[XMR] Monero Speculation

[Peachy]

Lost of discussion on eMunie. What would you like to know?

As for the inference that MV=PQ is broken and/or pseudo-science, that's not the entire the story. 

The theory is sound, but all prior implementations have been flawed.  Why?  Humans!   The only way to efficiently and accurately control supply prior to emunie was to have a central governing body analyze hundreds of reports on the economic health and these reports are generally delayed in their ability to provide "timely" information (e.g. months or quarters old since it takes a while to collect and distribute).  Accordingly, these delays add a whipsaw/bullwhip effect when utilized for monetary policy since they are acting with imperfect information. 

With a systemic method of monitor/response the ecosystem can maintain the supply/demand balance much more rationally.

We agree on the premise that up until now implementation of it has been flawed. But I conjecture you fail to see that you will fail too. Why? Because humans! Don't see yourself above that...Supply/Demand is broken too.

I have a degree in Supply Chain Operations and 20+ years of experience.  I don't think that managing it is broken.  There's a whole world out there that's been doing it for decades.  You should check out APICS and their knowledge on the application of it.

What I mean is the notion that when demand falls supply must increase is flawed. Supply can be so low that demand actually falls. In the context of supply chain management where you operate within a most times rather simple system compared to the world economy, sure you can manage it. My objection is to apply it to what we are talking about here. The notion that in an economy you can manipulate demand through supply is flawed. Just look at the QE happening. It is supposed to stimulate the economy, but it doesn't reach the goal because there is not a lot of confidence. You are ignoring other factors.

That doesn't mean I do not appreciate the efforts undertaken in trying it out.

You might want to recheck the assumptions as the theory in its essence is that there should be just enough supply to meet demand and no more.  Therefore, the goal of the system isn't to manipulate demand through supply, but merely to meet the needs of demand dynamically so as to produce a fairly stable price level and, accordingly, dampen as much as possible the price volatility. 

With pretty much every crypto you have 2 levers you can pull:  Price or Volume.

Bitcoin and pretty much all others use a fixed volume method (albeit with a programmed inflationary model)

eMunie uses a (relatively) fixed price model (with cavets) and senses the volume needed to allow business to be conducted.

There's obviously more to it than the above, but this is the economic method in simplistic terms.   

I haven't even begun to articulate the blockless transaction-forest model and how it is a supremely monumental innovation.

[smooth]

Enough eMunie unless there is an actual (open source) product to examine or at least a paper to read. Otherwise it is irrelevant to
Monero. Zero posts deleted

[Anon136]

It's interesting that the orderbook always has so much more liquidity on the buy side than the sell side even in times when clearly supply and demand are clearing with each other rather equitably (such as over the last couple weeks where we have been hovering in a 0.003-0.004 range). If there were really so many more buyers than sellers than we would not be trading in a range we would be going up. So the sellers are out there, they are just not accounted for on the order book. Any idea why?

[jehst]

My Long-Term Outlook:

Bulls are unable to protect $300 BTCUSD or $1 XMRUSD price levels. Now XMR and BTC must look to their "real economies" (non-speculative uses) as baseline support. Because XMR and BTC both have double-digit supply inflation, their real economies must expand at a triple-digit rate to safely overcome supply inflation. Let's look at the real economies.

XMR's real economy is driven mostly by Crypto-Kingdom.
BTC's real economy is driven mostly by Silk Road's descendants. (NOT Coinbase, Bitpay, Dell, Microsoft -- they don't soak up supply. They juggle bitcoins and then throw them back onto the market.)

Silk Road's descendants are not transparent so it is difficult to measure this economy's expansion. We can see that the number of listings has increased, but not at triple-digit rates. Crypto-Kingdom is more transparent. Its growth is good, but maintaining a triple-digit growth rate of players and economy will be difficult. Without the bulls on our side, we have to prepare for a long, drawn-out decline to baseline support, where almost no one wants BTC and XMR except for Silk Road users and Crypto-Kingdom players. Where they are the only people standing between oversold price levels and oblivion.

In 2021, the inflation situation will be reversed. Bitcoin and Monero's supply inflation will be down to single-digits (closer to 2-3%), but their real economies will likely be expanding at double-digit rates. Sometime between 2015 and 2021, the pin will drop. We don't need to defeat the bears. We only have to survive them.

[Anon136]

My Long-Term Outlook:

Bulls are unable to protect $300 BTCUSD or $1 XMRUSD price levels. Now XMR and BTC must look to their "real economies" (non-speculative uses) as baseline support. Because XMR and BTC both have double-digit supply inflation, their real economies must expand at a triple-digit rate to safely overcome supply inflation. Let's look at the real economies.

XMR's real economy is driven mostly by Crypto-Kingdom.
BTC's real economy is driven mostly by Silk Road's descendants. (NOT Coinbase, Bitpay, Dell, Microsoft -- they don't soak up supply. They juggle bitcoins and then throw them back onto the market.)

Silk Road's descendants are not transparent so it is difficult to measure this economy's expansion. We can see that the number of listings has increased, but not at triple-digit rates. Crypto-Kingdom is more transparent. Its growth is good, but maintaining a triple-digit growth rate of players and economy will be difficult. Without the bulls on our side, we have to prepare for a long, drawn-out decline to baseline support, where almost no one wants BTC and XMR except for Silk Road users and Crypto-Kingdom players. Where they are the only people standing between oversold price levels and oblivion.

In 2021, the inflation situation will be reversed. Bitcoin and Monero's supply inflation will be down to single-digits (closer to 2-3%), but their real economies will likely be expanding at double-digit rates. Sometime between 2015 and 2021, the pin will drop. We don't need to defeat the bears. We only have to survive them.

There is a pretty good chance that monero will take over a good portion of what you are calling the "real economy" of btc.

[jehst]

My Long-Term Outlook:

Bulls are unable to protect $300 BTCUSD or $1 XMRUSD price levels. Now XMR and BTC must look to their "real economies" (non-speculative uses) as baseline support. Because XMR and BTC both have double-digit supply inflation, their real economies must expand at a triple-digit rate to safely overcome supply inflation. Let's look at the real economies.

XMR's real economy is driven mostly by Crypto-Kingdom.
BTC's real economy is driven mostly by Silk Road's descendants. (NOT Coinbase, Bitpay, Dell, Microsoft -- they don't soak up supply. They juggle bitcoins and then throw them back onto the market.)

Silk Road's descendants are not transparent so it is difficult to measure this economy's expansion. We can see that the number of listings has increased, but not at triple-digit rates. Crypto-Kingdom is more transparent. Its growth is good, but maintaining a triple-digit growth rate of players and economy will be difficult. Without the bulls on our side, we have to prepare for a long, drawn-out decline to baseline support, where almost no one wants BTC and XMR except for Silk Road users and Crypto-Kingdom players. Where they are the only people standing between oversold price levels and oblivion.

In 2021, the inflation situation will be reversed. Bitcoin and Monero's supply inflation will be down to single-digits (closer to 2-3%), but their real economies will likely be expanding at double-digit rates. Sometime between 2015 and 2021, the pin will drop. We don't need to defeat the bears. We only have to survive them.

There is a pretty good chance that monero will take over a good portion of what you are calling the "real economy" of btc.

Aye, there is. But by then, the pie will be much bigger. The real economies of both BTC and XMR will be much more than a small handful of enterprises.

[smooth]

(NOT Coinbase, Bitpay, Dell, Microsoft -- they don't soak up supply. They juggle bitcoins and then throw them back onto the market.)

Coinbase is a bit different. A significant part of their account base is investors, maybe not big ones, but people buy some Bitcoins via Coinbase and leave them there. As for Dell, Microsoft, Overstock, etc. and most of Bitpay/Coinbase merchant customers (there maybe some exceptions there, not clear), not only do they not soak up Bitcoins, but their volume, after the initial publicity, is very close to zero.

[Anon136]

My Long-Term Outlook:

Bulls are unable to protect $300 BTCUSD or $1 XMRUSD price levels. Now XMR and BTC must look to their "real economies" (non-speculative uses) as baseline support. Because XMR and BTC both have double-digit supply inflation, their real economies must expand at a triple-digit rate to safely overcome supply inflation. Let's look at the real economies.

XMR's real economy is driven mostly by Crypto-Kingdom.
BTC's real economy is driven mostly by Silk Road's descendants. (NOT Coinbase, Bitpay, Dell, Microsoft -- they don't soak up supply. They juggle bitcoins and then throw them back onto the market.)

Silk Road's descendants are not transparent so it is difficult to measure this economy's expansion. We can see that the number of listings has increased, but not at triple-digit rates. Crypto-Kingdom is more transparent. Its growth is good, but maintaining a triple-digit growth rate of players and economy will be difficult. Without the bulls on our side, we have to prepare for a long, drawn-out decline to baseline support, where almost no one wants BTC and XMR except for Silk Road users and Crypto-Kingdom players. Where they are the only people standing between oversold price levels and oblivion.

In 2021, the inflation situation will be reversed. Bitcoin and Monero's supply inflation will be down to single-digits (closer to 2-3%), but their real economies will likely be expanding at double-digit rates. Sometime between 2015 and 2021, the pin will drop. We don't need to defeat the bears. We only have to survive them.

There is a pretty good chance that monero will take over a good portion of what you are calling the "real economy" of btc.

Aye, there is. But by then, the pie will be much bigger. The real economies of both BTC and XMR will be much more than a small handful of enterprises.

Maybe. But even if that isnt the case. Even if the whole pie shrinks, even if the total use cases shrink, if monero takes over a good portion of bitcoins dark market utility, we could be looking at sizable returns. Just by virtue of the fact that monero is so much less capitalized than bitcoin.

[jehst]

My Long-Term Outlook:

Bulls are unable to protect $300 BTCUSD or $1 XMRUSD price levels. Now XMR and BTC must look to their "real economies" (non-speculative uses) as baseline support. Because XMR and BTC both have double-digit supply inflation, their real economies must expand at a triple-digit rate to safely overcome supply inflation. Let's look at the real economies.

XMR's real economy is driven mostly by Crypto-Kingdom.
BTC's real economy is driven mostly by Silk Road's descendants. (NOT Coinbase, Bitpay, Dell, Microsoft -- they don't soak up supply. They juggle bitcoins and then throw them back onto the market.)

Silk Road's descendants are not transparent so it is difficult to measure this economy's expansion. We can see that the number of listings has increased, but not at triple-digit rates. Crypto-Kingdom is more transparent. Its growth is good, but maintaining a triple-digit growth rate of players and economy will be difficult. Without the bulls on our side, we have to prepare for a long, drawn-out decline to baseline support, where almost no one wants BTC and XMR except for Silk Road users and Crypto-Kingdom players. Where they are the only people standing between oversold price levels and oblivion.

In 2021, the inflation situation will be reversed. Bitcoin and Monero's supply inflation will be down to single-digits (closer to 2-3%), but their real economies will likely be expanding at double-digit rates. Sometime between 2015 and 2021, the pin will drop. We don't need to defeat the bears. We only have to survive them.

There is a pretty good chance that monero will take over a good portion of what you are calling the "real economy" of btc.

Aye, there is. But by then, the pie will be much bigger. The real economies of both BTC and XMR will be much more than a small handful of enterprises.

Maybe. But even if that isnt the case. Even if the whole pie shrinks, even if the total use cases shrink, if monero takes over a good portion of bitcoins dark market utility, we could be looking at sizable returns. Just by virtue of the fact that monero is so much less capitalized than bitcoin.

I would like to believe that dark net market administrators and customers would be quick to adopt new, superior alternatives. Unfortunately, humans are creatures of habit and often won't change unless forced to change. People are in the habit of using BTC and in the habit of using centralized, trust based marketplaces. We see that the dark net market rouges are very slow to adopt multisig transactions, very slow to adopt XMR, and very slow to try Open Bazaar. If I had to make a bet, I would bet that they'll still be doing the same thing years from now that they are doing today. In other words, I wouldn't peg my hopes on them being smart enough and forward looking enough to do what's in their best interests by using XMR. Some may be drawn to DASH, which may survive or even thrive for many years before the occurrence of a systemic meltdown event.

Dark net market activity is not part of XMR's real economy and may never be. Luckily for XMR, there are hundreds of millions of dollars worth of legal opportunities for XMR: offshore banking, cross-border corporate transactions, tax avoidance (not evasion),  online gambling, porn and any and all ordinary transactions where privacy is desired. The space into which XMR can expand has a trillion dollar ceiling. We don't need to worry about the ceiling. For now, Crypto Kingdom is here and it's real.

[dewdeded]

Serious DNMs can't adopt XMR because it has no Multi-Sig TXs.

Why would DNM need OpenBazaar? They have their own CMS, they developed, improved (over years now) & know.

I think "dark net market rouges are very slow to adopt multisig transactions" is not true. From my POV it looks like this: a) there is consensus in the DNM scene that they want to use Multi-Sig and they only approve marketplaces with multi-sig escrow as serious and to be trusted, see:
http://www.deepdotweb.com/marketplace-directory/categories/multisig-and-trusted
b) DM were the first to rollout and test Bitcoin multi-sig escrow E-Commerce on the whole internet

[jehst]

Why would a DNM need OpenBazaar? They have their own CMS, they developed, improved (over years now) & know.

Because every 6 months, one of the top DNMs shuts down and people lose their money.

I think "dark net market rouges are very slow to adopt multisig transactions" is not true. From my POV it looks like this: a) there is consensus in the DNM scene that they want to use Multi-Sig and they only approve marketplaces with multi-sig escrow as serious and to be trusted, see:
http://www.deepdotweb.com/marketplace-directory/categories/multisig-and-trusted]

Despite multisig's availability and visibility, if you actually browse through the dark net market listings, you'll see that 90% of the transactions do not employ multisig. I don't consider 10% adoption after years to be fast.

b) DM were the first to rollout and test Bitcoin multi-sig escrow E-Commerce on the whole internet

Sure, compared to the whole internet, they are adopting multisig at the speed of light. The whole internet won't be using multisig at all in the next 10 years.

[iourzzz]

So no economic reasoning whatsoever to the choice of approx 0.9% inflation?

There is plenty of economic reasons, first being to secure the network,[/b] without network no transactions, like rpietila said its close to what gold is now. 1% is bellow the long-run ideal inflation on a large scale economy (believed to be 2%). 1% runs of the risk of deflation with eventual lost coins it will become de-facto deflationary in the long run.

I didn't say tail emission was a bad idea. I agree with it. It just shouldn't be a "magic number" value. And Monero is NOT gold. Most everything about it is quite different than gold. There seems to be no logical reason to choose that value based on "that's how gold is".

It wasn't logical, it was indeed a magic number (at least 1% was; 0.3 coins/minute is derived from the 1%/year) chosen at the start more or less arbitrary manner based on subjective views of what was useful to do. If it turns out to be a disastrous choice with horrible consequences, then Monero will fail. This is an experiment.

Sure, we can just say "hey it is an experiment". But wouldn't it be nicer to have a logical economic reasoning with maybe not precisely predictable results, but at least an intelligently planned results? I already see interesting brain storming in the last few posts. Generally the less magic numbers, the better. Something for Monero Research Labs maybe...



EDIT: If I'm dragging this on in the wrong thread just ask and I'll happily move it elsewhere.

I think it is befitting to realise that "intelligently planned results" does not just happen, especially in such an inherently wishy-washy subject as economics. It's akin to hubris to believe we can "fix" it with the "perfect formula", because the world and the economy is such a dynamic place. There are too many variables inflicting upon that little special reward percentage for THAT to be the 'magic number'.

I can get behind the "let's experiment based on a finger in the air" approach as a 'better than' solution. Especially because no currency is eternal, and eventually something else and better comes along and Gresham's Law applies.

With a low percentage of 0.9% I do believe that coins lost will be larger than the emission.

Economies are the living entities. The same may relate to the currencies. One point of view is that they are being created and ruled by human beings. But another one that they use human beings for their own needs of existance and development. So who knows probably the magic numbers are not so random... They could be a part of global plan of Monero as an intelligent system to conquer the world and make it a better place by attracting the right people who will provide the right set of various variables and opportunities to get strong evolutionary advantages in the long run.

[smooth]

It's interesting that the orderbook always has so much more liquidity on the buy side than the sell side even in times when clearly supply and demand are clearing with each other rather equitably (such as over the last couple weeks where we have been hovering in a 0.003-0.004 range). If there were really so many more buyers than sellers than we would not be trading in a range we would be going up. So the sellers are out there, they are just not accounted for on the order book. Any idea why?

I think they just dump. It is a sort of (temporary of course) equilibrium as rpietila pointed out. The sellers don't need to wait because the buy book is strong so they can just dump and the buyers don't need to bid up because of all the dumping.

[kurious]

It's interesting that the orderbook always has so much more liquidity on the buy side than the sell side even in times when clearly supply and demand are clearing with each other rather equitably (such as over the last couple weeks where we have been hovering in a 0.003-0.004 range). If there were really so many more buyers than sellers than we would not be trading in a range we would be going up. So the sellers are out there, they are just not accounted for on the order book. Any idea why?

I think they just dump. It is a sort of (temporary of course) equilibrium as rpietila pointed out. The sellers don't need to wait because the buy book is strong so they can just dump and the buyers don't need to bid up because of all the dumping.

Agreed - there is no price to 'chase' right now - most buyers (like myself, I imagine) have buys set up to catch dips lower than average buy in, or at perceived 'cheap' prices... As long as they 'may' come as it seems right now - why chase up the price?  The order book is of course filled with net buyers. I have some sells in too, to help average down - but not nearly as many as buys.  If I am not alone, it may be at least part of the answer.

The XMR market's resilience is refreshing and feels far more positive than BTC if you compare this thread to say the Wall Observer, in terms of sentiment.

[macsga]

^^
I think this is because XMR is younger than the BTC and we expect (I know, long shot) to reach it in popularity. Besides, there are no trolls in here which is very comforting when you're trying to educate yourself price-wise or tech-wise. Admittedly, XMR feels like "the future" into my mind now. I personally managed to build a nice stash (ie: so many I won't regret the BTCs spent if it goes to 0 and so many that I'd thank myself I bought them if it goes to "da moon").

[rpietila]

Monero stands out among all the cryptocoins with such a margin currently Just "waiting" (=continuing the good work) and letting the bigger numbers convert based on the merits of Monero, is a valid strategy when you are in such a good position as we are.

[rpietila]

"Real economy" as a predictor of the value of a "money" is a total fallacy.

Study gold. It does not have an appreciable real economy, and measuring its flows is difficult and obscure based on the paper gold charade.

Same with XMR, or BTC. The market cap is based on the willingness of people to hold. As with gold, I actually could not care less if it is directly spendable. Perhaps I have to say it again, since it is important: I could not care less if I can spend my BTC/XMR on stuff.

As long as it is alive, it has value, and then it has a price, and then I can hoard/dishoard it. That's it. By definition, I can always do what I want. If it is better value to convert XMR to another form before spending it for goods/services, it is just a practicality. If I can pay directly, it is just a practicality. Either way, it does not really affect my propensity to hold, and holding (alone) gives money its value.

I believe the qualities of XMR are such that when people just learn about it, they are willing to hold it. The more they hold, regardless of wallets, regardless of spending opportunities, the higher the market cap.

[aminorex]

Why is this simplistic economic equation MV=PQ so popular, even among many bitcoiners ? It's pseudo science in my opinion.     

Take care not to rob "pseudoscience" of its meaning.

It's actually a tautology, but can be analogized to the ideal gas law.  

Aren't we just in these days worldwide witnessing that the equation is rather stupid and doesn't fit? It is pseudo science (and wrong at that even).

What does it not fit?

[kurious]

^^
I think this is because XMR is younger than the BTC and we expect (I know, long shot) to reach it in popularity. Besides, there are no trolls in here which is very comforting when you're trying to educate yourself price-wise or tech-wise. Admittedly, XMR feels like "the future" into my mind now. I personally managed to build a nice stash (ie: so many I won't regret the BTCs spent if it goes to 0 and so many that I'd thank myself I bought them if it goes to "da moon").

Feels like a breath of fresh air here, yes - and Monero is young with all the potential upside that implies.

Of late, BTC has been a drudge, post the euphoric bubble rise of 2013.  I am still heavily in, but less concerned as I was about switching a reasonable % of my stash into XMR.   I have enough BTC to make a life changing difference if it indeed rises to its full potential - mostly in cold storage.

However, having not been into BTC until early 2013, the feeling that I am able to accumulate far more here at the early stage has a strong appeal.

I am about 30 to 1 in terms of XMR - BTC, which is not too much to lose in a wipe out, but has a huge upside if Monero achieves only a proportion of its potential.

The Black Swan of BTC collapse and general crypto chaos in the near term is factored in - but with so much infrastructure in place now, I think this is so minimal as to be dismissible.

TLDR:

Sun's out, future is bright.

[GingerAle]

^^
I think this is because XMR is younger than the BTC and we expect (I know, long shot) to reach it in popularity. Besides, there are no trolls in here which is very comforting when you're trying to educate yourself price-wise or tech-wise. Admittedly, XMR feels like "the future" into my mind now. I personally managed to build a nice stash (ie: so many I won't regret the BTCs spent if it goes to 0 and so many that I'd thank myself I bought them if it goes to "da moon").

Feels like a breath of fresh air here, yes - and Monero is young with all the potential upside that implies.

Of late, BTC has been a drudge, post the euphoric bubble rise of 2013.  I am still heavily in, but less concerned as I was about switching a reasonable % of my stash into XMR.   I have enough BTC to make a life changing difference if it indeed rises to its full potential - mostly in cold storage.

However, having not been into BTC until early 2013, the feeling that I am able to accumulate far more here at the early stage has a strong appeal.

I am about 30 to 1 in terms of XMR - BTC, which is not too much to lose in a wipe out, but has a huge upside if Monero achieves only a proportion of its potential.

The Black Swan of BTC collapse and general crypto chaos in the near term is factored in - but with so much infrastructure in place now, I think this is so minimal as to be dismissible.

TLDR:

Sun's out, future is bright.

Aight, so to reuse a phrase, is it true that the whole bitcoin bubble was artificial bot driven with fake USD? If thats the case, there's no actual reason for bitcoins meteoric 2013 spike and thus the true valuation of any cryptocurrency is still up in the air with absolutely no points of reference.

I just don't understand: if the price spike of BTC was fake, we should really stop referring to it as real.