[XMR] rpietila Monero Economics thread

[drawingthesun]

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.)

Also your risk should change based on your age and lifestyle. If you're closing in on retirement you might want to put less into high risk investments (bitcoin) and super high risk investments (monero).

Also, dga, why are you invested in BBR and not Monero?

[1714811113]

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[dga]

Also your risk should change based on your age and lifestyle. If you're closing in on retirement you might want to put less into high risk investments (bitcoin) and super high risk investments (monero).

Also, dga, why are you invested in BBR and not Monero?

More medium term (6mo) upside potential, more opportunities to help push it forward through strategic contributions.  I like that BBR is taking risks on changing some of the deeper issues with the cryptonote core such as the mandatory mixins.

If you told me I had to buy and hold for the next 5 years, I'd probably do something like an 80/20 split of XMR/BBR, because I think that it XMR's momentum and popularity is a nontrivial advantage.  But that's not the position I'm in or the time horizon I'm looking for, and I'm not a passive participant.  I've allocated about 3 hours per week of time to hurl some improvements at BBR, be it in the form of code (miners or otherwise), suggestions, or writing.  You might notice, for example, that the intro to Boolberry.com web page has been rewritten a bit today and should feel a little more approachable to a less-geeky audience.  I hope to get the rest of it done over the next few days.

But don't listen to me for advice -- I treat all of crypto as a gigantic fun experiment to learn from, and when I get lucky, make some spare change.  I don't have any money invested in it that I can't say goodbye to.  Within my high risk, I give myself a bit of "play" money where I figure that if I learn something by losing it, I'm still ahead.

[statdude]

But don't listen to me for advice -- I treat all of crypto as a gigantic fun experiment to learn from, and when I get lucky, make some spare change.  I don't have any money invested in it that I can't say goodbye to.  Within my high risk, I give myself a bit of "play" money where I figure that if I learn something by losing it, I'm still ahead.

I hate saying goodbye to any money

[luigi1111]

top holding:  280,000 XMR

Seems to me you're just a smidgen high; I'd guess just <260k. 

[Roy Badami]

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.  

I'm interested to know your source for 0.001.  Lowest price I've seen documented is 0.003 on Bitcoin Market in April/May 2010 (EDIT: which is the earliest data I have.  Do you have earlier, Risto?)

roy

[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.  

I'm interested to know your source for 0.001.  Lowest price I've seen documented is 0.003 on Bitcoin Market in April/May 2010 (EDIT: which is the earliest data I have.  Do you have earlier, Risto?)

roy

Sirius has told in multiple occasions that he sold 5000 (or 5050) bitcoins for $5, making the record for the floor price.

[Roy Badami]

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.  

I'm interested to know your source for 0.001.  Lowest price I've seen documented is 0.003 on Bitcoin Market in April/May 2010 (EDIT: which is the earliest data I have.  Do you have earlier, Risto?)

roy

Sirius has told in multiple occasions that he sold 5000 (or 5050) bitcoins for $5, making the record for the floor price.

Ah, thank you!  I guess I was thinking of price data from exchanges, rather than private transactions.

[Okurkabinladin]

Just so you all know. Trading volume of Monero is third now, only Litecoin and Bitcoin have bigger volume. Incredibly bullish.

http://coinmarketcap.com/

[smooth]

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.

No one had that dominant a share of mining for a sustained period of time. I can say this with near 100% certainty, but not quite 100% because various contrived conspiracy theories make it theoretically possible. I can say with absolute 100% certainly that no one had more than 70-75%

Given the significant fraction of all mined coins that changed hands on OTC and the cryptonote exchange in the early days I think it is fair to say that if someone accumulated 400k (around 20 days of full output) it was likely due to buying rather than mining.

[statdude]

Anyone keeping a 20K+ holders list?

I have mine but not long enough to warrant posting yet.


In other news:
Risto please no more buy walls till Friday. I'm waiting for some BTC's to hit coinbase so I can buy

[damashup]

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.

Thanks - will consider holding at least until the emission halves. Although, I'm banking on significant technical advances as the coin moves from alpha to beta stage - will take that to create a demand that will outstrip supply over that period.

Given the emission rate, 'Miners Economics' will also be key to the success of XMR. Let's hope a good portion can afford to hold for medium/ long term.

[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?

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.)

Also your risk should change based on your age and lifestyle. If you're closing in on retirement you might want to put less into high risk investments (bitcoin) and super high risk investments (monero).

Also, dga, why are you invested in BBR and not Monero?

Thank you both for the advice. I was more concerned with how I should be investing in Monero relative to Bitcoin (as a non-Bitcoin holder), as oppose to where crypto-currencies should sit in my general investment portfolio.

I agree this is less 'investing' more speculating/ gambling. As such my inclination is to go 'back' on one currency (Monero) and hedge with another (Bitcoin). Boolberry was the third currency that I'm taking an interest in btw - it would certainly be my darkhorse for success & I love rooting for the underdog!

[Skinnkavaj]

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.)

Also your risk should change based on your age and lifestyle. If you're closing in on retirement you might want to put less into high risk investments (bitcoin) and super high risk investments (monero).

Also, dga, why are you invested in BBR and not Monero?

Thank you both for the advice. I was more concerned with how I should be investing in Monero relative to Bitcoin (as a non-Bitcoin holder), as oppose to where crypto-currencies should sit in my general investment portfolio.

I agree this is less 'investing' more speculating/ gambling. As such my inclination is to go 'back' on one currency (Monero) and hedge with another (Bitcoin). Boolberry was the third currency that I'm taking an interest in btw - it would certainly be my darkhorse for success & I love rooting for the underdog!

Boolberry is a terrible name. Monero sounds much more legitimate and serious.

[stellarman]

Thanks, Risto. Good thread.

Following.

[Macno]

Hi,

is there a post somewhere which explains the (economic) differences between XMR and DRK in a not too technical way?
Of all the Anon-Coins, I am only invested in DRK so far but you guys seem pretty sure XMR is better (you don`t even mention DRK) and I`d like to know why.
Unfortunately it is pretty hard to find such informations, as any Altcoin-community seems to act like some kind of sect, flaming at anyone who even mentions another coin. Diversification seems to be less popular than going all in into the coin one fell in love with...but this thread sounds reasonable so far, so I ask here instead of the DRK thread  
I hope the question is not OT though.

(Edit: rpietila is the famous "Risto" I heard mentioned so many times?)

[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.

No one had that dominant a share of mining for a sustained period of time. I can say this with near 100% certainty, but not quite 100% because various contrived conspiracy theories make it theoretically possible. I can say with absolute 100% certainly that no one had more than 70-75%

Given the significant fraction of all mined coins that changed hands on OTC and the cryptonote exchange in the early days I think it is fair to say that if someone accumulated 400k (around 20 days of full output) it was likely due to buying rather than mining.

I didn't say 70-75% I said think closer to 60% than 25%. I know that for absolute certain that a player has had close to 50% of the hash for a significant amount of time. Anyways, theres no point arguing about it because it not easily provable and frankly makes no difference which of us is right.

If you mined from almost the beggining with close to 50% hash you could theoretically get 400k in 40 days. I however dont believe the top holder has that many anyway hence why I was asking where the 400k figure came from.

[Its About Sharing]

Hi,

is there a post somewhere which explains the (economic) differences between XMR and DRK in a not too technical way?
Of all the Anon-Coins, I am only invested in DRK so far but you guys seem pretty sure XMR is better (you don`t even mention DRK) and I`d like to know why.
Unfortunately it is pretty hard to find such informations, as any Altcoin-community seems to act like some kind of sect, flaming at anyone who even mentions another coin. Diversification seems to be less popular than going all in into the coin one fell in love with...but this thread sounds reasonable so far, so I ask here instead of the DRK thread  
I hope the question is not OT though.

(Edit: rpietila is the famous "Risto" I heard mentioned so many times?)

If you search this thread there were some great points brought up by Aminorex and others on why Monero's Cryptonote is superior (in many ways) to Darks mixing.
At a superficial, yet very important layer, the name Monero sounds nice, Dark is Dark. Not saying that is bad. But just look at what happened to Dark Market - immediately
the source was taken and Open Bazaar was formed. There is a lot to a name (fortunately or unfortunately).

I'm not as technical when it comes to the security, but even looking at things like Volume say alot. Monero (not listed here) would be the number 3 coin! http://www.cryptocoincharts.info/v2/coins/info

Today:
Darks total volume Using - http://www.cryptocoincharts.info/#jump-drk-btc = 167 BTC
Monero's total volume Using - http://www.cryptocoincharts.info/#jump-xmr-btc =357 BTC

Now, volume isn't the tell all, but this has been the pattern of late. I think many who hold DRK really must wonder how they will spend them in the future (outside of person to person).
Not saying it doesn't succeed as there is plenty of space, but it looks like it is starting to fall out of favor. Monero has been REALLY gaining traction.

IAS

[rpietila]

I however dont believe the top holder has that many anyway hence why I was asking where the 400k figure came from.

Little birds mentioned that number as the high point of one early miner some time ago. So it is not necessarily the case that:

A. It is accurate
B. It still holds
C. It has come solely from mining.

After repeated statistical runs on the data, I am now fairly certain that the 5 largest holders together own 20-35% of the total supply. The largest one alone has near certainly more than 100k, likely even 200k, but not likely more than 300k as of now. (400k would be an outlier.)

This is all statistics, but with statistics on my side, I have become what I am financially, since I started investing in 1996. 

[dreamspark]

I however dont believe the top holder has that many anyway hence why I was asking where the 400k figure came from.

Little birds mentioned that number as the high point of one early miner some time ago. So it is not necessarily the case that:

A. It is accurate
B. It still holds
C. It has come solely from mining.

After repeated statistical runs on the data, I am now fairly certain that the 5 largest holders together own 20-35% of the total supply. The largest one alone has near certainly more than 100k, likely even 200k, but not likely more than 300k as of now. (400k would be an outlier.)

This is all statistics, but with statistics on my side, I have become what I am financially, since I started investing in 1996. 

Thanks.

On the lower bound of your estimate, 20%, that would give you a figure for the five holders of total 453,400.
On the upper bound of your estimate, 35%, that would give you a figure for the five holder of total 793,450.

With the upper bound meaning an average of 158,690 per person and the lower bound meaning an average of 90,680 to me thats quite a large difference. If for arguments sake we say the top holder has 200k how do you see the following 4 players being weighted? Normally with alts the value tends to stay lower for a longer period of time that allows these "super holders" to quietly accumalate these high quantities of coins.

In XMR's case it is and has been a relatively high priced coin (for a brand new alt) since the beggining. For your figures in regards to the top 5 and their holding percentage you would therefore suppose that they deep pockets in the first place? I guess what Im getting at is from my POV the ownership is more spread than this is suggesting and I'm trying to think of scenarios where 5 people would still hold 35% of the total supply as as a miner production cost (anytime after the first few weeks) has been relatively high.

[HardwarePal]

I however dont believe the top holder has that many anyway hence why I was asking where the 400k figure came from.

Little birds mentioned that number as the high point of one early miner some time ago. So it is not necessarily the case that:

A. It is accurate
B. It still holds
C. It has come solely from mining.

After repeated statistical runs on the data, I am now fairly certain that the 5 largest holders together own 20-35% of the total supply. The largest one alone has near certainly more than 100k, likely even 200k, but not likely more than 300k as of now. (400k would be an outlier.)

This is all statistics, but with statistics on my side, I have become what I am financially, since I started investing in 1996.  

I dont think that even 300K-400K would be much of an issue even now in the early stages with excessive inflation (1.1%) due to the emission curve. Most people will sell off in the 0.01+ range.

We are in the still in the speculation phase of the technology with alot more people moving into the coin after doing their due diligence, even though there are rough issues that are being worked on.  

I have 4 friends that have invested 10-50BTC each this past weekend , that I have been pestering for over a month to do their research.

Not everyone will psychologically handle the markets ups and downs and hold their coins throughout those phases.