rpietila Altcoin Observer

[saddambitcoin]

i'm about to join the 50/50 club = 50% BTC 50% Monero

obviously i'm not a superwhale but its significant to me.

Please be adviced that 99/1 is the prudent allocation.

Thank you for your advice, I agree it is best to remain cautious. I'm only playing with what I can afford to lose. But I have a very good feeling in Monero and I enjoy the company of more intelligent people. Hehe

If I had 10k BTC it would be a different story. I'm trying to rebuild my stash after dumping too much in July 2013 tbh...many lessons I have learned the hard way.

edit: like my sig?

[iloveny161]

I hold 99 xmr per btc at the moment.

I personally think that the hash rate and the price have to converge.  I know this is an unpopular view, and I understand why it is unpopular, so please don't feel obligated to explain it to me.   I am not confident that I have articulated the (very simple) reasoning which compells me:

XMR is presently the best yeilding coin to mine with a GPU.  Thus, all the obsolete litecoin mining farms should be dumping coins as fast as they can be mined.  This drives up hash rate until difficulty rises and price drops from the dumping.

When XMR is no longer the best yielding coin to mine with a GPU, these miners will move along to another coin, and the remaining miners will not be the economically efficient rational actors -- they will hold in larger proportions.  Price will rise because supply is reduced.  Hash rates will stabilize (or collapse, ending in the death of the coin, if only there were not a cult following -- but there is, so it won't). 

As long as this cycle takes the price/difficulty to higher levels on average iterations, the economy will grow, regardless of mercantile applications.  When the cult-miner cycle burns enough fiat, and dispersion levels are adequate, merchants will be attracted to the XMR market.  At that point growth is self-sustanining, as long as the coin is fit for use.

I think stabilization requires that price-drop * difficulty-rise  = XMR-mining-yield / Second-best-mining-yield, in this case, about 40%.  I.e. price * difficulty should approach 1.8e6 XMR*hash.

At this time that is the only prediction I am willing to make about XMR in the near term.  Feel free to call me on it.

Thanks for posting this analysis. I'm a newb trying to get a better understanding of this. Could you post what numbers we should be using for the variables in this equation?

XMR-mining-yield / Second-best-mining-yield, in this case, about 40%.  I.e. price * difficulty should approach 1.8e6 XMR*hash.

[dreamspark]

In regards to portfolio allocation as an early investor in XMR with the rise in price from 0.000X XMR has become a much higher percentage of my portfolio than I either expected or would aim for. Its not 50-50 but its far from 99-1. At this point with what I still feel are cheap XMR I'm finding it very difficult not to make that percentage bigger let alone trying to diversify more and make it smaller!

As has been said 99/1 is easy with thousands of coins but if someone owned 10 BTC for example I would see it as a waste to only invest 1 if your well thought out analysis came to the conclusion of more upside in XMR, lets not forget were not talking about btc/fiat here we're talking about XMR/BTC which is another highly volatile asset in itself.

[rpietila]

I hold 99 xmr per btc at the moment.

^---- I suggest everyone should use this way of expressing their XMR/BTC ratio. ----^


(The alternatives, such as "1% in XMR" are misleading, reliant on the exchange rate etc.)


=> Just the pure "how many XMR per BTC" tells it all

I have in between 1-5 XMR per BTC, so I am slightly overweight.

The 75/25 ratio someone suggested, would at this price equal 100 XMR per BTC.


* * * *

Wow, I think the rally has more legs!  

(Currently everybody cannot buy 100:1 leverage, because the coins outstanding is 0.15:1....)

[Este Nuno]

I hold 99 xmr per btc at the moment.

^---- I suggest everyone should use this way of expressing their XMR/BTC ratio. ----^


(The alternatives, such as "1% in XMR" are misleading, reliant on the exchange rate etc.)


=> Just the pure "how many XMR per BTC" tells it all

I have in between 1-5 XMR per BTC, so I am slightly overweight.

The 75/25 ratio someone suggested, would at this price equal 100 XMR per BTC.


* * * *

Wow, I think the rally has more legs! 

(Currently everybody cannot buy 100:1 leverage, because the coins outstanding is 0.15:1....)

Yeah, as I suspected the money is starting to flow into XMR again.

BBR, not so much. Unless there is simply a significant lag in BBR following XMR it looks like I might have overestimated the XMR/BBR correlation this time.

[dreamspark]

Yeah, as I suspected the money is starting to flow into XMR again.

BBR, not so much. Unless there is simply a significant lag in BBR following XMR it looks like I might have overestimated the XMR/BBR correlation this time.

For sure, there's not enough different for it to co-exist on any significant level. I think even 10% of XMR price is too much. I don't doubt another cryptonote coin will achieve some success but it needs to offer something significant, BBR isn't even a hedge really.

[nakaone]

guys do you think we can have a serious discussion for ripples? - I do not own them but I am considering to buy some.

from my perspective there are BIG cons but also BIG pros regarding ripple. I understand that it is hated in the cryptoscene.

[rpietila]

guys do you think we can have a serious discussion for ripples? - I do not own them but I am considering to buy some.

from my perspective there are BIG cons but also BIG pros regarding ripple. I understand that it is hated in the cryptoscene.

Ripple is not a crypto. So please let's not have a discussion on them, any more than we have concering Paypal or Zimbabwe dollars.

[superresistant]

-_-
blah blah blah, monero should not be overly inflationary, it must go like bitcoin, after mining 'stops', only transactions fees are rewarded to the miners, anything more will kill a currency, bitcoin model is well approved.

Nothing is approved. We have no idea what will happen to Bitcoin in a near future.

Gold is well approved, and its inflation has stayed at about 0%-2% for millennia
Since antiquity, the amount of gold has roughly gone up 100x. This is equal to 0.23% average APR.
I will continue in the Monero economics thread.

Let's continue...

So gold has inflation but can we say that this inflation is infinite ?

How does it compare with Monero ?

[r0ach]

People whining about continuous, non-zero block rewards look like fools to anyone with common sense.  There's this thing that exists called strong encryption where people that own the coins are eventually going to die or misplace them somehow, and the outside world will never have a chance to get to many of those coins.  It's the equivalent of having everyone on the planet bury their life savings on the ocean floor instead of using a bank. 

If they die having money in a bank, either the government, their relatives, or the bank is going to get to it.  You're not getting to the Bitcoins, so there will be a continuous depletion of supply from the economy.  Just from car accidents alone, god knows how many BTC per year would be lost if it became a large part of the economy.  Maybe 1/10th of 1% of the money supply lost per year due to, "woops, dropped my phone in the toilet".

[superresistant]

People whining about continuous, non-zero block rewards look like fools to anyone with common sense.  There's this thing that exists called strong encryption where people that own the coins are eventually going to die or misplace them somehow, and the outside world will never have a chance to get to many of those coins.  It's the equivalent of having everyone on the planet bury their life savings on the ocean floor instead of using a bank. 
If they die having money in a bank, either the government, their relatives, or the bank is going to get to it.  You're not getting to the Bitcoins, so there will be a continuous depletion of supply from the economy.  Just from car accidents alone, god knows how many BTC per year would be lost if it became a large part of the economy.  Maybe 1/10th of 1% of the money supply lost per year due to, "woops, dropped my phone in the toilet".

Right, today Bitcoins lost are lost but will it be the case in a near future ?
There are simple solutions for your relatives to get your Bitcoins when you die.

[rpietila]

I will continue in the Monero economics thread.

Let's continue...

So gold has inflation but can we say that this inflation is infinite ?

How does it compare with Monero ?

Sorry I did not find the economics thread anymore..

[equipoise]

Sorry I did not find the economics thread anymore..

Here it is: https://bitcointalk.org/index.php?topic=597878.0

[r0ach]

Right, today Bitcoins lost are lost but will it be the case in a near future ?
There are simple solutions for your relatives to get your Bitcoins when you die.

It will always be like that.  Take that Paul Walker guy as an example.  It's not always the case, but people who are multimillionaires usually have a good bit of cash in their checking and other liquid accounts.  If that guy had a bunch of BTC and drove his car into a tree making a fireball explosion, the odds of people getting the BTC aren't that high.  He could either destroy it in the accident, or have it on his computer at home and with nobody knowing that he owned any, they might never find it, even with a wallet that wasn't encrypted.

Then you have all the people involved with BTC going to jail like Ross Ulbricht, maybe Karpeles.  Not all of them are going to willingly tell the govt private keys.  The coins will just go into limbo.

[AlexGR]

-_-
blah blah blah, monero should not be overly inflationary, it must go like bitcoin, after mining 'stops', only transactions fees are rewarded to the miners, anything more will kill a currency, bitcoin model is well approved.

Nothing is approved. We have no idea what will happen to Bitcoin in a near future.

Gold is well approved, and its inflation has stayed at about 0%-2% for millennia
Since antiquity, the amount of gold has roughly gone up 100x. This is equal to 0.23% average APR.
I will continue in the Monero economics thread.

Let's continue...

So gold has inflation but can we say that this inflation is infinite ?

How does it compare with Monero ?

Well Monero, or any other crypto for that matter, won't be here for millenia - that much we know (or at least suspect with high degree of %).

Gold inflation, as a measure of scarcity, is "somewhat" negated by population increase / number of users of gold. For example in 1974 there was just 4 bn people... now we are running at 7.1bn people and going for the 8bn mark in a decade... So the gold distribution per person necessitates a doubling of the above ground quantities in the same time span between earth's 4bn and 8bn - just to remain constant. But the mining supply also accelerates due to better mining methods and incentives to mine (as price of gold skyrockets due to inflation in the monetary supply).

While gold is universal, in the sense that everyone knows it, cryptos are a booming market and thus they do not require a population doubling to reduce the impact of inflation. The only thing necessary for something like that is a wider adoption from the existing pool of humans. An ever-expanding user base negates inflation through new money flowing in.

[David Latapie]

^---- I suggest everyone should use this way of expressing their XMR/BTC ratio. ----^

2/3 of XMR for me if you consider other altcoins
3/3 of XMR if you don't (I don't have BTC anymore)[/quote]

[AlexGR]

People whining about continuous, non-zero block rewards look like fools to anyone with common sense.  There's this thing that exists called strong encryption where people that own the coins are eventually going to die or misplace them somehow, and the outside world will never have a chance to get to many of those coins.  It's the equivalent of having everyone on the planet bury their life savings on the ocean floor instead of using a bank.  

It doesn't matter. Coins are fractional. Instead of using 10 coins to do a transaction, you'll simply use 5 if half the coins are lost - because the value of the remaining coins will double due to scarcity.

Given that you can go up to less than 1 coin (with 0.5, 0.2, 0.0003 etc) it's not a problem in any way.

[dreamspark]

People whining about continuous, non-zero block rewards look like fools to anyone with common sense.  There's this thing that exists called strong encryption where people that own the coins are eventually going to die or misplace them somehow, and the outside world will never have a chance to get to many of those coins.  It's the equivalent of having everyone on the planet bury their life savings on the ocean floor instead of using a bank.  

It doesn't matter. Coins are fractional. Instead of using 10 coins to do a transaction, you'll simply use 5 if half the coins are lost - because the value of the remaining coins will double due to scarcity.

Given that you can go up to less than 1 coin (with 0.5, 0.2, 0.0003 etc) it's not a problem in any way.

Yes but then you create a deflationary currency which can be argued isn't economically viable. Look at the places that have deflationary currencies and see if you think its a great idea.

[r0ach]

It doesn't matter. Coins are fractional. Instead of using 10 coins to do a transaction, you'll simply use 5 if half the coins are lost - because the value of the remaining coins will double due to scarcity.

Of course it matters, because everyone still living is receiving free money by proxy and things that are ultra, super, hyper deflationary tend to have crap for liquidity.  This is further emphasized by the "bad money beats good money" phenomenon chronicled by some economists where the currency that is considered the equivalent of a live hand grenade to hodl wins control of the market.  Dogecoin might be somewhat of an example here.

A unit of currency is supposed to represent a constant value in best case scenario, not aim for hyper deflationary or inflationary on purpose.  I voted for Ron Paul, but many libertarians just don't get it.  In the real world, the currency that can reach closest to equilibrium wins, not the heavy deflationary one.  Then in the case of a true equilibrium currency, the inflationary one might even still beat it due to the effect mentioned above.

There are known knowns, and unknowns, and in between are the doors of inflation.

[digicoin]

Its all about solving the 51% issue and has some good recommandations on the topic, whereas anonymints proposal is easily cheatable and thus wont work (like the drk masternode payments are easily cheatable).

How?

Seriously?

https://bitcointalk.org/index.php?topic=688510.msg7809053#msg7809053
Can you explain that thread then?

https://darkcointalk.org/threads/rc4-development-and-path-going-forward.1604/

With this launch, we introduced a new soft-fork method, which some users have affectionately dubbed the “spork”. As clients update, new features - Masternode payments, in this case - are implemented and available, though not strictly enforced by the network. After almost all users are updated, the fork can be remotely activated, which would enforce the new feature rules. If successful, the new feature(s) would be permanently activated and enforced. If unsuccessful, enforcement can be deactivated remotely for the whole network without the need for users to update their clients. In the latter case, a checkpoint would be added to put the whole network back on the same chain.

This allows us to test higher risk, innovative features in mainnet without having to hard fork the network and without the risk of a live rollback where all users must update.

DRK is so dangerous. By installing DRK wallet, people is tricked into installing malware, virus or becoming part of botnets. DRK devs are so dangerous. They control you remotely. People, be careful.