Gold collapsing. Bitcoin UP.

[marcus_of_augustus]

Back to the gold topic.

There is a referendum in Switzerland, in November, which is likely to secure a yes vote that the SNB holds 20% of its assets in gold (currently at 7.6%). As soon as this passes the bank will have five years to reach the 20% target. There is no legal escape for it. Considering that the SNB balance sheet has recently blown out Fed/BoE/BoJ-style - it will have to buy up to 1,700 tons of gold in the open market - and take delivery!

http://www.zerohedge.com/news/2014-10-28/things-make-you-go-hmmm-swiss-gold-status-quo-showdown

I really think this will put a floor under the current gold price, and maybe even spark another medium-term rally.

Will be interesting to watch the weasels at the SNB try to wriggle out of it ... after the shit they pulled with the EUR peg anything is possible.

[solex]

I'm very interested to see what spin and hype will be deployed toward a NO vote.  Or just plan old vote rigging. A YES vote would send a shockwave. ..

I am sure that many Swiss voters think 20% is lowish, and some think it should be higher.

The SNB should be buying large in the futures markets right now, ahead of the vote, or be front-run by every commodities trader in the world afterwards.  (It can always unwind in the case of a No vote).

Will be interesting to watch the weasels at the SNB try to wriggle out of it ... after the shit they pulled with the EUR peg anything is possible.

They could ask UBS for the billions in bail-out funds back early.

There will undoubtedly be some scam accountancy off-balance-sheet tricks pulled to reduce the SNB assets.

[smooth]

again, it's more complicated than a simple upgrade b/c an upgrade just involves downloading an updated client.  my scenario requires a wholesale movement of all BTC to scBTC which exposes them to loss by hacking and identity exposure.

In order for there to be wholesale "movement" (I would say "exchange" or "locking" because I don't buy the notion of "moving" BTC), people would have to be adopting the sidechain, by downloading a client for it or using a web wallet or other intermediary client and using that mechanism to exhcnage/lock their BTC for scBTC. In other words, if most BTC is exchanged in that manner, then an economic majority has adopted the sidechain as a de facto replacement or upgrade for BTC.

[brg444]

again, it's more complicated than a simple upgrade b/c an upgrade just involves downloading an updated client.  my scenario requires a wholesale movement of all BTC to scBTC which exposes them to loss by hacking and identity exposure.

In order for there to be wholesale "movement" (I would say "exchange" or "locking" because I don't buy the notion of "moving" BTC), people would have to be adopting the sidechain, by downloading a client for it or using a web wallet or other intermediary client and using that mechanism to exhcnage/lock their BTC for scBTC. In other words, if most BTC is exchanged in that manner, then an economic majority has adopted the sidechain as a de facto replacement or upgrade for BTC.

do you not agree that in the face of such a predicament, BTC main chain would simply be adapted to fit the market need (feature implementation) and remove the need for any wholesale "movement"

[boumalo]

Back to the gold topic.

There is a referendum in Switzerland, in November, which is likely to secure a yes vote that the SNB holds 20% of its assets in gold (currently at 7.6%). As soon as this passes the bank will have five years to reach the 20% target. There is no legal escape for it. Considering that the SNB balance sheet has recently blown out Fed/BoE/BoJ-style - it will have to buy up to 1,700 tons of gold in the open market - and take delivery!

http://www.zerohedge.com/news/2014-10-28/things-make-you-go-hmmm-swiss-gold-status-quo-showdown

I really think this will put a floor under the current gold price, and maybe even spark another medium-term rally.

Switzerland is one of the closest countries to a real democracy and this referendum could be a game changer for Gold; the market understanding that the FED can't raise interest rates, stop QE and unwind without creating a (much needed) crisis will crash the USD and benefit Gold

[Pruden]

also, my prediction of a Dow Theory non-confirmation is looking good and is firmly on the table and in play as a major hint that we may be entering a period of severe volatility and perhaps recession as a bear cycle may be settling in.  we'll see how the next few days behave.

Stocks have held well in my opinion. In any case, you should wait at least a couple of weeks for Dow Theory confirmation.

[cypherdoc]

"the core observation is that “Bitcoin” the blockchain is conceptually independent from “bitcoin” the asset: if we had technology
to support the movement of assets between blockchains, new systems could be developed which
users could adopt by simply reusing the existing bitcoin currency"

http://www.blockstream.com/sidechains.pdf

the basic problem is right here.  separating the BTC from its blockchain will allow exploits.

I consider that statement to be Marketing. As such, I'm not sure it is possible for a Marketing statement to have an exploit.

BTC can only exist on the Bitcoin chain. scBTC is an alt that is backed by BTC.

If scBTC defeats BTC it means an alt has defeated BTC. I don't have a problem with that, but some do, of course.

precisely, in which case the BTC core would likely implement features of the apparent improved sidechain so as to mitigate the risk that exist in the exodus of the whole ecosystem

but you've already said that it's almost impossible to get consensus in the current system.  why would that change under a speculative attack?  pressure?  panic?  at what % shift?  40,50,60% of BTC to scBTC?  maybe they act too late.  maybe the speculative attacker is Maxwell himself who created the SC and stands to profit from a wholesale shift into the SC and stymies adoption of the innovation into the MC.  point is, you won't know.

let me step back one step and say this:  as long as the speculative attacker can create volatility, both chains stand to lose as security is weakened across the entire ecosystem.  you yourself said that an increasing #scBTC and a rising price would indicate that the SC is succeeding.  and i agree.  and so will everybody else, including other speculators as they move to the SC and take advantage of the risk free put.

[cypherdoc]

again, it's more complicated than a simple upgrade b/c an upgrade just involves downloading an updated client.  my scenario requires a wholesale movement of all BTC to scBTC which exposes them to loss by hacking and identity exposure.

In order for there to be wholesale "movement" (I would say "exchange" or "locking" because I don't buy the notion of "moving" BTC), people would have to be adopting the sidechain, by downloading a client for it or using a web wallet or other intermediary client and using that mechanism to exhcnage/lock their BTC for scBTC. In other words, if most BTC is exchanged in that manner, then an economic majority has adopted the sidechain as a de facto replacement or upgrade for BTC.

agreed.  but that would involve cold storage wallets being dug out all over the world and having to "exchange/lock" into scBTC which involves risk at multiple levels, not to mention the inconvenience.

[cypherdoc]

also, my prediction of a Dow Theory non-confirmation is looking good and is firmly on the table and in play as a major hint that we may be entering a period of severe volatility and perhaps recession as a bear cycle may be settling in.  we'll see how the next few days behave.

Stocks have held well in my opinion. In any case, you should wait at least a couple of weeks for Dow Theory confirmation.

of course.  the non-confirmation has not had confirmation.  yet.

[cypherdoc]

@cypherdoc

There is possible to build endless variation of SC's.

Let's talk about small group of them
 - Symmetric two-way peg
 - with conversion rate 1:1

a) We can verify they are Symmetric two-way peg b/c anybody can send anytime BTC to scBTC and back with conversion rate 1:1.
b) if (a) is not possible this this SC is not "Symmetric two-way peg with conversion rate 1:1"

i'm perfectly aware of that.

my baseline case includes those assumptions mainly b/c i think that will be the most common variety of SC created.

but that doesn't invalidate what i've outlined to be an expected speculative attack.

In case STWP (Symmetric two-way peg 1:1)
 - you can deposit bitcoins to SC anytime (today, tomorrow ... in year 2140) by bitcoin transaction -> if you know private keys of your bitcoins.
 - you can withdraw bitcoins from SC anytime by bitcoin transaction -> if you know how to create proof you destroyed scBTC
 - if you deposit  X bitcoins then you can  withdraw X (minus transaction fees) -> you did not spent scBTC

as i understand it, the SPV proof from BTC to scBTC has to be mined.  if enough miners switch over to the SC, say half, the MC could become more susceptible to a 51% attack that might prevent these SPV proofs from being constructed, no?

edit:  i know there's this federated thing that's possible but that's centralized.

Yes, now You and me can agree and create private Federated aSymmetricTWP (private b/c it is not public information, aSymmetric b/c we do not allow free investing -> only you and me can withdraw).
We can create  2 of 2 MultiSignatureAddress MSA (next algho is only example, so it may contains errors .. just for illustration)
 - you want to participate with 3 BTC I will with 2 BTC
 - offline(by email) : I'll sign you transaction you are able to withdraw 3 BTC from MSA (and send rest to my address)
 - offline: You'll sign transaction for me I'm able to withdraw 2 BTC from MSA (and send rest to your address)
 - offline: we will both sign  I deposit 2 BTC and you deposit 3 BTC to MSA
 - online: we will broadcast MSA transaction (MSA will be funded with 5 BTC )

Now we can transact offline (we do not need miners on SC) but we have SC.

that's a shitty solution to my speculative attack.  no one wants their BTC/scBTC locked up in some private proof where i have to rely on just you to change my position.  i want access to public open market exchange for maximum price discovery.

[cypherdoc]

the other major flawed assumption of SC's is that it will allow calm, rigorous, controlled evaluation of an innovation.  i ask, how is this possible in the face of the speculative attack i have just outlined?  or even in the scenario where a true innovative SC is produced as BTC in the form of scBTC floods into the SC?  it is my belief that many of these technical geeks, as you might call them, fail to consider that Bitcoin is just as much about money and economics as it is a technology.

as an early adopter and speculator myself beginning in Jan 2011 when the price was still under a dollar, i have observed first hand the response of the developer technical community to Bitcoin in the days before the price took off and then crashed during 4-5 bubbles.  MOST of them were skeptics of the economic concepts back then.  even some of its core developers continue to be so today.  only as the price took off did they sit up and listen.  there's nothing like a >1000% increase in the price of something to catch peoples attention and technical geeks are not to be excluded from the human emotional aspects of trading.  i believe SC devs would view a price increase in the exchange value of their particular scBTC to be validation that their innovation is working. and i don't believe they will be able to differentiate between the speculative attack i have just outlined from a real benefit market response. 

at the very least, SC attacks will cause volatility.  and volatility usually means most investors in an asset get hurt while a few that understand or exploit said volatility get rich.

[Bitmore]

Back to the gold topic.

There is a referendum in Switzerland, in November, which is likely to secure a yes vote that the SNB holds 20% of its assets in gold (currently at 7.6%). As soon as this passes the bank will have five years to reach the 20% target. There is no legal escape for it. Considering that the SNB balance sheet has recently blown out Fed/BoE/BoJ-style - it will have to buy up to 1,700 tons of gold in the open market - and take delivery!

http://www.zerohedge.com/news/2014-10-28/things-make-you-go-hmmm-swiss-gold-status-quo-showdown

I really think this will put a floor under the current gold price, and maybe even spark another medium-term rally.

Switzerland is one of the closest countries to a real democracy and this referendum could be a game changer for Gold; the market understanding that the FED can't raise interest rates, stop QE and unwind without creating a (much needed) crisis will crash the USD and benefit Gold

Since Bitcoin shares gold's property of scarcity, would not that be a good thing for Bitcoin?

[cypherdoc]

Back to the gold topic.

There is a referendum in Switzerland, in November, which is likely to secure a yes vote that the SNB holds 20% of its assets in gold (currently at 7.6%). As soon as this passes the bank will have five years to reach the 20% target. There is no legal escape for it. Considering that the SNB balance sheet has recently blown out Fed/BoE/BoJ-style - it will have to buy up to 1,700 tons of gold in the open market - and take delivery!

http://www.zerohedge.com/news/2014-10-28/things-make-you-go-hmmm-swiss-gold-status-quo-showdown

I really think this will put a floor under the current gold price, and maybe even spark another medium-term rally.

Switzerland is one of the closest countries to a real democracy and this referendum could be a game changer for Gold; the market understanding that the FED can't raise interest rates, stop QE and unwind without creating a (much needed) crisis will crash the USD and benefit Gold

Since Bitcoin shares gold's property of scarcity, would not that be a good thing for Bitcoin?

it is.  and it works better as money than gold.

[NewLiberty]

the other major flawed assumption of SC's is that it will allow calm, rigorous, controlled evaluation of an innovation.  i ask, how is this possible in the face of the speculative attack i have just outlined? 

Calm rigorous controlled evaluation?  Is that even a thing anymore?

Maybe someone should try this on an alt?
Nah...

[iCEBREAKER]

the other major flawed assumption of SC's is that it will allow calm, rigorous, controlled evaluation of an innovation.  i ask, how is this possible in the face of the speculative attack i have just outlined? 

Calm rigorous controlled evaluation?  Is that even a thing anymore?

Maybe someone should try this on an alt?
Nah...

Innovation is disruptive, especially when accelerated to the speed of Bitcoin.

I don't think (the overlords pushing) scamchains can be stopped at this point, so we're going to find out what effect the risk-free Satoshi Put will have, whether we want to or not.

After all the Maximalist vitriol spewed at innovation in the altcoin space, I'm looking forward to watching Bitcoin be hollowed out by parasitic sidecoins.   

[smooth]

again, it's more complicated than a simple upgrade b/c an upgrade just involves downloading an updated client.  my scenario requires a wholesale movement of all BTC to scBTC which exposes them to loss by hacking and identity exposure.

In order for there to be wholesale "movement" (I would say "exchange" or "locking" because I don't buy the notion of "moving" BTC), people would have to be adopting the sidechain, by downloading a client for it or using a web wallet or other intermediary client and using that mechanism to exhcnage/lock their BTC for scBTC. In other words, if most BTC is exchanged in that manner, then an economic majority has adopted the sidechain as a de facto replacement or upgrade for BTC.

do you not agree that in the face of such a predicament, BTC main chain would simply be adapted to fit the market need (feature implementation) and remove the need for any wholesale "movement"

I don't think there is any predicament at all. If the side chain is objectively a better chain as determined by stakeholders, then it is simply time to move on. There is not necessarily any reason try to try to backport everything to the original chain. BTC will have fulfilled its useful purpose of giving birth to the improved scBTC/BTC2.

[solex]

Since Bitcoin shares gold's property of scarcity, would not that be a good thing for Bitcoin?

I think that public debate about a return to the principles of sound money is very good for Bitcoin. The Swiss vote will help kick-start debates which will hopefully spread wider.

The problem is that the vast majority of the population (even in OECD countries) are unaware that 100 years of out-of-control command-and-control central bank lunacy has wrecked the world's financial system. It has created trillion dollar trade imbalances, bankrupt governments, Peak Debt, pay-later consumer culture, anti-savings bias, wealth inequality, commercial inefficiency, zombie banks, rigged markets etc, etc, ad nauseum.

In the same 100 years living standards have improved due to exponential gains in science and technology, which has masked the effects of the world's dysfunctional financial system. However, things could be so much better.

That's why I like Bitcoin. It is sound money, as is gold, but fit for the 21st Century. Now the Swiss might make a lot more people learn how important these matters are.

[justusranvier]

Back to the gold topic.

There is a referendum in Switzerland, in November, which is likely to secure a yes vote that the SNB holds 20% of its assets in gold (currently at 7.6%). As soon as this passes the bank will have five years to reach the 20% target. There is no legal escape for it. Considering that the SNB balance sheet has recently blown out Fed/BoE/BoJ-style - it will have to buy up to 1,700 tons of gold in the open market - and take delivery!

http://www.zerohedge.com/news/2014-10-28/things-make-you-go-hmmm-swiss-gold-status-quo-showdown

I really think this will put a floor under the current gold price, and maybe even spark another medium-term rally.

Will be interesting to watch the weasels at the SNB try to wriggle out of it ... after the shit they pulled with the EUR peg anything is possible.

How sure is anyone that the 7.6% figure is actually correct?

[iCEBREAKER]

Meanwhile, Gold collapsing,  bitcoin (also collapsing)

Oil too.

What is up? Just USD?

The USD is entering the 'red giant' phase, having exhausted its primary fuel of gold and silver backing and now being powered by the less dense energy source of hydrocarbon hegemony.  Although less productive, the economic bloat of malinvestment results in a higher apparent magnitude via the financialization process. 

That is why gold/silver/BTC (stuff you have) are collapsing, while insurance/food/medicine/education (stuff you need) costs are soaring.

While less massive bodies of fiat may ultimately wind up as harmless white dwarfs, the USD is so large it will enter a phase equivalent to carbon-burning when runaway debt-monetization overcomes the hydrostatic equilibrium provided by petrodollars.

This will result in a supernova of hyperinflation, and finally a black hole will remain where the global reserve currency once existed.

[marcus_of_augustus]

Meanwhile, Gold collapsing,  bitcoin (also collapsing)

Oil too.

What is up? Just USD?

The USD is entering the 'red giant' phase, having exhausted its primary fuel of gold and silver backing and now being powered by the less dense energy source of hydrocarbon hegemony.  Although less productive, the economic bloat of malinvestment results in a higher apparent magnitude via the financialization process. 

That is why gold/silver/BTC (stuff you have) are collapsing, while insurance/food/medicine/education (stuff you need) costs are soaring.

While less massive bodies of fiat may ultimately wind up as harmless white dwarfs, the USD is so large it will enter a phase equivalent to carbon-burning when runaway debt-monetization overcomes the hydrostatic equilibrium provided by petrodollars.

This will result in a supernova of hyperinflation, and finally a black hole will remain where the global reserve currency once existed.

that's good