rpietila Altcoin Observer

[rpietila]

Monero, my man, why are you tanking? 

Thank you for explanations. My own (unchanged from the time of the provocative question) is that:

MRO's inflation is designed to be very high in the opening months (the only alternative being premine, instamine or IPO - none of which showing much success in the way of distributing the initial monetary base in a fair and functioning way). At present we are generating about 23,000 MRO per day with the BTC value of BTC104. Bitcoin is generating BTC3600 per day.

Since MRO's new supply is 2.9% of that of Bitcoin, it surely needs to be real interesting for the price to rise significantly.

Again, I don't think this is a bad thing. It is just the nature of the fair coin generation function (and the very reason I lost my alt virginity). When Bitcoin was launched in 2009, the price went basically nowhere in the following 1.5 years. But once the inflation had slowed and exchange opened, it started the 6400x moonshot in 1 year.

When MRO is 1.5 years old, about 40% of the supply will have been mined and the inflation has been slowed to 14k MRO/day. At that point it is difficult to imagine that the price would be this low On the other hand, the network security will still be there unlike with the rapidly mined coins.

All scamcoins, pump&dumpcoins, IPO-"coins", 100%premine-coins: you have yet to see your 1.5th birthday.

[drawingthesun]

Monero, my man, why are you tanking? 

Thank you for explanations. My own (unchanged from the time of the provocative question) is that:

MRO's inflation is designed to be very high in the opening months (the only alternative being premine, instamine or IPO - none of which showing much success in the way of distributing the initial monetary base in a fair and functioning way). At present we are generating about 23,000 MRO per day with the BTC value of BTC104. Bitcoin is generating BTC3600 per day.

Since MRO's new supply is 2.9% of that of Bitcoin, it surely needs to be real interesting for the price to rise significantly.

Again, I don't think this is a bad thing. It is just the nature of the fair coin generation function (and the very reason I lost my alt virginity). When Bitcoin was launched in 2009, the price went basically nowhere in the following 1.5 years. But once the inflation had slowed and exchange opened, it started the 6400x moonshot in 1 year.

When MRO is 1.5 years old, about 40% of the supply will have been mined and the inflation has been slowed to 14k MRO/day. At that point it is difficult to imagine that the price would be this low On the other hand, the network security will still be there unlike with the rapidly mined coins.

All scamcoins, pump&dumpcoins, IPO-"coins", 100%premine-coins: you have yet to see your 1.5th birthday.

Also there are some interesting discussions going on at the moment about the eventual supply after the initial 18 million coins are mined.

https://bitcointalk.org/index.php?topic=583449.msg6962215#msg6962215

I have a post further down that shows different scenarios starting after initial coin emission is over (I know, far in the future, but this stuff needs to be put in stone now, like Bitcoins supply was decided by Satoshi)

https://bitcointalk.org/index.php?topic=583449.msg6964052#msg6964052

I have high hopes for this coin.

[r0ach]

We have Nxt and Ethereum that are about to allow for these turing complete contracts.

I think Ethereum actually dropped the turing complete part, at least that's what people are saying.

[drawingthesun]

We have Nxt and Ethereum that are about to allow for these turing complete contracts.

I think Ethereum actually dropped the turing complete part, at least that's what people are saying.

I wonder why people are saying that? The homepage still says turing complete contracts and nothing on their blog, forum or reddit suggest that turing completeness has been dropped.

Interesting.

[Anotheranonlol]

Monero, my man, why are you tanking?  

Welcome to fickle and ADHD altcoin markets. Even if a coin has significant merit it's not prudent to simply hodl.
Sometimes you won't be able to point to a specific reason a coins 'irrationally' tanking unless the rise up was just as irrational.

I argued about the overvaluation of MRO a few weeks ago:

https://bitcointalk.org/index.php?topic=578192.msg6572921#msg6572921
https://bitcointalk.org/index.php?topic=578192.msg6573363#msg6573363
https://bitcointalk.org/index.php?topic=578192.msg6574031#msg6574031

I didn't buy at that time because the price was pumped too high-  which most argued against. People think this is a naive argument which it is but doesn't stop it from being true.

I waited few days for price to fall by more than 100% to buy then sold at around 590-620% profit, Not the best but perfectly comfortable with that. I'm not buying back at this time.

Many people have not factored in the final supply nor consistent inflation because they don't hold the coins in a long term purview. Emission curve means nothing to many when they are trading on daily or weekly intervals and moving onto the next coin, even if it's a shitcoin the smallest gimmick or development can allow a near guaranteed profit. You can't really go against the grain of the market when you working on short to mid term. no reason to stay in one place when there's consistent % gains denominated in BTC to be had across the whole market.  
 

[rpietila]

You can't really go against the grain of the market when you working on short to mid term. no reason to stay in one place when there's consistent % gains denominated in BTC to be had across the whole market. 

Ah ok. I am not interested in that (as reasoned in the OP). I have enough gains in BTC. I am not really angry if MRO is tanking and I know full well how many dollars of new investment is needed each day to retain the valuation.

As with BTC, it does not matter what the price is. What matters is how many % of the coin you own, if the technology is sound and has a potential to break out. MRO was the first coin with interesting technology and fair launch. That's why I hold approx the same % as I hold BTC.

I mentioned this in ToF, so let it be known here also that I like MRO very much at 0.002, I like it at 0.004, but would not buy over 0.010. Going to 0.020 in the immediate future is a sell zone with an intention to buy back at 0.010 or less.

[drawingthesun]

At 0.01 BTC, MRO would have a circulation value of 120,000 BTC in two years.

This is rather high, the only sweet spot being that if MRO does succeed to become a default sister currency to Bitcoin, we might be able to expect a market cap of 500,000 BTC.

Obviously this is a best case scenario.

Around 2 - 4 years MRO does start becoming quite rare, however it's going to take guts to hold through the first few years.

[Anotheranonlol]

You can't really go against the grain of the market when you working on short to mid term. no reason to stay in one place when there's consistent % gains denominated in BTC to be had across the whole market.  

Ah ok. I am not interested in that (as reasoned in the OP). I have enough gains in BTC. I am not really angry if MRO is tanking and I know full well how many dollars of new investment is needed each day to retain the valuation.

As with BTC, it does not matter what the price is. What matters is how many % of the coin you own, if the technology is sound and has a potential to break out. MRO was the first coin with interesting technology and fair launch. That's why I hold approx the same % as I hold BTC.

I mentioned this in ToF, so let it be known here also that I like MRO very much at 0.002, I like it at 0.004, but would not buy over 0.010. Going to 0.020 in the immediate future is a sell zone with an intention to buy back at 0.010 or less.

Of course, I only focus on the percentage ownership/total supply too. I think it's the most logical approach

The thing is, not to state the obvious because I''m sure you're very aware; If you believe MRO/BTC going to 0.002 when it's currently 0.004 if you sell at 0.004 and manage to buy back in at avg 0.002 you've increasing your holdings 100%. In such a fickle and volatile markets where these kinds of falls and rises are inevitable, where is the sense in not doing this? unless you really do not have the time and already sitting on a such a nice pile of BTC to not warrant bothering riding the waves when you believe it's going to go sky high regardless; (such as this fellow)

In a stable market, price is declining 50% of the time, so that's not an issue.  As for being blown out of the water, being the in leading position in contention for 10% of global GDP still makes me wet.

It's nice to have this optimism. MRO can be quite valuable from his projections  

I sold at ~0.0062 because it was coming down. I've no doubts it will rise above todays 0.0046 in future but it's also coming down to below 0.004 (likely within the week). So short term trader like myself with a little patience will almost double holdings compared with buying and holding.

[rpietila]

At 0.01 BTC, MRO would have a circulation value of 120,000 BTC in two years.

This is rather high, the only sweet spot being that if MRO does succeed to become a default sister currency to Bitcoin, we might be able to expect a market cap of 500,000 BTC.

Obviously this is a best case scenario.

Around 2 - 4 years MRO does start becoming quite rare, however it's going to take guts to hold through the first few years.

Since I am not a daytrader, I am counting on just that.

At 0.10 MRO is looking a tad expensive, at 0.020 it is an overshoot given the current fundamentals. It just happens to be the #2 currency which is currently at #21 I will tell when my perception changes.

I am repeating myself but the greatest asset of Bitcoin is its userbase, which has become as it is as a result of a long ongoing process of distribution the coins by mining and trading. I see that something similar is happening with MRO, unlike 99% of other coins. The slow distribution is an absolute prerequisite for the coin's long-term success. Any premine, instamine, ninjamine, IPO, PoS or other gimmick is not working. They are not legitimate, and the market shuns them, after the pump&dump has done its course. AUR had the best environment to try unselfish premine and direct distribution, but even that was a failure.

[rpietila]

I mentioned this in ToF, so let it be known here also that I like MRO very much at 0.002, I like it at 0.004, but would not buy over 0.010. Going to 0.020 in the immediate future is a sell zone with an intention to buy back at 0.010 or less.

The thing is, not to state the obvious because I''m sure you're very aware; If you believe MRO/BTC going to 0.002 when it's currently 0.004 if you sell at 0.004 and manage to buy back in at avg 0.002 you've increasing your holdings 100%. In such a fickle and volatile markets where these kinds of falls and rises are inevitable, where is the sense in not doing this?

a) I am not believing it. Saying I'd like to have something implies that it is something that likely does not happen.

b) Even if it does happen, there is no way to both sell my position now and buy it back then, with perfect timing and no slippage. If BTC is doing its yearly wave, I can capture maybe 30% of the downtrend with 30% of my position, resulting in a 13% gain in my holdings. I have no fantasies that I could do any better with an alt, and due to their 250:1 difference in marketcap, I would spend equal amount of time in netting 250 times less.

Therefore I just buy below 0.010 and sell above 0.020 if we get there.

[xDan]

rpietila, did you ever given an opinion on Peter R's "spin-offs" idea?

I'd think it would appeal to anyone with mostly BTC investments. It could revolutionise the altcoin space. It could also use a bounty

Existing BTC holders would be able to claim a proportional share of any new spin-off altcoins, while the altcoin's developers and other foresighted early adopters could purchase the new spin-off coins at vastly reduced prices from those BTC holders who are not yet convinced of its value.

[r0ach]

There are two problems that scare me from Monero personally:

1)  The block chain bloat is supposedly 8x bigger than Bitcoin

2)  I question whether Bitcoin itself will be able to survive while using only transaction fees as a miner subsidy, which means it's a much more nightmarish scenario for smaller coins.

Any serious PoW alt coin should maintain a minimum block reward greater than zero in my opinion.  The amount of coins lost per year through human error or death will probably be higher than 1%, so a perpetual 1% inflation or "debasement" would not actually be that in practice.  People such as Anonymint argue for 2%.  We are already seeing how Quark is one of the few coins that offers a non-zero perpetual block reward, but their 0.5% isn't high enough to have any network security.

[Keyboard-Mash]

There are two problems that scare me from Monero personally:

1)  The block chain bloat is supposedly 8x bigger than Bitcoin

This has been reported to be 3-5x as well. It seems more of a speculative issue, as there are numerous ways that the blockchain bloat can be addressed. This has been discussed in the last few pages of the Monero thread in the last 24 hours.

Summary:

1 - 3d NAND flash being mass produced will greatly negate future storage considerations.

2 - Off chain transactions by route of a third party

3 - Removing the block chain below a certain transaction

Maybe you have better ideas? Again, it's a speculative issue .. but still something to consider.

2)  I question whether Bitcoin itself will be able to survive while using only transaction fees as a miner subsidy, which means it's a much more nightmarish scenario for smaller coins.

Any serious PoW alt coin should maintain a minimum block reward greater than zero in my opinion.  The amount of coins lost per year through human error or death will probably be higher than 1%, so a perpetual 1% inflation or "debasement" would not actually be that in practice.  People such as Anonymint argue for 2%.  We are already seeing how Quark is one of the few coins that offers a non-zero perpetual block reward, but their 0.5% isn't high enough to have any network security.

This was also addressed today. Currently there is a MIP being worked on that would fix subsidy at .333333. There is active discussion on whether or not it would be more beneficial to support a fixed low inflation of about 1%, or a fixed emission of .333333. There was also talk of whether or not these values should be fixed or variable. The effects of both become apparent only years to decades after they would be implemented, but it is an active stance on moving toward a currency that does not have to survive on transaction fees alone. Do you have any particular tendency to favor an inflation or fixed subsidy?

[AlexGR]

The slow distribution is an absolute prerequisite for the coin's long-term success. Any premine, instamine, ninjamine, IPO, PoS or other gimmick is not working. They are not legitimate, and the market shuns them, after the pump&dump has done its course. AUR had the best environment to try unselfish premine and direct distribution, but even that was a failure.

People see success and failure in terms of price. When price tanks a coin is declared dead. When price is good, the coin is a success.

The altcoin field is populated with attention-deficit-disorder people who are like bumblebees moving from one flower to the other. If price is stagnant or falling for a couple of months, a coin is declared dead and they move along. Altcoins do not have the luxury of going with a bitcoin type of curve due to the perception of "being dead" that will actually "kill" them as people abandon these coins. If an altcoin waits 3-4 years to do its distribution before it makes its success it will have been overtaken by so many other coins who are now offering much more than it does.

It's a weird game, but the rules are different for alts than btc. They have to make an impression and make it stick - fast.

[rpietila]

It's a weird game, but the rules are different for alts than btc. They have to make an impression and make it stick - fast.

Do I have to tell why I have never invested in an alt before? 

If all they have been good for is p&d and you see immediately from the parameters that even in theory thay have no lasting power regardless of the success of the pump...

I am fine with MRO. As long as the team takes it to the right direction and there is an active and growing community and the technology promise is intact, I have no problem just buying more if it goes lower. In the worst case I end up buying them all (followed by an event nullifying their value) and still will have spent less than 1% of my stash 

[digitalindustry]

At 0.01 BTC, MRO would have a circulation value of 120,000 BTC in two years.

This is rather high, the only sweet spot being that if MRO does succeed to become a default sister currency to Bitcoin, we might be able to expect a market cap of 500,000 BTC.

Obviously this is a best case scenario.

Around 2 - 4 years MRO does start becoming quite rare, however it's going to take guts to hold through the first few years.

Since I am not a daytrader, I am counting on just that.

At 0.10 MRO is looking a tad expensive, at 0.020 it is an overshoot given the current fundamentals. It just happens to be the #2 currency which is currently at #21 I will tell when my perception changes.

I am repeating myself but the greatest asset of Bitcoin is its userbase, which has become as it is as a result of a long ongoing process of distribution the coins by mining and trading. I see that something similar is happening with MRO, unlike 99% of other coins. The slow distribution is an absolute prerequisite for the coin's long-term success. Any premine, instamine, ninjamine, IPO, PoS or other gimmick is not working. They are not legitimate, and the market shuns them, after the pump&dump has done its course. AUR had the best environment to try unselfish premine and direct distribution, but even that was a failure.

i don't think MRO is a bad design but i'll take a wager with you against the "terminal decline" statement if you want to refine it?


i mean this isn't so hard to understand is it :


V
|Stealth Phase -------------------------------------| Attention| ----------Main phase ----------------------| Blowoff -------       | >>>>>>> return to mean < as stated in the first video by myself -


you see to learn about trading and markets you need to learn about humans.

the reason i can use the first graph is because Quark is designed and issued in a way that gives it the best chance at being a free market device or entity -

so it will fit the "human model" better in those respects.

so for me this bet would be easy money.

can can tell you right now we are in "disrepair" ha ha , well many are - i have no feeling because i'm a psychopath. just ask that guy that was trolling on our forum : D

*
the reason you have never invested in an Alternative design is because you have had a lack of education about the specific models i expect, this was probably caused by the torrent of shit that was blasted on thsi forum - i however see that as the essential "junk DNA" that the market needs to stay healthy.

[drawingthesun]

digitalindustry, are you talking about Quark replacing Bitcoin? I'd say that would be hard as Bitcoin's network effect is massive and will be very long lasting. I'd wager that Bitcoin will gain side trees/chains and gain many abilities long before Quark replaces it.

If instead you advise Quark to replace Monero, I'd say how that makes no sense. Monero exists for anonymous transactions and Quark does not.

Also the Monero community is in heavy discussion right now about the ideal coin emission once all 18 million coins have been mined. We are looking into never going below 0.333 MRO per block or something like a 1% or 0.5% inflation rate.

[drawingthesun]

The slow distribution is an absolute prerequisite for the coin's long-term success. Any premine, instamine, ninjamine, IPO, PoS or other gimmick is not working. They are not legitimate, and the market shuns them, after the pump&dump has done its course. AUR had the best environment to try unselfish premine and direct distribution, but even that was a failure.

People see success and failure in terms of price. When price tanks a coin is declared dead. When price is good, the coin is a success.

The altcoin field is populated with attention-deficit-disorder people who are like bumblebees moving from one flower to the other. If price is stagnant or falling for a couple of months, a coin is declared dead and they move along. Altcoins do not have the luxury of going with a bitcoin type of curve due to the perception of "being dead" that will actually "kill" them as people abandon these coins. If an altcoin waits 3-4 years to do its distribution before it makes its success it will have been overtaken by so many other coins who are now offering much more than it does.

It's a weird game, but the rules are different for alts than btc. They have to make an impression and make it stick - fast.

You're forgetting something Alex, the ring signature technology is too useful to be abandoned. Perhaps if something better comes out sure, I'll see your point.

Unless a technology comes out to defeat ring signature, at least one of the CryptoNote based coins will gain in popularity over time, even if it isn't Monero.

Also, in its current specification, Zerocoin/cash still has a trusted accumulator, and thus cannot be a suitable replacement for ring signature technologies.

[drawingthesun]

There are two problems that scare me from Monero personally:

1)  The block chain bloat is supposedly 8x bigger than Bitcoin

2)  I question whether Bitcoin itself will be able to survive while using only transaction fees as a miner subsidy, which means it's a much more nightmarish scenario for smaller coins.

Any serious PoW alt coin should maintain a minimum block reward greater than zero in my opinion.  The amount of coins lost per year through human error or death will probably be higher than 1%, so a perpetual 1% inflation or "debasement" would not actually be that in practice.  People such as Anonymint argue for 2%.  We are already seeing how Quark is one of the few coins that offers a non-zero perpetual block reward, but their 0.5% isn't high enough to have any network security.

1) See my post here:

Agree but lets not pretend that cryptonote doesn't have some drawbacks as well.

Im very interested in hearing proposals to deal with blockchain bloat for instance?

I've heard estimates that say Monero will have a chain between 1 - 5 times the size of a corresponding conventional blockchain.

A 5 times cost for anonymity is well worth it in my opinion. Of course any advancements that improve that are welcome.

Also Evan's latest idea is to route transactions through 10 masternodes to overcome the issue of bad nodes.

If this is the case, then the bloat could be similar to Monero.

Remember you can send a Monero transaction with the minimum inputs and outputs and it'll be similar in size to a conventional transaction.

https://forum.cryptonote.org/viewtopic.php?f=2&t=70#p579

Roughly speaking (very roughly!), if you intentionally make you Cryptonote transaction the same as in Bitcoin (2-3 inputs and outputs and no ambiguity) it's size and verification time will be very close to Bitcoin's parameters.

2) See my post here:

All simulations start after the initial 18,000,000 have been minted (I know it's not exactly 18,000,000, but it makes little difference.)

(Matlab code included in case I screwed up the math or something)

1 MRO released every 120 seconds
http://pastebin.com/UWLVZaam

1 MRO released every 60 seconds
http://pastebin.com/dkVYBFj3

0.33333333 MRO released every 60 seconds.
http://pastebin.com/GwQJQzje

Inflation at 1%
http://pastebin.com/3K0dMnZe

Inflation at 0.5%
http://pastebin.com/6tJtdrqP

Also, for fun times, Inflation at 5%
http://pastebin.com/z5vmmW3z

Basically, the community is now actively talking about the eventual coin emission after the initial minting of all 18 million coins.

[digitalindustry]

digitalindustry, are you talking about Quark replacing Bitcoin? I'd say that would be hard as Bitcoin's network effect is massive and will be very long lasting. I'd wager that Bitcoin will gain side trees/chains and gain many abilities long before Quark replaces it.

If instead you advise Quark to replace Monero, I'd say how that makes no sense. Monero exists for anonymous transactions and Quark does not.

Also the Monero community is in heavy discussion right now about the ideal coin emission once all 18 million coins have been mined. We are looking into never going below 0.333 MRO per block or something like a 1% or 0.5% inflation rate.

not at all - its not about  "replacing" but i will give you a hint - the world is neither rational or mathematical and its not going to do what you "think" it will do - at best we are monkeys that stand upright at present we use 18th century policies primarily -

so in summary, what you think is the "best" is different from what the world may perceive as so - but the trick is looking a little bit ahead an seeing where the "consensus" is going , to this degree the large declines in MSM concern me as well as their ability to "shape reality" - the problem with the hard fixed design is that inequity has to be sold just like the old days, if i look a little bit ahead , i can't see how it happens in a market of universal competition.

so we have a problem don't we.

of course you can say Bitcoin has the first leader advantage we all know this, but look at that graph again, the "smart money" are on this forum a lot of the time , and the institutional investors are going to learn from them its  peer environment ,but don't forget investors aren't chumps - they aren't going to do what you "think" they should do, they are going to do what makes them the most money .

and in this way simplicity and honesty works - as crazy as that sounds , i look a little ahead and i see that policy being useful.

as for MRO - can't comment have not looked at it enough - if its flawed i will find it - see the advantage of honesty is i can find flaws but i can post a challenge for others and they have to ignore me.