[XMR] rpietila Monero Economics thread

[Febo]

I see it as Poloniex tries to keep as much trading of Monero on their exchange as possible. Monero was 60-70% Poloniex volume from time it joined. I agree will not make huge difference. But still is some recognition of the coin.

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[Its About Sharing]

I see it as Poloniex tries to keep as much trading of Monero on their exchange as possible. Monero was 60-70% Poloniex volume from time it joined. I agree will not make huge difference. But still is some recognition of the coin.

But it might make a huge difference. If a whale wants to move some coins and another whale wants to buy Monero for a different crypto he is holding, it is off the order book, so to speak. Seems like it can increase liquidity also. And perhaps the anonymous nature of Monero fuels this more. More variables just got added...

I say things are getting more interesting.

[Okurkabinladin]

Bitcoin seems to be locked in downtrend, that could last for weeks. That could make Monero extremely attractive as a hedge.

[dewdeded]

Subbed.

[kurious]

it makes all the difference, a major exchange gave a nice and well deserved vote of confidence to Monero, its a win-win situation since XMR is on the top there for quite some time.

+1 Agreed

Polo effectively dumped Litecoin markets for XMR ones - a big bet on Monero. Polo ain't stupid - they want the volume there.  LTC has been losing its link to BTC price now, I think it's a smart move for Poloniex and good for Monero. 

TBH I used my (too high) LTC holdings to buy Monero as in the first place and I can't say I regret it... 

Good thread, Risto - will keep an eye on it of course.

[dewdeded]

Litecoin is the "Roman empire" of cryptos. They community really think they stay biggest altcoin forever. Just because of their history and some good numbers (in ratings/scorings) they still have, because the project is so old and once was seen as promising by the general CC scene, before the project failed and became inactive.
They think they are "to big to fail". Because obvious ALL altcoins are inferior to LTC, because LTC has this $200.000.000 market cap or 200 more full nodes vs. DogeCoin. Real-life comedy.

[Skinnkavaj]

Litecoin is the "Roman empire" of cryptos. They community really think they stay biggest altcoin forever. Just because of their history and some good numbers (in ratings/scorings) they still have, because the project is so old and once was seen as promising by the general CC scene, before the project failed and became inactive.
They think they are "to big to fail". Because obvious ALL altcoins are inferior to LTC, because LTC has this $200.000.000 market cap or 200 more full nodes vs. DogeCoin. Real-life comedy.

Litecoin will still be a store of value just like Bitcoin is I am sure.
The thing is that people really manipulate the market by writing writing everywhere Litecoin is dead and then it arises from the ashes.
Monero can be the third coin no doubt about it.

[smooth]

Litecoin is the "Roman empire" of cryptos. They community really think they stay biggest altcoin forever. Just because of their history and some good numbers (in ratings/scorings) they still have, because the project is so old and once was seen as promising by the general CC scene, before the project failed and became inactive.
They think they are "to big to fail". Because obvious ALL altcoins are inferior to LTC, because LTC has this $200.000.000 market cap or 200 more full nodes vs. DogeCoin. Real-life comedy.

Litecoin will still be a store of value just like Bitcoin is I am sure.
The thing is that people really manipulate the market by writing writing everywhere Litecoin is dead and then it arises from the ashes.
Monero can be the third coin no doubt about it.

Litecoin can be the 3rd coin, Monero will be 2nd, nice sign btw lol I think we are both biased.

I don't think Litecoin can really be 3rd. If it loses 2nd it will rapidly drop a lot more. It's main selling point is "alternative to Bitcoin."

[rpietila]

I am in the process of making a treatise on near-term (6 months) Monero economics. Just wanted to tell in advance and bookmark the thread for me.

[nakaone]

  especially looking forward to the methodology

[rpietila]

Just to open my thoughts, it would go along these lines..

Now the issuance is about 2.4 million. By 2014-12-31 it will be 5.5 million. This is a 129% increase.

Current number of owners is 8,000 (we need to do a thorough study on this, this one was a midpoint of many methods but not documented).

We need to estimate the potential growth, taking into account new exchanges (Cryptsy, BTC-E, China) and the coming GUI wallet.

Each new owner means on average $X buying pressure. Also many current owners are in the process of accumulating.

On the sell side, the miners sell, but the early making-a-quick-buck-when-it-hits-the-exchange crowd has largely sold according to my sources. When the price goes up, there is intense selling, even shorting (in this context: selling with the intention to buy back) but if the price breaks to the upside, some of the shorts have to buy back, aggravating the rise. When it goes really far, the diversifying pressure starts to materialize. It is not so pronounced yet, because the large holders typically hold much more BTC than XMR and can easily waith until there's a need to rebalance.

The distribution of coins to the owners of different size should theoretically follow power law for the top echelons. Now in my studies, I have found that many claim to have 20-50k coins but nobody seems to have 50k+. Perhaps they are lowplaying. Or perhaps they are too wealthy to participate in the polls. Or perhaps 20-50k just is a sweet spot for other reasons.

When the number of coins goes up 129% and the number of owners probably even more, we can already calculate the distribution of coins to the owners. So we will see how the top 1-3% changes, whether the same amount of coins that was enough to TOP-20 now, will be TOP-30 or TOP-40.

Why am I obsessed with the largest owners? Because they hold most of the coins. The top-0.1% in monero holds 28%, top-1% holds 50% and top-3% holds 62% (numbers taken directly from the definition of power law, so may not be accurate). Also, their collective action determines the value of the coin. If the top holders are in it for the long time, and do not have the intention or willingness to sell, but rather the willingness and means to accumulate, the value will certainly hold and rise.

Monero's backers include large holders of btc, also monero is an actual hedge for btc, which gives it more utility outside of speculation. If one wants to have 10% of his crypto stash in something else than btc for btc's sake, monero is the best candidate due to its technology and liquidity.

Using all these considerations and after crushing numbers, I should be able to forecast the number of owners, the distribution of coins between owners, and also the price level, in the end of December. The Monero devs are helping me with getting the historical data right.

[Skinnkavaj]

rpietila what I find very interesting about Monero is how much Bitcoin developers really like the CryptoNote concept. Take for example gmaxwell, PeterTodd, wumpus, nanotube etc.
Every name I mentioned have spoken well about XMR and currently three of the names are active in #Monero-dev.
wumpus is the leader of Bitcoin development team, he took over after Gavin and to my suprise I find him in the Monero dev channel.
I find this very interesting, because all of the guys here are really good cryptographers and have been the core bitcoin developers for years.

To see if the names here also particpate in other altcoin channels on freenode, I checked #darkcoin-dev, #darkcoin, #ethereum and #bytecoin and I could not find any of them has such a huge backing by good developers as Monero have.
For me as an investor, this give Monero huge credibility.

A question to you rpietila, did any of the above mentioned names influence you in your decision to support Monero? How did you find Monero from the very beginning?

[rpietila]

A question to you rpietila, did any of the above mentioned names influence you in your decision to support Monero? How did you find Monero from the very beginning?

Several people contacted me, and I also found out that the big names were, and are, flocking to Monero (in way greater numbers than in any shitcoins, and in higher numbers than the other 2.0 coins). For me, this is a very important factor when deciding where to invest.

[vuduchyld]

subbed

[binaryFate]

[...]
Using all these considerations and after crushing numbers, I should be able to forecast the number of owners, the distribution of coins between owners, and also the price level, in the end of December. The Monero devs are helping me with getting the historical data right.

Looking forward to this forecast!

[rpietila]

Somebody was asking if there is a table of XMR prices. This is from Poloniex, compiled by myself, disclaimer applies.

Code:

Day	Price ksat
19.5.2014	314
20.5.2014	595
21.5.2014	378
22.5.2014	353
23.5.2014	391
24.5.2014	645
25.5.2014	608
26.5.2014	494
27.5.2014	427
28.5.2014	414
29.5.2014	349
30.5.2014	260
31.5.2014	302
1.6.2014	327
2.6.2014	284
3.6.2014	279
4.6.2014	284
5.6.2014	258
6.6.2014	212
7.6.2014	212
8.6.2014	201
9.6.2014	218
10.6.2014	273
11.6.2014	279
12.6.2014	286
13.6.2014	300
14.6.2014	406
15.6.2014	444
16.6.2014	524
17.6.2014	493
18.6.2014	446
19.6.2014	527
20.6.2014	640
21.6.2014	856
22.6.2014	755
23.6.2014	725
24.6.2014	570
25.6.2014	540
26.6.2014	526
27.6.2014	410
28.6.2014	414
29.6.2014	419
30.6.2014	414
1.7.2014	379
2.7.2014	367
3.7.2014	401
4.7.2014	429
5.7.2014	400
6.7.2014	378
7.7.2014	339
8.7.2014	352
9.7.2014	338
10.7.2014	327
11.7.2014	294
12.7.2014	284
13.7.2014	261
14.7.2014	284
15.7.2014	318
16.7.2014	400
17.7.2014	505
18.7.2014	444
19.7.2014	453
20.7.2014	435
21.7.2014	488
22.7.2014	510
23.7.2014	484
24.7.2014	431
25.7.2014	423
26.7.2014	452
27.7.2014	431

[smooth]

There are older prices archived on the OTC thread: https://bitcointalk.org/index.php?topic=578192.0

The chart there combines OTC with the cryptonote exchange that existed for some of that time period.

Somebody was asking if there is a table of XMR prices. This is from Poloniex, compiled by myself, disclaimer applies.

Code:

Day	Price ksat
19.5.2014	314
20.5.2014	595
21.5.2014	378
22.5.2014	353
23.5.2014	391
24.5.2014	645
25.5.2014	608
26.5.2014	494
27.5.2014	427
28.5.2014	414
29.5.2014	349
30.5.2014	260
31.5.2014	302
1.6.2014	327
2.6.2014	284
3.6.2014	279
4.6.2014	284
5.6.2014	258
6.6.2014	212
7.6.2014	212
8.6.2014	201
9.6.2014	218
10.6.2014	273
11.6.2014	279
12.6.2014	286
13.6.2014	300
14.6.2014	406
15.6.2014	444
16.6.2014	524
17.6.2014	493
18.6.2014	446
19.6.2014	527
20.6.2014	640
21.6.2014	856
22.6.2014	755
23.6.2014	725
24.6.2014	570
25.6.2014	540
26.6.2014	526
27.6.2014	410
28.6.2014	414
29.6.2014	419
30.6.2014	414
1.7.2014	379
2.7.2014	367
3.7.2014	401
4.7.2014	429
5.7.2014	400
6.7.2014	378
7.7.2014	339
8.7.2014	352
9.7.2014	338
10.7.2014	327
11.7.2014	294
12.7.2014	284
13.7.2014	261
14.7.2014	284
15.7.2014	318
16.7.2014	400
17.7.2014	505
18.7.2014	444
19.7.2014	453
20.7.2014	435
21.7.2014	488
22.7.2014	510
23.7.2014	484
24.7.2014	431
25.7.2014	423
26.7.2014	452
27.7.2014	431

[saddambitcoin]

I suspect Monero will test 0.005 this week, a lot of people likely sold expecting another lengthy slow decline. Now the bid sum has gone up 4x since the last rise and the market sentiment is changing. A lot of people dumped in the past week and are looking to buy back in (me too, but i was holding 1000:1 XMR:BTC).

The facts:
-Veteran BTC lead devs and BTC whales are interested and active in XMR.
-Bitcoin itself is now increasingly focused on non-interesting things - regulation, not innovation. [perhaps fine for attracting bigger investors, but personally i miss the old bitcoin spirit]
-Hashrate on Monero continually increasing, Scrypt ASICs will displace a lot of GPU miners and I suppose they will come to XMR if they haven't already.

[Roy Badami]

A question to you rpietila, did any of the above mentioned names influence you in your decision to support Monero? How did you find Monero from the very beginning?

Several people contacted me, and I also found out that the big names were, and are, flocking to Monero (in way greater numbers than in any shitcoins, and in higher numbers than the other 2.0 coins). For me, this is a very important factor when deciding where to invest.

I'm not sure I'd damn XMR with the '2.0' moniker.  AFAICT the '2.0' name is being used to describe the 'platform' coins like Mastercoin and Ethereum whose primary purposes are supposed to be to enable all sorts of other applications, rather than simply to act as currencies.  XMR is, fundamentally, simply a coin that tries to be currency (and nothing more than a currency) - albeit the only serious contender in the currency sphere with any interesting technical innovation over BTC.

(And for the avoidance of doubt, I'm very wary of the whole 2.0 scene, and the above is not intended in any way to be critical of XMR - quite the contrary!)

roy

[nioc]

I suspect Monero will test 0.005 this week, a lot of people likely sold expecting another lengthy slow decline. Now the bid sum has gone up 4x since the last rise and the market sentiment is changing. A lot of people dumped in the past week and are looking to buy back in (me too, but i was holding 1000:1 XMR:BTC).

The facts:
-Veteran BTC lead devs and BTC whales are interested and active in XMR.
-Bitcoin itself is now increasingly focused on non-interesting things - regulation, not innovation. [perhaps fine for attracting bigger investors, but personally i miss the old bitcoin spirit]
-Hashrate on Monero continually increasing, Scrypt ASICs will displace a lot of GPU miners and I suppose they will come to XMR if they haven't already.

I basically agree with you.  But.  On Poloniex where all the action is there is 240 btc bid at 390 which is 36% of the total.  80 btc of it was placed 3 days ago when the price was dropping for 36 hrs and accelerating.  It has been relatively stable since, yes that is a short time.