[XMR] rpietila Monero Economics thread

[aminorex]

The only part that was relevant to economics got ignored:

Until people have obligations which can only be discharged in monero, there are no forced buyers, and volatility extremes will persist. 

This may seem obvious to others, but I hadn't realized it so clearly before.  The same is true of BTC.  If you really want to build the coin, you have to bill in Monero.

[1715123390]

1715123390

[rpietila]

The only part that was relevant to economics got ignored:

Until people have obligations which can only be discharged in monero, there are no forced buyers, and volatility extremes will persist. 

This may seem obvious to others, but I hadn't realized it so clearly before.  The same is true of BTC.  If you really want to build the coin, you have to bill in Monero.

This is exactly so.

Let's be realistic in that we are only about 8000 monerists. But let's be clever that we can still develop the economy

[saddambitcoin]

The only part that was relevant to economics got ignored:

Until people have obligations which can only be discharged in monero, there are no forced buyers, and volatility extremes will persist. 

This may seem obvious to others, but I hadn't realized it so clearly before.  The same is true of BTC.  If you really want to build the coin, you have to bill in Monero.

This is exactly so.

Let's be realistic in that we are only about 8000 monerists. But let's be clever that we can still develop the economy

Someone needs to purchase the first XMR pizza of course. Has it happened yet?

[rpietila]

Someone needs to purchase the first XMR pizza of course. Has it happened yet?

10,000 mXMR for the first 2 pizzas delivered hot in the cigar room of Malla castle.

[luigi1111]

Someone needs to purchase the first XMR pizza of course. Has it happened yet?

10,000 mXMR for the first 2 pizzas delivered hot in the cigar room of Malla castle.

There is already a pizza thread. Unfortunately, last I knew, most or all of the "winners" haven't come forward with the necessary info to complete the deal. (I'm the true winner of course, but not if no one will take my pizza! )

https://bitcointalk.org/index.php?topic=634978.0

[saddambitcoin]

I am selling a synthesizer for Monero in this thread:

https://bitcointalk.org/index.php?topic=724577.0

[binaryFate]

I am selling a synthesizer for Monero in this thread:

https://bitcointalk.org/index.php?topic=724577.0

Way to go! But you should sell *only* in XMR

[Zohann]

Some Silver and Palladium Bullion available for sale with Monero listed as payment here : http://honolulu.craigslist.org/oah/clt/4603370962.html

Cheers!

Zohann

[vuduchyld]

The only part that was relevant to economics got ignored:

Until people have obligations which can only be discharged in monero, there are no forced buyers, and volatility extremes will persist. 

This may seem obvious to others, but I hadn't realized it so clearly before.  The same is true of BTC.  If you really want to build the coin, you have to bill in Monero.

That's a great point in bold.  I wonder, though, if they have to be FORCED buyers...or if incented buyers count for something, as well.  For example, Dell is now taking BTC.  I bet they would take more if they offered a 5% (preferably more) discount on ALL BTC purchases (rather than the select few Alienware systems).  It wouldn't have been a force, but it sure would incent buyers to discharge their debt to Dell in BTC.

For Monero, the example that comes to mind is the XMR markets on Poloniex.  When they opened those markets, to me that was a pretty big statement.  They don't have, ya know, Dogecoin markets on Poloniex.  I moved XMR from two other exchanges just because of greater liquidity.  Not every coin (in fact not many coins at all) are behind the slash at Poloniex.

[smooth]

The only part that was relevant to economics got ignored:

Until people have obligations which can only be discharged in monero, there are no forced buyers, and volatility extremes will persist.  

This may seem obvious to others, but I hadn't realized it so clearly before.  The same is true of BTC.  If you really want to build the coin, you have to bill in Monero.

That's a great point in bold.  I wonder, though, if they have to be FORCED buyers...or if incented buyers count for something, as well.  For example, Dell is now taking BTC.  I bet they would take more if they offered a 5% (preferably more) discount on ALL BTC purchases (rather than the select few Alienware systems).  It wouldn't have been a force, but it sure would incent buyers to discharge their debt to Dell in BTC.

For Monero, the example that comes to mind is the XMR markets on Poloniex.  When they opened those markets, to me that was a pretty big statement.  They don't have, ya know, Dogecoin markets on Poloniex.  I moved XMR from two other exchanges just because of greater liquidity.  Not every coin (in fact not many coins at all) are behind the slash at Poloniex.

I agree with you, there don't need to be forced buyers, just consistent buyers. Because there sure are consistent sellers (miners). To balance there needs to be some regular, ongoing buying for some reason other than speculation. I would count speculating on other coins (i.e. Poloniex situation) in that mix, although it is still speculation, and I'm not sure that counts as consistent buying unless interest in speculating on those other coins is growing.

Otherwise you are fully relying on speculators to do all the buying, and that likely does imply higher volatility.

[vuduchyld]

I suppose I should start offering clients of my small business valuation service the option to pay me in XMR with a hefty discount.

[Anotheranonlol]

I suppose I should start offering clients of my small business valuation service the option to pay me in XMR with a hefty discount.

Hmm.. I am a contract worker.  Actually, a statutory employee in the U.S. at this point, but in fact on contract.  I can switch to PFTE if I wish to do so.  This would cut out an agency middle-man, who has been raking in $150/diem for my head, doing nothing whatsoever but trans-billing, since 2008.

Since I have an option here, I might exercise it by submitting to the agency an ultimatum:  I get paid in XMR or I terminate the contract and go permanent full-time, thus cutting them out.  That would mean they have to buy USD 1200 in XMR every non-holiday week-day, forever -- but they get to keep the $150/diem rake.

It also means I would quickly become a net seller of XMR.

I rather like the exercise part. I rather dislike the forces sales part.  Hmm...

As long as my credit is good, I am a buyer long past the point of despair.  When I start to feel the fear and depression, I cheer myself up by buying more.  I take some amphetamine and a shot of whiskey, if that's what it takes.  

Until people have obligations which can only be discharged in monero, there are no forced buyers, and volatility extremes will persist.  Just about the only thing that can give you a permanent loss is selling - especially forced sales from leverage.

Do you get paid in XMR for this kind of fanatical posting too? a lot of words to say very little.
XMR is a decent alt-coin but please.. hardly warrants talk like this yet.

[nioc]

I suppose I should start offering clients of my small business valuation service the option to pay me in XMR with a hefty discount.

Hmm.. I am a contract worker.  Actually, a statutory employee in the U.S. at this point, but in fact on contract.  I can switch to PFTE if I wish to do so.  This would cut out an agency middle-man, who has been raking in $150/diem for my head, doing nothing whatsoever but trans-billing, since 2008.

Since I have an option here, I might exercise it by submitting to the agency an ultimatum:  I get paid in XMR or I terminate the contract and go permanent full-time, thus cutting them out.  That would mean they have to buy USD 1200 in XMR every non-holiday week-day, forever -- but they get to keep the $150/diem rake.

It also means I would quickly become a net seller of XMR.

I rather like the exercise part. I rather dislike the forces sales part.  Hmm...

As long as my credit is good, I am a buyer long past the point of despair.  When I start to feel the fear and depression, I cheer myself up by buying more.  I take some amphetamine and a shot of whiskey, if that's what it takes.  

Until people have obligations which can only be discharged in monero, there are no forced buyers, and volatility extremes will persist.  Just about the only thing that can give you a permanent loss is selling - especially forced sales from leverage.

Do you get paid in XMR for this kind of fanatical posting too? a lot of words to say very little.
XMR is a decent alt-coin but please.. hardly warrants talk like this yet.

Obviously aminorex thinks XMR is more than a decent alt-coin.  You may think his writing is fluff but then again you would probably think a Silkie is merely fluff.  His writing actually exposes himself quite a bit.  Maybe you just don't like right clicking his words.  For me right clicking is always exciting.

Oh no you say, not another convoluted poster.

I don't pay or get paid.

[aminorex]

If I seem to be advocating XMR, it's because I am.  I think there is no freedom without privacy, and XMR is one of the best defenses technology has ever offered against the inhumane oppressions which technological society has created.  I put my money where my mouth is, so I will gain from the appreciation in value which I strongly anticipate will be found in Monero over the long haul.

Q.v., Since June 24 difficulty has been rising about 1.7% daily.  Emission is currently declining a little faster than 0.8% daily.  Compounding these factors over the course of 1 month,  we arrive at a factor of 2x increase in  the ratio cost-of-mining/supply-mined.

Monero will be worth twice as much, one month from today, by that metric, using neutral statistical assumptions consistent with empirical observation.

Personally, I think anyone selling mined XMR (unless selling during an upside short-term outlier, to buy back more during a reversion or reversal) is incredibly dense.  Probably they are just mining monero because it offers the best ROI, and have no clue what the coin actually is.  If they knew, they would know better.

I'm guessing that a miner education campaign would go a long way towards stabilizing price at a higher level.  Therefore I will fight any miner education campaign tooth and nail, to widen and extend my accumulation window.

EDIT: however, my teeth are expensive, and my nails are trim, so I should arrange to retire from the fight early.  If I vowed to fight with firearms, steel, dimethyl mercury, or nukes, it should be taken more seriously.

[cAPSLOCK]

It was interesting to me to see today when monero made it's current attempt at a bottom there were several of us in the poloniex trollbox.  I can only assume some of you were there for the same reason as I.

[aminorex]

It was interesting to me to see today when monero made it's current attempt at a bottom there were several of us in the poloniex trollbox.  I can only assume some of you were there for the same reason as I.

Starting to look like a very flat bottom.  21 hours now?

[rpietila]

2. We've only recently started tracking our download stats (since July 15th), and we thought we'd share with you some download stats for Monero over the past 3 weeks. Our most popular download has been our blockchain bootstrap, which has seen 41 425 completed downloads in 3 weeks, around 74tb of traffic usage! Leading the pack on these downloads is Windows with around 78.2%, followed by OS X with 14.5%, and the remaining 7.3% snagged by Linux. The client downloads are quite interesting, too - of a total of 15 000 downloads in 3 weeks, Windows again grabbed 78.4%, OS X only grabbing 9%, and Linux grabbing a surprising 12.6%! This obviously excludes those that clone the github repo and compile, which is the majority of Linux users and OS X users (thanks to sammy007's Homebrew recipe). We'd like to thank the donations we've received thus far - it goes directly to many things, including covering costs like the bandwidth provision to help bootstrap new users.

Monero devs have recently published the download stats for the last weeks, and these support markedly higher adoption than the previous consensus estimate of 8,000.

I have been doing the downloads vs. users analysis with Bitcoin in the past, and found a rough estimate that adoption is 1/3 of the downloads of a mandatory update. (I don't know where the 2/3 go but this is what the data has suggested in the past ).

So if we take the blockchain bootstrap downloads, the total number of users should be around 14,000.

For client downloads, we are talking perhaps about 17,500 / 6 new users in 3 weeks, which would be 3,000. (15,000 downloads + 2,500 compiled, divided by 3 and further divided by 2 because some of them just go to existing users anyway).

Then there is the change in the exchange accounts that do not have outside wallet at all. This is probably not large, because 3 weeks have been a general downtrend. But I'd still estimate that it has gone up a little because there's more exchanges now. Like 500-1,000.

All in all, my very rough calculation (method 1) gives 14,000, and (method 2) gives 8000 + 3000 + 500 = 11,500.


A very rough average of these methods is 12,500 current owners.

- Since the last calculation in 2014-7-17, the number has grown by 4,500 (56%).
 
- The internal growth rate has been 2.26% during the period, compared to 5.45% all-time-average of XMR (and 0.6% of BTC since 2010-1-1)

- Since the BTC/XMR has been in a decline during this period, the average stash has gone from 267 XMR to 207 XMR, and its BTC equivalent value from BTC1.35 to BTC0.78. Both have been in a secular downtrend and the recent figures are all-time-lows.

- BTC0.78 is only $450, and declining. This is at odds with Metcalfe's Law that says that the average goes up when adoption goes up.

- Inflation is 21,8kXMR == BTC82. Growth of userbase is 275/day. If we assume that each new user buys for $200 (BTC0.35), the new users will extinguish 118% of the supply. Yes, it has already been the case for 3 weeks that new users buy more than the whole mining output.

- In 30 days, given current growth of userbase (2.26%/day), and decline of inflation (-0.19%/day), the new buying will account for 244% of the supply. This is in only 30 days - the situation will be more out-of-sync when more time passes.

- That all newcomers get their coins + the price has even been in a downtrend, is only possible because of existing owners net selling. Since I know quite a lot of existing owners that have been net buyers, the rest of the pack has to have been selling with both hands to account for both the newcomers and the accumulating whales. (As per my convention, it does not matter who the whales are and if they have bought or mined, and with what equipment - if they do not sell 100%, they are accumulating, and withholding coins from the market, indirectly causing the speculators to sell more).

- When I wrote my last speculation update hardly more than 24 hours ago spelling continuing capitulation, I did not have the access to the information that Monero adoption is actually growing in the last weeks despite the downtrend in price. These numbers really made it! If Monero had 8000 users then and the growth for 1 more year was 0.6% per day, similar to bitcoin, it would have 70,000 users. But with 2.26% growth...................29 million users. This might be a good investment or hedge with some of your bitcoin. At least Bitcoinworld people can always do it in 5 minutes and no ID. This is not to be underestimated.

- I mean, for me there is not much of a difference if a coin has 50% more or less users now. But if it has 300 times more users in one year, it is probably at least 10 times more valuable right now than the current trading range we are in.



To compile and process this information takes a lot of time and I am not getting paid, neither I mind, since I would have done it anyway for my own purposes. I see the conclusions from the nice tables and graphs from my screen. But you don't. The significance of the things presented here is easily missed without seeing the graphs. That is however too much to ask from me. There is an initiative that I might be teamworking with somebody who polishes my important posts and embellishes them with pics. If this sounds valuable to you, chime in.

[aminorex]

There is an initiative that I might be teamworking with somebody who polishes my important posts and embellishes them with pics. If this sounds valuable to you, chime in.

*ding*

This sounds valuable to me.  I will be AFK for a while to sleep and do a fair day's work for my employer, but would like to discuss how I can help make this data beautiful and accessible for the community.

[Anotheranonlol]

There is an initiative that I might be teamworking with somebody who polishes my important posts and embellishes them with pics. If this sounds valuable to you, chime in.

*ding*

This sounds valuable to me.  I will be AFK for a while to sleep and do a fair day's work for my employer, but would like to discuss how I can help make this data beautiful and accessible for the community.

+1

I do intend on furnishing Risto's statistics with the sexy charts they deserve. This will be a non-trivial contribution and one which will be surely appreciated by the followers.  I am away on important business with a client, alas I will not divulge further information surrounding that here, but it's concerning XMR and should benefit any net buyers.

For now  I have one I prepared earlier which I will share with our dear subscribers without further ado.  

https://i.imgur.com/RaDpzcn.png

[Melbustus]

... If this sounds valuable to you, chime in.

It does.