[XMR] Monero Speculation

[Monerobuyer0]

Probably nobody here wants to read this viewpoint:

So, what will happen?

Back in 2013 we had Mt.Gox running on fractional/damaged reserve, so there had been more BTC available in trades than BTC total in existance and it did not matter because there was money inflow from the outsides. This year is more solid regarding those issues, just completely isolated market.

The 850,000 Bitcoins stolen (200,000 recovered) from Mt. Gox were roughly 8% of the coin supply. What was likely happening is this supply was employed to manipulate the float on Mt. Gox (buying from yourselves, etc) in order to drive a massive bubble..since 70% of all Bitcoin traded through Mt.Gox.

Given ASICs had come online, miners didn't need to sell as many coins to pay electricity.

The mass media was pumping Bitcoin up every day.

We probably don't have the level of upward price manipulation now. Sorry.

Edit: altcoins became the way to have the float tied up in one or two exchanges (e.g. Ethereum) so the insiders could manipulate the price. Crypto-currency is all about the scams.

Nobody invests into BTC or mining equipment anymore. When did you bought ASICs valued 10.000 USD last time? Aren't those USD you now use to buy BTC just been taken from former BTC sales?

Bitcoin cannot do without Alts, both built up a complete whole economy. Remember people are not buying/selling anything using BTC, they just gamble on Alts. Basically I do agree on BTC up causing Alts going down and vice verse. Enclosed system like two water tanks with a flexible tube connecting them.

This is true. Most people don't want to trade their BTC for a non-CC asset, because this their gambling money. They can't buy mining equipment with BTC to increase their holdings of crypto-currency. This is why ICOs have become more popular than mined distribution, with the ASIC resistant Monero as an exception.

ASICs killed the mining ecosystem. This has been r0ach's point, that if the coins don't circulate, then the ecosystem dies. Bitcoin is dying. Only the altcoin circulation kept Bitcoin alive.

Sorry I see Bitcoin as very vulnerable. No new money is coming in. A global contagion can force some large whales to liquidate to cover their ass in other illiquid loans and investments.

Prepare for the crash.

You just look very wrong right now.  BTC rising and every alt getting murdered.

[ArticMine]

Probably nobody here wants to read this viewpoint:

So, what will happen?

Back in 2013 we had Mt.Gox running on fractional/damaged reserve, so there had been more BTC available in trades than BTC total in existance and it did not matter because there was money inflow from the outsides. This year is more solid regarding those issues, just completely isolated market.

The 850,000 Bitcoins stolen (200,000 recovered) from Mt. Gox were roughly 8% of the coin supply. What was likely happening is this supply was employed to manipulate the float on Mt. Gox (buying from yourselves, etc) in order to drive a massive bubble..since 70% of all Bitcoin traded through Mt.Gox.

Given ASICs had come online, miners didn't need to sell as many coins to pay electricity.

The mass media was pumping Bitcoin up every day.

We probably don't have the level of upward price manipulation now. Sorry.

Edit: altcoins became the way to have the float tied up in one or two exchanges (e.g. Ethereum) so the insiders could manipulate the price. Crypto-currency is all about the scams.

Nobody invests into BTC or mining equipment anymore. When did you bought ASICs valued 10.000 USD last time? Aren't those USD you now use to buy BTC just been taken from former BTC sales?

Bitcoin cannot do without Alts, both built up a complete whole economy. Remember people are not buying/selling anything using BTC, they just gamble on Alts. Basically I do agree on BTC up causing Alts going down and vice verse. Enclosed system like two water tanks with a flexible tube connecting them.

This is true. Most people don't want to trade their BTC for a non-CC asset, because this their gambling money. They can't buy mining equipment with BTC to increase their holdings of crypto-currency. This is why ICOs have become more popular than mined distribution, with the ASIC resistant Monero as an exception.

ASICs killed the mining ecosystem. This has been r0ach's point, that if the coins don't circulate, then the ecosystem dies. Bitcoin is dying. Only the altcoin circulation kept Bitcoin alive.

Sorry I see Bitcoin as very vulnerable. No new money is coming in. A global contagion can force some large whales to liquidate to cover their ass in other illiquid loans and investments.

Prepare for the crash.

I actually for the most part agree with it. I  have been a Bitcoin bear for a while simply because I do not like the long term fundamentals. The biggest issue is the 1 MB blocksize issue and the proposals being thrown around are simply too little too late. There is a reason new venture capital is not moving into Bitcoin and that is simply that venture capital demands the possibility of very high growth because of the risk involved. The 1 MB blocksize limit is simply making stagnation part of the Bitcoin protocol and consensus model. I can think of no more effective way to drive venture capital away than to make stagnation an integral part of the Bitcoin protocol and consensus model.

While ASIC centralization is part of he problem, I would argue that were it not for the blocksize limit this alone is not to blame. The issue is that while China is by far the most cost effective place to manufacture ASICs and it also scores well in the electricity and climate are (parts of Northern China do get very cold in the winter) it has a very high latency Internet connectivity to the rest of the world due to the Great Firewall of China. A mid range residential Internet connection in many parts of the world will run circles over the best data centre grade Internet connection behind the Great Fire Wall of China in the mining critical area of latency. What has allowed the centralization in Bitcoin mining to occur is not just ASICs but the combination of a 10 min blocktime with a 1 MB blocksize limit together with ASICs. If Bitcoin had allowed the blocksize to grow back in 2012 - 2013, the Chinese ASIC manufacturer's would have been forced to sell their ASICs for export rather than operate them themselves locally and this would have prevented the concentration of Bitcoin mining in China. We must keep in mind the the Chinese miners are against any significant blocksize increase in Bitcoin for this very reason.

Even if someone developed an ASIC for CryptoNite that was truly competitive, I doubt the kind of mining concentration that has occurred in Bitcoin could happen In Monero simply because China would still be by far the most competitive place to manufacture the ASICs, but the combination of 2 min blocks and an adaptive blocksize limit would make China a very un-competitive place to operate the ASICs.

[tifozi]

A BTC rise is needed at least for the next month or two to flush out the ICO scams that have been prevalent on the boards since January. All these MAID/WAVES/LISK/UPPERCASESCAMCOIN seem to be coming from the same type of factory. Until this new generation of crypto believers get burnt, they will not learn their lessons, however harsh that sounds. It doesn't mean some of the profiteers will change their stance or all of the ones getting burnt will learn, but that's just the way it is with money.

An unfortunate side effect is that the only alt that has real practical value, long and short term (XMR) will also take some beating as the small fishes seem to be revolting against the manipulation that they have undergone from the whales for a long time.

[Monerobuyer0]

A BTC rise is needed at least for the next month or two to flush out the ICO scams that have been prevalent on the boards since January. All these MAID/WAVES/LISK/UPPERCASESCAMCOIN seem to be coming from the same type of factory. Until this new generation of crypto believers get burnt, they will not learn their lessons, however harsh that sounds. It doesn't mean some of the profiteers will change their stance or all of the ones getting burnt will learn, but that's just the way it is with money.

An unfortunate side effect is that the only alt that has real practical value, long and short term (XMR) will also take some beating as the small fishes seem to be revolting against the manipulation that they have undergone from the whales for a long time.

So why is monero dropping much harder than all those ICOs?

[TPTB_need_war]

I actually for the most part agree with it. I  have been a Bitcoin bear for a while simply because I do not like the long term fundamentals. The biggest issue is the 1 MB blocksize issue and the proposals being thrown around are simply too little too late. There is a reason new venture capital is not moving into Bitcoin and that is simply that venture capital demands the possibility of very high growth because of the risk involved. The 1 MB blocksize limit is simply making stagnation part of the Bitcoin protocol and consensus model. I can think of no more effective way to drive venture capital away than to make stagnation an integral part of the Bitcoin protocol and consensus model.

While ASIC centralization is part of he problem, I would argue that were it not for the blocksize limit this alone is not to blame. The issue is that while China is by far the most cost effective place to manufacture ASICs and it also scores well in the electricity and climate are (parts of Northern China do get very cold in the winter) it has a very high latency Internet connectivity to the rest of the world due to the Great Firewall of China. A mid range residential Internet connection in many parts of the world will run circles over the best data centre grade Internet connection behind the Great Fire Wall of China in the mining critical area of latency. What has allowed the centralization in Bitcoin mining to occur is not just ASICs but the combination of a 10 min blocktime with a 1 MB blocksize limit together with ASICs. If Bitcoin had allowed the blocksize to grow back in 2012 - 2013, the Chinese ASIC manufacturer's would have been forced to sell their ASICs for export rather than operate them themselves locally and this would have prevented the concentration of Bitcoin mining in China. We must keep in mind the the Chinese miners are against any significant blocksize increase in Bitcoin for this very reason.

Even if someone developed an ASIC for CryptoNite that was truly competitive, I doubt the kind of mining concentration that has occurred in Bitcoin could happen In Monero simply because China would still be by far the most competitive place to manufacture the ASICs, but the combination of 2 min blocks and an adaptive blocksize limit would make China a very un-competitive place to operate the ASICs.

Thanks for the support, but the GFW is a great lie. The ASICS only need a hash of the transactions, not all the transactions. The mining pool server can be located outside of China.

That will show you that the ASIC miners in China are greatlousy liars.

[ArticMine]

...

Thanks for the support, but the GFW is a great lie. The ASICS only need a hash of the transactions, not all the transactions. The mining pool server can be located outside of China.

That will show you that the ASIC miners in China are greatlousy liars.

I am not so sure. They still have to get the hash of the transactions across the GFWC and the results then back to the server. The issue here is latency not bandwidth.

[dEBRUYNE]

...

Thanks for the support, but the GFW is a great lie. The ASICS only need a hash of the transactions, not all the transactions. The mining pool server can be located outside of China.

That will show you that the ASIC miners in China are greatlousy liars.

I am not so sure. They still have to get the hash of the transactions across the GFWC and the results then back to the server. The issue here is latency not bandwidth.

If mining is centralized in China doesn't that actually transfer the latency issue to non-Chinese miners? Resulting in possible more centralization. I recall reading such a thing.

[TPTB_need_war]

...

Thanks for the support, but the GFW is a great lie. The ASICS only need a hash of the transactions, not all the transactions. The mining pool server can be located outside of China.

That will show you that the ASIC miners in China are greatlousy liars.

I am not so sure. They still have to get the hash of the transactions across the GFWC and the results then back to the server. The issue here is latency not bandwidth.

If mining is centralized in China doesn't that actually transfer the latency issue to non-Chinese miners? Resulting in possible more centralization. I recall reading such a thing.

Right. It is the minority that suffers from delayed block announcements, i.e. this is selfish mining.

Unless Chinese miners have a high latency between themselves within China?

Also I read the GFW was bandwidth limited. It is also latency limited and by how much? The Bitcoin block period is quite large so 100ms increase is probably fairly insignificant in the Poisson distribution.

[dEBRUYNE]

...

Thanks for the support, but the GFW is a great lie. The ASICS only need a hash of the transactions, not all the transactions. The mining pool server can be located outside of China.

That will show you that the ASIC miners in China are greatlousy liars.

I am not so sure. They still have to get the hash of the transactions across the GFWC and the results then back to the server. The issue here is latency not bandwidth.

If mining is centralized in China doesn't that actually transfer the latency issue to non-Chinese miners? Resulting in possible more centralization. I recall reading such a thing.

Right. It is the minority that suffers from delayed block announcements, i.e. this is selfish mining.

Unless Chinese miners have a high latency between themselves within China?

Also I read the GFW was bandwidth limited. It is also latency limited and by how much? The Bitcoin block period is quite large so 100ms increase is probably fairly insignificant in the Poisson distribution.

Even if they have high latency between themselves, I think the latency of US <-> China is higher than within China. To make a gaming comparison, even if I have, for instance, a fiber connection as EU or Chinese player and an US player has an ADSL connection, playing on an US server will result in the US player having lower latency (i.e. ping in gaming).

[ArticMine]

Well here is a test for getmonero.org http://www.websitepulse.com/help/testtools.china-test.html

Website Test Results
Tested From:   Shanghai, China
Tested At:   2016-04-22
00:22:49 (GMT +00:00)
URL Tested:   http://getmonero.org
Resolved As:   104.25.211.22
Status:   OK
Response Time:   14.872 sec
DNS:   0.000 sec
Connect:   0.277 sec
Redirect:   12.382 sec
First Byte:   2.213 sec
Last Byte:   0.001 sec
Size:   2779 bytes
   
Tested From:   New York, NY
Tested At:   2016-04-22
00:22:49 (GMT +00:00)
URL Tested:   http://getmonero.org
Resolved As:   104.25.211.22
Status:   OK
Response Time:   0.507 sec
DNS:   0.000 sec
Connect:   0.009 sec
Redirect:   0.083 sec
First Byte:   0.415 sec
Last Byte:   0.000 sec
Size:   2779 bytes

The overall response time was 14.872 sec vs 0.507 sec. On a 2 min blocktime (Monero) this is very significant. Also how would the Chinese miners communicate with each other if they are using external servers without going four times across the GFWC? If they use Chinese servers they could avoid this; however they would still have to deal with domestic spying that would introduce both latency and bandwidth limitations.

[dEBRUYNE]

Well here is a test for getmonero.org http://www.websitepulse.com/help/testtools.china-test.html

Website Test Results
Tested From:   Shanghai, China
Tested At:   2016-04-22
00:22:49 (GMT +00:00)
URL Tested:   http://getmonero.org
Resolved As:   104.25.211.22
Status:   OK
Response Time:   14.872 sec
DNS:   0.000 sec
Connect:   0.277 sec
Redirect:   12.382 sec
First Byte:   2.213 sec
Last Byte:   0.001 sec
Size:   2779 bytes
   
Tested From:   New York, NY
Tested At:   2016-04-22
00:22:49 (GMT +00:00)
URL Tested:   http://getmonero.org
Resolved As:   104.25.211.22
Status:   OK
Response Time:   0.507 sec
DNS:   0.000 sec
Connect:   0.009 sec
Redirect:   0.083 sec
First Byte:   0.415 sec
Last Byte:   0.000 sec
Size:   2779 bytes

The overall response time was 14.872 sec vs 0.507 sec. On a 2 min blocktime (Monero) this is very significant. Also how would the Chinese miners communicate with each other if they are using external servers without going four times across the GFWC? If they use Chinese servers they could avoid this; however they would still have to deal with domestic spying that would introduce both latency and bandwidth limitations.

This is a comparison with OkCoin:


Website Test Results
Tested From:   Shanghai, China
Tested At:   2016-04-22
00:37:30 (GMT +00:00)
URL Tested:   https://www.okcoin.cn/
Resolved As:   121.199.251.136
Status:   OK
Response Time:   0.252 sec
DNS:   0.086 sec
Connect:   0.007 sec
Redirect:   0.000 sec
First Byte:   0.096 sec
Last Byte:   0.063 sec
Size:   36254 bytes


Tested From:   New York, NY
Tested At:   2016-04-22
00:37:30 (GMT +00:00)
URL Tested:   https://www.okcoin.cn/
Resolved As:   121.199.251.136
Status:   OK
Response Time:   10.866 sec
DNS:   3.798 sec
Connect:   0.351 sec
Redirect:   0.000 sec
First Byte:   5.823 sec
Last Byte:   0.894 sec
Size:   36254 bytes

[ArticMine]

...

This is a comparison with OkCoin:


Website Test Results
Tested From:   Shanghai, China
Tested At:   2016-04-22
00:37:30 (GMT +00:00)
URL Tested:   https://www.okcoin.cn/
Resolved As:   121.199.251.136
Status:   OK
Response Time:   0.252 sec
DNS:   0.086 sec
Connect:   0.007 sec
Redirect:   0.000 sec
First Byte:   0.096 sec
Last Byte:   0.063 sec
Size:   36254 bytes


Tested From:   New York, NY
Tested At:   2016-04-22
00:37:30 (GMT +00:00)
URL Tested:   https://www.okcoin.cn/
Resolved As:   121.199.251.136
Status:   OK
Response Time:   10.866 sec
DNS:   3.798 sec
Connect:   0.351 sec
Redirect:   0.000 sec
First Byte:   5.823 sec
Last Byte:   0.894 sec
Size:   36254 bytes

If most of the hashrate is within China it may actually make more sense to take the hit on the transactions themselves by using a sever within China, but then it becomes very blocksize sensitive.

Edit 1: Dash could prove an interesting test case here since it has a 2.5 min blocktime and now has ASICs. If my theory is correct Dash could have more resistance to the mining concentration in China issue than Bitcoin because of the latency / GFWC issue; however it also a fixed blocksize limit.

Edit 2: The above argument can also be made for Litecoin.

[razen489]

XMR price doing fine, pressure because of bitcoin appreciation 
https://www.coingecko.com/de/kurs_chart/monero/btc

[tifozi]

A BTC rise is needed at least for the next month or two to flush out the ICO scams that have been prevalent on the boards since January. All these MAID/WAVES/LISK/UPPERCASESCAMCOIN seem to be coming from the same type of factory. Until this new generation of crypto believers get burnt, they will not learn their lessons, however harsh that sounds. It doesn't mean some of the profiteers will change their stance or all of the ones getting burnt will learn, but that's just the way it is with money.

An unfortunate side effect is that the only alt that has real practical value, long and short term (XMR) will also take some beating as the small fishes seem to be revolting against the manipulation that they have undergone from the whales for a long time.

So why is monero dropping much harder than all those ICOs?

Too many smart players and knowledge of the playing field for starters but you could right a whole whitepaper on XMR trading patterns and still nothing can be predict the future analytics of it.

We are not even looking at a comparable timeline for these ICOs to even compare but everyone know whats coming for them except the dreamy newbies.

[r0ach]

If Bitcoin had allowed the blocksize to grow back in 2012 - 2013, the Chinese ASIC manufacturer's would have been forced to sell their ASICs for export rather than operate them themselves locally and this would have prevented the concentration of Bitcoin mining in China.

This is just not true for numerous reasons.  You're basically saying we needed to spam blocks with bogus transactions for years on end to prevent an ASIC empire from growing in China.  If a larger block size existed allowing people to do things like this, people would have implemented something like a hard coded min transaction fee or just lowered block size to fight against it.  ASICs in China isn't a big problem because it's just a symptom of everything on earth being manufactured in China.  This will inevitably cease to exist through either tariffs or war.

[ArticMine]

...

This is just not true for numerous reasons.  You're basically saying we needed to spam blocks with bogus transactions for years on end to prevent an ASIC empire from growing in China.  If a larger block size existed allowing people to do things like this, people would have implemented something like a hard coded min transaction fee or just lowered block size to fight against it.  ASICs in China isn't a big problem because it's just a symptom of everything on earth being manufactured in China.  This will inevitably cease to exist through either tariffs or war.

No I am simply saying that the Bitcoin blocksize should have been and be allowed to rise to meet legitimate demand. An adaptive blocksize limit as is the case in Monero actually deals with spam issue also very well. If blocksize and the GFWC was not an issue then why are the Chinese miners so opposed to raising the blocksize limit? A 10 - 14 sec latency is not trivial when mining even with a 10 min blocktime. The myth that keeping the blocksize small was necessary to prevent miner centralization has been debunked in BItcoin by the GFWC.

The reality here is that we are dealing with complex financial systems with many variables. If one only takes a subset of the variables and makes assumptions then those assumptions will eventually fail. Not taking into the account the impact of government censorship on  Internet latency and proof of work mining is a good example as to why ignoring certain variables in the equation can lead to incorrect results.

Edit: The real issue here is that by setting such a critical parameter as the blocksize fixed in the protocol, instead of allowing the market to set the blocksize, Bitcoin has created a very powerful economic interest that now stands to loose a lot of money if Bitcoin is allowed to scale. This now has become a very serious problem for BItcoin.

[rpietila]

Low volume means that random guys owning lots of coins that they are willing to sell in this price domain (anything less than a few thousand$ per BTC) is drying up. We've been here for so long, if anyone wished to sell, he had plenty of time to do so.

And for sure, the random guys are not a renewable. We had a lot of them, but tell me how many exist any more! Not so many.

I meant the price will rise from supply being dried up until some guy sitting on a bunch of coins thinks the market is overextended.  He will then sell in hopes of buying back cheaper, then the volume and volatility starts.  I didn't mean the guy wanted to dump for no reason.  Only a fool would want to sell and walk away right now.

We have had plenty of fools in the last years but the function of market is towards weeding them out. (A rare natural example of decreasing entropy in a system).

My overall philosophy on the signs of the rises:
(has to be taken in the context of investments with the parameters similar to cryptocoins)

Quick rise on high volume - GOOD - Brisk new demand and coins change hands

Quick rise on low volume - BAD - Most of the issue in few hands = overhang risk, liquidity risk, possible scam

Slow rise on high volume - BAD - If a high volume causes only slow rise, it is a toppish sign (unless just emerging from a bottom; then good)

Slow rise on low volume - GOOD - Supply drying up, possibility that the trading range will soon be contested leading to a massive revaluation

What already happened with BTC, volume collapsed and price is inching upwards in the weekly, is going to happen to XMR soon.

The only thing that can prevent it is new demand, which means that we will go up quickly on high volume, instead of slowly on low volume.

Both of the scenarios are healthy.

[generalizethis]

...

This is just not true for numerous reasons.  You're basically saying we needed to spam blocks with bogus transactions for years on end to prevent an ASIC empire from growing in China.  If a larger block size existed allowing people to do things like this, people would have implemented something like a hard coded min transaction fee or just lowered block size to fight against it.  ASICs in China isn't a big problem because it's just a symptom of everything on earth being manufactured in China.  This will inevitably cease to exist through either tariffs or war.

No I am simply saying that the Bitcoin blocksize should have been and be allowed to rise to meet legitimate demand. An adaptive blocksize limit as is the case in Monero actually deals with spam issue also very well. If blocksize and the GFWC was not an issue then why are the Chinese miners so opposed to raising the blocksize limit? A 10 - 14 sec latency is not trivial when mining even with a 10 min blocktime. The myth that keeping the blocksize small was necessary to prevent miner centralization has been debunked in BItcoin by the GFWC.

The reality here is that we are dealing with complex financial systems with many variables. If one only takes a subset of the variables and makes assumptions then those assumptions will eventually fail. Not taking into the account the impact of government censorship on  Internet latency and proof of work mining is a good example as to why ignoring certain variables in the equation can lead to incorrect results.

Edit: The real issue here is that by setting such a critical parameter as the blocksize fixed in the protocol, instead of allowing the market to set the blocksize, Bitcoin has created a very powerful economic interest that now stands to loose a lot of money if Bitcoin is allowed to scale. This now has become a very serious problem for BItcoin.

Are there any good threads, sites or books dedicated to this subject? I'm between chapbooks and my new obsession is learning how a trustelessly decentralized cryptosystem would look in theory and in practice.

[ArticMine]

...

Are there any good threads, sites or books dedicated to this subject? I'm between chapbooks and my new obsession is learning how a trustelessly decentralized cryptosystem would look in theory and in practice.

It is more like the story is being written as we speak and Monero is the only coin in the top 20 by by market capitalization that has a solution. The question of a market based solution to scalability and the related issue of spam was not part of Bitcoin's initial design. The 1 MB blocksize was added to Bitcoin in 2010 as an anti spam "temporary" fix. Virtually every other coin has copied Bitcoin on this and inherited the problem.

Edit: My take is that the Monero community will likely write the book on the subject.

[SwedishGirl]

Monero is nice but will get hit so hard when Zerocash launches that you will all regret not getting out when you had the chance.