rpietila Wall Observer - the Quality TA Thread ;)

[rpietila]

I remain a little bit puzzled why you seem to want to continuously get your Monero book digs in - when in reality BTC is the ONLY "real" game in town. 

Monero is the first alt (okay some said LTC a year ago..) that functions as a hedge to Bitcoin.

Same as Bitcoin is a hedge to paper assets.

Gold is a hedge to all.

This is very precious, to find an asset that has good positive EV and is a hedge. Everyone who has BTC does a pareto-improvement move by buying XMR, with 0.25%-5% of the holdings. This has nothing to do with taking a position, it is a slam dunk move if you invest professionally.

Monero is quite a bit more than merely a hedge though.
It holds a separate non-trivial innovation track that is not developed in Bitcoin.

That's why I suggested that hedging in a pareto-optimal way is not yet even taking a position due to Monero's own qualities! 

[dEBRUYNE]

Good time to buy monero right now?
Looking to diversify 0.5% of my btc holdings into it

Also what exchange do you guys trade on?

All-time weighted average lies around 0.0042 IIRC, so with the the price now hoovering around 0.0038 it would be a good buy in point. I prefer poloniex to trade on, because it has by far the most liquidity. Trade volume also exceeds 100k $ most days, so it won't be a problem to do a big purchase.

Also have a look at this:
https://bitcointalk.org/index.php?topic=721045.msg8477489#msg8477489

FAQ here: https://bitcointalk.org/index.php?topic=721045.0
Missives (updates etc.) and other details : https://bitcointalk.org/index.php?topic=721045.0

Monero is the first alt (okay some said LTC a year ago..) that functions as a hedge to Bitcoin.

Same as Bitcoin is a hedge to paper assets.

Gold is a hedge to all.

rpietila,

Could you please elaborate on the factors or characteristics of XMR that you believe make it the 'first alt' that functions as a hedge to Bitcoin?

Why does XMR function as hedge better or rather than LTC or DRK, for example.

Thanks!

24Kilo

Altough this question isn't directed to me, look at the top of my post (where I quoted podyx) for reasons why monero matters. LTC is sort of a clone of bitcoin, which was advertised as ASIC resistant, now that ASICS are out that point is not valid anymore. Doesn't have any other functions bitcoin hasn't or can't implement. As for DRK, DRK had a huge premine and is not truly anonymous. Maybe some other members can elaborate a bit more on this?

I remain a little bit puzzled why you seem to want to continuously get your Monero book digs in - when in reality BTC is the ONLY "real" game in town.  

Monero is the first alt (okay some said LTC a year ago..) that functions as a hedge to Bitcoin.

Same as Bitcoin is a hedge to paper assets.

Gold is a hedge to all.

This is very precious, to find an asset that has good positive EV and is a hedge. Everyone who has BTC does a pareto-improvement move by buying XMR, with 0.25%-5% of the holdings. This has nothing to do with taking a position, it is a slam dunk move if you invest professionally.

Monero is quite a bit more than merely a hedge though.
It holds a separate non-trivial innovation track that is not developed in Bitcoin.
 

Agree on this, privacy is a big niche to be filled. Personally I think darkmarkets will change to XMR in the future if it has more liquidity.

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

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

How much would you bet?

Risto:  I appreciate the scenario that you describe with the dice; however, I remain a little bit puzzled why you seem to want to continuously get your Monero book digs in - when in reality BTC is the ONLY "real" game in town.  

Maybe down the road this will change and Monero or some other Alt may come to play a fairly significant role in the crypto space.. ... In the mean time,  a very large share of the investments (including mainstream investors) are going into BTC and this does NOT seem likely to change (or move over to another coin) for quite some time - at least several years the way that things seem to be currently going.  

Also, there is NO real fundamental flaws with BTC even though one or more of some of these other cryptos may have some features that would be difficult to have assimilated into BTC.

In the end, I believe that the odds are greater than 50% that BTC will surpass $5k per BTC.... but it remains possible that it could take a few more years to get above that price level.

I don't have exact numbers in my head at the moment (whether it is 60% or 75% or some other number) b/c I do believe that it remains difficult to place exact numbers on the probabilities when there are so many factors and so many actors.  I suspect that   it could take anywhere between 1 month and 2 years to move BTC prices to the next ATH..... and probably higher likelihood that such a move above previous ATH would take place within the next 6-9 months.

What about the 1MB blocksize limit? It requires a hard fork to change it, while monero has a adaptive blocksize limit.

[nakaone]

So Risto. If I understand you correctly you now think the failure risk of bitcoins is 50%? Sounds much more reasonable to me than the dramatically smaller risk for failure numbers you were speaking of half a year ago. Does this have to do with Monero entering the stage and the fact that you see chances growing for alternative coins or does it have to do with your view of bitcoin itself?

Yes, if "failure" is defined to mean "will not rise to $5000+ ever".

Still if the probability for rising such is 50%, it is an incredibly good buy, and this is what I have been saying all along.

I appreciate your posts, but did you know, that in reality there is no such thing as a 'probability'?

The so-called "Master Argument" was apparently first formulated clearly by Diodorus. He argued that the actual is the only possible. He observed that if something in the future is not going to happen, it was therefore true in the past that it would not happen.

Modern philosophers like J. J. C. Smart like to think that the future is "already out there" in the relativistic space-time continuum of the "block universe."

Modern determinists/compatibilists on free will like to argue that just as the past cannot be changed, so the future cannot be changed. "Change it from what to what?," says Daniel Dennett.

It doesn't really matter whether probability theory is true in the pure definition of reality. What matters is that it's accurate from an individuals perspective.

which can never be verified or falsified assuming that time + innovation is non-repetitive over time.

I think there are quite much better indicators than probability to classify the state of nature in the cryptoenvironment.

I would not say that risto was lucky with his investments, he found the right indicators and gave them probabilities - the second part was probably unneccessary.

[JayJuanGee]

So Risto. If I understand you correctly you now think the failure risk of bitcoins is 50%? Sounds much more reasonable to me than the dramatically smaller risk for failure numbers you were speaking of half a year ago. Does this have to do with Monero entering the stage and the fact that you see chances growing for alternative coins or does it have to do with your view of bitcoin itself?

Yes, if "failure" is defined to mean "will not rise to $5000+ ever".

Still if the probability for rising such is 50%, it is an incredibly good buy, and this is what I have been saying all along.

I appreciate your posts, but did you know, that in reality there is no such thing as a 'probability'?

The so-called "Master Argument" was apparently first formulated clearly by Diodorus. He argued that the actual is the only possible. He observed that if something in the future is not going to happen, it was therefore true in the past that it would not happen.

Modern philosophers like J. J. C. Smart like to think that the future is "already out there" in the relativistic space-time continuum of the "block universe."

Modern determinists/compatibilists on free will like to argue that just as the past cannot be changed, so the future cannot be changed. "Change it from what to what?," says Daniel Dennett.

It doesn't really matter whether probability theory is true in the pure definition of reality. What matters is that it's accurate from an individuals perspective.

which can never be verified or falsified assuming that time + innovation is non-repetitive over time.

I think there are quite much better indicators than probability to classify the state of nature in the cryptoenvironment.

I would not say that risto was lucky with his investments, he found the right indicators and gave them probabilities - the second part was probably unneccessary.

All this philosophical talk about probabilities NOT mattering is a bunch of bullshit.

We are individuals in a sea of unknowns, and there are so many courses that the future can take.

In the present, we have NO fucking clue, exactly, about the direction of the future, except to place probabilities on various outcomes. 

Surely, once the outcomes have taken place, then the future becomes 100% certain, but that 100% certainty of the outcome did NOT change the fact that we had NO real clue exactly what was going to take place except after it happened and except for doing our best to predict possible outcomes (with some outcomes being more likely, in our calculations than others).  There may be some luck involved with a lot of that prediction, also, and some people have better access to information and even better skills at seeing through the bullshit than others.

[NewLiberty]

It may generally be treated as humor when philosophers use the phrase "in reality" to describe a philosophy.
Moving on...
We've had a strong measure of BTC price stability for the last two weeks.  Consolidation.

[molecular]

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

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

How much would you bet?

How often can I play?

Everything!

[wachtwoord]

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

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

How much would you bet?

How often can I play?

Everything!

You would? Quote the gambler (although it's EV optimal of course). I would go with 50% which is already far above what the average person would wager.

[rpietila]

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

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

How much would you bet?

How often can I play?

Everything!

You would? Quote the gambler (although it's EV optimal of course). I would go with 50% which is already far above what the average person would wager.

I don't remember the Kelly formula exactly for this complex case, but it will suggest minimum 50% and max 83% anyway. That should be prudent for long term investor with the intent on maximizing his bankroll but not going broke.

Because earning capacity can be added to the bankroll in real life, and running into debt is possible, the optimal strategy could actually be 100% or more for those whose initial capital is small. If I was 20 and healthy (neither of which is true), and that was an actual question presented to me, I would probably have taken up to €5,000 debt to leverage my investment, since that is easy to pay back if you are 20 and healthy.

Later I learned to not take debt.

[Odalv]

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

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

How much would you bet?

How often can I play?

Everything!

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

[BitChick]

I remain a little bit puzzled why you seem to want to continuously get your Monero book digs in - when in reality BTC is the ONLY "real" game in town. 

Monero is the first alt (okay some said LTC a year ago..) that functions as a hedge to Bitcoin.

Same as Bitcoin is a hedge to paper assets.

Gold is a hedge to all.

This is very precious, to find an asset that has good positive EV and is a hedge. Everyone who has BTC does a pareto-improvement move by buying XMR, with 0.25%-5% of the holdings. This has nothing to do with taking a position, it is a slam dunk move if you invest professionally.

Monero is quite a bit more than merely a hedge though.
It holds a separate non-trivial innovation track that is not developed in Bitcoin.
 

Do people foresee Monero being used alongside Bitcoin in the future?  Or is there a belief that because it is superior it will take over Bitcoin at some point? 

I would think that it would be very difficult with the amount of traction Bitcoin has gained at this point for any cryptocurrency to dominate BTC.   

[wachtwoord]

I remain a little bit puzzled why you seem to want to continuously get your Monero book digs in - when in reality BTC is the ONLY "real" game in town. 

Monero is the first alt (okay some said LTC a year ago..) that functions as a hedge to Bitcoin.

Same as Bitcoin is a hedge to paper assets.

Gold is a hedge to all.

This is very precious, to find an asset that has good positive EV and is a hedge. Everyone who has BTC does a pareto-improvement move by buying XMR, with 0.25%-5% of the holdings. This has nothing to do with taking a position, it is a slam dunk move if you invest professionally.

Monero is quite a bit more than merely a hedge though.
It holds a separate non-trivial innovation track that is not developed in Bitcoin.
 

Do people foresee Monero being used alongside Bitcoin in the future?  Or is there a belief that because it is superior it will take over Bitcoin at some point? 

I would think that it would be very difficult with the amount of traction Bitcoin has gained at this point for any cryptocurrency to dominate BTC.   

The only way for Bitcoin to lose now is by being overtaken by another cryptocurrency. So, the question now is, what do you think the odds are of Bitcoin failing (let's say going to a market cap <100 Million).

[Biodom]

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

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

How much would you bet?

How often can I play?

Everything!

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

in that hypothetical only ONE round was allowed, hence it is more about maximizing profit/minimizing potential loss in a single roll.
Very interesting stuff.
I think that I instinctively used this approach in my very speculative investements (without knowledge about Kelly formula).
Last year it worked great, this year-not so much, but losses are limited by design.

[rpietila]

The only way for Bitcoin to lose now is by being overtaken by another cryptocurrency. So, the question now is, what do you think the odds are of Bitcoin failing (let's say going to a market cap <100 Million).

Well that is very unlikely to happen. Also I don't want to be losing 99% of my wealth so I would jump out first, much before.

This jumping out, if it for some reason gains traction, could make the air (market cap) go from one balloon to another really fast.

Nobody can be complacent.

[Biodom]

I remain a little bit puzzled why you seem to want to continuously get your Monero book digs in - when in reality BTC is the ONLY "real" game in town. 

Monero is the first alt (okay some said LTC a year ago..) that functions as a hedge to Bitcoin.

Same as Bitcoin is a hedge to paper assets.

Gold is a hedge to all.

This is very precious, to find an asset that has good positive EV and is a hedge. Everyone who has BTC does a pareto-improvement move by buying XMR, with 0.25%-5% of the holdings. This has nothing to do with taking a position, it is a slam dunk move if you invest professionally.

Monero is quite a bit more than merely a hedge though.
It holds a separate non-trivial innovation track that is not developed in Bitcoin.
 

Do people foresee Monero being used alongside Bitcoin in the future?  Or is there a belief that because it is superior it will take over Bitcoin at some point? 

I would think that it would be very difficult with the amount of traction Bitcoin has gained at this point for any cryptocurrency to dominate BTC.   

I think it is a correct question to ask (BTC vs upcoming alts), but very difficult to predict the outcome.
is BTC a yahoo to some (XMR? other?) google?
The technology has to be better and the team behind the coin has to be better, plus frontrunner should experience multiple setbacks at a critical time.
none of this is currently foreseeable.

[Skinnkavaj]

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

[TrueCryptonaire]

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

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

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

[molecular]

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

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

How much would you bet?

How often can I play?

Everything!

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

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

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

[Wary]

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

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

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

[wachtwoord]

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

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

How much would you bet?

How often can I play?

Everything!

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

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

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

Well in a profitable gamble such as this you want to approach EV as much as positive (as EV is positive) and as such make your bets as small as allowed (at $0.01 per bet anyone should take this bet of course). Risto explicitly excluded this option however.

[Skinnkavaj]

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

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

No. But harder to stop adoption of XMR, due to the fact that blockchain analysis is not possible. If I want to get paid in XMR I post an address here, and you cannot go look it up and see how much I have received and where I spent it. UNLESS I give you permission.