rpietila Wall Observer - the Quality TA Thread ;)

[mgburks77]

4. Altcoins will proliferate the # of coins in the ecosystem.

Anonymint, is there a thread in which you discuss this aspect?

I don't want to disrupt the flow of conversation here but I am very curious about this.

[7thKingdom]

On the subject of why $500 millionaires should not buy Bitcoin and why I disagree with Risto's claim that the only thing that matters is how many BTC you own...

1. A bitcoin is not an heirloom. The chances that it will hold its value long-term are very slim. Gold is a much better heirloom.

2. The 21 million supply limit is a lie. This WILL be violated and there are numerous ways it can happen. The most likely way is Bitcoin is obviously moving towards offchain storage and services. In fact, Bitcoin can't have instant transactions without offchain fractional reserves (technically the exchange has to be fractional for it to happen instantly). Also the government could today regulate the few pools who have 51% and the few ASIC miners who have large datacenters, and produce as many coins per coinbase as they wanted. Later when the masses are all using government regulated offchain Coinbase.com and Bitpay.com, etc, then government can do what ever it wants to the mining and the masses won't care.

So the debasement of bitcoins in the future is an interesting idea.  My question is, how do you see this playing out?  What kind of timeframe are we looking at in your opinion?

On that note, how would a cpu only coin like you suggest is needed prevent a fractional system from emerging?

[jmw74]

On the subject of why $500 millionaires should not buy Bitcoin and why I disagree with Risto's claim that the only thing that matters is how many BTC you own...

1. A bitcoin is not an heirloom. The chances that it will hold its value long-term are very slim. Gold is a much better heirloom.

2. The 21 million supply limit is a lie. This WILL be violated and there are numerous ways it can happen. The most likely way is Bitcoin is obviously moving towards offchain storage and services. In fact, Bitcoin can't have instant transactions without offchain fractional reserves (technically the exchange has to be fractional for it to happen instantly). Also the government could today regulate the few pools who have 51% and the few ASIC miners who have large datacenters, and produce as many coins per coinbase as they wanted. Later when the masses are all using government regulated offchain Coinbase.com and Bitpay.com, etc, then government can do what ever it wants to the mining and the masses won't care.

So the debasement of bitcoins in the future is an interesting idea.  My question is, how do you see this playing out?  What kind of timeframe are we looking at in your opinion?

On that note, how would a cpu only coin like you suggest is needed prevent a fractional system from emerging?

Can someone explain why we can't safely discount this?  

Whether people are using bitcoin notes or dollar notes doesn't seem (at first blush) to make much difference in the demand for actual bitcoin.  They are the same category - people who haven't adopted bitcoin.  Yes, there is a small amount of bitcoin backing the notes, but seems like we can safely discount the vast majority of the "adoption" because it didn't actually happen.  

People who only accept bitcoin (and not the notes), will just go on as if the notes don't exist. I would hope that the community that exists today would not be so stupid as to see the value in bitcoin to begin with, and then start accepting promises to pay.  

[7thKingdom]

On the subject of why $500 millionaires should not buy Bitcoin and why I disagree with Risto's claim that the only thing that matters is how many BTC you own...

1. A bitcoin is not an heirloom. The chances that it will hold its value long-term are very slim. Gold is a much better heirloom.

2. The 21 million supply limit is a lie. This WILL be violated and there are numerous ways it can happen. The most likely way is Bitcoin is obviously moving towards offchain storage and services. In fact, Bitcoin can't have instant transactions without offchain fractional reserves (technically the exchange has to be fractional for it to happen instantly). Also the government could today regulate the few pools who have 51% and the few ASIC miners who have large datacenters, and produce as many coins per coinbase as they wanted. Later when the masses are all using government regulated offchain Coinbase.com and Bitpay.com, etc, then government can do what ever it wants to the mining and the masses won't care.

So the debasement of bitcoins in the future is an interesting idea.  My question is, how do you see this playing out?  What kind of timeframe are we looking at in your opinion?

On that note, how would a cpu only coin like you suggest is needed prevent a fractional system from emerging?

Can someone explain why we can't safely discount this?  

Whether people are using bitcoin notes or dollar notes doesn't seem (at first blush) to make much difference in the demand for actual bitcoin.  They are the same category - people who haven't adopted bitcoin.  Yes, there is a small amount of bitcoin backing the notes, but seems like we can safely discount the vast majority of the "adoption" because it didn't actually happen.  

People who only accept bitcoin (and not the notes), will just go on as if the notes don't exist. I would hope that the community that exists today would not be so stupid as to see the value in bitcoin to begin with, and then start accepting promises to pay.  

I believe it is because off chain transactions are going to have to become a reality if bitcoin is ever going to reach the speed/scaling required by mass adoption.  And off chain transactions, by nature, open up the possibility of fractional reserves.

Selectively choosing to only accept bitcoin does nothing to prevent this as no one would would know which coins were being fractionally traded off of.  Only "real" bitcoins could ever be broadcast over the actual bitcoin network, but this does nothing to the supply of bitcoins being moved around the market (off chain) in general.

And even if they had a list of addresses associated with off chain systems to "blacklist", that would lead us right back to the original problem.  That the blockchain itself can not handle the scaling required for mass adoption and must allow some sort of off chain system to exist.

[flailing Junk]

And off chain transactions, by nature, open up the possibility of fractional reserves.

Open Transactions?

[jmw74]

I believe it is because off chain transactions are going to have to become a reality if bitcoin is ever going to reach the speed/scaling required by mass adoption.  And off chain transactions, by nature, open up the possibility of fractional reserves.

Selectively choosing to only accept bitcoin does nothing to prevent this as no one would would know which coins were being fractionally traded off of.  Only "real" bitcoins could ever be broadcast over the actual bitcoin network, but this does nothing to the supply of bitcoins being moved around the market (off chain) in general.

And even if they had a list of addresses associated with off chain systems to "blacklist", that would lead us right back to the original problem.  That the blockchain itself can not handle the scaling required for mass adoption and must allow some sort of off chain system to exist.

That's years off and we haven't nearly exhausted all the possible optimizations to reduce the required bandwidth for a full node, much less an SPV node.  Not to mention the improvements in hardware between now and then.

Which requires more trust, running an SPV node or accepting off-chain transactions?  Hint: off-chain.

I think it's silly that people are fully expecting fractional reserve.  If that happens, bitcoin has completely failed, IMO.  The whole reason we started issuing notes for gold centuries ago does not make any sense with bitcoin.  Bitcoin is already easy to carry and divisible.

This scalability issue is mostly bullshit FUD.  It may be a practical problem, temporarily, but we haven't exactly spent a lot of time optimizing it yet, and worst case, hardware improvements will solve it permanently.  Hardware speed is increasing exponentially and it's not going to stop anytime soon.  The number of transactions all earthlings need to do per day is not going to increase exponentially unless cryptocurrency specifically facilitates it.  And even then it would level off pretty soon.

That's not to say off-chain transactions don't have their place.  I'd be fine with, for example, an OpenTransactions issuer who proves his reserves and uses voting pools.  

Edit: just because the possibility of fractional reserve exists, doesn't mean we should accept it.

[Biodom]

Fact about Bitcoin
It does not matter, how much you paid for your bitcoins. It only matters, how many you have.

For this reason people, corporations and states who wait until "it grows bigger" are not acting smartly because they could buy the same amount for less now. Especially now, I mean this week.

This is actually a very solid argument in a binary scenario. I have encountered this before in biotech stocks where small companies meander in single digits until they either zero out OR strike "gold" and appreciate 1000%. Because market has essentially no information it can rely on, these companies undergo incredible volatility UNTIL the pivotal event and the trick is to accumulate shares regardless of price. After the binary even, you can either sigh/cry or collect the spoils/leave some for future growth.

[damnek]

Fact about Bitcoin
It does not matter, how much you paid for your bitcoins. It only matters, how many you have.

For this reason people, corporations and states who wait until "it grows bigger" are not acting smartly because they could buy the same amount for less now. Especially now, I mean this week.

This is actually a very solid argument in a binary scenario. I have encountered this before in biotech stocks where small companies meander in single digits until they either zero out OR strike "gold" and appreciate 1000%. Because market has essentially no information it can rely on, these companies undergo incredible volatility UNTIL the pivotal event and the trick is to accumulate shares regardless of price. After the binary even, you can either sigh/cry or collect the spoils/leave some for future growth.

I make some money by creating option strategies around news events on stocks like that. Basically I sell premium (which is high in biotechs) and create a strategy that puts the odds in my favour. If you do this over and over again you should be profitable.

edit: I'm desperately waiting for bitcoin option markets to become live

[SlipperySlope]

This scalability issue is mostly bullshit FUD.  It may be a practical problem, temporarily, but we haven't exactly spent a lot of time optimizing it yet, and worst case, hardware improvements will solve it permanently.  Hardware speed is increasing exponentially and it's not going to stop anytime soon.  The number of transactions all earthlings need to do per day is not going to increase exponentially unless cryptocurrency specifically facilitates it.  And even then it would level off pretty soon.

The Bitcoin Wiki has a good article and discussion on scalabiity that addresses the issue to my satisfaction.

https://en.bitcoin.it/wiki/Talk:Scalability
https://en.bitcoin.it/wiki/Scalability

[MilkyWayMasta]

AnonyMint, is http://blog.cryptocurrencyconcepts.net/post/81016742800/the-new-pyramid what you refer to when you say,

2. The 21 million supply limit is a lie. This WILL be violated and there are numerous ways it can happen. The most likely way is Bitcoin is obviously moving towards offchain storage and services. In fact, Bitcoin can't have instant transactions without offchain fractional reserves (technically the exchange has to be fractional for it to happen instantly). Also the government could today regulate the few pools who have 51% and the few ASIC miners who have large datacenters, and produce as many coins per coinbase as they wanted. Later when the masses are all using government regulated offchain Coinbase.com and Bitpay.com, etc, then government can do what ever it wants to the mining and the masses won't care.

and

4. Altcoins will proliferate the # of coins in the ecosystem.

[Carlton Banks]

Fact about Bitcoin
It does not matter, how much you paid for your bitcoins. It only matters, how many you have.

For this reason people, corporations and states who wait until "it grows bigger" are not acting smartly because they could buy the same amount for less now. Especially now, I mean this week.

This is what baffles me.  Waiting makes no logical sense at all.  Let's say I'm a big shot with $500 million to invest.  I can take 0.1% of that and buy BTC1000.  If bitcoin gets huge ($100k each), then I've increased my assets to $600 million (significant gain), and risked basically nothing.  And the reason I don't do this is, ostensibly, because it's small potatoes?  It makes no sense.  

Your reasoning assumes a multi-millionaire in isolation.

Best strategy for the multi-millionaire is to use money and influence to buy at the lowest price (pay for multi-pronged trolling campaign across all bitcoin and non-bitcoin media would be a must...). These guys are pathologically driven, you don't become so wealthy and influential any other way.

[windjc]

Fact about Bitcoin
It does not matter, how much you paid for your bitcoins. It only matters, how many you have.

For this reason people, corporations and states who wait until "it grows bigger" are not acting smartly because they could buy the same amount for less now. Especially now, I mean this week.

This is what baffles me.  Waiting makes no logical sense at all.  Let's say I'm a big shot with $500 million to invest.  I can take 0.1% of that and buy BTC1000.  If bitcoin gets huge ($100k each), then I've increased my assets to $600 million (significant gain), and risked basically nothing.  And the reason I don't do this is, ostensibly, because it's small potatoes?  It makes no sense.  

Your reasoning assumes a multi-millionaire in isolation.

Best strategy for the multi-millionaire is to use money and influence to buy at the lowest price (pay for multi-pronged trolling campaign across all bitcoin and non-bitcoin media would be a must...). These guys are pathologically driven, you don't become so wealthy and influential any other way.

Most high multi-millionaires do not have an incentive to invest in high risk investment - which is exactly what BTC is right now. Why high risk your money, when you have privaleged opportunities to invest in low risk decent returns using traditional systems. If you have $100 million and can earn 10-15% (10-15 million per year) with virtually no risk investments, then why bother with bitcoin?

Most ultra-wealthy do not foresee or believe in a fiat collapse either. So there's no incentive there.

Yes, a few like the Winklevoss twins are the exception, but most ultra millionaires are too consumed with their businesses, travel and ventures to learn about or care about bitcoin right now.

[jmw74]

Your reasoning assumes a multi-millionaire in isolation.

Best strategy for the multi-millionaire is to use money and influence to buy at the lowest price (pay for multi-pronged trolling campaign across all bitcoin and non-bitcoin media would be a must...). These guys are pathologically driven, you don't become so wealthy and influential any other way.

Yup, it does seem like that would be an obvious strategy.  It wouldn't surprise me if it were happening right now.  Then again, there are plenty of trolls who troll for the fun of it, not because they're being paid.  So just because we see them doesn't prove anything.

[Carlton Banks]

Your reasoning assumes a multi-millionaire in isolation.

Best strategy for the multi-millionaire is to use money and influence to buy at the lowest price (pay for multi-pronged trolling campaign across all bitcoin and non-bitcoin media would be a must...). These guys are pathologically driven, you don't become so wealthy and influential any other way.

Yup, it does seem like that would be an obvious strategy.  It wouldn't surprise me if it were happening right now.  Then again, there are plenty of trolls who troll for the fun of it, not because they're being paid.  So just because we see them doesn't prove anything.

It's true, first rule of troll club is never break persona and never admit hidden agenda.

I quite like having them around TBH, it's better to witness just what the best they can achieve is. The extent to which this forum gets trolls is arguably the best proof there is of bitcoin's value proposition.

[BitchicksHusband]

I not only believe there is only one possible future, but also that the whole existence has been "written" before being played. But from the human mind perspective that is shut-down in the space-time illusion, probabilities is the only way to make assessments, preparations, investments in relation with the future.

there is no evidence for that argument, and there is some pretty interesting evidence against that argument in the realm of quantum physics.

 - anything is possible. did you know that in the highest study of philosophy, even the validity mathematics is being debated.

All the fulfilled prophecy in Scripture is a pretty good evidence for that argument.  You just refuse to accept it.

[chessnut]

All the fulfilled prophecy in Scripture is a pretty good evidence for that argument.  You just refuse to accept it.

are you talking religion now?

[Chalkbot]

All the fulfilled prophecy in Scripture is a pretty good evidence for that argument.  You just refuse to accept it.

are you talking religion now?

I thought maybe it was a joke.... hopefully?

[BitchicksHusband]

All the fulfilled prophecy in Scripture is a pretty good evidence for that argument.  You just refuse to accept it.

are you talking religion now?

Yes, but only as a proof as to why some people believe in a single timeline.  While we have free will, God sees the choices that we will (inevitably) make, since he knows all.  So while there are theoretically infinite timelines possible based on every choice by every creature, in reality there would only be one that will actually be chosen and God already knows what that will be.

[BitchicksHusband]

All the fulfilled prophecy in Scripture is a pretty good evidence for that argument.  You just refuse to accept it.

are you talking religion now?

I thought maybe it was a joke.... hopefully?

Nope.  Not a joke.  I believe there is a single timeline, not infinite, and I'm explaining why.

[isov]

Why can you see on bitcoinwisdoms 5min chart of bitstamp a big volume candle of 2k coins but on the 15min chart you can't see that volume candle?