more readers if applied to Bitcoin, and I am willing to do it - but not without your help

I have not researched Bitcoin that much since finding Monero, so I need inputs on the point-estimates. They are presented in the following format:

date, on condition of price range X in previous date
probability of price in range (30,000-300,000 USD)
probability of price in range (3,000-30,000 USD)
probability of price in range (300-3,000 USD)
probability of price in range (30-300 USD)
probability of total loss during the period

The major finding from Monero was that it does not matter much how probable it is to lose all, since you can only lose what you invest, while the upside may be several orders of magnitude. With Bitcoin, the gross potential upside is much less (essentially the difference in the marketcap of the coins, almost 1000x), and therefore it is more important to be able to accurately estimate the downside as well as upside.

- What essential threats remain that would cause Bitcoin to reach a value of less than $30, or become unusable technically? (Political threats such as all major countries banning it are relevant only if they cause the price in the free world to collapse as a result - historically things tend to increase in price when banned)
- What is the probability that a technical failure would make Bitcoin not trustable (break in cryptography type of event), annualized?
- How likely is the "shutdown of Internet" type of event which would damage Bitcoin's usability, without endangering the balances, and what would happen to the price in this event?
- What needs to happen for Bitcoin to languish in these very low levels an additional number of months, despite the great increase of VC and economic activity and adoption as measured by any metric available?
- If a new price growth surge is achieved, what mechanisms will be the determining ones to cap it and at what price?
- ... (the list of interesting questions that I don't know the answer nor have even much thought about in the last few months)

On the positive side concerning the research, I am good in statistical modelling and this model is tested just this week and is ready to produce very interesting results with Bitcoin as well, when we get the point-estimates correct!

[bitcoin_bagholder]

I spent 2 days in developing a model for Monero price scenarios.

The idea was to construct a scenario tree with the following point-estimates:

- Price in 31.12.2015
- Price in 31.12.2016 on the condition that the previous price was X
- Price in 31.12.2017 on the condition that the previous price was X.

As prices were grouped in multiples of 10 only, it yielded a reasonably practical model that prompted to make 10 point-estimates and required the calculation of 145 scenario trees.

The results might be of interest here as well, tldr: in 61% probability you lose all, yet the average gain is 3700% in 32 months due to the presence of very positive scenarios in low probabilities.

This methodology might interest more readers if applied to Bitcoin, and I am willing to do it - but not without your help

I have not researched Bitcoin that much since finding Monero, so I need inputs on the point-estimates. They are presented in the following format:

date, on condition of price range X in previous date
probability of price in range (30,000-300,000 USD)
probability of price in range (3,000-30,000 USD)
probability of price in range (300-3,000 USD)
probability of price in range (30-300 USD)
probability of total loss during the period

The major finding from Monero was that it does not matter much how probable it is to lose all, since you can only lose what you invest, while the upside may be several orders of magnitude. With Bitcoin, the gross potential upside is much less (essentially the difference in the marketcap of the coins, almost 1000x), and therefore it is more important to be able to accurately estimate the downside as well as upside.

- What essential threats remain that would cause Bitcoin to reach a value of less than $30, or become unusable technically? (Political threats such as all major countries banning it are relevant only if they cause the price in the free world to collapse as a result - historically things tend to increase in price when banned)
- What is the probability that a technical failure would make Bitcoin not trustable (break in cryptography type of event), annualized?
- How likely is the "shutdown of Internet" type of event which would damage Bitcoin's usability, without endangering the balances, and what would happen to the price in this event?
- What needs to happen for Bitcoin to languish in these very low levels an additional number of months, despite the great increase of VC and economic activity and adoption as measured by any metric available?
- If a new price growth surge is achieved, what mechanisms will be the determining ones to cap it and at what price?
- ... (the list of interesting questions that I don't know the answer nor have even much thought about in the last few months)

On the positive side concerning the research, I am good in statistical modelling and this model is tested just this week and is ready to produce very interesting results with Bitcoin as well, when we get the point-estimates correct!

Things tend to increase in price when banned if there are no legal alternatives. Alcohol prohibition in the US is a good example. Different story if there are accessible legal avenues to get your fix. Contraband cigarettes (much cheaper). Colorado legalized pot and look what happened. Price was about double what you'd pay from the neighbourhood unlicensed pot dealer. Taxation and overhead is the killer.

If governments around the world banned bitcoin, corporate, bank and government coins will have the green light using blockchain tech. Our mainstream decentralized dream is over. We're back where we started, with bitcoins used for internet gambling (especially US citizens) and buying drugs. And not much else. What would the value of bitcoins be if pushed underground for eternity?

[rpietila]

Things tend to increase in price when banned if there are no legal alternatives. Alcohol prohibition in the US is a good example. Different story if there are accessible legal avenues to get your fix. Contraband cigarettes (much cheaper). Colorado legalized pot and look what happened. Price was about double what you'd pay from the neighbourhood unlicensed pot dealer. Taxation and overhead is the killer.

If governments around the world banned bitcoin, corporate, bank and government coins will have the green light using blockchain tech. Our mainstream decentralized dream is over. We're back where we started, with bitcoins used for internet gambling (especially US citizens) and buying drugs. And not much else. What would the value of bitcoins be if pushed underground for eternity?

Thanks for reply. Good observation; I was also thinking that it's useless to accuse me of doing no BTC research, if the public interest towards producing such is zero. Thanks for that as well

As for the point, govcoins do not replace bitcoin in anyone's mind who is clear on the main subject, that of the difference between trusted (fiat) and trustless (commodity). Despite using the same technology, govcoin is fiat and BTC is commodity. A dollar bill is fiat while toilet paper is commodity. Yet both are paper.

The government is increasing the pie for outlaw coins by their own lawless actions. These outlaw coins should not be public blockchain, though.

[rpietila]

Wow, the conversation is slow indeed...

[americanpegasus]

Wow, the conversation is slow indeed...

Bitcoin, monero, and what else? 
 
Is that the only things in rpietila's portfolio?  Or did Maidsafe or another alt make it in there too?

[rpietila]

Wow, the conversation is slow indeed...

Bitcoin, monero, and what else? 
 
Is that the only things in rpietila's portfolio?  Or did Maidsafe or another alt make it in there too?

Well, my portfolio does not evolve too quickly. From 2006 to early 2013 it was mainly silver. Then it was mainly bitcoin. And still is, but my interest has changed to monero.

It feels almost as if many people in Bitcoin are sitting upon their golden egg, waiting for it to fulfill all their wishes. Yes, there is the likelihood that it will, but it does not become any less likely if they also bought some moneros.

I was quicker to realize the potential of Monero as I had quite recently needed to forsake my first love, silver, for Bitcoin. The people who first fell in love with Bitcoin may have to suffer a hit in exchange rate if they refuse to "look after other women", just as I did by not switching my bulk holdings in late 2010 when you could have had 100 BTC for 1 ounce of silver, rather in 2013 when 1 ounce bought 0.2 BTC 

I haven't seen the compelling investment case in 2.0-coins, although I regard them as interesting projects.

[Zangelbert Bingledack]

I note that the Sane and Simple Bitcoin Savings Plan is about to reach 50,000 views, which is great for a thread that is only 10 pages and most people probably just read the OP (other threads have more reads, but probably not of the OP). That's a whole lot of hodlers who have potentially learned how to hold their coins more tightly by avoiding slop factors in portfolio management. I wonder how much that thread alone has contributed to the price. I've linked it quite a few times myself in various places on the net, and will continue to do so.

[rpietila]

The long periods of decline, such as the one we are experiencing, are much easier to weather when you do it according to the SSS plan.

If I had literally followed my plan, instead of buying back at a nice discount a year ago, the situation would be even better. So folks, do what I say, not what I do Load up on bitcoins (and monero) now as the scenario universe is heavily tilted on your favor, and be strict in selling on strength when it comes, and don't buy back in the subsequent slump (and of course, never ever sell on a loss).

BTC2 buys you 1,000 XMR. BTC20 buys you 10,000 XMR. I have a very strong feeling that doing it is equivalent to having bought 1,000 or 10,000 BTC when it was available for the same price (around Dec-10 to Jan-11). Hedging and risk managementwise it is the right thing to do. SSS applies to them as well, although I would advise to start selling only after a significant runup.

I am involved in a new website that will distill my writings here to coherent articles. Launch is expected next month.

[rjclarke2000]

The long periods of decline, such as the one we are experiencing, are much easier to weather when you do it according to the SSS plan.

If I had literally followed my plan, instead of buying back at a nice discount a year ago, the situation would be even better. So folks, do what I say, not what I do Load up on bitcoins (and monero) now as the scenario universe is heavily tilted on your favor, and be strict in selling on strength when it comes, and don't buy back in the subsequent slump (and of course, never ever sell on a loss).

BTC2 buys you 1,000 XMR. BTC20 buys you 10,000 XMR. I have a very strong feeling that doing it is equivalent to having bought 1,000 or 10,000 BTC when it was available for the same price (around Dec-10 to Jan-11). Hedging and risk managementwise it is the right thing to do. SSS applies to them as well, although I would advise to start selling only after a significant runup.

I am involved in a new website that will distill my writings here to coherent articles. Launch is expected next month.

Did I read this correctly? XMR Could potentially increase as Bitcoin has done?

[molecular]

If I had literally followed my plan, instead of buying back at a nice discount a year ago, the situation would be even better. So folks, do what I say, not what I do Load up on bitcoins (and monero) now as the scenario universe is heavily tilted on your favor, and be strict in selling on strength when it comes, and don't buy back in the subsequent slump (and of course, never ever sell on a loss).

This only makes sense if the bottom is in. Otherwise it's a contradiction, no? Maybe like a year ago, we think it's a nice discount now, but it really isn't?

EDIT: this is what your SSS post says about buying:

It is important to buy in as soon as possible

So someone reading that in Nov '13 (when you made the post) would've bought in right away and be 80% in the red now, still waiting for $2000.

I am involved in a new website that will distill my writings here to coherent articles. Launch is expected next month.

I applaud and look forward.

[rpietila]

I can only think with my own brains, and yes - I am telling you that the more I think, the more bullish I am on XMR, and at some point this will mean a relative bearishness even towards BTC.

I still own all the silver I had when I was a silverbug. But I am not really thinking that silver will make me a billionaire (not that I cared so much of that literally, but let's use it as a buzzword).

I still own about the same BTC that I ever had, the conversion to Malla Bitcoin Castle and buying some XMR did not make an appreciable dent.

So, despite that the number of XMR is less than that of BTC, you can buy them for 1/500 of the price. You don't need to sell your silver, you don't need to sell your BTC, the only thing you need to do is to buy some XMR.

The whole time I've been monitoring altcoins (about 2 years) I haven't found anything else worth buying.

XMR does everything that BTC does. Its development is even more active (by number of github commits), I like the community better, the CN technology (ring signatures) makes it anonymous in a way that Bitcoin can never be, my friends accept is as readily as bitcoin, it can be acquired with bitcoins from Poloniex (or converted back) with 5 minutes email-only registration, it has mymonero.org wallet, as easy as blockchain.info, ...

In a word, it's exactly where Bitcoin was in 2010 when I missed the train. I'm not going to miss this one, I lay back and let it play out 

[rpietila]

It is important to buy in as soon as possible

So someone reading that in Nov '13 (when you made the post) would've bought in right away and be 80% in the red now, still waiting for $2000.

Yeah, you can always cherrypick. If you take the whole price history, and compare buying in immediately to any other buyin strategy, it's hard to find one that yields a better result, even if we didn't take the resources spent in forming and executing the strategy into account. SSS is a simple, passive strategy, suitable for long-term high variance +EV investments, done with small-to-moderate % of your portfolio. It's not intended for dealers, traders, gamblers or the like.

[rjclarke2000]

I can only think with my own brains, and yes - I am telling you that the more I think, the more bullish I am on XMR, and at some point this will mean a relative bearishness even towards BTC.

I still own all the silver I had when I was a silverbug. But I am not really thinking that silver will make me a billionaire (not that I cared so much of that literally, but let's use it as a buzzword).

I still own about the same BTC that I ever had, the conversion to Malla Bitcoin Castle and buying some XMR did not make an appreciable dent.

So, despite that the number of XMR is less than that of BTC, you can buy them for 1/500 of the price. You don't need to sell your silver, you don't need to sell your BTC, the only thing you need to do is to buy some XMR.

The whole time I've been monitoring altcoins (about 2 years) I haven't found anything else worth buying.

XMR does everything that BTC does. Its development is even more active (by number of github commits), I like the community better, the CN technology (ring signatures) makes it anonymous in a way that Bitcoin can never be, my friends accept is as readily as bitcoin, it can be acquired with bitcoins from Poloniex (or converted back) with 5 minutes email-only registration, it has mymonero.org wallet, as easy as blockchain.info, ...

In a word, it's exactly where Bitcoin was in 2010 when I missed the train. I'm not going to miss this one, I lay back and let it play out 

I was an idiot and bought a lot of silver at $30. Being $17 right now I am obviously a bit annoyed.

What makes you think people will use Monero rather than BTC in the future? What plans are in the pipeline for Monero?

I am only asking as I don't know anything about XMR.

Thanks