rpietila Altcoin Observer

[aminorex]

the production costs of fiat ... are zero or close to zero.

fiat doesn't really exist anymore.  examples of fiat would be lincoln's greenbacks and kennedy's treasury notes.  (note the outcomes for the executive in each case.)

what does exist is debt.  it is not created by fiat.  it is enforced by the sword of the state, but it is not fiat.

i contend that the cost of this debt is quite vast.  and compounding very rapidly.  they are not production costs, but they are consequential costs of its production.

[aminorex]

If emission scaled linearly with hashing, we would lack an important check on the production of hashing hardware and the consumption of power for that purpose.

As far as I can tell, the rationale for imposing exponential inflation always comes down to fear of deferred consumption, and/or enmity for capital formation.  Both are intellectual errors which stem from defects of character.

[paulsonnumismatics]

Inflation is just a tool to adjust the impact of debt in the system. And, as some say, the tax of the poors... ;-)

[Johnny Mnemonic]

If emission scaled linearly with hashing, we would lack an important check on the production of hashing hardware and the consumption of power for that purpose.

How do current crypto emissions keep hardware production in check? I was under the impression the effect was the opposite.

[Majormax]

Hoarding has the goal of delayed buying. Of course, some people can hoard for the sake of hoarding, but most do it to store value for purposes of future consumption. Which again brings us to unique consumption cases that this or that currency can provide.

Storing today's excess for future consumption. That is indeed the reason money emerged in human society in the first place. It later became necessary to pay specific demands (Tax or trade etc)

Cryptocoin buyers so far fall into 2 categories : Those who want to store value for future consumption, and those who want to make a quick profit (preferably getting rich) in a shorter time frame.

The purchases of Cryptos with express intent to use for current expenditure are virtually nil. When Cryptos are demanded as payment for necessities , then mainstream adoption will be underway.

[aminorex]

If emission scaled linearly with hashing, we would lack an important check on the production of hashing hardware and the consumption of power for that purpose.

How do current crypto emissions keep hardware production in check? I was under the impression the effect was the opposite.

Poorly.  But I already regret what I said (and which you quoted)  because:

It doesn't matter whether emissions scale or are independent of hash rate, because the economy will be the same, and only the money supply will change.
If we accept the assumption that velocity is independent of the emission/supply ratio, I would have to agree in the main. 
(The assumption is questionable, however.)

The result in the linear scaling case seems to be one in which a mining monopoly inflates the float to zero, and hoards the emission (up to the tolerance of the military powers).
The brutal picture this paints seems no better than today's system of debt-serfdom - and not dissimilar in its bipartite power balance.

[smoothie]

...awaiting the explanation..

I don't think I can explain, it's a clash of ideologies. In that kind of opposition verbal arguments, which there's been no lack of recently, just don't work. There is a reason they made the "A picture is worth a thousand words" proverb, because sometimes you have to see it to believe.

Why can't you explain?

Basically the price of a commodity tends to gravitate towards its cost to produce. In this case PoS coins are produced with little effort/work. Hence a low price ultimately.

[Johnny Mnemonic]

If emission scaled linearly with hashing, we would lack an important check on the production of hashing hardware and the consumption of power for that purpose.

How do current crypto emissions keep hardware production in check? I was under the impression the effect was the opposite.

Poorly.  But I already regret what I said (and which you quoted)  because:

It doesn't matter whether emissions scale or are independent of hash rate, because the economy will be the same, and only the money supply will change.
If we accept the assumption that velocity is independent of the emission/supply ratio, I would have to agree in the main.  
(The assumption is questionable, however.)

The result in the linear scaling case seems to be one in which a mining monopoly inflates the float to zero, and hoards the emission (up to the tolerance of the military powers).
The brutal picture this paints seems no better than today's system of debt-serfdom - and not dissimilar in its bipartite power balance.

I agree that the priviledged can hoard emissions and control the network just as easily, but at least it comes at a cost (as opposed to creating endless debt out of thin air). But when comparing the evils, linear scaling still seems to be an improvement over the "traditional" decreasing block reward, as every coin has an equal cost and all mining work has an equal, "fair" value over time. And there wouldn't be a race to upgrade hardware to win blocks before the next halving.

[devphp]

...awaiting the explanation..

I don't think I can explain, it's a clash of ideologies. In that kind of opposition verbal arguments, which there's been no lack of recently, just don't work. There is a reason they made the "A picture is worth a thousand words" proverb, because sometimes you have to see it to believe.

Why can't you explain?

Basically the price of a commodity tends to gravitate towards its cost to produce. In this case PoS coins are produced with little effort/work. Hence a low price ultimately.

Crypto currencies are not a commodity, PoW or PoS, doesn't matter.
Commodity is something that can be consumed or can be used in manufacture production or you can wear it.
Digital commodity definition doesn't cut it either, it's only good to put Bitcoin and others into a specific tax category. Examples of digital commodity are songs, software. Crypto currencies are not digital commodities, you can't use them for their own properties, you can only use them for what they can buy. Which always brings us to utility value and unique use cases. Price of commodity absolutely can go below its cost to produce, if there has been overproduction (or a lot of cheap production) in the past and little demand at present and expected in the future. Price is always a function of supply and demand. Demand = use cases.

[OrientA]

Is it possible for the CN coin to be PoS + PoW? Would the untraceable address make PoS impossible?

[rpietila]

As well I could have said that the hoarding is the only thing that gives value to anything [ ... ]. If there is no interest in anyone to hoard (save) in your currency, even the marvellous use cases do not give it any value, as it just travels lightning-speed through the use cases, but is not in demand by anyone.

Hm, this is quite a change from the arguments used up to six months ago.  Claims like "1 BTC will soon be worth over 100'000 dollars" were entirely based on the prediction that bitcoin would capture some fraction of the e-payments in the world, and the price would have to be that high in order to have that much dollar volume with 21 million coins.

Although I reserve the right to change opinions, that is something I have never emphasized. Only that someone else but you has said it, does not make me responsible. 

[JorgeStolfi]

Hm, this is quite a change from the arguments used up to six months ago.  Claims like "1 BTC will soon be worth over 100'000 dollars" were entirely based on the prediction that bitcoin would capture some fraction of the e-payments in the world, and the price would have to be that high in order to have that much dollar volume with 21 million coins.

Although I reserve the right to change opinions, that is something I have never emphasized. Only that someone else but you has said it, does not make me responsible. 

I did not mean you specifically, but that was THE argument, nine months ago.  I don't recall reading any other back then.

[rugrats]

...awaiting the explanation..

I don't think I can explain, it's a clash of ideologies. In that kind of opposition verbal arguments, which there's been no lack of recently, just don't work. There is a reason they made the "A picture is worth a thousand words" proverb, because sometimes you have to see it to believe.

Why can't you explain?

Basically the price of a commodity tends to gravitate towards its cost to produce. In this case PoS coins are produced with little effort/work. Hence a low price ultimately.

Crypto currencies are not a commodity, PoW or PoS, doesn't matter.
Commodity is something that can be consumed or can be used in manufacture production or you can wear it.
Digital commodity definition doesn't cut it either, it's only good to put Bitcoin and others into a specific tax category. Examples of digital commodity are songs, software. Crypto currencies are not digital commodities, you can't use them for their own properties, you can only use them for what they can buy. Which always brings us to utility value and unique use cases. Price of commodity absolutely can go below its cost to produce, if there has been overproduction (or a lot of cheap production) in the past and little demand at present and expected in the future. Price is always a function of supply and demand. Demand = use cases.

This is one of my pet peeves with the cryptosphere in general - creators of currencies must not only be able to code, they damn better understand the entire economic function and purpose of their creation if they are to be taken seriously by serious people. One of the least talked about thing about Satoshi was his grasp of economics, commodity markets, social sciences and politics. He was taken seriously not only because he was a genius coder and an idealist, but because he understood the fundamental economic role of his creation.

[jmw74]

As well I could have said that the hoarding is the only thing that gives value to anything [ ... ]. If there is no interest in anyone to hoard (save) in your currency, even the marvellous use cases do not give it any value, as it just travels lightning-speed through the use cases, but is not in demand by anyone.

Hm, this is quite a change from the arguments used up to six months ago.  Claims like "1 BTC will soon be worth over 100'000 dollars" were entirely based on the prediction that bitcoin would capture some fraction of the e-payments in the world, and the price would have to be that high in order to have that much dollar volume with 21 million coins.

It's beginning to become apparent that it's pretty unlikely that Bitcoin can compete on that level with private entities I think.

There are some bad an inefficient companies out there. Even if Bitcoin makes them step up their service or get over taken by a competitor that does it better it seems like a long shot that Bitcoin is going to become some sort of financial hegemon anytime soon.

Unless there is large scale bank bail-ins. Or some other financial disaster. Then there might be a large flight of capital in to Bitcoin.

But really at this point I'm pretty convinced that the only way crypto has a chance at mainstream adoption is through someone coming up with new, innovative, and easy ways to use it for regular people.

I'm glad to see others realizing this.

Bitcoin is the pressure release valve.  When gatekeepers try to censor you (prevent you from spending your money as you see fit, seizing it, inflating it, reversing payment, etc), bitcoin lets you circumvent. It's not free though, bitcoin is a horribly inefficient and expensive ledger-keeping system.  Still, compared to being censored, it's still quite attractive.

Gatekeepers are not all stupid, they will be forced to loosen their restrictions or die. 

So, gatekeepers will loosen up just enough to keep you from fleeing to bitcoin.  That is actually FAR looser than they are today, which is great.  Ultimately, though, bitcoin must remain niche due to its inefficiency.  It will force competition and simply obliterate banking and finance as we know it today.  However many of the same gatekeepers will still be around, they'll just be much friendlier.

[vuduchyld]

Just a bloody period for all crypto over the last couple of months.

Still trying to do work on indexing, but I have a record of coinmarketcap showing total crypto cap at $8.6 billion on August 4th.

Just two months later, we're at $4.6 billion for a whopping 46.5% slide.  Not a lot of hiding places.

[stellarman]

Hoarding has the goal of delayed buying. Of course, some people can hoard for the sake of hoarding, but most do it to store value for purposes of future consumption. Which again brings us to unique consumption cases that this or that currency can provide.

Once the expected loss in transaction costs is smaller than the expected loss of the transactional currency being a weaker store of value, people prefer currency exchange to hoarding the transactional currency. Between cryptos, currency exchange cost is very low, so I don't give much chance of success to a coin that is a weak store of value even though it had superlative transactional use.

But higher usage on the other hand makes a coin gain in value also, therefore making it a better store of value.

Is not higher use (velocity) really the only way a currency can gain traction ?  

Fundamental demand is always going to outlast speculative demand.

+1

Velocity and usefulness are the keys to the value of any currency (not just crypto). Both velocity and usefulness are tied to the confidence people have that they can USE the currency to buy things of value. Similarly, people won't hoard a currency unless they have confidence in its future usefulness.

I predict that when a truly useful cryptocurrency exists -- one that is valued based on its velocity and utility -- I predict that its price will also be much less volatile than the cryptocurrencies we have today.

[e-coinomist]

Just a bloody period for all crypto over the last couple of months.

Still trying to do work on indexing, but I have a record of coinmarketcap showing total crypto cap at $8.6 billion on August 4th.

Just two months later, we're at $4.6 billion for a whopping 46.5% slide.  Not a lot of hiding places.

Total Market Cap: $ 4,639,741,579
Last updated: Oct 05, 2014 3:30 PM UTC

24h change -9.28 % for the top three, some doing as worse as -18.60 % (XMR). No hiding place anywhere, with the exception of "BitShares PTS" but that is a small one.

That is the mess, now where is the reason? Is it:

1) Satoshi got hacked, the email adress popped up recently, his Bitcoins get dumped. Since all Altcoins reference their trade value on that, going down in flames too. Should be visible inside Blockchain analysis.
2) Some other party sells on a grand scale. I remember there had been huge reserves inside Silkroad and MtGox. Traceable.
3) People distrust information technology now since the Snowden incident, so they sell (many small private holdings)
4) The other reason, it is not to many sells but lack of buying support. Should be visible in comparing the Orderbooks with history data (which I do lack)
5) Generall lack of interest since private people cannot mine Bitcoins anymore on their desktops. Duh, difficult one ... Difficulty is still high. But how to know where the Hashrate originates from?

edit:
6) self fullfilling prophecy taking place outside of the Altcoins. BTC gets sold because the price dips, with the intention of buying back in on a cheaper value. Hence the price dips further. This starteded 2~3 days ago

[robinwilliams]

i am fairly sure the sell off has been building somewhat and the TRIGGER was how the market BARELY MOVED when paypal announced its integration w bitcoin and basically there was a 3% bump that got sold off in 12 hours.

everyone knew it wasn't going up or a long time and way overbought at that point.  my question is what's the bottom for bitcoin/xmr.  i was lucky enough to pull out 4 zeros to pay off credit card RIGHT before the sell off (btc around 380 i think and xmr around 310).  am tempted just to buy back in but i think btc can go to 270...

[JorgeStolfi]

That is the mess, now where is the reason? Is it:

Much simpler: the Chinese speculators, who lifted the price last November from ~120 to ~1200,  are becoming disenchanted with bitcoin (which, for them, is only good for speculation), selling all they have for whatever price they can, and leaving the market.

And now some large holders in the West are surely having second thoughts, and doing the same -- discreetly, while telling everybody to hold.

[Este Nuno]

1) Satoshi got hacked, the email adress popped up recently, his Bitcoins get dumped. Since all Altcoins reference their trade value on that, going down in flames too. Should be visible inside Blockchain analysis.

Pretty unlikely this is happening. People would notice it I think and be shouting it from the rooftops if those coins moved at all.