Topic: rpietila Altcoin Observer - page 169. (Read 387493 times)

Closed source,
Closed team,
Marketing budget > development budget
Airdrops/giveaways substantial to distribution
Changes in social contract to benefit a minority
Multilevel rewards
Issuance cliffs/stages
Lottery rewards
Crackpot cryptography claims

Haha, that leaves nothing to discuss then.
You should only invest in Bitcoin and XMR, thread can be closed

that sounds really reasonable; thanks

6. PoS
7. IPO
8. Extremely fast emission schedule
9. Developer hailed as genius despite few if any previous accomplishments
10. False, fraudulent, or unverifiable back story
11. (Likely bought or purpose-created) sock puppet accounts hyping the coin or trolling competitors

None of these are definitive, but a pretty good point system could probably be created that would be quite accurate.

Any coin that meets any of the below criteria easily makes the cut:

1) The coin is a clone/tweak of bitcoin.
2) The coin uses centralized checkpointing, "backing"/pegs, etc. Anything centralized.
3) The coin was pre-mined.
4) The coin was ninja-mined.
5) The coin was insta-mined.


...many more easy-to-spot criteria, I'm sure.

I think it is a good time to buy XMR...

DRK sellers rotating into MRO=moon ? 

How do we stablish the definition of shitcoin tho? Is DRK a shitcoin due its instamine incident?

Fervent scramble through uncategorized and completely unorganized notes started, then I'm going to start all over again by first firing up the GPU's and noting how much power they're using these days

Extremely high potential adoption saturation levels just might again be achieved over an incremental time period .. but that's gonna require checking everything again from scratch.

you might want to pull some asks.  this thing looks like it has some legs. 

i really need to get a monkey on this thing.

Anyhow, I can't find a way to even put error bars around my estimate of the supply rate, so it doesn't really do me any good, even if my causal logic is perfect.  

I'm putting out some feelers looking for better data.

Well its an empirical point as well, showing that in fact changes in price do not follow from changes in difficulty (but the reverse does occur). This was measured for bitcoin, but I can't believe that bitcoin has any shortage of not-entirely-rational enthusiasts. In fact almost the entire public bitcoin mining market is non-economic and has been for years.

Unfortunately, since I can't find the actual evidence for this, the point is greatly weakened.

Especially since they could sell the shitcoin and then buy double the amount of XMR with the proceeds!

Self-moderation: mentioning shitcoins in the thread is PROHIBITED.

Oh, on that I agree. As long as people are mining a less profitable coin instead of a more profitable one, they are enthusiasts almost by definition. Professional economically-motivated miners optimize, and that means choosing the best opportunities.

Do see my edit above though. This still has no direct influence on price because of the way the difficulty-adjustment algorithm serves as a one-way wall separating the two sides of the market.

There is an indirect influence, in the sense that "enthusiasts" are likely to be investors, since they are "enthusiastic" about the coin. They'd likely feel the same way even if they weren't mining though, they'd just buy instead (in fact at present it seems a fair number are doing both).

I am not using EC2.  EC2 ceased to be a factor long, long ago.  What I am doing is taking in to account the opportunity cost of not mining a more profitable coin.  I can't see any other approach as corresponding to rational actors.

This is not really true. Work out actual costs. If you are using EC2 prices to measure cost you are doing it (very) wrong.

Furthermore, if it were true, it would not have a causal relationship to price. It would affect difficulty (difficulty would drop because current mining costs are too high). But there is no causal link between difficulty and price. The adjustment algorithm serves as an (almost) one-way impenetrable wall that isolates the trading (price) side of the market from any influence from the mining side (but not vice versa).

It is low relative to cost.  When mining margins go negative, it is going to have repercussions on the behaviour of rational actors.  More so if they have short discounting horizons, of course, but all rational actors.

This is the enthusiast category.  They are not mining for profit, but to support the network.  They will buy XMR at a premium with their plant and power, because they are long-term holders.  
Yes, this is the economic equivalent of buying at a higher price.  They are not at scale, so they can afford it.  I am in this category.  The behaviour is fundamentally different from other categories of rationally self-interested miner.


dga made a good case, but I am completely unconvinced, because he didn't address my point:  When some actors are not acting in a rationally self-interested manner, the economy is dramatically different.  If the majority of miners are not acting in a rationally self-interested manner, it will be an economy from Mars, totally alien.


This I agree with.


This, I do not.  My mining behaviour is invariant, inelastic, not price sensitive.  It does not relate to expectation of return in any way, because my horizon is effectively infinite.

I agree with this.


I do not agree with this. The price is not "low" or "high." The price is what is is, which is a balance between the 22.6K coins mined per day and the willingness of investors (in which you may include various categories: whales, enthusiasts, short term speculators/traders, etc.) to make a net investment in this coin of about 50 BTC per day. If demand for such investment increases to 100 BTC per day, then the price of the coin will double. If demand drops to 25 BTC per day, the price will drop in half.


I have no idea how much is botnets, and I don't really see any way to ever know, but I certainly think it is plausible that botnet owners might be bullish on the coin and therefore be making a decision to hold some of it rather than sell. Or it could be that they are selling through exchanges and privately. There is substantial demand to buy this coin in private off-exchange deals, I can tell you that from personal experience.

By the same logic, any miner at scale who doesn't sell would also be bankrupted.

The only exception would be a miner who covers his operating costs by way of capital investment.

Approximately 22.6K XMR are coming into existence by mining every day. It doesn't matter what mining costs are, nor does it matter how many miners compete for that 22.6K. The same 22.6K is coming into existence, and needs to either be held by a miner (who then must invest to cover his own operating costs), or by other investors. 100% of the coins will end up being held by someone, and that holder is an net investor.

In the short term the relationship between difficulty and price affects miners entering and existing the mining business, but it does not affect price. This was explained by dga here (I think, although it might have been on the XMR or BBR threads). It has also been demonstrated by a real academic study that statistically demonstrated a causal link from price to difficulty but not from difficulty to price (though for the past several months I have been unable to locate a link to said study).

As explained earlier here by rpietila and myself, there is little difference between the miner himself investing, and the miner selling (directly or indirectly) to an investor. Either way the investment must occur because someone believes it to offer a favorable return. This sort of specialization can be natural and normal and desirable, but vertical integration between mining and investing can also at times be desirable.

The bottom line is that price is determined (nearly -- excluding minor short term fluctuations in supply) entirely by demand to invest in the coin.