Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 231. (Read 907248 times)

Sidechains from the Bitcoin blockchain are very interesting.

http://letstalkbitcoin.com/blockchain-2-0-let-a-thousand-chains-blossom/#.U0w8Eh__5k8

We have known for a while that Bitcoin is more than a deflating store of value, and more than an efficient peer to peer payment mechanism. We have known that Bitcoin is a disruptive technology platform.

Sidechains, as I understand them, are merged mined with a slightly modified Bitcoin protocol that permits two-way pegging to Bitcoin. The only coins mined are the Bitcoins mined by Bitcoin miners, and any bitcoin can be purchased into a sidechain where they are stored until such time as they may be sold back into the Bitcoin blockchain to again become available for ordinary bitcoin transactions. Each of many potential sidechains motivates Bitcoin miners to merge mine a certain sidechain by way of sufficient transaction fees - the Bitcoin reward, and fixed 21 million limit, are left alone. Sidechains are isolated from the Bitcoin blockchain, and are likely to be less conservative than, and more innovative than Bitcoin.

Sidechains seeking bitcoin will have to outbid other users, and therefore prices will rise should sidechains gain acceptance. Altcoins do not have the interoperability offered by sidechains, and most distinguishing features of altcoins could be implemented as a sidechain, e.g. very fast transaction confirmation, micro payments, etc.

It is hard to see how Bitcoin could be superseded, but is it is obvious that Bitcoin is a flexible platform for building upon.

There's good evidence of late that any truly competitive cryptocurrency cannot be a tweak of the Satoshi design. For one, Peter R's ledger hijack proposal has a great deal of merit. In addition, the side chains proposal from Adam Back suggests that the purpose of the main bitcoin blockchain could evolve to that of a super-asset, one from which all other innovated assets on their respective side-chains derive their value. The function of all alts and/or information service hybrids (e.g. Namecoin or StorJ) can be run as a parallel, inter-operating branch of the main blockchain. The sidechains can compete with one another for the same service, or could be created to serve the purpose for real-world conditions that are only temporary. Experimental sidechains can flourish or die.

So the case for bitcoin's being the "only" system is looking more likely, at least while it's hash rate and fundamental properties remain unblemished. I suspect that a different paradigm is the only system that will supersede bitcoin.

Even if Facebook dollars would be better for microtransactions, people would still want to hold their wealth in Bitcoin because it cannot be manipulated or confiscated by a central authority. No amount of branding by any corporation or government is ever going to overcome that fundamental advantage of Bitcoin.

fiat and banking system is hardly used by 2Bn people.

I think his $100,000 valuation doesn't assume that.  It assumes that it will be used by a lot of people, but not everyone.

So Reptillia is basing it as if Bitcoin will be the sole means of wealth transmission and currency, I am a bull to, but do not neccessarily agree with that premise, however I still will only re-evaluate my position and consider selling at around 20-30K, based on what the Crypto scene looks like then. I think both new and old players will innovate and take away a lot of the added value that bitcoin offers over our current financial system. EG if you can send Facebook dollars for free than the micro-payment argument for bitcoin is passe.

Bitchick-lite™?

I think a lot of high profile thefts tell a different story - in many of them the coins never moved from the original theft address and still remain there.

Of course, the reason the hackers haven't moved them probably has nothing to do with ideology.  It's more to do with not getting caught.  They are waiting until they can confidently mix and sell their coins without being tracked.

Oh, let me add to that! Some are worried that criminals (i.e., hackers) are holding tons of bitcoins. If we are worried about uber wealthy criminal hackers in the future, it's not enough that they stole bitcoins today (or in the past), they would also need to believe in the vision of Bitcoin's future to hold on to them. My bet is that many hackers did the opposite, they just tried to get rid of their stolen booty as quickly as possible. If there are hackers who are holding for the very long term, then at the very least they appreciate Bitcoin's value and are unlikely to crash the market with a huge sell some indeterminate time in the future.

I would add more more thing to rpietila's excellent observation.

There are those who bought early, but didn't really understand.  Perhaps they bought on a friend's advice, or just on a lark.  These are the coins that get shaken loose on the next downturn.  Getting in early is only half the battle. 

+1000

This is such a concise articulation of what I also believe to be exactly correct that I am considering printing it out and hanging it on my wall

And I am quite sure I know the reason for that. It is the extreme information asymmetry between Bitcoin owners and non-owners. (To simplify,) Bitcoin owners know that bitcoins are very valuable, and they buy and hold as much as they can. But as a result of their price going up, it forces people to sell, not because they don't trust Bitcoin, or expect the EV to be anything less than $100k or whatever in a few years, but because their entire net worth consists of bitcoins and it is rational to diversify (cf. Kelly betting). Even if the price goes down, these true believers cannot buy much more because the same optimal allocation strategy holds true.

The ones who don't own bitcoins, don't know it is good They are converting to bitcoiners at an exponential rate, though (see my previous post, and this thread for the ownership distribution). This increasing adoption gives the steam to the rise of price, in a self-sustaining virtuous cycle.

First only very few people knew about Bitcoin, and they were technologically astute and early adopter type. Many could start using Bitcoin immediately upon hearing. In the second phase more people heard, but they were, on average, slower. In the third phase or so, in which I belong, I heard and it took me 12 months to buy. In the next one, people who heard in 2011, propelled the boom in 2013 because their average decision making time was even longer. In the whole of 2013, especially the time around the peaks, 100s of millions of people heard about Bitcoin. On average, these people are even slower than previous ones, perhaps taking on average 24 months to enter (and also a smaller percentage of them enters). But they are so many! There is nothing you can really do to prevent the fraction of these people adopting Bitcoin, and by doing it, their action increases the price again by a decade, letting the rest of the planet to hear about it and putting hundreds of millions of people in the pipeline.

Bitcoiners know it, the rest don't. The price does not go to $1 million in an instant because only the ones who realize the above thing, can push the price up, but it will nevertheless go there eventually, because the above thing is a self-sustaining loop. Therefore buying bitcoins when you read and realize it, is the most lopsided bet you can ever make. You can actually pay $460 for something whose EV (expected value = average payback of all scenarios weighted by their probabilities) is in between $100k and $1M+. ONLY the fact that people realize this one at a time, slowly but exponentially, keeps the bitcoin price "at check", growing at an average of 1000% per year, for 5+ years now.

My wealth is dependent on the above being true. Nobody has explained to me, why it is not so. The stage is yours!

Kudos for the person who explained this to me in 2010, after which it took me 12 months to buy, after which it took an additional 18 months to realize it, which realization threatened my sanity, which was only saved by starting to smoke cigars. After 12 more months I tell it to you, please don't repeat my mistakes. Consider if it is valid, and invest accordingly. I am quite sure that next month you will not see this low prices any more, because the information is freely available.

Yeah, the cost basis for my remaining bitcoins is more than $100 negative. It is an exaggeration to say that I am rich if bitcoin goes to zero, but I think I'll find something else to do, even for making money. It (making money) becomes easier when you are well-off and well-known, neither of which is solely dependent of my number of bitcoins, although I am grateful for the opportunity that I am living because of them.

My situation is the inverse equivalent.  My smaller pile of coins has exactly zero cost basis.  There is no way I wont wait out the dark times, and I'll be with you at the bottom if it comes.  You'll be rich, and I'll will have lost nothing.

In my own trading, I give almost zero weight on "news". There are some developments that change the probability whether Bitcoin hits big ($1M) or not. To them I give some weight. Mostly I give weight to whether the price is below or above its long-term trend. This kind of trading schedule lets me buy low and sell high, gives peace of mind, and is the almost only strategy that actually is implementable for someone of my size (too small to manipulate world market, too big to daytrade efficiently anywhere). If BTC fails, I am prepared to ride it to the bottom, because I have sold high.

That's where I have placed my bets...  All in around 407.

Looks like we are reversing 

Well China least 9 % of all available Ukraine farmland last year. Seams they need it more than anyone else.
http://www.theworldofchinese.com/2013/09/china-buys-five-per-cent-of-ukraine/

Could be, but most people reacted immediately to the news about the 15th, without actually waiting for the 15th to roll around

dat 468 test