rpietila Altcoin Observer

[nioc]

MEW?

[psterryl]

OP has predicted a 1000x fiat-denominated gain in Monero (equates to a ~35 billion dollar market cap after all supply is minted) here, so it wouldn't surprise me that quite a few people are attracted and have thrown a few btc down, especially after the recent price-movements with BTC.

Monero is differentiated from other fantasmic Alt coins by the following:

- ring signatures
- open-sourced anonymity features provided by something stronger than 'coinjoin'
- based on a completely fresh codebase rather than something satoshi-derived

Looks like you forgot a few points in your post there so I went and fixed it up for you.

[Melbustus]

...

I'm curious as to which large BTC holders are invested in to XMR other than the ones we know of from this thread?

Monero appeals to early/larger bitcoin holders far more than other alts (for reasons I've outlined several times (possibly in this thread; I honestly don't recall)). But I'd say quite a few from that demographic consider the alt-subforum to mostly be a cesspool of charlatans and shallow thinkers which is best avoided, so I wouldn't expect much posting here from that set.

[Majormax]

OP has predicted a 1000x fiat-denominated gain in Monero (equates to a ~35 billion dollar market cap after all supply is minted) here, so it wouldn't surprise me that quite a few people are attracted and have thrown a few btc down, especially after the recent price-movements with BTC.

Monero is differentiated from other fantasmic Alt coins by the following:

LOL

Every community thinks it has the answers.

[smooth]

But I'd say quite a few from that demographic consider the alt-subforum to mostly be a cesspool of charlatans and shallow thinkers which is best avoided, so I wouldn't expect much posting here from that set.

And they're right.

[rpietila]

It is a kiss of DEATH to Bitcoin if some "there" try to quench the "competition".

The Monero camp is composed of large Bitcoin holders and if we collectively withdraw our support, at this point it means a steep dive for Bitcoin.

I did not even mention the possibility that other honest bitcoiners might also want to switch allegiance. I know there are many. Bitcoin attracts scammers but also honest people.

Seriously...... I am trying to understand what you are saying, but it seems you are suggesting that a few big bitcoin holders can collectively tank Bitcoin. If this is the case, then Bitcoin is the biggest scam ever.
 

Prisoners dilemma

It's a not so thinly veiled threat. In short;  What is being alluded to is since XMR camp is composed of large BTC holders, if certain competing CN groups attempt to attack XMR, the XMR camp will strike back by driving the value of BTC down (which generally crashes the value of all alts) , not to mention your 'unrealised' gains in fiat from whatever BTC you might happen to own.

Well, not quite what I was thinking. But the actual thought is difficult to express...

Let's say that the market cap of a coin is the measure of the trust that people collectively have towards the coin. If coin X costs $1, and people A, B, C, and D own it 4, 3, 2, and 1 units respectively, the market cap equals $10. This much money the people are willing to trust to be held in this coin.

If someone, let's say A, decided that his trust towards the coin has increased, and instead of $4, he wants to allocate $5 of his portfolio to the coin, he can go to market and buy more until his position is valued $5.

If the action happens without significant new emission (mining) happening meanwhile, A must buy from either B, C, or D. If one of them (eg. B) has listed a coin for sale at the previous price for whatever reason, A can express his increased trust with no change in market price (it was offset by the actualization of the latent decreased trust of B).

But if no one directly wants to sell their coins, A must bid higher to obtain them. If the others are strict with their decision to trust only $3, $2 and $1, respectively, worth of value to the coin, they sell when their coins exceed that value. In a case where they did just that, the following would happen as a result of one person deciding to trust the coin a little bit more:

- coin market value would increase by 10%
- A would hold 4.55 coins valued at $5
- B would hold 2.73 coins valued at $3
- C would hold 1.82 coins valued at $2
- D would hold 0.91 coins valued at $1
- a total of 0.55 coins have been sold to A for $0.60.

A paid only $0.6 to have his stack valued up $1, and others got free money + their stack is worth the same. Not bad!

In reality people often have more rigid price flexibility in this kind of situations, which means that they don't sell so eagerly. This means that price goes up even quicker, and the pursuit to trust $5 becomes easier.

OK - but the same works both ways. Let everything else be the same (ceteris paribus), but this time A has lost some, 25% to be exact, trust towards the coin, and wants to reflect his lessened trust so that his investment is no more worth $4 but $3. What happens?

Without a coincidence of someone wanting to simultaneously increase trust, A has to push the price down to meet the neutral reaction by the others ("X has come down, so it's good to buy low" - this reflects their willingness to trust the equal amount of $ in the coin regardless of fluctuations).

To reduce A's exposure in the coin to $3, the following happens:

- coin market value would decrease by 10%
- A would hold 3.33 coins valued at $3
- B would hold 3.33 coins valued at $3
- C would hold 2.22 coins valued at $2
- D would hold 1.11 coins valued at $1
- a total of 0.67 coins have been sold by A for $0.60.

I will continue soon, this is messy to explain...

[JorgeStolfi]

Let's say that the market cap of a coin is the measure of the trust that people collectively have towards the coin. If coin X costs $1, and people A, B, C, and D own it 4, 3, 2, and 1 units respectively, the market cap equals $10. This much money the people are willing to trust to be held in this coin.

Is the market cap a variable worth considering?

Person Z,  creator of the X coin, mined 1 trillion coins in the first hour after creating the currency.  After giving out those 10 coins to A, B, C, and D for free, he sold one coin to himself for 1$.  Presto, the market cap is 1 trillion $, and his friends's hoards are worth 10$...

Market cap is a meaningful concept for items whose market liquidity is close to the total issuance.  If all owners of Apple stock (or even gold) were somehow forced to sell all their holdings on market within one year, their total revenue would be fairly close to the market cap.   That is not true for cryptocurrencies, not even for bitcoin.

Perhaps you meant to say that A, B, C, and D bought their coins at 1$?  In that case one should exclude from the "market cap" any large hoards acquired well below market price? Or replace market cap by total invested capital (sum of the dollar amounts that current owners paid for their coins, plus interest perhaps)?

EDIT: I take back the "even gold".  I have no idea of what woudl happen to gold price in that scenario.

[smooth]

Market cap is a meaningful concept for items whose market liquidity is close to the total issuance.  If all owners of Apple stock (or even gold) were somehow forced to sell all their holdings on market within one year, their total revenue would be fairly close to the market cap.   That is not true for cryptocurrencies, not even for bitcoin.

I don't think that's right. Market liquidity doesn't need to be close to issuance, if people are choosing to hold for reasons other than lack of liquidity. Liquidity really only needs to be adequate for each holder or any group of holders operating as a group.

[rpietila]

Let's say that the market cap of a coin is the measure of the trust that people collectively have towards the coin. If coin X costs $1, and people A, B, C, and D own it 4, 3, 2, and 1 units respectively, the market cap equals $10. This much money the people are willing to trust to be held in this coin.

Is the market cap a variable worth considering?

Person Z,  creator of the X coin, mined 1 trillion coins in the first hour after creating the currency.  After giving out those 10 coins to A, B, C, and D for free, he sold one coin to himself for 1$.  Presto, the market cap is 1 trillion $, and his friends's hoards are worth 10$...

Market cap is a meaningful concept for items whose market liquidity is close to the total issuance.  If all owners of Apple stock (or even gold) were somehow forced to sell all their holdings on market within one year, their total revenue would be fairly close to the market cap.   That is not true for cryptocurrencies, not even for bitcoin.

Perhaps you meant to say that A, B, C, and D bought their coins at 1$?  In that case one should exclude from the "market cap" any large hoards acquired well below market price? Or replace market cap by total invested capital (sum of the dollar amounts that current owners paid for their coins, plus interest perhaps)?

EDIT: I take back the "even gold".  I have no idea of what woudl happen to gold price in that scenario.

Good point. I am about to continue explaining that tenet next, or perhaps you can since you started already.

My great idea is to define the market cap of a liquid monetary commodity, to be the sum total of the trust towards it.

And then tell why the attacks towards Monero might have unintended consequences because not only they affect the trust people feel towards Monero, but also how they feel about other coins, whose "fanboiz" may be behind the attacks. In the hypothetical case that Bitcoin Foundation and BCT devteam were behind the attack, this would cause significant damage to Bitcoin. Why? The 10-15k holders of XMR collectively trust it only $6 million. But the same guys trust Bitcoin up to $100s of millions. If they decide to sell this stash out of fear or retaliation, the price would be destroyed.

[JorgeStolfi]

Market cap is a meaningful concept for items whose market liquidity is close to the total issuance.  If all owners of Apple stock (or even gold) were somehow forced to sell all their holdings on market within one year, their total revenue would be fairly close to the market cap.   That is not true for cryptocurrencies, not even for bitcoin.

I don't think that's right. Market liquidity doesn't need to be close to issuance, if people are choosing to hold for reasons other than lack of liquidity. Liquidity really only needs to be adequate for each holder or any group of holders operating as a group.

But for those scenarios the relevant quantity is market price,  not market cap.  Or, rather, (size of largest lot considered)*(mean price for sale or purchase of that lot).

The market cap is (market price)*(total issuance); why would total issuance matter, if only a small fraction of it can be traded at that price?

[Anotheranonlol]

It is a kiss of DEATH to Bitcoin if some "there" try to quench the "competition".

The Monero camp is composed of large Bitcoin holders and if we collectively withdraw our support, at this point it means a steep dive for Bitcoin.

I did not even mention the possibility that other honest bitcoiners might also want to switch allegiance. I know there are many. Bitcoin attracts scammers but also honest people.

Seriously...... I am trying to understand what you are saying, but it seems you are suggesting that a few big bitcoin holders can collectively tank Bitcoin. If this is the case, then Bitcoin is the biggest scam ever.
 

Prisoners dilemma

It's a not so thinly veiled threat. In short;  What is being alluded to is since XMR camp is composed of large BTC holders, if certain competing CN groups attempt to attack XMR, the XMR camp will strike back by driving the value of BTC down (which generally crashes the value of all alts) , not to mention your 'unrealised' gains in fiat from whatever BTC you might happen to own.

Well, not quite what I was thinking. But the actual thought is difficult to express...

Let's say that the market cap of a coin is the measure of the trust that people collectively have towards the coin. If coin X costs $1, and people A, B, C, and D own it 4, 3, 2, and 1 units respectively, the market cap equals $10. This much money the people are willing to trust to be held in this coin.

If someone, let's say A, decided that his trust towards the coin has increased, and instead of $4, he wants to allocate $5 of his portfolio to the coin, he can go to market and buy more until his position is valued $5.

If the action happens without significant new emission (mining) happening meanwhile, A must buy from either B, C, or D. If one of them (eg. B) has listed a coin for sale at the previous price for whatever reason, A can express his increased trust with no change in market price (it was offset by the actualization of the latent decreased trust of B).

But if no one directly wants to sell their coins, A must bid higher to obtain them. If the others are strict with their decision to trust only $3, $2 and $1, respectively, worth of value to the coin, they sell when their coins exceed that value. In a case where they did just that, the following would happen as a result of one person deciding to trust the coin a little bit more:

- coin market value would increase by 10%
- A would hold 4.55 coins valued at $5
- B would hold 2.73 coins valued at $3
- C would hold 1.82 coins valued at $2
- D would hold 0.91 coins valued at $1
- a total of 0.55 coins have been sold to A for $0.60.

A paid only $0.6 to have his stack valued up $1, and others got free money + their stack is worth the same. Not bad!

In reality people often have more rigid price flexibility in this kind of situations, which means that they don't sell so eagerly. This means that price goes up even quicker, and the pursuit to trust $5 becomes easier.

OK - but the same works both ways. Let everything else be the same (ceteris paribus), but this time A has lost some, 25% to be exact, trust towards the coin, and wants to reflect his lessened trust so that his investment is no more worth $4 but $3. What happens?

Without a coincidence of someone wanting to simultaneously increase trust, A has to push the price down to meet the neutral reaction by the others ("X has come down, so it's good to buy low" - this reflects their willingness to trust the equal amount of $ in the coin regardless of fluctuations).

To reduce A's exposure in the coin to $3, the following happens:

- coin market value would decrease by 10%
- A would hold 3.33 coins valued at $3
- B would hold 3.33 coins valued at $3
- C would hold 2.22 coins valued at $2
- D would hold 1.11 coins valued at $1
- a total of 0.67 coins have been sold by A for $0.60.

I will continue soon, this is messy to explain...

I think I got your examples, but not sure I followed the thought process completely.

An example with 2 seperate coins, let's call them B and X. Let's assume X has lower market cap than B. and let's just assume they have been fully distributed as per your example.

If you had holdings of those 2, and wanted to give a helping hand to carry out the second scenario in your example on Coin B as 'punishment' for perceived attacks on coin X- to demonstrate you have lost trust, the only way it would make sense is if you imagine your gains in coin X will offset the losses you incurred from whatever coin B is measured in, right? - (even if those 'losses' in B may only be temporary.) because coin X is denominated in coin B.

But you wouldn't be putting downward selling pressure on coin B in order to buy coin X, as there is no need to sell B for what it's measured in to buy X, when you can outright swap Coin B for coin X (again , since coin X is measured IN coin B)

unless you imagine that people are not measuring the price of coin X in coin B but instead by another metric, (like perhaps the same metric coin B is measured in), and so the loss of worth, from 'loss of trust' of Coin B will have no negative impact on your profit in coin X, and actually result in increasing the ratio of Coin B/ Coin X.

(in the same way a gain of trust in Coin X would increase the ratio of Coin B/ Coin X,  even without a decrease in trust in coin B.)

except the increased trust in coin X would result in proportionally bigger gains for existing holders, considering the market caps, and decreased trust in B would result in proportionally bigger losses in Coin B?

Am i following or on another planet?

[sonoIO]

I have also said elsewhere that the Satoshi coins are completely ignored by everyone these days. They represent the single biggest problem for Bitcoin, if Satoshi is alive he is doing the worst he possibly can for Bitcoin by keeping those coins as they are. He should give away 95% of them to all active addresses and sell the rest right away.

This is completely off-topic but i'll make an exception. IMO the best Satoshy can do with his bitcoins is to create a educational foundation. Give terms and subjects to be teached, and release fraction of funds when someone has a proof that he did it. That would rather fairly distribute the coins around the World. Educational POW

[smooth]

Market cap is a meaningful concept for items whose market liquidity is close to the total issuance.  If all owners of Apple stock (or even gold) were somehow forced to sell all their holdings on market within one year, their total revenue would be fairly close to the market cap.   That is not true for cryptocurrencies, not even for bitcoin.

I don't think that's right. Market liquidity doesn't need to be close to issuance, if people are choosing to hold for reasons other than lack of liquidity. Liquidity really only needs to be adequate for each holder or any group of holders operating as a group.

But for those scenarios the relevant quantity is market price,  not market cap.  Or, rather, (size of largest lot considered)*(mean price for sale or purchase of that lot).

The market cap is (market price)*(total issuance); why would total issuance matter, if only a small fraction of it can be traded at that price?

1. It's a definition. As long as you know the definition you can work with it. You might say that "Market Cap" is not very interesting in certain situations, and I would agree.

2. I could define Liquidity Adjusted Market Cap (a term I just made up) as the price times the amount held by any individual or coordinated group that can be sold for that price. Or perhaps the maximum of that quantity over all prices. So in your earlier example (not quoted above), the friends' holdings would contribute $10 each to LAMC and Z's coins would contribute $10, assuming there is liquidity to sell at most 10 coins for $1 (we don't really know this) and everyone is choosing to hold, for a total of $50. If there is liquidity to sell 200 coins at 0.50, the friends could sell 10 each (total 40) and Z could sell 200, making the LIMC at $0.50 therefore $120. Under the second version of my definition, given these facts the price-unconditional LAMC of the coin would then be $120 (but might be higher if the there is a higher maximum at another price).

Any similarity to Ripple, etc. is intended.

[sonoIO]

Market cap is a meaningful concept for items whose market liquidity is close to the total issuance.  If all owners of Apple stock (or even gold) were somehow forced to sell all their holdings on market within one year, their total revenue would be fairly close to the market cap.   That is not true for cryptocurrencies, not even for bitcoin.

I don't think that's right. Market liquidity doesn't need to be close to issuance, if people are choosing to hold for reasons other than lack of liquidity. Liquidity really only needs to be adequate for each holder or any group of holders operating as a group.

But for those scenarios the relevant quantity is market price,  not market cap.  Or, rather, (size of largest lot considered)*(mean price for sale or purchase of that lot).

The market cap is (market price)*(total issuance); why would total issuance matter, if only a small fraction of it can be traded at that price?

1. It's a definition. As long as you know the definition you can work with it. You might say that "Market Cap" is not very interesting in certain situations, and I would agree.

2. I could define Liquidity Adjusted Market Cap (a term I just made up) as the price times the amount held by any individual or coordinated group that can be sold for that price. Or perhaps the maximum of that quantity over all prices. So in your earlier example (not quoted above), the friends' holdings would contribute $10 each to LAMC and Z's coins would contribute $10, assuming there is liquidity to sell at most 10 coins for $1 (we don't really know this) and everyone is choosing to hold, for a total of $50. If there is liquidity to sell 200 coins at 0.50, the friends could sell 10 each (total 40) and Z could sell 200, making the LIMC at $0.50 therefore $120. Under the second version of my definition, given these facts the price-unconditional LAMC of the coin would then be $120 (but might be higher if the there is a higher maximum at another price).

Any similarity to Ripple, etc. is intended.

Or even maybe Liquidity and Potential Adjusted Market Cap? Where the Potential is some inverse function of a coin age

[Majormax]

.. a gain of trust in Coin X would increase the ratio of Coin B/ Coin X,  even without a decrease in trust in coin B.)

except the increased trust in coin X would result in proportionally bigger gains for existing holders, considering the market caps, and decreased trust in B would result in proportionally bigger losses in Coin B?

Am i following or on another planet?

Without going into excessive detail, I would caution that it is not possible to make an empirical judgement : there are too many variables, too many participants, and the variations are reflexive (trading markets). It is just the same as predicting daily index and stock movements.

[sgi02]

Hello rpietila,

                 I've read your OP on different alt's (and rules), since this thread is titled the Altcoin Observer I felt this question was apropos...

BC
is designed a 100% premined pump&dump get-rich-quickly coin, which I did not touch when it was introduced to me in the early days of the first pump. Stay out (unless you like to be on the receiving end).

I currently hold BC and recently liquidated 33% of my holdings for XMR. I was curious as to why you hold these opinions regarding Blackcoin as I know none of these to be true. I realize this topic is trending towards Monero, but being that you're one of the reasons I have invested more in XMR, I thought I would ask. Thanks for your time.

Regards,

sgi02

[bitcoin_bagholder]

Anonymint is one of a kind.  In so many ways.

God bless.

Smart guy, probably could benefit from getting laid a bit more. Hope he comes back!

Very smart. Not your stereotypical crackpot anarchist who somehow managed to elude the men in white coats.

[pa]

Anonymint is one of a kind.  In so many ways.

God bless.

Smart guy, probably could benefit from getting laid a bit more. Hope he comes back!

Very smart. Not your stereotypical crackpot anarchist who somehow managed to elude the men in white coats.

So smart I couldn't understand what he says half the time, I'm not being sarcastic.

Clearly highly intelligent. I've learned a lot from his critical posts. But the idolization of Martin Armstrong is hard to understand or take seriously. If MA could do the things AM thinks he can do, MA would be the wealthiest man in the world. But I hope AM succeeds in his quest to create the ultimate cryptocurrency.

[fluffypony]

BC
is designed a 100% premined pump&dump get-rich-quickly coin, which I did not touch when it was introduced to me in the early days of the first pump. Stay out (unless you like to be on the receiving end).

I currently hold BC and recently liquidated 33% of my holdings for XMR. I was curious as to why you hold these opinions regarding Blackcoin as I know none of these to be true. I realize this topic is trending towards Monero, but being that you're one of the reasons I have invested more in XMR, I thought I would ask. Thanks for your time.

When I have questions like this I find it useful to refer to this guide first: http://www.devtome.com/doku.php?id=a_massive_investigation_of_instamines_and_fastmines_for_the_top_alt_coins

It says, of Blackcoin -

"For those of us keeping track, Blackcoin was launched Februrary 24th at 6:00 (no indication is given what time zone this is)). Block 4100 commenced on February 27th at 6:15. In 3 days…Blackcoin produced some 40 million coins (or 50 million). Now they rest at around 75 million coins and only PoS occurs from here.

This is photographic evidence that supports our brief searching of the blackcoin blockchain. The majority of the first 10000 blocks were PoW, and since they were all producing 1,000 BC, the bulk of the coins were made within one week. Anyone should be highly skeptical of the start of this coin. Who would think that the creator of this coin is thinking about enriching your pockets and not theirs?

To this end, who cares about their PoS option? They dished out thousands of blocks at 1000 BC a pop for three days. You would have to hold 100,000+ BC to be able to mint that kind of Blackcoin, which at today's rate would cost you in the neighborhood of $15,000 to obtain 100,000 BC. Are you sure you want to lock in that coin for minting now?"

The author of that guide is vicious in his exposé, and only lists 14 altcoins as being "acceptably mined" (of which Monero is one). Nonetheless, most savvy investors agree wholeheartedly with him and can't fault the facts he demonstrates.

[jwinterm]

The author of that guide is vicious in his exposé, and only lists 14 altcoins as being "acceptably mined" (of which Monero is one). Nonetheless, most savvy investors agree wholeheartedly with him and can't fault the facts he demonstrates.

While the site seems reasonable and well researched, I do take issue with some of their characterizations, particularly those with fastmines due to poor difficulty adjustment (litecoin and vertcoin are listed as questionable, with vert still teetering on the edge of extreme caution), while coins like boolberry and monero (which had a private miner supposedly raking in half of all blocks at one period, a fairly extended period for boolberry) or maxcoin (which also had a private miner and then hardforked to change block reward to a smaller amount several months after launch) are listed in acceptably mined currency section.

If you look at the top 10/100/1000 addresses on bitinfocharts.com for vertcoin, it has a far better/broader distribution than namecoin or terracoin (fairly mined currencies according to the site), and the stats aren't available for franko, maxcoin, potcoin, and most of the others listed as fairly mined on bitinfocharts.com, but I suspect since most of them failed to remain popular they are very concentrated amongst a few.

Also, the writer is obviously a proponent of devcoin (which he lists in an even higher category than fairly mined - it is an "ethical" coin) states:

Using the same SHA-256 algorithm, their model gives only 10% of mined coins to miners and the other 90% to the Devcoin foundation to split amongst web developers, writers, and other creative content producers.

So apparently it's "ethical" to keep 90% of all coins for the foundation to distribute as it pleases, but what amounts to a less than 10% of coins now for vertcoin (and constantly dropping) or less than 1% for litecoin lands them in the questionable category.

I have no issue with blackcoin and other superfast PoW then switch to PoS coins being listed in extreme caution category.