[XMR] rpietila Monero Economics thread

[Okurkabinladin]

Monero seems to be quite unstable. What's wrong with the price?

Actually, it is remarkably stable since start, no large pumps and dumps along the way. Mean average price rising since may.

[rpietila]

Monero seems to be quite unstable. What's wrong with the price?

Actually, it is remarkably stable since start, no large pumps and dumps along the way. Mean average price rising since may.

What is the total range of XMR trading ever, including all outliers?

I gather it should be about 0.00039 - 0.01110. If so, these are only 28x apart from each other 

For any other coin, it's more. With Bitcoin, the range is 0.001 - 1,236;  difference being 1,236,000x. 

[HardwarePal]

Monero seems to be quite unstable. What's wrong with the price?

Actually, it is remarkably stable since start, no large pumps and dumps along the way. Mean average price rising since may.

What is the total range of XMR trading ever, including all outliers?

I gather it should be about 0.00039 - 0.01110. If so, these are only 28x apart from each other 

For any other coin, it's more. With Bitcoin, the range is 0.001 - 1,236;  difference being 1,236,000x. 

Was the 0.00039 done OTC and on the first XMR exchange before polo ?

[Kuriso]

It is always good to see how you rank compared to others in owning a coin. But how?

With Monero, the blockchain provides no help in determining balances. So the distribution of holdings must be constructed purely theoretically. What we use in the analysis of this post is just the following information:

- Number of XMR (about 2.2 million when this was done);
- Assumption that the distribution follows power law for the highest 3% of the holders (it does if we are talking about general wealth) - the power law distribution has the property that the owners of 100-200 coins collectively own the same number of coins as the ones owning 200-400 coins etc. But their number is 2x higher (because the other group was 2x richer), and the density is 4x more (because not only there was 2x the number of people, but also the bracket is in absolute terms only half the size);
- Below that, the distribution forms a nice bulge centered around the median holding and drops quickly towards insignificant holdings;

I have calculated 2 possibilities that give the result for both 5,200 and 13,200 holders. The results are presented in logarithmic brackets that are 0.333 log10 units wide (unlike my usual precision of 1 log unit, this gives 3 times more information). The exact form of the very top (holdings of the top-5 or so holders) affects the distribution somewhat, but with XMR it cannot be deduced either directly or statistically. I have assumed that the Case A scenario has a large outlier but Case B does not have it.


--- removed the BS ---

so what does it mean.  you wanted me to ask here.

Please elaborate what you find difficult?

I dont find anything difficult. I asked you what was the purpose of the numbers you provide. In the trollbox you said I didnt understand what it meant so I want to know what you think it means.

You are trying to calculate the possible holdings of XMR based on 2 scenarios.  That's a good way of going about it.  One high.  One low.  What I don't get is, why?  These numbers mean nothing and if they are just as good as your prediction for XMR at .0065-.0068, your figures are off. 

You can assume this general distribution on just about any coin.  Only difference is, on most other coins you can get a better idea of distribution based on blockchain analysis.  Don't forget that blockchain analysis and rich list will be inaccurate and false because large holder are smarter than you think and spread coins across multiple address to mask their holdings.  So in the end the number are really useless.

So again I ask, why?

[Kuriso]

Monero seems to be quite unstable. What's wrong with the price?

Actually, it is remarkably stable since start, no large pumps and dumps along the way. Mean average price rising since may.

Really?  Have you looked at the chart?  From a high of .01111 to a next dump low of .0024xxx.  I'd call that a large pump and dump.

https://poloniex.com/exchange/btc_xmr

[Okurkabinladin]

Monero seems to be quite unstable. What's wrong with the price?

Actually, it is remarkably stable since start, no large pumps and dumps along the way. Mean average price rising since may.

Really?  Have you looked at the chart?  From a high of .01111 to a next dump low of .0024xxx.  I'd call that a large pump and dump.

https://poloniex.com/exchange/btc_xmr

So perhaps, you didnt notice, that just last year in april BTC lost 78% of its value in correction, right? ;-) Yes, I am watching charts and making investment decisions with them in mind.

[RAJSALLIN]

Following

[darlidada]

Monero seems to be quite unstable. What's wrong with the price?

Actually, it is remarkably stable since start, no large pumps and dumps along the way. Mean average price rising since may.

Really?  Have you looked at the chart?  From a high of .01111 to a next dump low of .0024xxx.  I'd call that a large pump and dump.

https://poloniex.com/exchange/btc_xmr

Chart doesnt tell the whole story. High of .0111 was something like a 1 xmr sell off to noobs when xmr got introduced on Poloniex.

Here's the real story :

otc : dont remember but there's a thread about it
crytponote exchange : high of 2,25 mbtc then dump to 0,8 mbtc
poloniex : high of 8 mbtc then dump to 1,75 then high of 10 then dump to 2,3

[Kuriso]

Monero seems to be quite unstable. What's wrong with the price?

Actually, it is remarkably stable since start, no large pumps and dumps along the way. Mean average price rising since may.

Really?  Have you looked at the chart?  From a high of .01111 to a next dump low of .0024xxx.  I'd call that a large pump and dump.

https://poloniex.com/exchange/btc_xmr

So perhaps, you didnt notice, that just last year in april BTC lost 78% of its value in correction, right? ;-) Yes, I am watching charts and making investment decisions with them in mind.

You said, "Actually, it is remarkably stable since start, no large pumps and dumps along the way." and you are wrong.  XMR has had 3 large pump and dumps on Poloniex and several small ones.  The largest XMR pump and dump was pre-mintpal and went from .00190xx to .01xxxx and then back down to a low of .0024xxx.  That dump was very close to the same loss you say BTC had.  Your attempt to deflect and ignore the fact you were wrong has failed.

  

[Kuriso]

Monero seems to be quite unstable. What's wrong with the price?

Actually, it is remarkably stable since start, no large pumps and dumps along the way. Mean average price rising since may.

Really?  Have you looked at the chart?  From a high of .01111 to a next dump low of .0024xxx.  I'd call that a large pump and dump.

https://poloniex.com/exchange/btc_xmr

Chart doesnt tell the whole story. High of .0111 was something like a 1 xmr sell off to noobs when xmr got introduced on Poloniex.

Here's the real story :

otc : dont remember but there's a thread about it
crytponote exchange : high of 2,25 mbtc then dump to 0,8 mbtc
poloniex : high of 8 mbtc then dump to 1,75 then high of 10 then dump to 2,3

"High of .0111 was something like a 1 xmr sell off to noobs when xmr got introduced on Poloniex."  Yes I think you are right.  The .0111 was one of those early sells but during the pre-mintpal pump, XMR touched .01 twice and followed that buy touching .0996xxx and .0916xxx.  It then fell to a low of .0024xx before rebounding where it is today.  That's still a fall of about 76% from its most recent high.

[eizh]

Monero seems to be quite unstable. What's wrong with the price?

Actually, it is remarkably stable since start, no large pumps and dumps along the way. Mean average price rising since may.

What is the total range of XMR trading ever, including all outliers?

I gather it should be about 0.00039 - 0.01110. If so, these are only 28x apart from each other  

For any other coin, it's more. With Bitcoin, the range is 0.001 - 1,236;  difference being 1,236,000x.  

The XMR OTC thread: https://bitcointalk.org/index.php?topic=578192.0

The first recorded OTC trade was by me for 0.0005 4 days after Monero launched. It went as low as 0.0002 for several trades in the following 2 weeks, which is the lowest as far as I know.

However, for the coin's publicity smooth once hosted an auction here 1 day after launch: https://bitcointalk.org/index.php?topic=577296.0

It was for 100 XMR and I won with a bid of 0.005 BTC, giving a price of 0.00005 (note the zeros). This is lower by an order of magnitude but I'm not sure you want to count it since it wasn't a market trade per se.

[rpietila]

If such data is available, the "market price"*"volume"*"time" -table across all exchanges and methods would be much appreciated, eg. in 0.1 log-units brackets:

Code:

	week 17	week 18	week 19
0,01000			
0,00794			
0,00631			
0,00501			
0,00398			
0,00316			
0,00251			
0,00200			
0,00158			
0,00126			
0,00100			
0,00079			
0,00063			
0,00050	3000		
0,00040	10000		
0,00032	15000	5000	
0,00025	10000	5000	
0,00020		10000	

[Its About Sharing]

Regarding Rpietila's first post, I think ones investment into XMR (or any alt you see worthy) can also be calculated by where/when you started with BTC. I say this because if you created enough new wealth and rotate that into XMR, your really not risking much of anything. Note, if you are newly into BTC and don't have money to spare, then. 1:1 ratio or something comfortably low, might be better for you, as a hedge.

For simplicities sake, say you got into Bitcoin when it was at $25 and say you invested $2,000:
That would put your original investment (80 BTC) at app. $50,000. 80 Monero (.336 BTC) would seem a bit trivial, especially if you have your eggs in only two baskets.

What about taking your original $2,000 (now worth app. 3.22 BTC) and buying app. 770 XMR?
I still see this as a relatively small amount of XMR due to the "two basket" metaphor. This is a 10:1 ratio app.
Risking newly created money though, certainly can lighten the pressure.

Personally, I'd reserve maybe 10% - 15% of my BTC ( or a dollar equivalent) to where I see fit, Even if I got in relatively late, as there probably is a good chance of finding the next BTC in this brand new space.  My bet is on Monero.

IAS

[rpietila]

Also for somebody to have amassed 280,000 coins, that could only have happened as a rather static percentage of the new inflation (there has been no way to generate or buy them for cheaper in such a quantity - Bitcoin did have this window open for Satoshi but Monero hasn't had it, and will not have it). This means that his stash would have been bought at the average price of at least 0.0025, and would have cost him at least BTC700, probably even BTC1,000 or more.

I followed monero from the otc time and probably the first ten pages of the thread. AFAIK there were little to no buys over the counter with more than 10000 xmr volume. Even otc it was very hard to aquire reasonable amounts of xmr. I cannot speak for the OTC in freenode (?)/ IIRC. Maybe some powerful miners would have the possibility to get a six digit amount of xmr - but to buy them would be quite complicated.

In my deduction, I also read the threads and saw that the sums traded in OTC were so small both in XMR and (especially) BTC terms that nobody could have amassed a 6-figure holding by means of that alone.

However I heard from a second-hand source that Monero has a wealthy backer, whose fortune has amounted up to 25% of the coins prior to the previous bubble about a month ago. It follows naturally that the acquisition of such a fortune and the bubble (or: divestment and the bust) may be related. Even my meager purchases last week have been connected to the price rise and they were not 6-figure amounts

Even if such an entity still exists, I don't find the situation problematic. He has paid the full price, of BTC or electricity, for his holdings, and to get the same percentage of the total amount as Satoshi has of BTC (~900,000 XMR), there is still the need to buy the rest at the full price.

I know that some of the brightest minds of Bitcoin, and of the world, are currently in buy-only mode concerning XMR. They have done the math and will leave the selling to the miners. One of the purposes of this thread is to show you, how little is actually needed to reserve your seat in the VIP-area, should this coin take off.

[rpietila]

Perhaps we can go deeper to the mystery of the 400k guy? To have a 25% share of the coins at any time, it requires that he would have needed to have 25% of the hashpower uninterruptedly from the beginning to the end, AND the opportunity cost of such power would've been 100s of BTC. The only realistic way to do it would have been a privileged miner with much lower electricity cost that that of the others.

Or he would have bought 25% of all the new supply in the exchanges (which is ludicrous, since many miners don't sell, so 1 guy would have bought like half of the coins brought for sale, from day 1 on...)

If you ask me, it is more likely that the biggest holder now is found in the 140-280k XMR range. It just gets too difficult and not profitable enough to actually corner 25% of the supply. With such resources (100s of BTC) you have other things to do...

This way logic can be applied.

[rpietila]

Whats the bechmark for being a VIP of Monero, 500, 1000, etc?

 

Typically it starts when the power law takes hold ie. you are "better than" 97%.

With XMR, you need 1000. Go get some!

[damashup]

After hearing that many are positioning such that they hold 100:1 (XMR:BTC), which is about 25% in XMR, or even 400:1, which is more than half in XMR, I also set myself up to acquire a larger position. That was a contributing factor in the rise last week but I am not even nearly done. It just does not feel right to sell XMR to receive BTC when you are already as loaded with BTC as I am.

What would your advice be to people like me (relative newcomers to cryptocurrencies) holding little or no Bitcoin? There are only three coins that hold my interest Bitcoin and Monero being two of them. I'm currently holding at a ratio of 2000:1 (XMR:BTC) with a view to raking into a few more BTC each time the price of XMR doubles.

I see the growth in XMR outstripping that of all other coins (including BTC) over the next 6-9 months. If it doesn't perform as I expect in that period, I may then look to pull back.

Sound sensible or too bullish?

[aminorex]

After hearing that many are positioning such that they hold 100:1 (XMR:BTC), which is about 25% in XMR, or even 400:1, which is more than half in XMR, I also set myself up to acquire a larger position. That was a contributing factor in the rise last week but I am not even nearly done. It just does not feel right to sell XMR to receive BTC when you are already as loaded with BTC as I am.

What would your advice be to people like me (relative newcomers to cryptocurrencies) holding little or no Bitcoin? There are only three coins that hold my interest Bitcoin and Monero being two of them. I'm currently holding at a ratio of 2000:1 (XMR:BTC) with a view to raking into a few more BTC each time the price of XMR doubles.

I see the growth in XMR outstripping that of all other coins (including BTC) over the next 6-9 months. If it doesn't perform as I expect in that period, I may then look to pull back.

Sound sensible or too bullish?

So far I have never regreted buying xmr - not even at the ath, although I was then buying fewer.   If your holding time goes out to 500 days emission is halved.  If xmr is not destroyed in that time your holdings will likely rise in value in proportion to exp(n_nodes^2) over that time.   Plan accordingly.

[dga]

After hearing that many are positioning such that they hold 100:1 (XMR:BTC), which is about 25% in XMR, or even 400:1, which is more than half in XMR, I also set myself up to acquire a larger position. That was a contributing factor in the rise last week but I am not even nearly done. It just does not feel right to sell XMR to receive BTC when you are already as loaded with BTC as I am.

What would your advice be to people like me (relative newcomers to cryptocurrencies) holding little or no Bitcoin? There are only three coins that hold my interest Bitcoin and Monero being two of them. I'm currently holding at a ratio of 2000:1 (XMR:BTC) with a view to raking into a few more BTC each time the price of XMR doubles.

I see the growth in XMR outstripping that of all other coins (including BTC) over the next 6-9 months. If it doesn't perform as I expect in that period, I may then look to pull back.

Sound sensible or too bullish?

This is all a question of how you want to allocate your risk.

My general view is that having some %age of your investment portfolio in high risk investments is good (and that %age depends on your age and financial picture).  But the smart way to manage high risk is to diversify into multiple individual high risk investments -- so if you've allocated 1% of your total wealth to high-risk investments, don't put all 1% of it in XMR.  But if that 2000 XMR represents only 1% of your high risk portfolio, then what's wrong with it?

(I consider BTC part of my high risk portfolio also - but I have about 1000:1 BBR to BTC, and that's a leveraged gamble where I'm hoping that giving source code and technical commentary back helps moderate the risk.)

[dreamspark]

Perhaps we can go deeper to the mystery of the 400k guy? To have a 25% share of the coins at any time, it requires that he would have needed to have 25% of the hashpower uninterruptedly from the beginning to the end, AND the opportunity cost of such power would've been 100s of BTC. The only realistic way to do it would have been a privileged miner with much lower electricity cost that that of the others.

Or he would have bought 25% of all the new supply in the exchanges (which is ludicrous, since many miners don't sell, so 1 guy would have bought like half of the coins brought for sale, from day 1 on...)

If you ask me, it is more likely that the biggest holder now is found in the 140-280k XMR range. It just gets too difficult and not profitable enough to actually corner 25% of the supply. With such resources (100s of BTC) you have other things to do...

This way logic can be applied.

Where does the 400k come from ?

At times during the early mining phases one player had far more than 25% of the hash (think closer to 60%). The market was also much smaller so the diff was lower and you could have well over half the network for a rather cheap (in hindsight at least) sum. Some people are miners for a living and as such with 100's of BTC's the best thing they feel to do is use it to make/mine more.