Topic: rpietila Altcoin Observer - page 67. (Read 387491 times)

Economists who believe in efficient markets (I don't, really) would say that there are hidden risks, and activities aren't necessarily economically profitable even if they are profitable in a simple accounting sense. In this case, for example, you can't sell the coins right away, so you are risking price fluctuation while they mature. There might be other risks as well (legal risks?), if you really look for them.

@dga: what has baffled me the most in your story is your disclaimer at the end: you're saying you're not holding any bitcoins. Really ?! anyway thanks for sharing:)

Agreed - that's why I'm trying the "hold" strategy with BBR, because I've never actually done it before.   I'm moderately conservative with money, so I get a little chicken about things as high risk as alt-coins.  But I figured that a few thousand BBR wasn't actually a ton of money in the big picture, so I'm doing it as an experiment.

I mined and sold a lot of BBR on Amazon when it was profitable, so that the BBR I held on to was "free" (I covered all of my mining expenses, pulled out some realized profit, and then held on to some of the extra).  I realize that's not economically rational, but it was emotionally easier to convince myself to hold on to it when I wasn't incurring any expenses other than the time it took.

The story I'd write about BBR, if I ever do, is how surprisingly long it remained profitable on EC2 CPU instances even after otila and wolf and I released our CPU optimizations.  There was a large window when you could just git clone the BBR repository, start a miner running on an AWS spot instance, and make a (small) amount of money.  Economics tells us that shouldn't happen for very long, because other people will come along and mine as well.   I think there's a really interesting lesson in there about the barrier to entry:  For a long time, the fastest BBR miners were solo miners, and it was a little tricky to compile / run for the average person, so the few folks who could get things running well on EC2 were still doing pretty well.

Watching crypto is like watching technology and economics on fast-forward.  It's pretty amazing.

Thank you for sharing your experience and economic point of view.
Of course it will be very different if you mine for arbitrage now, or try to improve the coins value from helping them put your code to open source code if you expect that long term success of the coin, you get more value with this strategy.  
I´m curious about if your strategy works for the future, i hope it and my gut say it will.
Just thought you was selling BBR in the beginning when the price was so hight and profitability was big from AWS mining.

They de-optimized the miner to make it look "plausible" that BCN had been around for two years when they in fact cranked out a fake premined blockchain in a much shorter time on a computer or a small cluster. I question plausible because the idea that no one would have optimized the miner in two years is equally if not more implausible. It is most implausible of all that the miner wouldn't at least use the AES instructions, since a large part of the entire purpose of the design of the algorithm was to use them.

Any extra coins they got from mining other coins after launch with their un-de-optimized miner would be a bonus. It is unknown and likely unknownable how much that was, although given the fact that the coins didn't go instamine (the difficulty adjustment worked so roughly the correct total number of coins were mined in the first days) it couldn't be more than a few percent at most.

There are certainly platinum bullion coins, (e.g. the Platinum Noble), and if Wikipedia is to be believed, Platinum and Paladium get currency codes, too (XPT and XPD).  Looks like Rhodium doesn't, but all three are available in bar form from bullion merchants.

roy

Just bookmarked your blogspot

I looked around your blog. Very nice.

One question though. I'm not sure I understood it right. Did they deoptimize the miner to get more for themselves?

I'll do a follow on one of these days/months.

I might write about BBR, but it wasn't nearly as fun a story (or profitable) as XMR.  I obviously had an optimized miner for it, but decided to take a different strategy with BBR of mining a lot, holding it, and then contributing  code back to the coin to try to improve its value, so I spent a lot of time taking those optimizations and putting them into the open source simpleminer.  In contrast, with XMR, I just mined and sold instantly.

It wasn't as profitable as keeping the xmr miner completely private, but it's hard to compare given the market cap difference.

What I've found is that overall, "totally private miner"  (XMR) >> "optimize, mine, release" (BBR) > "convince the developers to pay to open source" (PTS) > "open source miner with optional dev fee" (RIC) > "give code away and ask for donations" (scrypt).

Not economically surprising, but some good lessons in there for future coin developers who want good miners -- get someone to do it ahead of time.

Yes nice article dga, any chance you can update your blogpost about cuckoo to its current state?

I got out of silver about 10 days before the crash and made a killing, but I didn't know about bitcoin and put it into a classic mustang instead...At least its appreciated.

Wow very interesting story.
Can we expect more altcoin mining story´s from you? (like i guess you also do BBR AWS mining and in the beginning it was quite profitable)

Not sure exactly whats going on with boolberry but I am happily liquidating my small hedge there today,

Well, it depends on how you define success. Litecoin succeeded in doing exactly what it set out to do: become an alternative to Bitcoin.

And to be fair 2 minute confirmations are a feature over Bitcoin. Regardless of whether it would take the same amount of time to make the probability of a double spend negligible. For virtually all transactions one confirmation is sufficient on any currency with a mature network.

The idea that there is a network ready to go with a different hashing algorithm than Bitcoin is a strong enough motivator to attract investment. There will always be a 'Litecoin' to go along with Bitcoin. Even if it's only 2-5% of Bitcoin's market cap. That spot is not a bad place to be, and I would never say that any currency with that amount of market cap wasn't a successful one.

The big question now is what currency will take that number two spot? Litecoin certainly won't hold it with the attitude of its community.

This.

Litecoin offers exactly zero features over Bitcoin, so its chances of succeding have always been zero.

It has been created for people (kids or kid-like) who whined about not being able to mine Bitcoin anymore with their hardware. Not exactly a sound base to build something upon.
It's getting what it long deserved.

Well Litecoin only holds its place because of brand.

If Litecoin falls from #2 it'll drop off the top 20 in days and never return.

I cannot see a situation where Litecoin is fighting for #3 for long, once #2 is taken all confidence in the reason people invested in Litecoin will be gone.

No what doomed LTC is that it doesn't make a good silver. LTC aimed to be #2 which is fine according to rpietila's model, and so far it has done that, but it will likely fail to hold that spot in the future, and then at 3+ it is all over.

cypherdoc

Does anyone know someone who sold a large amount of silver at the top of the silver bubble and put that money in to Bitcoin?

The timing then was almost perfect. Anyone who got out of silver during Bitcoin's initial 2011 $30 bubble and got in any time before or after and held would have made the trade of a lifetime.

Another one would be selling silver in 2012 when it was still in the $30's and buying Litecoin for pennies.

So what's the asset that should be sold now to buy your crypto of choice(obviously XMR for most people here)? Or is there no current comparable trade. I probably wouldn't bother selling silver at this point.