Topic: Calling top at $16500 (Even Newer!: $2483 bottom 19 Feb 2021 MtGox said so!) - page 35. (Read 24373 times)

Without the bitcoin network, there would be no dataset.

If you can't write the dataset has no value. It's like trying to separate BTC and the Blockchain. One cannot work without the other.

If you think that 2 of 3 collusion is possible, you aren't considering the economic incentives. You consider human behaviour with regards to miners trying to defraud users, but you seem to overlook human behaviour with regards to mitigating any threat.

It's happening now. BTC at 33% market dominance, from a coin that had it all going for it, because the users have lost faith in it. The market *always* has the final word.

You cannot censor a bitcoin tx. Even with a majority of miners colluding. I can broadcast to a minority miner. At which point it is publicly visible. As people realise what is happening the will move. The participants who are dishonest have just destroyed the value proposition of their chain.

There is a concrete demonstration of this principle taking place right now.


The bitcoin whitepaper is 9 pages long. It's very simple. It's your misunderstanding of it that requires so much explanation, because you are entrenched in a position that is becoming increasingly untenable due to empirical evidence that contradicts what you are saying.

Wiles' proof of Fermat's last theorem is 129 pages long.

Sometimes it takes a building of an argument in order to make a point.  Depending on the reader's mileage, it can take some room.  Talking someone out of his delirium needs the deconstruction of a lot of beliefs which are taken for granted, or sold by cheap rhetoric.  All this can need arguments.

Einstein said: "one should make things as simple as possible, but not more so."  Making things simple, but not too simple, is a lot of work.

Simplistic facts do not require lengthy diatribes.  Beliefs do not require lengthy diatribes.  But arguments can need so.   This is why beliefs win over arguments in simple minds.

The point is, bitcoin is not a network. It is a data set.  What happens on the network has no value in bitcoin.  Only what goes in the data set.  The network only serves to pass messages from the users, to those who write the data set to have it hopefully included, and back, to inform the users of the data set that was produced.  The network doesn't have any other function.  That data set is called the block chain.  The whole power of bitcoin's system is in who can write what stuff in the block chain.  Not who is doing what on a network.  So no network metric has any power distribution value.  You can get all the messages (about transactions) you want on the bitcoin network, they are of no value if they don't make it in the block chain.   You can easily send a payment over the network to the person you want to pay.  That person will see your message.  But it has no value. It is only if your message is registered in the block chain that it "exists".  So all power in bitcoin has to do with who can write what in that data set.  Bitcoin is not Tor.


Decentralization has to do with how many independent, and a priori opposing/competing entities are needed to impose a decision.  If a decision is irreversibly imposed by majority, you can say that decentralization is the number of colluding entities that are needed to reach majority.  In bitcoin, that's 3.  As I explained above, the whole idea of trustlessness by decentralization was to have such a large set of participants, even dishonest participants, that by all practical means, a collusion would be too hard to set up.  With 3, that's simply not the case.


There is no way you can see, in the block chain, that a transaction got censored.  It simply isn't there.  And even if you would see it, which you can't, what would you do ?  The only thing you can do, is exactly what you can do to Facebook: tell the news on (centralized) news channels.  Within the bitcoin system, there's no way to talk.

There are ways to measure decentralisation, statistical methods to aggregate the minimum number of hops between network participants. The bitcoin network is, and tends towards a near complete ring.

You are arguing that decentralisation is to do with the number of participants, which is a naive and incorrect understanding.

Your Facebook analogy is flawed, as I have already outlined in an earlier post. Your defence is still flawed because zuck can censor and manipulate in secret. The blockchain is a public ledger.

Facts do not require lengthy diatribes. You think people would pay money for your opinions? Dude it’s a community where people discuss bitcoin. You stand on merit, and one if the ways in which you demonstrate credibility is having the decency to respect the value of others’ time.

Your wall of text posts merely indicate that you feel like your time is far more important than everybody else’s.

Yes, that's the idea of trustlessness through decentralization.  The only common thing a large set of untrustworthy people can agree upon, is the original set of rules, even if all of them, individually, would like to deviate from it, but each one in his own way.  But the only way to deviate from it successfully, is to deviate from it in the same way as a majority.  For that, they need to set up a large conspiracy.  And, as you say, they can't trust one another within that conspiracy, to stick to that deviation and not do anything else.  If their conspiracy fails, they are worse off than if they had followed the common original rule set.  

This is also how you can get a large set of people to obey a rule set that they don't like.  This is how a general can get soldiers go dying on the front lines.  If a minority of soldiers rebels and tries to avoid their stupid fate, they will get shot as traitors or deserters.  If a majority of soldiers rebels, the general is done.  But how, as a soldier, to be sure that your majority mutiny will work out ?  If you don't reach majority, you're dead for sure.  If you just go to the front lines, you might survive.  It is the basis game theory of all repressive systems.

This is also the great danger that resides in crypto.  We might all be forced, by crypto, to obey rules we don't like.  Decentralized systems can become very dangerous.  If the King becomes nasty, you can go and kill him.  If a decentralized system starts behaving in a nasty way, there's nothing you can do.  Maybe one day, we may regret that we've shown some how they can lock in people in a decentralized rule set...

See also: https://bitcointalksearch.org/topic/m.29143511

Maybe bitcoin is the "paperclip maximizer" that will destroy us, because it wants to turn everything into proof of work.  Even if all of us, we see it, but individually, we cannot get out of the decentralized rat race, there's nothing we can do: we will be mining, and nothing else !

Bitcoin's power consumption is, at this moment, several GW.  If all mining were done with the latest Antminer S9, which consumes 0.1 J/GH, and we're at 20 billion GH/s right now, bitcoin would consume 2 GW.  However, we see that the hash rate is strongly rising right now, because the price increase of bitcoin, and the new S9 miner's technology, haven't yet reached equilibrium, simply because hardware hasn't yet been installed fast enough to catch up.  Right at this moment, mining is very lucrative.  We can expect most probably a factor of 5 in hash rate.  So we can expect in a few months time, unless the price crashes, that bitcoin will consume 10 GW (or is already consuming this, because of older hardware running).

If bitcoin becomes world-wide accepted as a means of payment, its market cap should rise about x100 because that's the level of market cap of world-wide currencies (tens of trillions).  If bitcoin is not a currency, but a speculative asset (everything points in that direction), the market cap can even go much higher: the total market cap of speculative assets is rather 2 quadrillions.  That's another factor of x100.
So potentially, bitcoin has a factor of 10 000 to go still if it eats the entire speculative asset market.
But let us assume that it eats 1% of that.  That's still a factor of 100.  Now, that should imply also a factor of 100 in proof of work power consumption.  If now, we are at 10 GW, we will then be at about 1 TW.  World electricity production is 2.8 TW.  

So, if all financial investment systems invest 1% in bitcoin, bitcoin will force us to consume 1/3 of world electricity production for mining.

They don't know that decision.  If they knew the exact block (and more, the RULES that decided to make that block) on which they would be giving hash rate, then that sub-miner that would "find the hash" wouldn't send it to the pool, but would publish the block all by himself of course.  So it is essential for the good functioning of a pool, that the miners in the pool don't know on what block they are hashing, or they can screw the pool when they win.  As such, the miners of a pool don't have any "control" over what their pool decides to make as a block.  They could, at best, know on what previous block their pool is hashing, and hence, whether or not their pool has decided to orphan a block, because that's part of what they have to hash.  But the content of the block is hard to guess: they only get the top of the Merkle tree.

Miners are in fact just subcontractors that sell hashes for coins to the pool.    And most of them just configure gear and software, and let it run.  Not much "judgement" in there.

The betrayers will be betrayed by dishonesty within their own conspiracy to defraud, is that right.   The weakest point is surely from alternative blockchains not diverting this one, I prefer the proof of stake system which involves the largest holders in confirmation and makes it necessary to divert those funds simultaneously to defraud the whole chain.  The best security comes form open competition, I dont like that mining has come close to a closed system


I agree but pool owners dont have perfect autonomy over every miner in their pool.   I would guess miners under the pool will detract from the admin decision.    Not many will want to mine by themselves but its not too hard to setup a new pool to consolidate a vote contrary to the owners.

It would be true in the short term though.

I really would like to emphasize this.  The entire idea of trustlessness is a reverse application of the tragedy of the commons.  

The tragedy of the commons is normally understood that people all agree that it would be better if everyone did X, except that it is individually more advantageous to do Y, even if everybody doing Y is worse in the end.   It is a matter of game theory and Nash equilibrium.  The definition of a Nash equilibrium is this:
"that set of strategies E of a set of N players in a game G, such that, for every player P, if player P changes strategy, and his N-1 peers keep their strategy in E, it is worse for P in the game G than if he applies his strategy in E".

The school example is the Prisoner's Dilemma https://en.wikipedia.org/wiki/Prisoner%27s_dilemma.  Many games have at least one Nash equilibrium.  The whole "tragedy" is that the Nash equilibrium can be far from the optimal global strategy.

"Decentralisation" pushes this thing somewhat further.  One can break out of a Nash equilibrium by collusion with other players.  E may be a Nash equilibrium of game G, if players P and Q collude, they can "game the system" and break out of a normal Nash equilibrium.  In the Prisoner's Dilemma, if the two prisoners collude, they can get away with a better solution than the single Nash equilibrium of the system.

So having a game with a simple Nash equilibrium doesn't protect that equilibrium against collusion.  However, collusion becomes harder and harder if more and more players need to be part of it.  If you can set up a game, in such a way that there's a "Nash++" equilibrium, that is stable against not just one pair of players colluding, but can only be broken if a very large set of players collude, you get an extremely stable system, even if most of the players "would like to leave it in a different way" - that is, would like to game the system in THEIR way.

THAT is decentralisation as a means to obtain trustlessness: having a system in which there is a Nash++ equilibrium, so that even with a large set of "dishonest" players, the equilibrium (the rules of the system) won't be broken.  Because to break it, such a large collusion is needed, that it is too hard to organize and to "trust".

It is like the Prisoner's Dilemma with 500 prisoners.  They will all speak.  Because the probability that not one single one of them will speak, is essentially zilch.  It is the tragedy of the commons from the point of view of the cheaters: even if a collusion would be better for them if they all colluded, it is simply not going to happen: some will cheat the cheaters and then it will be "worse" for those trying to collude.

As the URL said, I didn't have time to write a short letter.  If you want it terse, these services are paid-for.  You get the free, long version here.  Contact me for the paid-for short version  


Remember that we are talking about "decentralization".  By putting it so bluntly, you can say "if the boss of Facebook is dishonest, then he can screw Facebook communication.".  That's just as obvious.  What does this have to do with "decentralization" ?  

It has to do with the fact that in a "decentralized system", there needs to be massive collusion of independent and even competing entities to reach that 50%.  So the measure of the number of independent, competing entities is the measure of decentralization.  With Facebook, that number is "1": the boss of Facebook.  With bitcoin, that number is "3".  Ok, slightly better, true.

The whole idea of "decentralisation" was that the number of *independent* entities was so large, that the idea that sufficiently many of them to collude over the same "dishonesty" in the same way, that they can reach majority, is essentially unthinkable.  If you have 500 independent people all over the world with more or less equal voting rights, and opposed, competing interests, then the possibility of 250 of them to collude over the same dishonesty, is relatively small.  If you have 1 million of people with voting rights, all over the world, in different cultures, nations, .... then the chances that they are going to collude is zilch.   The whole idea of trustlessness was the idea that a large set of potentially dishonest participants are nevertheless obliged to follow the common rule set, even if each of them is potentially dishonest, simply because in order to deviate from it, they'd need such a large, common, identical conspiracy that it is not going to happen because impractical and improbable.  Each of them would conspire, but over different things, and they can never reach a majority conspiracy.

If you have 3 guys that see one another regularly at conferences, though, that's indeed SOMEWHAT more decentralized than if you have one guy that needs to agree with himself, but I'm not really impressed.


If these 3 guys screw us, we have no recourse.  In the same way that if Facebook's boss screws us, we have no recourse.  Or if 15 ministers of finance of the Euro zone screw us, we have no recourse.


Nope.  If Zuck screws with Facebook, another one will take his place ; shareholders can fire him ; you might attack him in court ; there are so many things that could screw up Facebook.  Yahoo was also the king of search results and now it is Google.  MySpace was the place to be, now it is Facebook. As a big boss of such a thing, you have to be very careful.   But we agree: the fear of the market is what keeps these monarchs or oligarchs more or less in check.  Not "decentralization".  Hell, the Euro is more decentralized than Bitcoin ! You need a 2/3 majority of finance ministers.  That's more than 3 miner pool owners !

Your walls of text are very trying. Your first paragraphs can be much more tersely expressed as "if >50% miners are dishonest then they can screw with the network"

This is not new information.

The subsequent 4 paragraphs can be surmised as "if these miners screw the network we have no recourse"

You need to learn to be succinct. I think you are confusing yourself with your own prose.

Miners dont screw with the network, because if they did, they wouldn't get paid. Zuck can do wtf he wants with impunity, because he is the god of facebook.

I know you said that, but no cigar.  Bitcoin's mining pools have hash majority with 3.  Let us say, 4.  The 4 biggest mining pools hold
65% hash rate under their knee.  See https://blockchain.info/pools  If these 4 entities decide that your transaction is not going to make it in the block chain, then you can transmit it as many times as you want, it won't make it into the block chain.

They will firstly not include your transaction in the block THEY make.  Moreover, they can decide NOT to mine on top of a block that contains your  transaction, as made by a minority miner.  If ever a minority miner includes your transaction, his block will get orphaned, and given that the 4 entities have 65% hash rate, his orphaned prong will always lose.  They may be friendly to these smaller pools, and inform them that they should exclude your transaction, or lose their blocks.  If these 4 guys maintain a blacklisted set of addresses, then the coins in these addresses are dead.  You'll never know.

Note that mining POOLS are the entities that decide on what block they mine, and what transaction they include.  The miners connected to the pool don't have anything to say in this decision, and don't even KNOW these decisions.

The only thing you can do is shout here, or on coindesk, or on national TV, or on Facebook (oh sweet irony) that your transactions always remain in the mem pool and never get confirmed, and in those cases they get confirmed once, that block gets orphaned.

There's your "decentralization". True, you need 4 guys (strictly speaking, 3 guys) to decide that together.  Zuckerberg can do it on his own.

Now, why isn't this happening ?  Well, maybe it IS happening. There is no way to know that amongst all the rejected transactions in the mempool, there is not one of a poor guy that is excluded. But if it isn't, it is not happening for exactly the same reason it is not happening on Facebook: because of the market.  If it would get known that the mining pools do this, they may lose business.  Miners may connect to another mining pool.  Bitcoin may plummet in the market.  And exactly for the same reason, you get your messages through on Facebook, because Zuckerberg doesn't want you to tell the press that Facebook is censoring you.  

In fact, there's more chance that Zuckerberg is afraid of this bad publicity, than the mining pools.  Remember that they played perfectly according to bitcoin's rules.  No node will complain.  So, your message is just as guaranteed (or even more) to get through on Facebook, than on the bitcoin network.  And not because of decentralization.  Because of fear for bad publicity.

There.  Be careful if you insult a Chinese king of bitcoin.  You may never transact again.  And note that it doesn't cost them a single hash, or a single fee (apart from yours, of course).  And now, re-read what I said above about "decentralization".  Because not only the mining pools have this power.   Core has that power too.  If they decide to blacklist your address in the next version of bitcoin core, then you can do what you want, your transactions will not any more be part of the official bitcoin protocol !  If you think that's a joke, that's more or less what Vitalik did with the DAO hacker.  Ethereum's protocol was modified so as to kill this guys' transactions and pretend they never happened.

All this "decentralization" talk is entirely bogus.  Salesmen snake oil.  But it is not needed (in most cases).  Because of the market and fear of bad publicity.  Like with openly centralized entities. 

I bolded the important part which invalidates the comparison to facebook: Facebook can block your message.

I think you've inferred something that isn't there as a result of not considering that Facebook is a central authority, whereas PoW creates a decentralised network, in which participants are increasingly incentivised to ensure it can be trusted en masse. It's distributed trust.

As long as you can broadcast a tx to the network you can be almost certain that it cannot be blocked.

To compromise this, is to compromise belief in the system which reduces perceived value, which degrades security by reducing incentives.

Nope.  This is 2014 all over again.  Crazy run up, ATH, crash, bull traps in steps on the way down for a long period.
In the run-up, how many people do you think got burned, and are now bag holders ?  That' like the MtGox run-up.  At every modest upward movement now, some of those bag holders will take their losses and curse crypto, pushing the thing down again, removing hope of all others.  The longer it takes, the deeper it goes.  Until all of these bag holders have cashed out, taken their losses as the greater fools that fuelled the gains of the previous holders that sold them on the right moment.  Bottoming out for a while, until the next run-up.  Or not, of course.  But it is not thinkable that in the near future, people are still going to BUY near the ATH.  There's a lot of burned bag holders wanting to sell, to cut their losses.  First, all of these have to get out.  That takes time, the time to accept and forget.  None of the FOMO buyers during the run-up are capable of HODLing while they see how they got burned, seeing their paper losses increase at every down movement, and losing hope at every weak attempt at recovery.  

you said:


I replied:

Then you say:

Facebook allows you to reach all other participants in the network as quickly as possible with your message, there is immediate consensus that this was indeed your message and in as much as your message is in agreement with the "protocol", it will not be blocked or otherwise obfuscated.  This is why I said that if that's what your definition is about, Facebook satisfies it perfectly.

This is, however, not the communication problem a crypto currency needs to solve.  In fact, a crypto currency needs to solve the INVERSE problem: how to avoid that you can obfuscate, hide your message or give YOU the opportunity to otherwise deny participants in the network to learn about your message.  A crypto currency needs to solve the problem of global non-repudiation, not of divulgation !

Indeed, what you, as a user of a crypto currency, would actually want, is that you can send a message to SOME participants, while hiding that message from other participants.  If you want to buy a car with bitcoin, you would like the car salesman to learn about your message (your transaction).   But you would like to hide that message to the jewellery shop, and you'd like to send a similar message to the jewellery shop, making them believe you can spend your coins again.   The whole machinery of bitcoin is such that, no matter how you try, you cannot hide the fact that you sent a message to the car salesman.

The solution that all crypto currencies have, is that there is some form of collective, unique repository/database where these messages have to be registered, and which can be consulted by all participants, in such a way that nothing can be erased from that repository, or at least, that the effects of that message cannot be reversed in that repository.  

And then, there's the battle of how we secure this repository against erasure.  How do we make a repository such that once a message is inside, it cannot be removed.  How can we make sure that all LATER participants in the system will be made aware of the message that you sent, even if you want to avoid that by all means ?

In fact, if we would have such a system, in which we can register messages for all participants, which cannot be erased, that's all we actually need.  In such a universal scribble book, we could invent all kinds of tokens, of which we can determine that we transact them with a digital signature.  Everyone could invent his own token.  I could invent the dinofelis token, and  you can have my dinofelis token number 1 against a pizza, with the declaration that I'll never emit another dinofelis token number 1.  In as much as people value the dinofelis token number 1, which is now unique (I cannot put a message in the scribble book to emit another one: it is clear to everyone that that second one is bogus and in contradiction with what I said before), you, who sold me a pizza against that token, can transact it with your signature, for a pancake.  I wonder whether the dinofelis token number 1 would rise a lot in value, honestly.   But bitcoin's creator restricted enormously the liberty to write stuff in that universal scribble book, and invented rules to make dinofelis tokens, the only ones that one can transmit on the scribble book he invented.  He invented a lot more rules: when the scribble book will be updated, who decides, and so on.

And this is where my notion of decentralisation comes in: the whole set of rules, the people who can decide what goes into the scribble book and what not, and so on, becomes a matter of power.  You're not emitting your own token.  The rules of power decide who emits tokens.

That said, it is this funny formalisation in "rules" that have tricked people into thinking it is worth something - and given that it is now a Keynesian beauty contest, it IS worth something.   If one would have set up just a scribble book in which my dinofelis token number 1 was registered, it still wouldn't have taken on any value in the market.  Nobody cares about that.  The whole marketing around the notions "currency" and "coin" and so on were sheer brilliant.  But they also implied "power".   Power to obtain goods and services.  Power to deny goods and services.   Like any power structure.

If you think about it, it is entirely crazy.  Anyone out there can start a scribble book.  Anyone out there can invent different rules.  There is strictly no reason why one would spend a fortune to have a token in one scribble book, while a token in another one doesn't cost much, and if you want to, you can invent your own of which you are the master, and it cost you nothing.  This is the purest form of recursive belief system, or, if you want to, the biggest greater fool game in the world.  A token in a scribble book is, a priori, worth nothing, because you can, if you want to, make your own scribble book.  But given the fact that it has now been proven that people value it, you can bet on the fact that others might value it too.  So even if YOU don't value it, others do (and even if they don't, they know that other others do....).  You may buy it against genuine value, just to hope to sell it to a greater fool.  Because it is in THIS scribble book, and not in THAT scribble book.
Nobody believes a bitcoin is actually worth anything, but everybody believes that he will find someone who believes he will find someone who will accept it against value, just to pass the hot potato to someone else.  Too bad for the last one in the row.

IMO we are in a market position similar to April - May 2013 (a wave III and IV), except that back then the price was manipulated upwards by Markus the bot.
So if we already completed an ABC correction, we are going to move sideways, maybe even touching the ATH, and with multiple support tests, for the next months, before rallying as high as 100k$.
If the correction is not over yet, then we can expect another large drop, but I doubt anything less than 6k$. And the recovery would take longer, maybe over a year, but eventually should reach over 50k$.
On the short term, 24h and 12h MACD are negative and won't cross into positive soon, but 6h could cross into positive in a couple of days (or it could be a fakeout, so be careful).

I think this is bitcoin's third bubble that just burst.  

First bubble: summer 2011.  Starting out at something like $0.1 in 2010 and doing x300, up to near $30 in the summer of 2011.
Then the bubble burst, down to $3 in 2012.   x300, /10.

Second bubble, December 2013.  Starting out around $3 (previous burst bubble),  x400, up to near $1200 in December of 2013.
Then the bubble burst, down to $200 in 2015.  x400, /6

Third bubble (?) December 2017.  Starting out around $200 (previous burst bubble), x100, up to near $20000 in December 2017.

Note that it gets somewhat less violent, and longer.  So maybe down only a factor of 5.  I think your $4000 are close, and it will take a few years maybe.

However, one big game changer: this time, bitcoin is not alone.  Market monopoly gone.  Down from over 85% to some 35% market share.

Was this the last one ?  It looks a lot like the few bull traps we saw in 2014.

I think there will be one more but I don't know.  

In fact, this is not bitcoin's bubbles, but crypto's bubbles.  It is a highly speculative market, like the stock market, that bubbles regularly.
My take on crypto is that it is the new financial gambling circus casino.  It is perfect for that: no fundamentals.  Only betting coins.  I think it will replace a large part of world's big capital's demand for financial casino, which is now the derivatives market, estimated at about 1.6 quadrillion dollars or so.  I think crypto will eat a big chunk of that.  It doesn't have its place in the money market, because it is speculative, not a currency.  It's all about getting rich, and screwing others.
However, I think bitcoin is clunky.  I don't know if bitcoin will still be there for the next bubble.  I hope so.  But it is very old-fashioned now, and clunky.  The next bubble should bring crypto to the many 10 trillions side, so some percentage of the world finance casino.  But I don't know what crypto.  Will bitcoin + cousins still be part of it ?  I expect a times several 100 for the next bubble for the whole of crypto, but bitcoin's market share may very well drop by a factor of 10, so maybe the run-up will be meagre, and I'm not sure it will get over the previous ATH this time.  We'll see.  I think it will take a few years of bear market in any case.
When *that* bubble bursts, we'll not be the dominant species on earth any more: intelligent machines will have taken over through crypto.

Back to the subject at hand though, where are we in the speculative hype cycle?

During the mania phase we see a plethora of posts on here all using positive language about buying.

Right now we are seeing a mix of “bit worried” and negative “don’t sell” posts.

Multiple new threads being started by the same people essentially saying the same thing.

This forum has been since the day I joined one of the most reliable indicators of sentiment, over time it becomes easier to read.

So yeah everything points to “return to normal/fear”

The irony here is that all other coins are pretty much following BTC, so if I am BCH shill, I’m technically trash talking “my own coin”

Maybe some people on spec subforum are here to speculate about what is likely to happen, and not here to try and pump/dump a coin, or some other agenda.

Just maybe.

GL All!