rpietila Wall Observer - the Quality TA Thread ;)

[AnonyMint]

However, masses don't have a compelling need to use Bitcoin and the tax issue adds another reason for them to stay away. The rumor will spread virally, "you need to do a Schedule D to use Bitcoin".

People will slowly realize that the tax issue is NOT a good reason to stay away. All across America, there will be thousands of conversations in the coming years just like this one:

Jim: Does the IRS reaaaaaallllly give a shit whether I do a Schedule D? Surely I can just fudge it, right?

Bob: You could probably fudge it if you only used it like once or twice for small purchases,

Why did the USA expend in inordinate resources to make high profile cases of teenagers innocently downloading a few songs using Napster?

Please don't ignore the question.

The reason is because the government didn't want the population to be free of copyright law slavery.

Do you really think the government is going to give up its control over money?

Your mindset is based around things that don't challenge the government's control. Indeed the government will look the other way when their control isn't threatened. Even the guy who runs the FinCEN said in recent interview, they will regulate much more strongly if Bitcoin is used by most of the population.

or if you held it during a period when bitcoin value didn't go up a lot. The IRS really won't give a shit unless you made a significant amount of money on your bitcoin holdings.

Jim: And you're telling me that's a bad thing?

Bob: It sucks. My cousin Billy-Bob earned $50,000 in bitcoin capital gains last year and only got to keep something like $40,000.

You are conflating the market segment of speculators with the market segment of masses. You continue make this critical error.

You assume that the masses love to speculate. And you assume that Bitcoin is always going up. Hey right now what the masses see is Bitcoin is going down.

Masses are afraid of volatile speculations. They come it at the end, to lose everything.

I do agree the Bitcoin could end up being a huge pyramid ponzi bubble as more and more get sucked into the intoxicating rise, with no fundamental compelling use as a currency. Smart traders will sell when it can be overhead at birthday parties amongst the mothers that they are buying Bitcoin "to the moon". We've seen this before in history of man.

Jim: What's so bad about that?

Bob: He like, had to fill out a Schedule D, man.

Jim: So you're saying it's worth it to give up $40,000 so you can avoid filling out a Schedule D?

Bob: Exactly.

Jim: You're mom and dad were first cousins, weren't they? .....

Now you are just being a dick. Is that really necessary to insult in order to discuss?

[BTCtrader71]

One of the big needs I expect is when the confiscations begin, there will be a rush into crypto-currencies.

Early bitcoin enthusiasts appreciated this (the threat of confiscations in particular, or totalitarian governments in more general terms) from day 1.

The more totalitarian governments also appreciate this; they see bitcoin as a threat for this reason, and so they move against bitcoin sooner rather than later.

The less totalitarian governments (I include the US here) have no immediate plans to do any crazy-ass confiscations. But, if and when they decide to borrow a page from FDR ... it will be too late. Bitcoin will be entrenched.

Most people won't appreciate all of this until it hits them over the head, at which time they will make Satoshi a saint.

[seleme]

EMunie will be anonymous.

[AnonyMint]

An anonymous coin would be great. Be sure to note it here when you find someone(s) to launch it.  A well thought out alt could grow very quickly compared to bitcoin. The market is ready established, and crypto-funded.

Note that the developer of Darkcoin admitted to me yesterday that I was correct and Darkcoin breaks anonymity by trusting the master node with your identity.

I provided him a suggestion, but it is not my best idea of how to do anonymity (which requires a different design than Darkcoin has).

[AnonyMint]

EMunie will be anonymous.

hahaha.

[BTCtrader71]

Please don't ignore the question.

...

Do you really think the government is going to give up its control over money?

I think this is a very good question, and I think the answer is no, they will not give up control over money. At least, not on purpose. So in my mind the question becomes: does the government regard cryptocurrencies as a threat to their control over money? A few years ago I might have predicted yes, but recently I have been leaning more towards no, based on less-than-hostile comments from various people like Ben Bernanke, Janet Yellen, Alan Greenspan. Arguably, Greenspan doesn't get it and is not able to judge whether it's a threat. The other two are probably in a better position. My most recent thinking is that the rise of fall of the US dollar will depend on lots of things, but bitcoin is not as high on that list as early enthusiasts (like me) used to think. In an ideal world, bitcoin will not topple the central banking system, something else will; and when that happens, bitcoin will save us all from chaos. I am sure my thinking on this question will continue to evolve.

Your mindset is based around things that don't challenge the government's control. Indeed the government will look the other way when their control isn't threatened. Even the guy who runs the FinCEN said in recent interview, they will regulate much more strongly if Bitcoin is used by most of the population.

My current thinking (again, this is likely to evolve as time goes on) is that by the time they decide to regulate bitcoin, it will be too late.

Jim: What's so bad about that?

Bob: He like, had to fill out a Schedule D, man.

Jim: So you're saying it's worth it to give up $40,000 so you can avoid filling out a Schedule D?

Bob: Exactly.

Jim: You're mom and dad were first cousins, weren't they? .....

Now you are just being a dick.

Having been born south of the Mason-Dixon line, I meant only to make fun of myself. My apologies if I offended ...

[AnonyMint]

The less totalitarian governments (I include the US here) have no immediate plans to do any crazy-ass confiscations. But, if and when they decide to borrow a page from FDR ... it will be too late. Bitcoin will be entrenched.

The head of the USA Treasury department that oversees FinCEN has said in recent interview (have a link to it on my thread) they are monitoring adoption very closely. He specifically said that government oversight will increase if it becomes possible to move large amounts of money with Bitcoin and/or you can live by spending only Bitcoin. And that was only the financial crimes division. He said other departments were watching it with other mandates. This will not fly past their radar. He specifically mentioned anonymity as a threat many times. He also said they have people tracking the block chain.

[creekbore]

Allow me to an express a view on the factual points you raised, creekbore:

I'm talking about the fact that the news, satire programs, newspapers, magazines etc ridicule BTC.

All press is good press.  Just wait until the next wave of pedophiles and terrorists.

I talk to people about BTC and they think I'm a crank.

Always true of the vanguard.  It means there's a lot of upside.

The IRS statement,

Good news.  Institutional money would not touch it until there was tax clarity.

China's slow strangulation of BTC,

Admittedly painful, but to be expected, and not in any way fatal.

Gox,

That's over.

the FUD surrounding NeoBee

NeoBee is rather minor.  Cyprus?  Noise.

The bid/sum ratio is dreadful, you can't dispute the numbers

Bids 50% out from the book can't be taken seriously.

You bring up adoption metrics but I actually raised this issue -- most of the data available through blockchain suggest adoption is going very poorly.  But instead lets focus on a single set of data (increased BTC addresses) ...but I use a new address for withdrawals and deposits everytime I do a BTC tx.  I suspect many do the same, so this data is meaningless.  No-one comments on this.

You are mistaken regarding which number I deem significant.  New addresses is not significant.  The number of active addresses during a rolling window is the best representation available for the size of the commerce network.  The only other number which reflects this vigor is the value transferred, again, during a rolling window.

Instead I get a page of n^p x p>x means everything is OK. 

It is what it is.  Whether it is OK or not is very subjective.  You might enjoy a benzodiazepine.  Not too much now.  It will make you feel things are a bit more OK.

Price can do many things, but it can't deviate from fundamental value for too long, or there is arbitrage.

Thanks for getting back Am.  Bit peeved Risto can't be arsed given he claims I have 'an agenda'....bloody senior management

Re. PR....that's a kind of old fashioned belief (any publicity is good publicity) I think audiences are more sophisicated in some respects, more receptive to brainwashing in others.  The message from the MSM is pretty simple - if you go near BTC you will lose money.  We can speculate about media ownership, editorial freedom etc but lets not fool ourselves into thinking the Gox publicity is good for BTC.

Re. "there's always an upside" ...loving it but come on. 

RE. IRS...as always you are bullish.  But Anony and others seem to disagree with you on this (I'm not American and haven't got a clue about your kafaesque tax system but most comments I see tend to be negative).

Cyprus...noise?  Yeah, I guess Europe is nothing...its where you guys fight wars.  It's only the worlds first bricks and mortar BTC bank....fuck it, irrelevant.

Bid/sum....well sure....when the numbers don't agree with my world view...ignore them...I tell my bank manager the same about my mortgage.

Re. addresses...well this is good...if I am mistaken, great but thus far it makes little sense to me (eg how do you know if an address is active from the data we were discussing and define a rolling window).  If I make a new address to send a few satoshis to exchange one and then forward them to a new address, multiplied a few times multiplied by thusands of old time users how does this equate to 'increased adoption.'

I could accept this if all the other charts backed this up....but they don't (eg number of tx has remained pretty much constant over the last 12 months).  Infact, the only chart that shows any sort of positive increase is...surprise, surprise, the one we should embrace.

It does seem that data is being cherry picked to fit an opinion rather than an opinion being formed from data.

I dislike benzos but thanks for the offer...you seem to think something is 'wrong' with me for not accepting your opinion hook, line and sinker.  I'm neither bullish nor bearish, simply curious about those of either party who take an extreme stance.

[AnonyMint]

RE. IRS...as always you are bullish.  But Anony and others seem to disagree with you on this (I'm not American and haven't got a clue about your kafaesque tax system but most comments I see tend to be negative).

IRS ruling is bullish because the investors now know the rules.

It is bearish only in the sense that the masses are not coming any time soon into Bitcoin, so this can deflate some of the near-term overextension by n00b investors who were expecting the masses to come tomorrow. Just another factor to cause weak hands to lose hodl when the price drop below $400 scares them.

Re. addresses...well this is good...if I am mistaken, great but thus far it makes little sense to me (eg how do you know if an address is active from the data we were discussing and define a rolling window).  If I make a new address to send a few satoshis to exchange one and then forward them to a new address, multiplied a few times multiplied by thusands of old time users how does this equate to 'increased adoption.'

I could accept this if all the other charts backed this up....but they don't (eg number of tx has remained pretty much constant over the last 12 months).  Infact, the only chart that shows any sort of positive increase is...surprise, surprise, the one we should embrace.

The correlation of n^2 == p is undeniable from Peter R's upthread chart.

Rather n appears to be 50% higher than baseline adoption at 100,000 (if you accept my TA notion that baseline is the linear projection of the bottoms on the log 10 chart). Thus the lack of transactions expansion could support my idea that n will come down to 100,000 so that the recent divergence between n^2 and p is corrected (instead of p rising to resolve the divergence).

Then we bottom and upwards "to the moon" from there (until the next bubble overextension and correction).

[AnonyMint]

Please don't ignore the question.

...

Do you really think the government is going to give up its control over money?

I think this is a very good question, and I think the answer is no, they will not give up control over money. At least, not on purpose. So in my mind the question becomes: does the government regard cryptocurrencies as a threat to their control over money? A few years ago I might have predicted yes, but recently I have been leaning more towards no, based on less-than-hostile comments from various people like Ben Bernanke, Janet Yellen, Alan Greenspan.

Propaganda. Have you followed what Larry Summers said? They want digital currency so they can easily confiscate. The establishment is supporting Bitcoin because they can more easily track where all the money is.

....but bitcoin is not as high on that list as early enthusiasts (like me) used to think. In an ideal world, bitcoin will not topple the central banking system, something else will; and when that happens, bitcoin will save us all from chaos. I am sure my thinking on this question will continue to evolve.

It is very high on their list if it can grow.

They are trial ballooning different ways to bring the world onto a digital ledger so they can confiscate by pressing a button. Off chain on Bitcoin will be the mechanism to achieve this control.

They have nothing to fear from Bitcoin, because one pool already controls 50% of the mining. They could easily blacklist coins tomorrow if they needed to.

Now they just to manage their baby well to keep you all supporting their desired outcome of slavery.

Proof is in the facts. Bitcoin is not decentralized. You all are controlled by propaganda. The mining is already controllable by the government.

The key now is to manage it so you all don't wake up and move to an anonymous coin. To keep you all locked in by your greed and the thought the largest market size is best.

Your mindset is based around things that don't challenge the government's control. Indeed the government will look the other way when their control isn't threatened. Even the guy who runs the FinCEN said in recent interview, they will regulate much more strongly if Bitcoin is used by most of the population.

My current thinking (again, this is likely to evolve as time goes on) is that by the time they decide to regulate bitcoin, it will be too late.

Jim: What's so bad about that?

Bob: He like, had to fill out a Schedule D, man.

Jim: So you're saying it's worth it to give up $40,000 so you can avoid filling out a Schedule D?

Bob: Exactly.

Jim: You're mom and dad were first cousins, weren't they? .....

Now you are just being a dick.

Having been born south of the Mason-Dixon line, I meant only to make fun of myself. My apologies if I offended ...

That makes two us. Born and raised to age 15 in New Orleans.

[creekbore]

RE. IRS...as always you are bullish.  But Anony and others seem to disagree with you on this (I'm not American and haven't got a clue about your kafaesque tax system but most comments I see tend to be negative).

IRS ruling is bullish because the investors now know the rules.

It is bearish only in the sense that the masses are not coming any time soon into Bitcoin, so this can deflate some of the near-term overextension by n00b investors who were expecting the masses to come tomorrow. Just another factor to cause weak hands to lose hodl when the price drop below $400 scares them.

Re. addresses...well this is good...if I am mistaken, great but thus far it makes little sense to me (eg how do you know if an address is active from the data we were discussing and define a rolling window).  If I make a new address to send a few satoshis to exchange one and then forward them to a new address, multiplied a few times multiplied by thusands of old time users how does this equate to 'increased adoption.'

I could accept this if all the other charts backed this up....but they don't (eg number of tx has remained pretty much constant over the last 12 months).  Infact, the only chart that shows any sort of positive increase is...surprise, surprise, the one we should embrace.

The correlation of n^2 == p is undeniable from Peter R's upthread chart.

Rather n appears to be 50% higher than baseline adoption at 100,000 (if you accept my TA notion that baseline is the linear projection of the bottoms on the log 10 chart). Thus the lack of transactions expansion could support my idea that n will come down to 100,000 so that the recent divergence between n^2 and p is corrected (instead of p rising to resolve the divergence).

Then we bottom and upwards "to the moon" from there (until the next bubble overextension and correction).

OK, no-one has still bothered to state what 'n' stands for (I'm assuming p = price) but it all sounds highly plausible.

Selling wife and kids as we speak.

[AnonyMint]

- After about 2-3 months, we are near 1000 and there is a hurdle to get over it. It succeeds and the rally is ignited, catapulting us to a new ATH of 3000-7000 in July-August. From taking the old ATH of 1163 to making the new, it is only 20-40 days.

I wonder what the next catalyst will be to get the next wave of investors to rush in?

I am thinking the confiscations begin in Europe, but I think not that soon.

Any ideas? Just curious.

[AnonyMint]

OK, no-one has still bothered to state what 'n' stands for (I'm assuming p = price) but it all sounds highly plausible.

I wrote that upthread. Here it is again.

It is the number of unique addresses from the blockchain.info chart. And Peter R showed that n^2 correlates with price p. This is Metcalf's Law and Reed's Law.

I had explained in an upthread post that if we use a ruler on the n chart along the bottoms since 2012, then should currently be at 100,000 yet it is currently at 150,000.

Also there was a divergence since February where p declined but n rose. That divergence must be resolved. Will p rise or n decline?

If n must drop by 33%, then p price could drop to 0.67 x 0.67 = 45% of recent p (inconclusive to determine which recent p to multiply by .045, perhaps $450 - $600).

I also projected the bottom from July 2012 using compounding and I also get a $300 to $350 target for the bottom within next 2 weeks.

$450 is a lot closer to the bottom than $600 was. Risto is correct about that.

[aminorex]

RE. IRS...as always you are bullish.  But Anony and others seem to disagree with you on this (I'm not American and haven't got a clue about your kafaesque tax system but most comments I see tend to be negative).

AnonyMint is concerned about mass adoption, because he wants to save the world.  More power to him.  Being in the world, I think it could use some saving.  But his particular form of mass adoption is not necessary or to be expected during the time between now and the next two or three hype cycles.  IRS treatment of bitcoin can be harmful to mass adoption in the medium term, but good for institutional adoption in the near term.

Cyprus...noise?  Yeah, I guess Europe is nothing...its where you guys fight wars.  It's only the worlds first bricks and mortar BTC bank....fuck it, irrelevant.

It's not even a country really.  It's a disputed island with fewer people on it than live a what they call a "small town" in China.  

Bid/sum....well sure....when the numbers don't agree with my world view...ignore them...I tell my bank manager the same about my mortgage.

Which offer has more impact on price, 1000 BTC ask $0.5 north of BBO, or 1000 BTC ask at $3000?  I discount numbers that merit discounting.  If you fail to do that, then you will make irrational choices.


I won't try to fix your failure to understand why recently active addresses are valid value-adding nodes in a network.  I'm just not sure I could do much good there.

I dislike benzos but thanks for the offer...you seem to think something is 'wrong' with me for not accepting your opinion hook, line and sinker.  I'm neither bullish nor bearish, simply curious about those of either party who take an extreme stance.

Just trying to make you happier.  You seem rather dour about the facts.  

I am extremely bullish because I believe fundamental factors will dominate over time.  The conjunction of compelling factors which are in bullish agreement is of the kind which are persistent and largely insensitive to the more problematic aspects.  Bearish factors tend to be fleeting ones.  They have a big impact, but it fades rapidly.  When the fundamental factors cease to paint a bullish picture,  I will change my approach.  Presently, the more bullishness I can convey to others, the better of they will be,  in my opinion.  It's hard to remain bullish when price crashes, when fiduciaries fail, when thieves are trying to hack you, bears spew FUD, the press is negative, DDOSers are attacking the forums and exchanges.  If people don't see the light at the end of the tunnel, they will fail.  Their hands will weaken.  Their DCA program will be forgotten.  If you want to make the world a better place, one where people who love freedom and human dignity are empowered, and those who love to enslave others decline in relative influence, then you've got to be a booster.  It's not easy to hold through such insane volatility.  It would be nice if we could all be that strong, but some are weak, and can use encouragement.

[creekbore]

OK, no-one has still bothered to state what 'n' stands for (I'm assuming p = price) but it all sounds highly plausible.

I wrote that upthread. Here it is again.

It is the number of unique addresses from the blockchain.info chart. And Peter R showed that n^2 correlates with price p. This is Metcalf's Law and Reed's Law.

I had explained in an upthread post that if we use a ruler on the n chart along the bottoms since 2012, then should currently be at 100,000 yet it is currently at 150,000.

Also there was a divergence since February where p declined but n rose. That divergence must be resolved. Will p rise or n decline?

If n must drop by 33%, then p price could drop to 0.67 x 0.67 = 45% of recent p (hard to determine which recent p to use $450 - $600).

OK, thanks.

But here you are saying unique addresses....earlier Aminorex was saying 'active' addresses.

Now, I just went onto a couple of exchanges and created half a dozen new addresses.  But I'm still a single user.

I won't pretend to know the math but my wife (soon to be sold for BTC ) is a scientist and I know from her that all source data has to be analysed for standard errors, Cronbach, GLAs etc...its all beyond a thicky like me but the one thing I have picked up is that using 'raw' data is problematic.  So, do these calculations take into account this sort of thing?

[AnonyMint]

When I have to report capital gains, do you think I record all that stuff myself?  No.  I go to turbotax.com, type in the name of my brokerage and credentials and it imports it all for me.  Software.  There's nothing fundamentally different about bitcoin that it can't be reported the same way.

I have never been able to get my brokerage to interopt with H&R Block and never was worth the time to figure out. That you figured out how to get interoption is great for you, but fact is there is a huge amount of Murphy's Law involved and this won't scale.

One of Steve Jobs favorite analysis and putdowns to very smart people was, "that won't scale". I know because my former genius boss says Steve did it to him.

Interoperation friction destroys scaling.

You aren't using your broker to do that for Bitcoin now, so you must be doing it manually. Or you are not reporting your small Bitcoin transactions.

I have often wondered if many are setting themselves up to be destroyed by the IRS by not reporting small BTC transactions.

I believe the dying socialism will use every little violation to rip us apart.

My perspective is viewed as too extreme and paranoid.

[BTCtrader71]

Propaganda. Have you followed what Larry Summers said? They want digital currency so they can easily confiscate. The establishment is supporting Bitcoin because they can more easily track where all the money is.

I have not, but will look for it when I have time. I think the overall reaction of the government towards cryptos is going to turn out to be very complex. And fascinating. And one thing to keep in mind, is that there will be no unified reaction, because "the government" is run by lots of people with conflicting agendas. With campaigns funded by more people with different agendas. And varying degrees of technical sophistication.

They are trial ballooning different ways to bring the world onto a digital ledger so they can confiscate by pressing a button. Off chain on Bitcoin will be the mechanism to achieve this control.

They have nothing to fear from Bitcoin, because one pool already controls 50% of the mining. They could easily blacklist coins tomorrow if they needed to.

Now they just to manage their baby well to keep you all supporting their desired outcome of slavery.

Proof is in the facts. Bitcoin is not decentralized. You all are controlled by propaganda. The mining is already controllable by the government.

The key now is to manage it so you all don't wake up and move to an anonymous coin. To keep you all locked in by your greed and the thought the largest market size is best.

I have contemplated what sort of technical battle would ensue if the government decided to take explicit control of the blockchain.

For the sake of argument, suppose the government announced that all miners had to be "licensed" or "approved" or some such thing. How could the crypto community fight this? I suppose the community could fork the blockchain to make a branch run only by miners that were not government sponsored. Perhaps, there could be some underground network of anarcho-miners who are required to pledge their allegiance to the Ghost of Satoshi to become part of the network. There would ALWAYS be people willing to risk their lives to run this network. So I don't think the government could kill the network. What they could do, is prosecute people who are caught using the "unapproved" bitcoin blockchain. They'd probably have to crack down pretty hard. And whether they would be successful, I dunno.

Another question: what if two (or more) governments battle for control of the blockchain, so no one gets 51%? Does that mean Satoshi wins?

[aminorex]

But here you are saying unique addresses....earlier Aminorex was saying 'active' addresses.

We're talking about different things.  Peter R's chart referenced by AnonyMint was based on unique non-dust addresses.  He also ran the correlation to the active addresses, which I prefer because I consider it the best proxy for a commerce node.  I believe the gbianchi's chart, which described the I^2.26 fit was the first published fit of price to the latter factor.  I think that was done some time in November.

Now, I just went onto a couple of exchanges and created half a dozen new addresses.  But I'm still a single user.

The number of people using bitcoin doesn't matter as much as the number of commerce nodes.  If everyone creates 10 addresses a day, and uses them for a transaction, then the number of active nodes will be the number of people times 70 (7 day rolling window).  In fact everyone creates addresses at some average rate.
The point is that the number of active users is proportional to the number of active addresses, to a first order approximation.  The number and sizes of their transactions will also play a role, but will be second order factors.  The same proportional reasoning applies to the unique addresses, but multiplied by the average age of the addresses.  The exponential fit is scaled by the multipler.  It doesn't matter what the multiplier is.  Thats how math works.

[creekbore]

I won't try to fix your failure to understand why recently active addresses are valid value-adding nodes in a network.  I'm just not sure I could do much good there.

Why is this a 'failure'....we seem to have some 'dissonance' here.

You interpret these nodes as a new user...I see them as possibly being a previous user.  If you can divine the difference please tell me how it is done....IP addresses?  And TOR and proxy users?

Re. Neo...dismissing this story because of Cyprus' population size. C'mon.

Sorry if I appear 'dour' but 'facts' are subjective and I was taught to question those who have entrenched views or positions.  And anyway benzos make one neither happier or healthier (I believe Tamazepan is extremely carcinogenic).

[aminorex]

I believe the dying socialism will use every little violation to rip us apart.

I agree strongly.  I've seen it happen to many people.  http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/1594035229

I would not characterize the villain as "socialism" per se.  Such ideologies are tools in the hands of Bernaysian manipulators who gain much power by factionalizing the populace.

Staying low profile and knowing which felonies are likely to be prosecuted and when is a helpful individual survival strategy, although it is not helpful to the society.  The problem is civil obedience.  https://www.youtube.com/watch?v=S2li9E_94MA

I switch between these approaches according as I pick my fights.

My perspective is viewed as too extreme and paranoid.

It is definitely too extreme and paranoid for many purposes.  Whether it is adequately extreme and paranoid for your purposes -- of that, you are the best human judge.