Topic: Gold collapsing. Bitcoin UP. - page 349. (Read 2032265 times)

I'm glad some people around here have the good foresight to save their quality posts. Those were 2 good walks back in time. I completely agree but don't have as much time nor energy to express it.

If your main point is how few "rogues" (~10%) it takes to switch to a new majority ledger, I think you may be neglecting the arbitrage opportunities that would create. Arbitrage seems to undo the cascade effect of the small exchange float, with arbitrageurs profiting from that market inefficiency.

That is, if the scenario is such that 10% of investors are motivated to switch their portfolio allocations (whether slowly or quickly), then by hypothesis the remaining 90% are not motivated to change their portfolio allocations. But the actions of the 10% result in the portfolios of the 90% changing anyway, against their will.

For example, suppose the 90% only wanted to hold a "tiny bit" of their crypto-wealth as LTC and all the rest as BTC, but now the ongoing price change has left them with say "5x a tiny bit" of LTC and a little less BTC.

Insofar as the 90% are mostly strong hands,* not price chasers, they will react by bringing their portfolios back in line. That means they will do the opposite to what the 10% are doing, but with 9x the force: sell their allocations in the minority ledger, now for a giant premium, and buy more BTC at these cheap prices. I believe this negates the "small float" issues of having only a tiny amount of each coin available on exchange at any one time (not to mention that when prices move drastically a lot of coins [and fiat] come out of hiding).

In the end it seems like the price will balance out as one would expect, with the market cap of the new ledger being about 10% that of the Bitcoin ledger, as I think Litecoin once was. The price will of course overshoot to the downside temporarily depending on how fast the switch happens and how weak the average hands are (but exhausting the coins on exchange and thereby bringing coins out of hiding means awakening the Smaug-level strong hands). And any overshoot is yet a further opportunity for arbitrage to further entrench the majority ledger investors who have the strongest hands.

So I tend to think "it all boils down to normalcy" with this one. That is, 10% switching just means 10% switching. If they switched to Litecoin, for example, that would put its market cap at something like 10-15% of Bitcoin's, and for lesser-valued coins a bit closer to 10%.

*Which is one of the nice things about having a mature ledger that has used years of extreme volatility to throw all but the strongest hands off the bronco

Unifying two topics here.
A hard fork is in some ways akin to the creation of a new alt.  A difference being that it happening fairly rapidly where one of the chains typically survives at the expense of the other.

Rare events such as a hard fork are edge cases wherein unique opportunities for mischief present themselves.  Some of these are fairly obvious others are less obvious.  Certainly there are ways to amplify an economic attack through various types of DDoS as has been often done in the past.  These should be well and fully anticipated, especially by exchanges, and most especially by exchanges that may deal with both forks.

I don't think Pruden is oblivious of this, his IQ is in my understanding about half way between us two (and even I undestand it ).

Yes. "Free float" matters, and transaction costs (the largest being inflation tax aka "capital gains tax") are the main driver reducing the free float.

In everything except pegged assets, the wealth effect both in appreciation and depreciation of the asset is great.

My post as regards to the possible transition from Bitcoin to a fungible cryptocurrency posits that only 10-25% of the value currently stored in Bitcoin can be migrated to the contender coin, because as this happens, it causes both a negative wealth effect where the rest of the bitcoins lose the bulk of their value, and a positive wealth effect where the contender coins increase in value. The result is that the value which belonged to the majority of the original bitcoin holders is invisibly transferred to the early minority who correctly guessed the transition and acted accordingly.

Yes I know the regulars in this thread do not like to even think this way, but hey - that is the same mechanism that transferred the value from outside world to Bitcoin after we bought it in 2010-2011 and up to 2013! The net new demand cash flow that lifted BTC from $1 to $32 for example, was likely only about 5% of the corresponding increase in the market cap (even the total trade volume in Mt.Gox during the period was only a small fraction of the increase in marketcap).

The changes in world capital base are rather slow. Even a huge financial bust is not destroying capital that much. What mainly happens is that the imaginary capital is written off as malinvestment (in reality it was destroyed during the boom already) and asset values take a hit, but the earning capacity of the current assets (here: not meaning liquid assets, but assets that are solid and needed) stays intact, or even increases as the excess capacity is purged out. The IRR of the assets increases in proportion to the decrease of their valuation, as the IRR is defined as annual_profit : valuation.


I hope you realize Pruden's point that what you call "capital" here is "liquidity" and that is not affected by changes in asset values, rather it is diametrically the opposite: rising liquidity causes the fall of interest rates and they both cause the rise in asset values and vice versa.

The coming bond malaise is most basically explained by this simple way: the world is loaded to the hilt with bad debt; the least productive members of the society (governments, frothy business and homeowners) are indebted far in excess to their assets or productive capacity, whereas the most productive (solid businesses, TPTB, savers and knowledge nomads) are the creditors. Cyprus example showed that TPTB is easily able to get away with stealing from the creditors in case the push comes to shove, while retaining the debtors in their grip. While I have always asserted that going into debt is stupid, holding debt is if possible an even worse proposition in the coming years. TPTB is screwing you as surely as they are grabbing the assets of the debtors. The bonds regime is a racket, charade, fraud and scam.

(The debtors are already their slaves, so the strategic thinking goes along the lines how to enslave you)  


My bold 2013 prediction for forward escape and bitcoin singularity (the collapse of fiat and bonds, leaving only the CB's printing money to prop up their market in hyperinflation, and the printed money chasing bitcoin prices up to unfathomable heights denominated in currency, and quite high in purchasing power as well  - it is already the case that CB's buy all the new bond issuance as there is no sane market actor doing it with their own money!) was just a few years early. With the developments in Bitcoin in the last 2 years with TPTB buying clandestinely with both hands and enacting draconian regulation in this 100% transparent chain, I have more confidence than ever to the scenario becoming true soon.

They are trying to use it for entrapment of the value to a thing they can control to a larger extent even than the present assets. For this reason diversifying to the private cryptocurrencies now is very prudent. Armstrong's model forecasts that the private assets will enjoy in the coming years, and that includes Bitcoin only to the point that it is perceived as a private asset. Unfortunately in my thinking it is strongly entrenched in a slide to not being one in the years to come.


To me as well. But confidence in gold was formed during millennia, cryptos have quite a game ahead for gaining the same level of confidence, because low inflation == premine, and there is no question that all the cryptos that exist have far too much tilted to gaining the low inflation too early, and attempting to make a huge value grab to early adopters. Despite its infancy, I dare to say that CKG is the most level-headed attempt at correcting the flawed economic thinking in cryptocurrency issuance.

The nice thing is we now have this wonderful market mechanism for separating the wheat from the chaff in economic theory. And once prediction markets arise, this mechanism will become even more powerful and with far-reaching implications.

Bitcoin specific economic education would be cursed with the same desinformation to the same degree as other economics, and main stream media babble. But no problem, add to the melting pot if you can. In the end, the good information will trump the bad (maybe that is just hope).

We're doing our part here and elsewhere. A systematic guide would be very nice, though I think people do pick up the key ideas with enough exposure via high-visibility forum/reddit posts. I've seen many come around over the months and years. A comprehensive education project would certainly speed up that process.

There's a real need for comprehensive Bitcoin-specific economic education.

The Satoshi Nakamoto institute could have filled that role, but it doesn''t look like they are able or willing.

If it was "no shit" then you would have never criticized me for stating the propagation of information was a P2P relay. Is that your way of saying "mea culpa"?

So what was your point? Did I make an assertion that P2P was undesired?

I only asserted that being P2P on propagation of information doesn't mean that the design of the system is P2P. I assert that the move to IBLT for new block announcements makes the system centralized and the P2P propagation becomes an irrelevant appendage w.r.t. to whether the system is P2P.

No shit.

I'm not asserting anything about Facebook.  I don't give a fuck about Facebook or almost any like entity.  One of the few thing Bitcoin has (or had) vs. the competition was peer-2-peer function which is highly important in a situation where censorship and interference is a real threat that users may wish to guard against, and it would be ignorant not to anticipate these threats should Bitcoin ever pose a real threat to the modern banking system and/or state sponsored fiat solutions. To throw it away in order to make it 'scale'. which is a problem already solved by a zillion other competitors, is silly to me.  This particularly because Bitcoin has a lot of natural deficiencies against established (and theoretcal) solutions which will almost certainly make it noncompetitive in this sphere.

As always, my solution would be to leverage those aspects of the Bitcoin solution which it already rules at, and P2P and related security and robustness is chief among these.  If Bitcoin served as a backing store behind sidechains or other such solutions not only could it retain it's initial advantages but the resulting solution set would be even stronger and reach a wider userbase with tuned solutions anyway.

That duality between infinitesimal and infinite extent is the ultimate (unreachable, asymptotic) end of the trend of entropy to 0 (and imperceptibly infinite simultaneously), yet without friction we would be there instantly and the universe would be featureless (and imperceptible, infinitely diverse). Thus we wouldn't exist in terms of our perception. Spacetime is a convincing illusion created by perception (i.e. existence). We exist because we perceive we do. Without friction, we could not perceive.

Kudos on the lexicomanic, grandiloquent, glottologist attempt and sesquipedalian prose.

I refer to perception and existence in the spacetime domain. Analogous points can be made on any analogous domain.


Your tautology is (a case applicable to Gödel's incompleteness theorem because it is) an assumption of the absence of an outside observer. If you define the universe according that to assumption, then you assume God can't exist, but yet you can't falsify that assumption and thus you violate the fundamental tenet of science.

Another way to conceptualize Gödel's incompleteness theorem is a relativistic system can't falsify that an absolute point doesn't exist. Thus any set of claims that attempt to be absolute (complete) will be incorrect (inconsistent).

This is why any program run on a Turing-complete machine (i.e. unbounded recursion) can't be proven to halt, for this would be both universally (because the entropy is unbounded) complete and consistent.

---

Was there a prior one I didn't know I created?

Another Anonymint alt?

You mind is like a rare orchid blooming in a quagmire, a beautiful bird trapped in a menagerie of farm animals.  Please pay no attention to the neophytes and B-listers, nor to the effluvium discharged by their ego-driven loquaciousness.    

Now I must share with you that I was stuck recently by such an afflatus that the tenebrous nature of the universe was illuminated, as though God shone a light to the aphotic depths of cosmic understanding.  The unifying theory I pieced together from that moment is not only a breakthrough, but of such breaking breakthroughyness that it is more properly a breakthrough-n-beyond.


Yes, beyond the figurative edge of the universe (for literately the universe must have no edge ).  

Quote

and thus could not exist (would collapse into an infinitesimal point), but that is not elucidation is not necessary for the point we need to discuss now.

Indeed, but I must interject: for if the universe were an infinitesimal point, and nothing beyond it exists, then would it not equally be infinite in magnitude?  Does not the measure of measures becomes sensibly nonsensical?  Unquizzically quizzical?

That is all I can muster for today, for it is with great pains that I must wade through the drudgery of the other comments in this thread.

I have said what I have come to say.  

I shall now leave this forum never to return.  

There is that same conceptual need for absolutism that plagues goldbugs.

Then your definition is that only a fully connected mesh topology is P2P. But we know for a fact that multifurcating physical networks are more efficient than fully connected topology. Thus P2P would be uneconomic except that we can layer the logical IP network on top of the physical network. Nevertheless similar economics apply to the logical IP network and thus no real-world P2P networks exist without relaying (propagation) because Reed's law (i.e. # of connections in fully connected topology) is exponential complexity (scaling) cost. You are asserting that Facebook would need to send every user message from any user's node to all 1 billion users' nodes in order to be P2P. Thus you might as well quality your definition of P2P to — a fully connected mesh topology that can't scale and thus doesn't exist in the real world.

Heck if the Bitcoin block announcement network was fully connected mesh, then wouldn't need IBLT because there wouldn't be his huge propagation delay problem that leads to orphans.

I rather have a more sane definition of P2P, i.e. it is not client-server. In other words, every client can communicate to another client, even through a relay. Servers don't relay rather they serve. Facebook is not relaying the message from one user to another, because the end-to-end principle is not in play (Facebook is not acting as a dumb, fungible intermediary).

Thus sorry you were entirely incorrect in your accusation.

P.S. I rather think client-server is an oxymoron and should be appropriately named servant-master.

Probably they do.  Big miners suck compared to not having big miners in a system such as Bitcoin IMO.  That was one of it's design defects.  That is entirely beside the point, though, since my comment had nothing in particular to do with Bitcoin, much less the state of Bitcoin.  My point is that 'peer-2-peer' and 'relay' are opposite constructs.

That said, with certain layers of encapsulation the phrase is a bit less absurd on it's face.  Application peering is (or can be) close enough to 'peer-2-peer' in spite of the fact that we use commercial network providers who do various kinds of switching at the transport layers.

ECB can't monetize because there is no political consolidation of the debt of member nations. Instead its austerity and defaults. There was already a Greek bond default but it was hidden. The authorities claimed they gave bondholders the option to cash out, but in fact did not honor any of the elections of investors to do so. Europe will hit the CONFIDENCE stampede wall in September.

Rpietila is correct, the CB don't control anything. They are dependent on investor CONFIDENCE that they do control something. They can push markets for short periods of time. The wise investors time this and exit before the curtain falls. They've moved from the long to short end of the curve, waiting for the greater fools to follow then they exit to the USA after collecting gains (preexisting bonds increase in price when rates go more negative than they are already are).

P.S. an economics lesson from a programmer and yet some fanboiz think I don't have anything up my sleeve.

Pruden your first fundamental error is to conflate the market bid/ask price with the amount of monetary capital that had been exchanged (or maybe that is your point! see below). If the float is small then the bid/ask can moved with a very small proportion of the market cap.

Also like most goldbugs you (apparently I presume based on this one post) tend to view investing in absolutes (my theory of the goldbugs it is because they want a fundamental surety of precision of information which doesn't exist in the real-world), which are extremely rare if non-existent events because society's knowledge rarely if never drops to 0. A great speculator such as rpietila understands the probabilities and fuzzy logic rule. I sucked at trading when I wanted precision. I am good at trading when I relax and let the available information speak to me about what I do and do not know.

Bond markets rarely if never go from $50 trillion "market cap" to "no ask" instantly. Even during the small revolutionary government (and market cap) of the Wiemar hyperinflation, those who wanted to convert to gold had time to do so. Although deflation is an unexpected waterfall crash and hyperflation is more visible ramp, thus deflation occurs when more capital was destroyed (and this is because hyperinflation only happens when a small government dissolves itself with the people losing CONFIDENCE and deflation happens when society-at-large has ingrained its psychology with socialism with the masses CONFIDENTLY digging in their heels demanding continuation of their destruction. And note this is why after 2017 will be so horrific because the capital flows into the USA will have no where also to go! because the investors won't have the knowledge or options and the capital is finally realized as destroyed).

The capital that is destroyed did not exist, i.e. monetary digits are only capital if the executor has the knowledge. Those who didn't convert their capital even though they had adequate time to do so, thus did not possess the necessary knowledge capital.

You are correct that the notional values provided by the bid/ask price can not be accurately interpolated to tell us the liquid market cap. The only perfectly liquid asset is currency and that is only liquid up to the CONFIDENCE of the people in the currency. Thank you for pointing that out and raising this elaboration.

In short, capital flows are essential to understanding market timing and function.

Yet you are correct that estimates of total capital are exaggerated by lack of information (we would have to have a time machine or be able to predict all the investors' knowledge a priori). But you need to acknowledge that the float of physical gold is tens of $billlion only (or at most a $trillion but I doubt it)[1] and the float of crypto is in the $millions only. So relatively the knowledgeable capital—that can flow out of bonds into gold and crypto—is immense. See the float is smaller than the "market cap" for both bonds and gold, not just bonds as you were thinking thus we don't need complete information because fuzzy logic can eliminate the dependent variable from our prognostication analysis.

[1] Note Fekete was the one who taught me that gold is used as a store-of-value because it has very high stocks-to-flows ratio.

Utilities. Railroads. Public highways. Wireless telcom.

Those are the model that Bitcoin falls into with needing to allocate a scarce resource for the public good. Once you remove the decentralized opt-in because the resource is scarce and not accessible to every individual, then we exit the meritocracy of free markets and enter the lalaland of public control over the Tragedy of the Commons.

This is why I say that IBLT and Bitcoin are broken as pertains the fundamental tenet that Satoshi gave us in section 4 of his seminal whitepaper.

Sorry fanboiz.

Armstrong's sources say nationalization of banking (and retirements) is (are) coming.

http://armstrongeconomics.com/archives/30472