[XMR] Monero Speculation

[dloghwak]

As far as the 'bitcoin halving pump', I am becoming increasingly convinced it might not happen at all.  

It is in progress right now, as we speak.  It starts with a volatility squeeze.

Why should there be a halving pump? There is no information arbitrage, everyone knows about the halving.
It would be pure speculation/manipulation and not sustainable imho.

[TheKoziTwo]

a BETTER coin, one with improved technology can replace bitcoin .... the improvement must be very significant and bitcoin needs to stagnate and fail to improve over a very long time....
If a coin can be replaced over night by another coin with better technology ...nobody is going to want to hold any significant value in any coins....People will stop buying them. If there's not faith in a currency staying around and holding value it won't hold any value at all.

You really need to distinguish a variety of cases and phases of development in order to apply that reasoning suitably.  

Firstly, we should distinguish application tokens and financial engineering vehicles from cash money.  The end-game for cash money has a well-defined fundamental valuation, with low model risk (Fisher quantity theory), whereas the model risk for app tokens and ponzis is vast, and the best case upside potential is much curtailed relative to cash money.  All crypto is now primarily a speculative vehicle, but BTC at least has a fundamental economy of some size, and that won't change suddenly.

Secondly, we should distinguish the various levels of maturity of cash money.  Gold is mature.  Debt-based national currency under centralized management is experimental, but ubiquitous.  Bitcoin is unknown to 99.95% of the potential user base, and lacks essential features, and development is stagnating.  Monero is unknown to 99.9999% of the potential user base, and lacks essential features, but development velocity is quite respectable.  Clearly the growth potential of XMR is much greater than any other instrument in operation today, if you consider the prospect of becoming the primary international medium of financial exchange to be within the realm of possibility.

The best example of crypto achieving bitcoin mcap is bitcoin, and that took 5 years.  It takes time for money to flow, and the pipes are narrow enough so that back-pressure prevents too rapid a rise in mcap for XMR.  It would take perhaps $200mm influx to bring XMR to parity with BTC.  Poloniex can handle perhaps 20000BTC/diem, max, so it would take at least two months for parity to be achieved, if everyone decided today that BTC was utterly uninteresting, and only XMR mattered.  So, if XMR will be successful similarly to BTC, with no less speed, it will take between 2 months and 3 years to get there.  Meanwhile, there is no particular reason for BTC to decline while XMR ascends.  Quite the contrary, in fact, as buying XMR requires first buying BTC.  By the time XMR reaches USD 420, BTC will almost certainly pass $1k - unless a reliable and accessible fiat exchange or three opens meanwhile.

No, if everyone decided today that BTC is utterly uninteresting the price would very quickly reach 0. And there would be nobody buying BTC to exchange for XMR. No sane XMR holder would sell for BTC. The BTC/XMR pair would be rendered useless on the spot and at best fractions of XMR would be sold for BTC in the final hours of bitcoin's death.

If we extend the time period it takes for most people to lose interest in BTC to something longer like 2 months you'll still have early speculators dumping BTC to preserve their wealth. Some will dump for USD and some will dump for XMR. But a few enlightened speculators would likely be enough to cause major panic and havoc to the cryptocurrency space. The smartest speculators will recognize the fallacy that will haunt the space, namely: A coin can easily be replaced with a little improvement in technology with no ill effects on the economy. This is a fallacy because if that is the case there will be a race to the bottom in every following coin in the dawn of a new one. Competition will drive the time it takes to replace a coin down from perhaps 3 years today to 1 year, 6 months, 3 months, 1 month, 2 weeks, 1 week, 1 day... At some point coins are replaced so often that they can no longer hold any value. What is the properties of money? One is store of value. Which will be no more. Without store of value we can't have a medium of exchange. Without that, there is no currency.

[r0ach]

If Bitcoin "falls from dominance" (e.g., it's surpassed by Monero as #1 in market value), but its own valuation remains similar or increases, presumably you wouldn't expect that to have a disastrous effect on investor confidence in all cryptocurrencies?

Of course, and I already made that post a few weeks ago:

Altcoins are a prisoner's dilemma and not possible to beat Bitcoin

https://bitcointalk.org/index.php?topic=1398586.0

Due to this dynamic, if you like Monero for some reason and were operating under any sort of game theory or art of war tactics, even if you hated Bitcoin, you would pump Bitcoin for the halving then move to Monero afterwards because that's what is most beneficial to you.

The way that Eth went from nothingness to people pretending it's challenging Bitcoin (mostly with automated spam accounts), while having absolutely garbage fundamentals, reeked of a banker attack on Bitcoin itself.  They're monopoly men and drank the koolaid make believing Vitalik is the second coming of Jesus, so they thought they could both attack Bitcoin and make money at the same time.  They bought up all the coins in IPO and initial release, then banks like Goldman pumped it.  Now they get to find out they effectively pumped a useless turd.  So while it did have some minor, temporary stagnation effect on BTC, it's going to cost them a lot of money unless they can find lots of greater fools to unload those ethers on.

[aminorex]

I hope to make a much clearer and more cohesive case at a later date, but for now I must work.  The level of emotion and the rhetorical cast of the arguments I am seeing here does not inspire confidence.  Conclusions simply do not follow from the level of desire for an outcome, nor from an intense aversion to alternatives.

[TheKoziTwo]

If Bitcoin "falls from dominance" (e.g., it's surpassed by Monero as #1 in market value), but its own valuation remains similar or increases, presumably you wouldn't expect that to have a disastrous effect on investor confidence in all cryptocurrencies?

Of course, and I already made that post a few weeks ago:

Altcoins are a prisoner's dilemma and not possible to beat Bitcoin

https://bitcointalk.org/index.php?topic=1398586.0

Due to this dynamic, if you like Monero for some reason and were operating under any sort of game theory or art of war tactics, even if you hated Bitcoin, you would pump Bitcoin for the halving then move to Monero afterwards because that's what is most beneficial to you.

The way that Eth went from nothingness to people pretending it's challenging Bitcoin (mostly with automated spam accounts), while having absolutely garbage fundamentals, reeked of a banker attack on Bitcoin itself.  They're monopoly men and drank the koolaid make believing Vitalik is the second coming of Jesus, so they thought they could both attack Bitcoin and make money at the same time.  They bought up all the coins in IPO and initial release, then banks like Goldman pumped it.  Now they get to find out they effectively pumped a useless turd.  So while it did have some minor, temporary stagnation effect on BTC, it's going to cost them a lot of money unless they can find lots of greater fools to unload those ethers on.

Altcoins being a prisoner's dilemma. Great post! It explains why there are so many anti-bitcoin shills these days.

[americanpegasus]

You are making some serious game theory errors if you believe there is no way for an altcoin to ever overtake Bitcoin.  Bitcoin will likely never be worthless, but it doesn't have to remain on top.  You are subscribing to a fallacy if you believe this. 
 
Consider Usenet vs. Internet.  Consider MySpace vs Facebook.  Consider the Kingdom of Britain vs the spunky 13 colonies of the Americas.  Consider Chistianity vs Judaism.  Consider humanity vs every other mammal.  Consider Reddit vs Digg.  Consider a thousand examples. 
 
You are failing to recognize that if an asset generates faith in utility in itself it no longer is bound by its parent asset, and can break free from such a prisoner's dillema - especially if we can get fiat on ramps.  There are literally billions of people in this world who may first hear of cryptocurrency through the Cryotonote family and be surprised there was once a predecessor crypto to it called Bitcoin.  Have you ever considered that?

[binaryFate]

Quite interesting to follow the very trenched opinions...  
I think a major point in the reflexion is the size of the cryptospace overall and the perception of it.
If too small, Bitcoin failure is deemed to doom all other crypto countenders. TheKoziTwo thesis as I understood.
If big enough, then perceived as a variety of sufficiently uncorrelated possibilities and not a single fate blob. Then loss of confidence in btc does not affect other crypto countenders as they are judged on their own merit with little consideration for the btc history. aminorex thesis as I understood.

My opinion is both views are sensible, but they will dominate the market sentiment on very different time scales. (TheKoziTwo considerations being shorter term). In practice it might be that aminorex considerations are reality long term, but after a potentially painful chasm to cross because of TheKoziTwo considerations.

Would be helpful to mention what time scales you're all looking at, I'd dare to think everybody would then agree.

[iCEBREAKER]

Bitcoin development is stagnating.

Is it true?

 

https://github.com/bitcoin/bitcoin
Latest commit 5131005 3 hours ago @laanwj laanwj Merge #7723: build: python 3 compatibility

Segwit is mostly done being tested and scheduled for deployment Soon.  Sidechains and payment channels are in development.  The community agreed to Core's roadmap at the ScalingBitcoin conference.  Elements Alpha is packed with gobs of scrumptious Wonka-style chocolate crypto magic.  CSV, RBF, and CLTV are here, now.  That's not "stagnating."  BBR is stagnating.  Bitcoin is doing everything but that.

Please don't moan about anyone needing to  Leave Dash Alone   if you're going have a Hearnia about how XT/Classic failing means certain d000m stagnation for Honey Badger.

[binaryFate]

[...] The community agreed to Core's roadmap at the ScalingBitcoin conference. [...]

Without opening the bitcoin maximalist dam please, what makes you measure the community support for this or that, to the point of being affirmative and general as you do here?

[iCEBREAKER]

[...] The community agreed to Core's roadmap at the ScalingBitcoin conference. [...]

Without opening the bitcoin maximalist dam please, what makes you measure the community support for this or that, to the point of being affirmative and general as you do here?

I measure presence or absence in the dev community via merit, demonstrated roughly by lines of code contributed and/or other analogous accomplishments.  This is exactly what I mean:

https://bitcoin.org/en/bitcoin-core/capacity-increases (90% of all commits to Bitcoin Core in 2015)
https://www.cryptocoinsnews.com/bitcoin-core-miners-agree-hard-fork-code-comes-july-2016-activation-in-2017/

The devs writing and voluntarily taking on responsibility for fixing the code when it breaks get to decide what goes into that code, and when.

FOSS isn't the Dilbert Corporation where the clueless Boss can order Wally to write unstable software to Catbert's Evil Marketecture specs.

Talking about crypto doesn't make you part of crypto.  Honey Badger really doesn't give a damn about a few pushy/noisy activist investor wannabees.

[smooth]

The devs writing and voluntarily taking on responsibility for fixing the code when it breaks get to decide what goes into that code, and when.

That is true, but it is users of the network who decide which code to use. Thus far there has been no real momentum by users toward changing vendors, but if there were, number of commits by developers of a single vendor's implementation would not make any difference.

[smooth]

The smartest speculators will recognize the fallacy that will haunt the space, namely: A coin can easily be replaced with a little improvement in technology with no ill effects on the economy.

The key question is what constitutes "a little" improvement.

Even something like LTC could be major improvement, in theory.

You can't measure qualitative improvements in terms of number of lines of code changes. If scrypt really were a much better and nearly optimal PoW algorithm and 2.5 minutes a much better and nearly optimal block time and coblee a much better and nearly optimal community founder/leader, and 2011 a much better and nearly optimal time to launch a cryptocurrency, then BTC could indeed have been replaced by LTC, yet BTC could not have been replaced by anything, becase at least on these metrics, it would be nearly optimal, rendering further major improvements impossible and the fallacy is no longer a fallacy.

[iCEBREAKER]

I measure presence or absence in the dev community via merit, demonstrated roughly by lines of code contributed and/or other analogous accomplishments.

The devs writing and voluntarily taking on responsibility for fixing the code when it breaks get to decide what goes into that code, and when.

That is true, but it is users of the network who decide which code to use. Thus far there has been no real momentum by users toward changing vendors, but if there were, number of commits by developers of a single vendor's implementation would not make any difference.

It's not the number of commits that matters, it's the merit demonstrated by their utility that matters.

I'm not sure how I could have made that any more clear.  I guess "number of commits" is just a trigger for some people, no matter how many layers of disclaimers its embedded context.   

I don't care how many extra commits Hearn and Toomin added to XT and Classic, because they were all BS like checkpoints and blacklists.  OTOH, LN and SEGWIT are high on my DO WANT list.

The users of the network are those who own coins.  Like fake AWS Sybil nodes that don't actually store/send coins, non-economic users are irrelevant (no matter how much noise they can generate on Reddit).

As you note with great understatement, "Thus far there has been no real momentum by users toward changing vendors."

http://bitcoinocracy.com/ indicates the socioeconomic majority is firmly with the devs responsible for 90% of all commits to Bitcoin Core in 2015 (as it should be).   

[smooth]

I measure presence or absence in the dev community via merit, demonstrated roughly by lines of code contributed and/or other analogous accomplishments.

The devs writing and voluntarily taking on responsibility for fixing the code when it breaks get to decide what goes into that code, and when.

That is true, but it is users of the network who decide which code to use. Thus far there has been no real momentum by users toward changing vendors, but if there were, number of commits by developers of a single vendor's implementation would not make any difference.

It's not the number of commits that matters, it's the merit demonstrated by their utility that matters.

I'm not sure how I could have made that any more clear.  I guess "number of commits" is just a trigger for some people, no matter how many layers of disclaimers its embedded context.   

I don't care how many extra commits Hearn and Toomin added to XT and Classic, because they were all BS like checkpoints and blacklists.  OTOH, LN and SEGWIT are high on my DO WANT list.

You have an influence, yes. So what is on your DO WANT list, matters, but you are only one among many. And merit certainly has a role in influence, though people can disagree on what constitutes merit.

The users of the network are those who own coins.

Not entirely. Economic influence is more complicated than that. For example, value depends entirely on willingness to accept (aka buy) coins, whether the person buying already happens to own coins or not.

[regexlove]

Just an idea, minutes ago:

to be confirmed seconds later:

saw both/similar views switching back and forth wildly more times by now

[iCEBREAKER]

I measure presence or absence in the dev community via merit, demonstrated roughly by lines of code contributed and/or other analogous accomplishments.

The devs writing and voluntarily taking on responsibility for fixing the code when it breaks get to decide what goes into that code, and when.

That is true, but it is users of the network who decide which code to use. Thus far there has been no real momentum by users toward changing vendors, but if there were, number of commits by developers of a single vendor's implementation would not make any difference.

It's not the number of commits that matters, it's the merit demonstrated by their utility that matters.

I'm not sure how I could have made that any more clear.  I guess "number of commits" is just a trigger for some people, no matter how many layers of disclaimers its embedded context.   

I don't care how many extra commits Hearn and Toomin added to XT and Classic, because they were all BS like checkpoints and blacklists.  OTOH, LN and SEGWIT are high on my DO WANT list.

You have an influence, yes. So what is on your DO WANT list, matters, but you are only one among many. And merit certainly has a role in influence, though people can disagree on what constitutes merit.

The users of the network are those who own coins.

Not entirely. Economic influence is more complicated than that. For example, value depends entirely on willingness to accept (aka buy) coins, whether the person buying already happens to own coins or not.

Potential Bitcoin owners are not "users of the network" (unless we broaden the definition to include everyone).  Economic influence is a much more general and complicated topic (everybody drink when the phrase "intrinsic value" is used  ).

People may disagree about anything, and often do.  The issue here is the reasonableness of those disagreements.

Many Classic supporters, especially the cranky I-hate-GMAX/PTODD/LUKEJR types, disagree with the idea that committing code demontrates merit, but they are not being reasonable (or even interacting in good faith, due to their greater goal of a governance coup).

Unless I start contributing useful code, my DO WANT list only influences Honey Badger to the extent I buy/sell/hold Bitcoins.  Non-economic users, just like non-economic nodes, are irrelevant.

[smooth]

I measure presence or absence in the dev community via merit, demonstrated roughly by lines of code contributed and/or other analogous accomplishments.

The devs writing and voluntarily taking on responsibility for fixing the code when it breaks get to decide what goes into that code, and when.

That is true, but it is users of the network who decide which code to use. Thus far there has been no real momentum by users toward changing vendors, but if there were, number of commits by developers of a single vendor's implementation would not make any difference.

It's not the number of commits that matters, it's the merit demonstrated by their utility that matters.

I'm not sure how I could have made that any more clear.  I guess "number of commits" is just a trigger for some people, no matter how many layers of disclaimers its embedded context.   

I don't care how many extra commits Hearn and Toomin added to XT and Classic, because they were all BS like checkpoints and blacklists.  OTOH, LN and SEGWIT are high on my DO WANT list.

You have an influence, yes. So what is on your DO WANT list, matters, but you are only one among many. And merit certainly has a role in influence, though people can disagree on what constitutes merit.

The users of the network are those who own coins.

Not entirely. Economic influence is more complicated than that. For example, value depends entirely on willingness to accept (aka buy) coins, whether the person buying already happens to own coins or not.

Potential Bitcoin owners are not "users of the network" (unless we broaden the definition to include everyone).

Sure they are, or at least can be. Immediately prior to acquiring their first coins they have launched and wallet and synced it, possibly synced up their own economically-independent full node if they want to have maximum confidence the coins they are about to acquire are actually real.

Other users who may not own coins or whose influence is not measured in coins owned include those with a large flow-through (services highly valued by their use, with such use not measured well by the coin ownership of their operator).

Economic influence is a much more general and complicated topic (everybody drink when the phrase "intrinsic value" is used  ).

And yet, this general and complicated topic is what actually decides which software runs the network. Coin voting means nothing, other than yet another way to spin politics. Certainly I agree this has nothing to do with node count.

[iCEBREAKER]

Potential Bitcoin owners are not "users of the network" (unless we broaden the definition to include everyone).

Sure they are, or at least can be. Immediately prior to acquiring their first coins they have launched and wallet and synced it, possibly synced up their own economically-independent full node if they want to have maximum confidence the coins they are about to acquire are actually real.

Other users who may not own coins or whose influence is not measured in coins owned include those with a large flow-through (services highly valued by their use, with such use not measured well by the coin ownership of their operator).

Economic influence is a much more general and complicated topic (everybody drink when the phrase "intrinsic value" is used  ).

And yet, this general and complicated topic is what actually decides which software runs the network. Coin voting means nothing, other than yet another way to spin politics.

"Are" != "can be" (OK, notwithstanding the tiny transient edge case of new user bootstrapping)

"A large flow-through" would seem to imply coin ownership or at least possession/custody (however temporary).

Coin voting means something, as does block voting via version bits and whatnot.  Blowing off the resoundingly pro-Core/anti-Classic results on Bitcoinacracy is yet another way to spin politics.

Even if the results are more descriptive than causative, nobody is going to start a contentious fork war with so many BTC pledged to defend Core (and attack GavinCoin with well-funded doublespend-short-doublespend loops).

[smooth]

Potential Bitcoin owners are not "users of the network" (unless we broaden the definition to include everyone).

Sure they are, or at least can be. Immediately prior to acquiring their first coins they have launched and wallet and synced it, possibly synced up their own economically-independent full node if they want to have maximum confidence the coins they are about to acquire are actually real.

Other users who may not own coins or whose influence is not measured in coins owned include those with a large flow-through (services highly valued by their use, with such use not measured well by the coin ownership of their operator).

Economic influence is a much more general and complicated topic (everybody drink when the phrase "intrinsic value" is used  ).

And yet, this general and complicated topic is what actually decides which software runs the network. Coin voting means nothing, other than yet another way to spin politics.

"Are" != "can be" (OK, notwithstanding the tiny transient edge case of new user bootstrapping)

It's more than that. If you are about to acquire coins (and therefore economically significant) then you must have some access to the network. If not, then it isn't possible for you acquire coins!

"A large flow-through" would seem to imply coin ownership or at least possession/custody (however temporary).

Yes, but the amount of ownership may be small, or even in some cases nonexistant. An example of the latter would be joinmarket, an important and valued service that never takes ownership of coins.

Coin voting means something, as does block voting via version bits and whatnot.  Blowing off the resoundingly pro-Core/anti-Classic results on Bitcoinacracy is yet another way to spin politics.

These are all indicators of something sure, but they don't determine what software runs the network, any more than node count does. Even the latter indicates something, if something of vastly overstated importance by some in this debate.

[Monerobuyer0]

If we extend the time period it takes for most people to lose interest in BTC to something longer like 2 months you'll still have early speculators dumping BTC to preserve their wealth. Some will dump for USD and some will dump for XMR. But a few enlightened speculators would likely be enough to cause major panic and havoc to the cryptocurrency space. The smartest speculators will recognize the fallacy that will haunt the space, namely: A coin can easily be replaced with a little improvement in technology with no ill effects on the economy. This is a fallacy because if that is the case there will be a race to the bottom in every following coin in the dawn of a new one. Competition will drive the time it takes to replace a coin down from perhaps 3 years today to 1 year, 6 months, 3 months, 1 month, 2 weeks, 1 week, 1 day... At some point coins are replaced so often that they can no longer hold any value. What is the properties of money? One is store of value. Which will be no more. Without store of value we can't have a medium of exchange. Without that, there is no currency.

Easily replaced?  No way.  No one will think that, because that is not what will have happened.

What will have happened if bitcoin falls and an alt takes the top position, is that ONE other crypto managed to replace it, after 7+ years, with (probably) significantly superior technology, out of the hundreds or thouands of coins that were made in the hopes of becoming #1 and replacing bitcoin.


No one is going to believe that what occurred was accomplished easily.  Will they think its *possible* yes.  But only if a new, much superior technology to the new top coin came around, and only with a lot of effort, and a rise spanning a significant period of time.


This is a good thing, because it will mean that the market starts to ACTUALLY CARE about the fundamentals of the cryptocurrencies, and people will be looking for the coins with technical superiority which can rise to the top, and getting out of stale coins with no development and outdated models.


I am tired of the crypto environment where almost nobody understands or cares about fundamentals, and hype and marketing rules the day.  The most fundamentally secure cryptos like Monero should be at the top, and maybe if bitcoin falls people will actually wake the hell up and start looking for the technically best crypto.