rpietila Altcoin Observer

[dreamspark]

Rotate out of some LTC or BTC to Monero?

It seems a wise investment decision to at least throw a few % at Monero, its by far the most interesting crypto Ive seen in a while. The prices right now are almost hilariously undervalued and Im taking this opportunity to buy more at prices that wont be visited again.

[EFS]

Rotate out of some LTC or BTC to Monero?

I sold almost all of my LTC's and bought Monero.

[Globb0]

hmm so buy buy buy.

We will see, keep looking at it not exactly over whelming me at the moment. Perhapse its the Alt burns on my finger tips from last time.

[ShroomsKit_Disgrace]

Should we put a warning in the alt section that says:

"Sold your LTC and Buy Monero as soon as possible."  ?

[liexel]

I might be cementing a 40% loss in LTC if I sell it now. Should i sell anyway for xmr?

[dreamspark]

hmm so buy buy buy.

We will see, keep looking at it not exactly over whelming me at the moment. Perhapse its the Alt burns on my finger tips from last time.

Perhaps, by all means wait and see but like most things in the crypto world those who panic last get burned just like the people who panic bought up at around .009 + when it was obviously going to correct. My advice would be to get any BTC you were going to invest and just invest 10-15% and wait and see if your worried about being burnt. One of the best things about XMR at the moment is that the inflation means that big run ups are often bought back into line fairly quickly and thus you wont get left too far behind before there's another chance to get on the train.

[superresistant]

I might be cementing a 40% loss in LTC if I sell it now. Should i sell anyway for xmr?

I sold my last Litecoin 6 months ago. You're a bit late.

[rpietila]

Wow it seems my last post to my Altcoin observer was a good 11 pages ago 

Let's try something with this one:

I've been thinking about how to quantify the support behind altcoins with some quantitative metric. The start for any such analysis is of course the market cap. Then there is the estimated number of users, or the estimated number of owners (perhaps with a cutoff grade), otoh it might be possible to quantify the strength of the devteam in a way, and the possibilities are many.

What I came to think is the following metric (somebody can write it in Math, I'll just spell it in English):

Each crypto investor's crypto wealth (measured in BTC) is divided into as many equal parts as he holds different coins, given that his % holding of that altcoin's coins in circulation is at least equal to his % holding of BTC's coins in circulation. These parts are credited to the respective altcoins. The sum of these equals the support to the said altcoin.

Example:
Mr. Rich holds 10,000 BTC and an equal amount of XMR + 1,000 DOGE. Since his XMR holding is significant (higher % of coins in circulation than his BTC holding), it is counted, whereas the DOGE holding is not.

=> The fortune is credited to support BTC and XMR equally, 5,000 BTC each.

Conclusion:
XMR is already in top #X of alts, despite the market cap being in the middle range. This is because the tremendous support (calculated in the following way) from BTC powerhouses who seldom give their support to many or any of the coins between BTC and XMR in the marketcap table.

Discussion:
The formula downplays the "support" to the coins where people have invested most of their wealth in, since these kinds of situations often arise from circumstances outside of those people's control. My support to BTC for example cannot realistically go to much higher level should it rise another 1,000%, as I am already all in and tax and other considerations weigh heavily on whether I can ever sell much of the stash. Also it weighs down those altcoins with pump&dumpish character (unrich people unable to actually support the coin, buying too much, trying to make a quick buck) and premined/IPOed coins (dev/"dev" holding a shitton of coins, unable to support any more than he is already doing, and probably holding dozens of other coins also, just in case this one goes sour).

The formula magnifies the "support" to the coins where people who have no selfish reason to buy a coin (BTC whales who cannot motivate the purchase by making money as they are too big to operate in the alt universe exchanges) do it anyway in such quantities that it matters (the cutoff grade for somebody holding BTC13k is to hold 0.1% of the alt, which is huge, and requires planning to even source somehow). Also the fewer altcoins you are invested in, the more support the formula credits to each one of them, which is kind of obvious. You cannot support 10 altcoins credibly so that anyone would be affected. By holding only one, the effect is huge.

Why the supporter's total wealth is used, is also because the price support in the exchanges. With a typical p&d coin, at the top of the pump, the coin represents a large % of the wealth of those who are/have been/ever will be interested in it. There is no willingness or even ability to cushion the fall. With XMR (or any coin that ranks well in my formula), there are people holding 1 or (typically) 2 orders of magnitude more BTC than XMR, which provides the buy support at whichever level the market clears. This cannot prevent the price rises, but will efficiently cap the falls, due to the rapidly rising buy support at any price in the range of 0.004->0.002, the latter of which we will never see again.

[KeyserSozeMC]

^

There's one issue. Greed.

You have a castle, unicorns and batmobiles.

Other people dream of that. It's hard to make them stick just to one altcoin. There must be motivation.
A good development team needs funds ( to be motivated ) to work.


What you're saying is actually okay, but kind of impossible. If it was like that, we wouldn't have altcoins, after BTC.


-KSMC

[dreamspark]

Fantastic post Risto and some really good points made, also possibly one of the best attempts Ive seen to quantify the support of an alt.

I particularly like the point about how often devs and other so called large holders of an alt don't have the BTC to back up their holdings and thus you end up in an uncontrollable downward spiral.

One point I would question is what makes you say you cant sufficiently support 10 alts? I agree that by holding 1 the conclusion is that you have a very strong support for that alt but with a decent BTC stash, at least financially 10 alts could be supported. I agree it is impossible to  divide your time in terms of dev and support to that many alts. Lets not forget there have been many opportunities since XMR markets opened to gain .1% for roughly 30 BTC and with other alts if you catch them early, a much higher % than that.

Other than that though I think your closest Ive seen to being able to gauge real alt support.

[hill]

JUST hold BTC, MSC, XCP and NXT.

[KeyserSozeMC]

JUST hold BTC, MSC, XCP and NXT.

What the heck is MSC and XCP?

[devphp]

What the heck is MSC and XCP?

Mastercoin and Counterparty, both run on Bitcoin network as their transport blockchain.
Out of those two XCP is a better choice, but neither of the two can compare to NXT.
Bitcoin network is just slow to trade on.

[superresistant]

What the heck is MSC and XCP?

Mastercoin and Counterparty, both run on Bitcoin network as their transport blockchain.
Out of those two XCP is a better choice, but neither of the two can compare to NXT.
Bitcoin network is just slow to trade on.

I said it before but I repeat it :
Using 2 blockchains add the possible flaws/risks from both.
If you want a real innovative PoS, go for Nxt.

[KeyserSozeMC]

What the heck is MSC and XCP?

Mastercoin and Counterparty, both run on Bitcoin network as their transport blockchain.
Out of those two XCP is a better choice, but neither of the two can compare to NXT.
Bitcoin network is just slow to trade on.

I said it before but I repeat it :
Using 2 blockchains add the possible flaws/risks from both.
If you want a real innovative PoS, go for Nxt.

Don't forget how "fair" was the distribution of NXT.

( I missed the train, yeah, but still a fact. )

[dreamspark]

What the heck is MSC and XCP?

Mastercoin and Counterparty, both run on Bitcoin network as their transport blockchain.
Out of those two XCP is a better choice, but neither of the two can compare to NXT.
Bitcoin network is just slow to trade on.

Thing is with xcp is they are just arbitrary tokens and completely unnecessary, correct me if Im wrong but I seem to remember when researching when counterparty was first announced that the XCP tokens were a) not needed and b) essentially worthless.

[superresistant]

Don't forget how "fair" was the distribution of NXT.
( I missed the train, yeah, but still a fact. )

Forget about fairness. You're not gonna make money on fairness.

The units of Nxt does not matter any more, Nxt has become something more than a currency.
It is now a platform for trading and business. It has a true decentralised and active exchange.

[devphp]

Thing is with xcp is they are just arbitrary tokens and completely unnecessary, correct me if Im wrong but I seem to remember when researching when counterparty was first announced that the XCP tokens were a) not needed and b) essentially worthless.

Not sure what you mean.
XCP is a protocol on top of Bitcoin protocol, an additional layer that runs a decentralized exchange. An exchange needs its units of accounting. Do you mean Bitcoins could be used for that directly? Perhaps, I have no idea. The Counterparty developers chose to use their own token, does it matter what token is used? It's a functional exchange, but like I said it's slow and like superresistant added, it may be vulnerable to Bitcoin's flaws as well as its own.

[nakaone]

JUST hold BTC, MSC, XCP and NXT.

I also hold these coins, in different percuentual amounts, so you gave me a fit occasion to discuss an issue. Besides the quality of these projects, which varies dramatically, and Ristos, in my opion too strict definition of pre mine scam, one has to wonder why these protocols should network in the way bitcoin probably does. Peter R wrote a post here, which almost completely changed my perception regarding altcoins. If you break down what your INVESTMENT in bitcoin is than it is nothing but the investment in a  boardless worldwide decentralized ledger, which has a massive first mover advantage and additionally the possibility to absorb almost (this is the stuff where it gets interesting) all functions of the existing altcoins - cryptonotes might or might not be an exception (I think they are because of an educated guess regarding the regulation of bitcoin).

That said you can say all altcoins, except probably xmr and maybe for a limited amount of time xcp are not worth investing - I think that is true, but the speculation around altcoins fullfills a purpose. It is basically a reflection of the current weaknesses in the btc protocol, or better said it is a reflection of what the cryptospace thinks are the current weaknesses in the btc protocol. so if you want to make money just join the keynesian beauty contest, but get your objectives clear beforehand.

I am quite happy that you chose nxt in your holds - nxt is innovative, it has quite an army of developers but it has one thing which differs from the other two and that is the marketcap. In my opinion a further increase  in market cap can only be given by network effects, it has to leave altcoin space and fullfill a real life purpose (this starts around 0,5% to 1% of bitcoins market cap, different opinions?) - I am really indifferent if this happens or if this doesn't happen.

maybe we can break it down to a rule of thumb which says up to a market cap of 0,5-1% of btc altcoins can simply be valued by their innovative potential (innovators are getting paid much more than followers - see drk to all the followers), from 0,5% to 1% network effects have to start to legitimize a further increase in value.  

[KeyserSozeMC]

Don't forget how "fair" was the distribution of NXT.
( I missed the train, yeah, but still a fact. )

Forget about fairness. You're not gonna make money on fairness.

The units of Nxt does not matter any more, Nxt has become something more than a currency.
It is now a platform for trading and business. It has a true decentralised and active exchange.

I agree with everything you said in the post above.

But the way how it was distributed.. Meh, it'll be a stain for a long time.