[XMR] Monero Speculation

[ArticMine]

The idea of borrowing XMR in any market but particularly in this market sends shivers up my spine.

Just my two moneritos. 

[rpietila]

The idea of borrowing XMR in any market but particularly in this market sends shivers up my spine.

Just my two moneritos.  

IN CK, it's possible to lend XMR short-term at about 0.38% and borrow about 0.60%. The bank has borrowed 4227 XMR and lent out 3767 XMR.

It will be interesting when the value rises, how it will affect the game and if there will be foreclosures.  

[ArticMine]

The idea of borrowing XMR in any market but particularly in this market sends shivers up my spine.

Just my two moneritos.  

IN CK, it's possible to lend XMR short-term at about 0.38% and borrow about 0.60%. The bank has borrowed 4227 XMR and lent out 3767 XMR.

It will be interesting when the value rises, how it will affect the game and if there will be foreclosures.  

Yes. That can work because there is an effective hedge, given that a rise in the value of XMR would lead to an increase in the value of CK and the assets therein. Without an effective hedge one can create a situation similar to the one in Russia where people were financing the purchase of Russian real estate with USD mortgages. Only in this case the impact can be far worse since for example XMR/USD can easily spike by a much greater factor than USD/RUB.

The fate of pirateat40 in 2012 with his massive XBT short position, is a very important lesson to anyone considering taking on XMR denominated debt today. 

[rpietila]

Yes. That can work because there is an effective hedge, given that a rise in the value of XMR would lead to an increase in the value of CK and the assets therein. Without an effective hedge one can create a situation similar to the one in Russia where people were financing the purchase of Russian real estate with USD mortgages. Only in this case the impact can be far worse since for example XMR/USD can easily spike by a much greater factor than USD/RUB.

The fate of pirateat40 in 2012 with his massive XBT short position, is a very important lesson to anyone considering taking on XMR denominated debt today. 

There are no real-world guarantees for the ingame loans. (This of course is the reason why "useless" = no opportunity cost XMR can fetch such an interest rate.) So if CK does not have at least beta=1 with the rise of XMR, the borrowers can walk away by surrendering their ingame assets to the bank. If the bank cannot meet its own obligations due to cascading defaults, it goes belly up and creditors do not receive in full.

This is how it should be IRL also, and was, when money was still something that could not be created at convenience.

Most creditors however, have a bond position of 200 XMR against a real-life XMR position of 20k or so. This creates to them a situation where they enjoy the nice interest rate with the "only risk" being that XMR rises so fast that the game cannot keep up, and they lose a fraction of the 1% lent, while the remaining 99% in cold wallet increases 10x or so in purchasing power.

The borrowers' risk is limited to ingame assets anyway.

Resemblance to pirateat40 is superficial at best.

[ArticMine]

Yes. That can work because there is an effective hedge, given that a rise in the value of XMR would lead to an increase in the value of CK and the assets therein. Without an effective hedge one can create a situation similar to the one in Russia where people were financing the purchase of Russian real estate with USD mortgages. Only in this case the impact can be far worse since for example XMR/USD can easily spike by a much greater factor than USD/RUB.

The fate of pirateat40 in 2012 with his massive XBT short position, is a very important lesson to anyone considering taking on XMR denominated debt today.  

There are no real-world guarantees for the ingame loans. (This of course is the reason why "useless" = no opportunity cost XMR can fetch such an interest rate.) So if CK does not have at least beta=1 with the rise of XMR, the borrowers can walk away by surrendering their ingame assets to the bank. If the bank cannot meet its own obligations due to cascading defaults, it goes belly up and creditors do not receive in full.

This is how it should be IRL also, and was, when money was still something that could not be created at convenience.

Most creditors however, have a bond position of 200 XMR against a real-life XMR position of 20k or so. This creates to them a situation where they enjoy the nice interest rate with the "only risk" being that XMR rises so fast that the game cannot keep up, and they lose a fraction of the 1% lent, while the remaining 99% in cold wallet increases 10x or so in purchasing power.

The borrowers' risk is limited to ingame assets anyway.

Resemblance to pirateat40 is superficial at best.

So if I understand this correctly there is no net short XMR position for over 99% of the debt and the remaining 1% is backed on a non recourse basis by in game assets. Given that the in game assets would likely hold their value against XMR under most scenarios, there is no resemblance to pirateat40 in any practical sense.

The situation I am talking about is a classic short position where the asset purchased with the borrowed XMR is uncorrelated to the value of XMR, not a tightly hedged situation such as the CK case.

[rpietila]

So if I understand this correctly there is no net short XMR position for over 99% of the debt and the remaining 1% is backed on a non recourse basis by in game assets. Given that the in game assets would likely hold their value against XMR under most scenarios, there is no resemblance to pirateat40 in any practical sense.

The situation I am talking about is a classic short position where the asset purchased with the borrowed XMR is uncorrelated to the value of XMR, not a heavily hedged situation such as the CK case.

There is no net position of anything. The game currency, moneretos, is only pegged to XMR so that 1 XMR buys 1,000,000 moneretos, but we do not offer redemption because we don't feel it adds any value at this point to give even the remotest ground for anyone to believe his manmade laws are violated by our humble game.

If people go long and short on moneretos as part of their gameplay, they can use it as a real-world hedge of their actual XMR position, but at present we are talking about minuscule amounts. Since CK internal growth rate is about 2% per day, in a few months the economy may have grown so that this opportunity starts to make actual financial sense for the (admittedly limited) target group of high-finance understanding yet meager means. It is highly likely that the rates go down then, though, as can be seen from the shape of our current interest rate curve (0.38% daily at 3mo, 0.19% at 12mo).

The whole game is now in the stage of economic simulation, the gameplay will be built on this economic structure soon, which is the reason we have banks and interest curves serving 87 characters currently.

[EvanMon]

Looks like an inverse head and shoulders pattern is forming on the 12 hour chart starting around January 10th with the neckline breakout at about 0.00133. Order books are very thin on the sell side, less than 10 btc to break through.

[Quicken]

I like to make charts, and there are two big crossovers coming up in the next few months.

First we have the '7' crossover at the end of March. This is where the total supply of XMR goes above 7 million, while the monthly increase rate (as percent of supply) drops below 7 percent for the first time.

Second, and much more importantly, we have the '50' crossover coming up in September. This is where the XMR supply reaches 50 percent of 18.4 million, while the annual increase rate (as percent of supply) drops below 50 percent.

Happy hunting. 

[nakaone]

we can discuss shit about charts etc. pp. - this is maybe important for the liquidity providers but for the rest it is dust in the wind.

the outcome for monero will be binary. in 2-3 years it will either be currency [not neccessarily token] number 2 or it will be a-like-vertcoin forgotten coin in the history of crypto-evolution.

if it fails it will be interesting and long discussed why. Until that time I happily take the risk, as I did from the very beginning of the project.

[Quicken]

we can discuss shit about charts etc. pp. - this is maybe important for the liquidity providers but for the rest it is dust in the wind.

the outcome for monero will be binary. in 2-3 years it will either be currency [not neccessarily token] number 2 or it will be a-like-vertcoin forgotten coin in the history of crypto-evolution.

if it fails it will be interesting and long discussed why. Until that time I happily take the risk, as I did from the very beginning of the project.

You're talking about demand, while I was talking about supply. They are both important.

[nakaone]

we can discuss shit about charts etc. pp. - this is maybe important for the liquidity providers but for the rest it is dust in the wind.

the outcome for monero will be binary. in 2-3 years it will either be currency [not neccessarily token] number 2 or it will be a-like-vertcoin forgotten coin in the history of crypto-evolution.

if it fails it will be interesting and long discussed why. Until that time I happily take the risk, as I did from the very beginning of the project.

Vertcoin and Groestlcoin = 99% identical to BTC except the POW algo
Monero = 99% different including the POW algo

Monero is a completly different being, it can only be replace by something better both in the initial distribution and in features, not an easy feat.

exactly.
the simple explanation for building a long term project in this strange environment with one dominant player is:

a) finding a niche
b) having developers which are capable of building the software properly
c) evolution of an acitve community which is capable of building the first services
d) having users (if a,b and c are fullfilled d is simply a consequence)

monero is somewhere between b and c. but let me get this clear, once the niche is filled, the coin will not be replaced any more no matter how much technical superior the following projects are. - this weirdo idea of some experts that bitcoin will be replaced by something better which we should wait for is so brutally flawed that I really wonder what they get their money for.

[cAPSLOCK]

this weirdo idea of some experts that bitcoin will be replaced by something better which we should wait for is so brutally flawed that I really wonder what they get their money for.

I see two spaces which will be filled by something other than bitcoin.  The 2.0 smart contracts etc system (counterparty? etherium? nxt?) and privacy. 

[GingerAle]

this weirdo idea of some experts that bitcoin will be replaced by something better which we should wait for is so brutally flawed that I really wonder what they get their money for.

I see two spaces which will be filled by something other than bitcoin.  The 2.0 smart contracts etc system (counterparty? etherium? nxt?) and privacy. 

smart contracts = the new lawyers will be people that can read code to determine the integrity of the smart contract.

u think there's a use case for private contracts?

[jehst]

this weirdo idea of some experts that bitcoin will be replaced by something better which we should wait for is so brutally flawed that I really wonder what they get their money for.

I see two spaces which will be filled by something other than bitcoin.  The 2.0 smart contracts etc system (counterparty? etherium? nxt?) and privacy.  

Market-pegged crypto assets are another very cool niche as well. I love the idea that I can short the S&P 500 using cryptographically secure collateral in a trustless, low-risk environment. Or hold crypto-rubles or crypto-Chinese yuan. Market-pegged assets are just as interesting a niche as smart contracts. We just have to see which system can do it best.

[nakaone]

this weirdo idea of some experts that bitcoin will be replaced by something better which we should wait for is so brutally flawed that I really wonder what they get their money for.

I see two spaces which will be filled by something other than bitcoin.  The 2.0 smart contracts etc system (counterparty? etherium? nxt?) and privacy.  

Market-pegged crypto assets are another very cool niche as well. I love the idea that I can short the S&P 500 using cryptographically secure collateral in a trustless, low-risk environment. Or hold crypto-rubles or crypto-Chinese yuan. Market-pegged assets are just as interesting a niche as smart contracts. We just have to see which system can do it best.

look - I hold even one of this smart contract tokens in quite a decent amount and had even a few projects more - the nearer to bitcoin the better.
but if you really really break it down you have to ask - why use bitshares as a collateral, when it would be much easier to use btc as a collateral? - if it works they will clone it and use it as a sidechain, same holds true for obvious all other 2.0 projects.
my argumentation for still holding especially the one I am closest to is that the incentive for btc to clone is low as well as it takes serious manpower to do it. if they fail to clone these projects early theymay have time to enter the space and embed into the industry.

the core difference with monero or the technology is that bitcoin will have serious political problems to embed it into a sidechain once it is regulated. do you really think that any authority will accept an (almost) bulletproof private ledger, where blockchain analysis is (close to) impossible?

as told before - there will probably be one big decentralised transparent ledger, which is very likely bitcoin. there will additionally be one big private decentralised ledger - this one still has to be found - I think monero is at this point of time the most likely.

[equipoise]

this weirdo idea of some experts that bitcoin will be replaced by something better which we should wait for is so brutally flawed that I really wonder what they get their money for.

I see two spaces which will be filled by something other than bitcoin.  The 2.0 smart contracts etc system (counterparty? etherium? nxt?) and privacy. 

I know this is not the right thread to discuss other altcoins, but smart contracts are already a reality. Surprisingly (for me) it was implemented in a coin I treated like a shitcoin (mine and sell whatever the price). The coin is proof of capacity (you mine it on many TBs of HDD) and is called BURST. Here is a recent publication about BURST and smart contracts: https://www.cryptocoinsnews.com/cryptocurrency-burst-makes-smart-contracts-reality-happened-ethereum/. I was just mining it and selling, so I didn't researched it a lot, so everything I know about the coin is that it seems it's not a premine and it's NXT based (but not POS). I have the feeling it's very easy to pump and dump (low market cap, many large miners still not selling) so be extremely careful with it.

[dewdeded]

What is today is today. But actually, it is easy to see, why in the future  ~5 to ~8 large Crypto Currencies are probably:

- 1 to 3 universal ones
- 2 commercial-operated & B2B-focused
- 1 Anon / Privacy Coin
- From 0 to 1 for a micro-transactions
- 1 to 3 asset exchanges plattforms their unique coins (ie trading of company shares.)
- 1 to 2 strong, non-volatile crypto Asset Coins for long-term investment

Total = 6 to 12 big leading Crypto Currencies in a sea of thousands of small, unimporant, stupid, nonsense CCs

Substituting times on, what we have today in strong projects, that certainly wont disappear:

- Universal: Bitcoin
- commercial-operated & B2B-focused: Stellar & Ripple
- An Anon / Privacy Coin: Monero
- Micro-transactions: currently unknown, none
- Asset Exchange plattforms: Bitshares
- Crypto-asset Coins for long-term investment: currently unknown, none

To me, this is very logical. I especially set the values for debatable points very variable.



Source: my huge brain

[pippo]

Anon Coin: Monero???
Anon Coin: Darkcoin

[smooth]

Anon Coin: Monero???
Anon Coin: Darkcoin

Because?

[0nlyBTC]

Anon Coin: Monero???
Anon Coin: Darkcoin

Why Darkcoin?