Bitcoin and its mining on the equilibrium path - ScienceDirect

The connection between the LTC price surge since mid november and the new Batch of Bitmain Miners.

I think its time that people understand a bit more, and post memes that explain nothing a bit less. There is too many newbies in crypto now who don't understand anything and just think Litecoin is great because its expensive.
Take a look at these 3 things:
Available Mining hardware
The Litecoin mining difficulty
The Litecoin price
Available Mining Hardware
Bitmain sold their last big batch of miners in early summer 2017, since then LTC Miners have been sold out. Suddenly mid november, LTC Miners were available again on Bitmain's Internet site.
The Litecoin mining difficulty
It takes a while for Bitmain to distribute all their miners, at the end of the summer it seems that the summer batch of miners has found their new owners. The Litecoin Difficulty stopped rising and was steady at a plateau.
Roughly 4 ASIC miners were necessary to mine one LTC in 24h until mid november.
Its an open secret that Bitmain "tests" their miners before they send them to their clients, and the day they started selling their new batch, they started "testing" it as well. You can see very clear how the difficulty jumped up and is growing steadily ever since.
From Friday to Saturday, the LTC difficulty jumped up from 1.7Mio to 1.9Mio, it's the biggest jump in difficulty this year if I haven't overlooked something.
Today, the mining profitability outcome/harvest is at almost 50% of what it was before the day Bitmain started "testing" their new miners.
Roughly 8 ASIC miners are now necessary to mine one LTC in 24h.
The Litecoin price
Not accounting for the spikes here and there, the LTC price this summer looked similar to the difficulty chart. During the summer, the price was quite steady at a plateau. This changed though in november. The price started to rise steadily.
From Friday to Saturday, the LTC price jumped up 50%, also the biggest jump in a pretty short time that we have seen this year.
I hope you are starting to see what pushes the price up lately. Its not the Goku/Vegeta Memes of the new "coalition" between Bitcoin and Litecoin. Its not Charlie Lee's twitter about LTC acceptance at
Its a necessary reaction to keep the network save and alive, because if profitability goes down to 0, miners will stop mining.
Have a nice weekend and enjoy the price spike.
I am not trying to proof that general demand does not push the price up! LTC is available in limited quantities, so of course there is an upward trend with increased demand. I am trying to show you one reason for sudden price increases (and decreases) that many newbies are not aware of.
2 corrections for clarity: changed profitability to outcome/harvest and put brackets around decreases, because my observations are actually that the price has to adjust upwards with increase in difficulty. I have not enough evidence that it goes downwards as well with decreased difficulty.
Profitability of LTC mining actually stayed the same since mid november due to the adjustment of the price to the increased difficulty.
edit 3
Users are commenting that the difficulty follows the price. I understand very well that when a coin becomes very profitable to mine, people jump on it. But how do you explain this then?
Until the 5th of December, the hash rate increased slowly. From 5th to the 8th of December the LTC hash rate increased to 250% of what it was was before.
The difficulty jumped up on the 6th of December from 1,3 to 1,7mio. And on the 9th of December from 1,7 to 2,4mio. So it increased to 200%, which means the profitability sunk to 50%.
The LTC price was steady until the 8th of December at 95$. From the 8th to the 9th of December it went straight up to 150$. A price spike right after everybody went home or drinking on a friday?
The price went up after the difficulty doubled, not before.
I'm just reading charts and try to make sense of them. Just saying "no" without having another explanation is just not very convincing.
submitted by grmpfpff to litecoin [link] [comments]

Cryptocurrencies - a relatively new tool for trading. Pt.1

Cryptocurrencies - a relatively new tool for trading. Pt.1
If you are going to trade in cryptocurrencies, look at what distinguishes them from other assets.
Active reaction to the news
At the moment, various news and events are the main factors influencing the rate of cryptocurrency. One positive news or even a short tweet can cause a cryptocurrency to rise several times, and similarly, negative news can bring down the course or launch a long-term deep correction. For example, John McAfee mentioned the XVG coin in his twitter, and XVG price has grown 50 times in a few days.
The difficulty is to quickly find the necessary news and correctly assess their impact. To do this, you need to have an understanding of the overall picture in the cryptocurrency market and in the blockchain industry, as well as regularly following the news. The best way to track news is to use Twitter and
Surely you have heard about hacking into cryptocurrency wallets and cyber attacks on cryptocurrency exchanges: systematic hacking of Mt.Gox, theft of NEM with Coincheck, hacking and theft of bitcoins from the crypto-mining market NiceHash. The more popular the cryptocurrencies and the higher the capitalization of the cryptocurrency market, the more the interest of intruders to them.
Unfortunately, no service can guarantee you complete security, but many exchanges have a complex security system, so it’s very difficult to hack into them. The security of your account on a cryptocurrency exchange largely depends on what actions you take for your personal security.
High volatility, low liquidity
The capitalization of the cryptocurrency market today is approximately 123 billion, Bitcoin alone is $ 67 billion. There are more than 2000 cryptocurrencies, and many of them are being traded at several exchanges, so there are many cryptocurrencies on various trading platforms, the course of which is fairly easy to move significantly for one player.
For example, on Poloniex, a fairly large and well-known stock exchange, for the Augur (REP) rate drawdown, the cryptocurrency in the top 50 by capitalization, by 50%, there are only about 12 thousand dollars needed:
Probably, the course will quickly return to the previous value, but such a scenario is not unrealistic. If you decide to trade on cryptocurrencies, you should be prepared for such incidents.
Therefore, technical analysis and strategies based on it do not always work well for cryptocurrencies: these tools emerged and were refined in a market where the crowd psychology works stably, and one player cannot significantly influence the course.
Pumps and dumps
Pump and dump is a sharp price movement up or down, respectively. Public sources or even paid chat rooms publish messages calling to buy some cryptocurrency on a particular stock exchange (as a rule, a little-known coin with a low capitalization). Messages about the purchase can be supported by fake news, pictures with technical analysis, estimates of “experts”. The pumps organizers first buy the coin, then announce the pump and sell the coin at an increased price.
With a very lucky set of circumstances, you can earn money too, but usually pump participants lose money: after a sharp increase in demand and a rise in price, demand returns to the previous level, and the offer grows (as the pump participants want to exit), and the cryptocurrency rate returns to the previous level. As a rule, everything happens in a matter of minutes. Even after that, the pump can be repeated: the participants of the first pump, who did not have time to sell the coin, publish calls to buy cryptocurrency and try to raise the course in order to exit the transaction with a profit.

>> This is only the first part of this educational article, to continue reading you should wait for the second part in the coming days. Thanks for your attention. #twim team
#twimtrade #education #general
submitted by RandianHero to TwimTrade [link] [comments]

Timescales of the fee pressure attack

The Attack

As most of you should know, Bitcoin is under attack by multiple actors that try to discredit it by causing a spike in transaction fees and subsequent negative commentary. It is unclear how well coordinated these actors are, but most of them seem to be seeking profits by shifting the Bitcoin scaling debate in their favor. Their methods have become increasingly absurd and aggressive:
All of these are accompanied by a flamewar-waging horde that constantly draws attention to any problems caused by high fees. Most likely, their goal is to induce a chain reaction between falling BTC price and hashrate that rapidly cuts down BTC block rate, pushing money into BCH, yielding BCH holders gigantic profits. Though my impression is that most of these actors don't really understand what they're doing. Many might end up just reducing their profits from the current Bitcoin hype.

The Defense

As you might also know, Bitcoin can mount multiple defenses against this, though only two of them are immediately effective:

Time and Segwit2x

Intended or not, the attackers now seem to have fired their entire arsenal. They now have to deal damage before the Bitcoin infrastructure has time to respond. I'd like to know just how much time they have, and whether this civil war could set the stage for a catastrophic Segwit2x fork that results in three or more zombie chains playing catch with the hashrate.
Therefore, I'm trying to guess BTC's reaction time-scales. Some ideas:
If I see this correctly, BCH users should be frantic to crush bitcoin as soon as possible, because their attack vectors are losing steam over time. And I doubt they want to sit it out and prepare a second charge, because the Lightning network looms on the horizon, which is a competitor their fluctuating 8MB-per-block chain cannot compete with.
But what will happen? Do Bitcoiners have the patience to hold their ground for a month or so? Will they be so divided afterwards that Segwit2x is a serious threat? It might take until October to sort out the current weirdness, and by then, the Segwit2x hard fork date is insanely close.
As a bottom line, I'd like to remind everyone to not get lost in short-term conflicts. Bitcoin could easily sail on with just two decisions: ignoring the BCH attack/troll fork and reaching a clear consensus on whether or not to hard fork to 2MB non-witness block data. I don't think that either SegWit1x or Segwit2x would be in much trouble on their own, but it is unclear if they can coexist, especially considering the possible hashrate interactions. If an interaction between multiple chains with aggressive decision-making ruins Bitcoin as a brand, nobody wins. Any compromise or delay on a hard fork is better than a hard fork gone wrong.
submitted by Varakari to Bitcoin [link] [comments]

Subreddit Stats: btc top posts from 2017-01-09 to 2017-02-07 22:40 PDT

Period: 29.80 days
Submissions Comments
Total 999 28052
Rate (per day) 33.52 904.13
Unique Redditors 409 2067
Combined Score 56126 117584

Top Submitters' Top Submissions

  1. 3835 points, 41 submissions: Egon_1
    1. "One miner loses $12k from BU bug, some Core devs scream. Users pay millions in excessive tx fees over the last year "meh, not a priority" (529 points, 262 comments)
    2. Charlie Shrem: "Oh cmon. @gavinandresen is the reason we are all here today. Stop attacking people, ...." (256 points, 61 comments)
    3. The core developers don't care about you. Let's fire them by hard fork to Bitcoin unlimited! (231 points, 83 comments)
    4. Bitcoin Core Hashrate Below 80% (211 points, 27 comments)
    5. "Bitcoin is an P2P electronic cash system, not digital gold. If Bitcoin's usefulness as cash is undermined, its value will be undermined too." (198 points, 196 comments)
    6. I like these ads (194 points, 25 comments)
    7. "ViaBTC Transaction Accelerator already help more than 5K delayed transactions got confirmed." (142 points, 27 comments)
    8. Bitcoin Unlimited: Over 800 PH/s (128 points, 21 comments)
    9. ViaBTC produces ZERO empty block in the last month. Best in SPV base mining pool. (117 points, 2 comments)
    10. New ATL (All Time Low) For Bitcoin Core Blocks (114 points, 59 comments)
  2. 2876 points, 24 submissions: ydtm
    1. The debate is not "SHOULD THE BLOCKSIZE BE 1MB VERSUS 1.7MB?". The debate is: "WHO SHOULD DECIDE THE BLOCKSIZE?" (1) Should an obsolete temporary anti-spam hack freeze blocks at 1MB? (2) Should a centralized dev team soft-fork the blocksize to 1.7MB? (3) OR SHOULD THE MARKET DECIDE THE BLOCKSIZE? (354 points, 116 comments)
    2. BU-SW parity! 231 vs 231 of the last 1000 blocks! Consensus will always win over censorship! MARKET-BASED blocksize will always win over CENTRALLY-PLANNED blocksize! People want blocksize to be determined by the MARKET - not by Greg Maxwell & his 1.7MB anyone-can-spend SegWit-as-a-soft-fork blocks. (271 points, 66 comments)
    3. The number of blocks being mined by Bitcoin Unlimited is now getting very close to surpassing the number of blocks being mined by SegWit! More and more people are supporting BU's MARKET-BASED BLOCKSIZE - because BU avoids needless transaction delays and ultimately increases Bitcoin adoption & price! (185 points, 80 comments)
    4. "Notice how anyone who has even remotely supported on-chain scaling has been censored, hounded, DDoS'd, attacked, slandered & removed from any area of Core influence. Community, business, Hearn, Gavin, Jeff, XT, Classic, Coinbase, Unlimited, ViaBTC, Ver, Jihan,, btc" ~ u/randy-lawnmole (176 points, 114 comments)
    5. "Why is Flexible Transactions more future-proof than SegWit?" by u/ThomasZander (175 points, 110 comments)
    6. "You have to understand that Core and their supporters eg Theymos WANT a hardfork to be as messy as possible. This entire time they've been doing their utmost to work AGAINST consensus, and it will continue until they are simply removed from the community like the cancer they are." ~ u/singularity87 (170 points, 28 comments)
    7. Blockstream/Core don't care about you. They're repeatedly crippling the network with their DEV-CONTROLLED blocksize. Congestion & delays are now ROUTINE & PREDICTABLE after increased difficulty / time between blocks. Only we can fix the network - using MARKET-CONTROLLED blocksize (Unlimited/Classic) (168 points, 60 comments)
    8. 3 excellent articles highlighting some of the major problems with SegWit: (1) "Core Segwit – Thinking of upgrading? You need to read this!" by WallStreetTechnologist (2) "SegWit is not great" by Deadalnix (3) "How Software Gets Bloated: From Telephony to Bitcoin" by Emin Gün Sirer (146 points, 59 comments)
    9. This trader's price & volume graph / model predicted that we should be over $10,000 USD/BTC by now. The model broke in late 2014 - when AXA-funded Blockstream was founded, and started spreading propaganda and crippleware, centrally imposing artificially tiny blocksize to suppress the volume & price. (143 points, 97 comments)
    10. Now that BU is overtaking SW, r\bitcoin is in meltdown. The 2nd top post over there (sorted by "worst first" ie "controversial") is full of the most ignorant, confused, brainwashed comments ever seen on r\bitcoin - starting with the erroneous title: "The problem with forking and creating two coins." (142 points, 57 comments)
  3. 2424 points, 31 submissions: realistbtc
    1. Remember this picture ? It was a very strong and cool message from around 2014 . Well, sadly it's not true anymore. But it was universally liked in the Bitcoin space , and probably brought here some of us . I remember even luke-jr reposting it somewhere (oh , the hypocrysis!! ). (249 points, 55 comments)
    2. Emin Gun Sirer on Twitter ' My take is the exact opposite: we are now finding out that Segwit isn't necessary and we can get the same benefits via simpler means. " (248 points, 46 comments)
    3. Gavin Andresen on Twitter : ' The purpose of a consensus system is to arrive at one outcome. Participating means accepting the result even if you initially disagree. ' (204 points, 56 comments)
    4. enough with the blockstream core propaganda : changing the blocksize IS the MORE CAUTIOUS and SAFER approach . if it was done sooner , we would have avoived entirely these unprecedented clycles of network clogging that have caused much frustrations in a lot of actors (173 points, 15 comments)
    5. Gavin Andresen on Twitter - 'This can't be controversial... can it? - a definition of Bitcoin' (136 points, 38 comments)
    6. adam back on twitter "contentious forks are bad idea for confidence & concept of digital scarcity. wait for the ETFs. profit. mean time deploy segwit & lightning" - no! a corrupt company like blockstream with a washed out ex cypherpunk like adam are what's bad for Bitcoin . (122 points, 115 comments)
    7. "Bitcoin: A Peer-to-Peer Electronic Cash System" - if you stray from that , you don't get to keep calling it Bitcoin. call it blockstreamcoin, adamcoin, gregcoin, theymoscoin or whatever and go fork off yourself . (112 points, 19 comments)
    8. soon 21 will have to change the scale , because 180 satoshi/KB won't be enough anymore - madness - feel free to send your complaints to greg maxwell CTO of blockstream (112 points, 31 comments)
    9. PSA : if you use a ledger wallet , you risk paying an absurdly high free - see here : 10$ for a 225 bytes 150$ tx - but remember , it's all fine for your elitist and gregonomic friends at blockstream (109 points, 111 comments)
    10. Luke 'the liar' Dashjr : ' My BIP draft didn't make progress because the community opposes any block size increase hardfork ever. ' -- yes , he wrote exactly that !! (96 points, 33 comments)
  4. 2129 points, 43 submissions: increaseblocks
    1. After failing to get 10K bitcoins for stolen NSA exploits, Shadow Brokers post farewell message, dump a cache of Windows hacking tools online (181 points, 23 comments)
    2. Coinbase and the IRS (146 points, 69 comments)
    3. Ryan X. Charles on Twitter - There is a leadership gap in bitcoin left by technical community members who didn't listen to miners, businesses or users. (117 points, 44 comments)
    4. Blockstream Core developer says you should "pay a $5 fee" to get your transaction to go through! (116 points, 32 comments)
    5. $2.50 transaction FEE paid on $37 transaction, still unconfirmed for 24 hours!! (109 points, 37 comments)
    6. Blockstream shareholder gives a little more insight into the company (107 points, 33 comments)
    7. Finished setting up my Unlimited full node. Took just over 24 hrs to sync with a 5 yr old laptop and standard U.S. connection + $50 1TB hard drive! (96 points, 46 comments)
    8. Matt Corallo/TheBlueMatt leaves Blockstream to go work for Chaincode Labs... is the Blockstream house of cards beginning to crumble? (86 points, 175 comments)
    9. 53,000 transactions in the backlog! (75 points, 79 comments)
    10. Doctor ₿ Goss on Twitter: Spending a year on #segwit instead of coordinating blocksize increase may not have been wise. Money that doesn't work is worthless (70 points, 11 comments)
  5. 1590 points, 9 submissions: parban333
    1. Dear Theymos, you divided the Bitcoin community. Not Roger, not Gavin, not Mike. It was you. And dear Blockstream and Core team, you helped, not calling out the abhorrent censorship, the unforgivable manipulation, unbecoming of supposed cypherpunks. Or of any decent, civil persons. (566 points, 87 comments)
    2. nullc disputes that Satoshi Nakamoto left Gavin in control of Bitcoin, asks for citation, then disappears after such citation is clearly provided. greg maxwell is blatantly a toxic troll and an enemy of Satoshi's Bitcoin. (400 points, 207 comments)
    3. Remember: while the blockstream trolls take Peter R out of context, Peter Todd really think Bitcoin should have a 1%/security tax via inflation. (146 points, 92 comments)
    4. So, Alice is causing a problem. Alice is then trying to sell you a solution for that problem. Alice now tell that if you are not buying into her solution, you are the cause of the problem. Replace Alice with Greg & Adam.. (139 points, 28 comments)
    5. SegWit+limited on-chain scaling: brought to you by the people that couldn't believe Bitcoin was actually a sound concept. (92 points, 47 comments)
    6. Remember: the manipulative Adam Back, CEO of Blockstream, want to fool every newcomer that doesn't know better into thinking that he practically invented Bitcoin. (91 points, 22 comments)
    7. Not only segwit support is laughable at the moment for something targeting 95% adoption, but it's actually diminishing. Wallet devs and people that spent resources implementing that ridiculous contraption must feel a bit silly at the moment.... (83 points, 143 comments)
    8. It's ironic that blockstream's concerns about hard forks security are what's actually caused concerns about hard forks security. (46 points, 5 comments)
    9. The Intercept - "Hidden loopholes allow FBI agents to infiltrate political and religious groups" - Just something to consider, right? (27 points, 2 comments)
  6. 1471 points, 10 submissions: sandakersmann
    1. Charlie Shrem on Twitter: "If we don't implement bigger blocks ASAP, Paypal will be cheaper than #bitcoin. I already pay a few dollars per tx. Stop hindering growth." (472 points, 254 comments)
    2. Olivier Janssens on Twitter: "Do you like Bitcoin? Then you like an unlimited block size. The limit was put in place as a temp fix and was never hit before last year." (252 points, 189 comments)
    3. Ryan X. Charles on Twitter: "Bigger blocks will allow more people access to every aspect of bitcoin, enhancing decentralization" (213 points, 179 comments)
    4. Is Bitcoin Unlimited Headed for Activation? (149 points, 38 comments)
    5. Marius Kjærstad on Twitter: "High fees push real economy out of #Bitcoin and makes price driven by speculation. Result is a lower real economy floor to catch the knife." (132 points, 37 comments)
    6. No Primary Litecoin Pool Will Upgrade to Segwit, Says LTC1BTC's Founder (103 points, 60 comments)
    7. Charlie Shrem: "Bitcoin is been built to appreciate or die. That's how it is. It has to continue to grow. If it doesn't grow then it's just gonna go away." (76 points, 15 comments)
    8. G. Andrew Stone & Andrew Clifford: Bitcoin Unlimited (Episode 166) (36 points, 1 comment)
    9. Joseph VaughnPerling on Twitter: "#SegWit on $LTC's safe b/c low TX vol. AnyoneCanSpend TX UTXO unlikely to hit 51% attack cost. On $BTC it'd be insidiously fatal. @SegWit" (21 points, 8 comments)
    10. Bitcoin Plummets After China Launches "Market Manipulation" Investigations Of Bitcoin Exchanges (17 points, 0 comments)
  7. 1408 points, 7 submissions: BeijingBitcoins
    1. LOL - /bitcoin user claims that people aren't being actively silenced; is actively silenced. (307 points, 142 comments)
    2. Reality check: today's minor bug caused the pool to miss out on a $12000 block reward, and was fixed within hours. Core's 1MB blocksize limit has cost the users of bitcoin >$100k per day for the past several months. (270 points, 173 comments)
    3. Satoshi: "The eventual solution will be to not care how big [block size] gets." (250 points, 75 comments)
    4. Top post on /bitcoin about high transaction fees. 709 comments. Every time you click "load more comments," there is nothing there. How many posts are being censored? The manipulation of free discussion by /bitcoin moderators needs to end yesterday. (229 points, 91 comments)
    5. Bitcoin Unlimited blocks at all time high! (143 of last 1000) (191 points, 56 comments)
    6. Censored in bitcoin: "Bitcoin Core hashrate reaches 79.7%" (91 points, 61 comments)
    7. Bitcoin Transaction Fees - All Time (70 points, 18 comments)
  8. 1235 points, 40 submissions: chinawat
    1. Julian Assange just used the bitcoin block number 447506 as a proof of life. (199 points, 42 comments)
    2. "$3000 donated anonymously to the @internetarchive in bitcoin just now. Made our day!" -- Brewster Kahle on Twitter (97 points, 3 comments)
    3. ‘Barclays took my £440,000 and put me through hell’ | Money (76 points, 22 comments)
    4. Venezuelan Police Arrest Eight Bitcoin Miners in Two Weeks, and the Country's Leading Bitcoin Exchange Suspends Operations (52 points, 2 comments)
    5. The Path To $10,000 Bitcoin (46 points, 11 comments)
    6. How Deutsche Bank Made a $462 Million Loss Disappear (44 points, 6 comments)
    7. "The plan (#mBTC units) has been discussed amongst local #Chinese exchanges, & we believe it will appease the regulators, w/ "lower" prices." -- Bobby Lee on Twitter (43 points, 36 comments)
    8. "Everyone knows that we need to reduce the max block size, but is a one-time drop to 300 kB really the best way?" -- theymos (40 points, 68 comments)
    9. Buy bitcoin from any 7-11 in the Philippines (36 points, 0 comments)
    10. The Race Is On for a Bitcoin ETF (31 points, 14 comments)
  9. 1010 points, 17 submissions: 1and1make5
    1. Last 1000 Blocks - Bitcoin Unlimited overtakes soft-fork-segwit signaling (165 points, 25 comments)
    2. Again: Bigger Blocks Mean More Decentralization - Roger Ver (101 points, 59 comments)
    3. cnLedger on Twitter - "@todu77 Contacted http://BTC.TOP . A different logic was used when dealing w/ (very occasional) empty blc. They'll update to BU only" (94 points, 6 comments)
    4. Controlling your own wealth as a basic human right - Brian Armstrong (93 points, 30 comments)
    5. Last 1000 Blocks - 20% of the Bitcoin mining network supports Bitcoin Unlimited (89 points, 4 comments)
    6. current hashrate: ~100 Ph/s (71 points, 5 comments)
    7. Throwback Thursday: mined their first BU block 1 month ago with ~31 Ph/s, today they have ~149 Ph/s (68 points, 6 comments)
    8. Epicenter Bitcoin 166 - G. Andrew Stone & Andrew Clifford: Bitcoin Unlimited (63 points, 50 comments)
    9. Coinbase Obtains the Bitlicense (53 points, 19 comments)
    10. Fun fact (doesn't mean anything): In the last 24 hours more blocks have signaled support for Bitcoin Unlimited than soft-fork-segwit (53 points, 5 comments)
  10. 984 points, 20 submissions: seweso
    1. Bitcoin unlimited is an expression of freedom. And freedom will always be misconstrued by paternalists/statists as something dangerous. (120 points, 64 comments)
    2. My hope for Bitcoin Unlimited is not to force a hardfork upon everyone, but to break through the censorship, to open minds. (106 points, 88 comments)
    3. Core threatening a POW change makes absolutely no sense whatsoever. (97 points, 58 comments)
    4. "We will run a SegWit release in production by the time [a 2MB hardfork] is released in a version of Bitcoin Core." (94 points, 84 comments)
    5. Blocked by Peter Todd for pointing out he started the propaganda war with his slippery slope video. (92 points, 41 comments)
    6. I can't wait to spend everyone's SegWit funds on a hard-forked >1Mb chain. ~ Seweso (72 points, 72 comments)
    7. BashCo putting his Bitcoin ignorance on display by stating "60,000 #Bitcoin transactions don't just magically appear out of thin air. #spam" (66 points, 12 comments)
    8. Bitcoin Core developers discussing and deciding on Bitcoin economics again (47 points, 13 comments)
    9. Reaction to: why-bitcoin-unlimiteds-emergent-consensus-gamble (46 points, 9 comments)
    10. "@seweso Show me an instance where core pushed out a change and cost miners a block reward." ~ I can do that ;) (37 points, 6 comments)
  11. 883 points, 16 submissions: Shock_The_Stream
    1. Emin Gün Sirer: Finally getting to the crux of the battle. LN/Segwit/fee-market are a synonym for "high fees." Nothing about this tech requires high fees. (155 points, 78 comments)
    2. BTC.TOP !! - New Alltime High for BU blocks @199 ! BTC.TOP alone just mined 4 BU blocks within 47 minutes (115 points, 26 comments)
    3. The great halvening of Samson's Segwit Pool: Mission accomplished! 1 yr: 12.50%, 6 month: 11.10%, 1 month: 7.83%, 1week: 6.67%, 4 days: 6% (107 points, 56 comments)
    4. Surpise: SegWit SF becomes more and more centralized - around half of all Segwit signals come from Bitfury ... (107 points, 45 comments)
    5. BS of the week by Rusty Russell: "If segwit doesn't activate, something is badly broken in Bitcoin" (102 points, 97 comments)
    6. Slush pool: Incredible bad luck for the Bitcoin Unlimited voters (43 points, 26 comments)
    7. The Bitfury Attack (43 points, 38 comments)
    8. 799! Jiang Zhuo'er teared down this wall! (40 points, 13 comments)
    9. Did Slush just stop mining segwit with the 'don't care' voters? (39 points, 36 comments)
    10. Fortune favours the bold: BTC.TOP with 300% luck today (30 points, 2 comments)
  12. 754 points, 10 submissions: AQuentson
    1. Price Shoots Up as Miners Checkmate and Bitcoin Unlimited Surpasses Segwit. (113 points, 28 comments)
    2. One Transaction Will Cost $400 if Bitcoin Hits $10,000 According to Jameson Lopp (104 points, 39 comments)
    3. Bitcoin Core Developer: Satoshi's Design Doesn't Work (100 points, 78 comments)
    4. Wow! Had no idea the BitcoinMarkets subreddit is completely censored. (90 points, 29 comments)
    5. F2Pool Will Not Upgrade Its Bitcoin Pool to Segwit "Anytime Soon" (89 points, 21 comments)
    6. The Bitcoin Market Needs Big Blocks, Says Founder of BTC.TOP Mining Pool (82 points, 21 comments)
    7. Almost $1 Billion Worth of Bitcoins Stuck in Transaction Backlog (72 points, 8 comments)
    8. ViaBTC's Hashrate Increases to 12 Percent (58 points, 2 comments)
    9. “The protocol debate is not my priority." - Jihan Wu, Bitmain's Founder (24 points, 13 comments)
    10. Wow! Almost $1 Billion Worth of Bitcoin is Stuck, Can't Move - What Happens if no Block is Found in One Hour (as has happened before) Will Bitcoin Literally Break Down? (22 points, 14 comments)
  13. 744 points, 10 submissions: BobsBurgers3Bitcoin
    1. Bitcoin Unlimited 1.0.0 has been released (274 points, 130 comments)
    2. Censored in r\Bitcoin: "35.8 Cents: Average Transaction Fee so far in 2017. The Average Transaction Fee in 2016 was 16.5 Cents" (260 points, 123 comments)
    3. 35.8 Cents: Average Transaction Fee so far in 2017. The Average Transaction Fee in 2016 was 16.5 Cents (74 points, 18 comments)
    4. Former Fed Employee Fined $5,000 for Using Computer for Bitcoin (37 points, 5 comments)
    5. Bitcoin: Why It Now Belongs in Every Portfolio (26 points, 0 comments)
    6. Bitcoin is 'a great hedge against the system' and could be the new gold (18 points, 1 comment)
    7. Bitcoin Will Change Money Like the Internet Changed Video (15 points, 0 comments)
    8. Is Warren Buffett Wrong About Bitcoin? (14 points, 3 comments)
    9. Bitseed Review – A Plug & Play Full Bitcoin Node (13 points, 2 comments)
    10. Bitcoin is soaring (and Business Insider does not change the title of the almost identical article published 3 weeks ago by the same author) (13 points, 1 comment)
  14. 732 points, 10 submissions: specialenmity
    1. Fantasy land: Thinking that a hard fork will be disastrous to the price, yet thinking that a future average fee of > $1 and average wait times of > 1 day won't be disastrous to the price. (209 points, 70 comments)
    2. "Segwit is a permanent solution to refuse any blocksize increase in the future and move the txs and fees to the LN hubs. The chinese miners are not as stupid as the blockstream core devaluators want them to be." shock_the_stream (150 points, 83 comments)
    3. In response to the "unbiased" ELI5 of Core vs BU and this gem: "Core values trustlessness and decentralization above all. Bitcoin Unlimited values low fees for on-chain transactions above all else." (130 points, 45 comments)
    4. Core's own reasoning doesn't add up: If segwit requires 95% of last 2016 blocks to activate, and their fear of using a hardfork instead of a softfork is "splitting the network", then how does a hardfork with a 95% trigger even come close to potentially splitting the network? (96 points, 130 comments)
    5. luke-jr defines "using bitcoin" as running a full node. Dictates that the cost of moving money ( a transaction) should exceed "using bitcoin". Hah (38 points, 17 comments)
    6. If it's not activating that is a strong evidence that the claims of it being dire were and continue to be without substance. nullc (36 points, 23 comments)
    7. I'm more concerned that bitcoin can't change than whether or not we scale in the near future by SF or HF (26 points, 9 comments)
    8. "The best available research right now suggested an upper bound of 4MB. This figure was considering only a subset of concerns, in particular it ignored economic impacts, long term sustainability, and impacts on synchronization time.." nullc (20 points, 4 comments)
    9. At any point in time mining pools could have increased the block reward through forking and yet they haven't. Why? Because it is obvious that the community wouldn't like that and correspondingly the price would plummet (14 points, 14 comments)
    10. The flawed mind of jstolfi (13 points, 17 comments)
  15. 708 points, 7 submissions: knight222
    1. BTC.TOP operator: “We have prepared $100 million USD to kill the small fork of CoreCoin, no matter what POW algorithm, sha256 or scrypt or X11 or any other GPU algorithm. Show me your money. We very much welcome a CoreCoin change to POS.” (241 points, 252 comments)
    2. For those who missed it, this is how the hardfork with Bitcoin Unlimited will happen. (173 points, 79 comments)
    3. Blocks mined with Bitcoin Unlimited reaching 18% (133 points, 28 comments)
    4. Bitcoin Unlimited is less than 1% away from outpacing Segwit for the last 1000 blocks mined (90 points, 44 comments)
    5. BU nodes peaked in the last days (28 points, 6 comments)
    6. Blockstream never tried to compromise but they will (too late). This is why: (22 points, 4 comments)
    7. BTC.TOP is having a good day (21 points, 6 comments)

Top Commenters

  1. Adrian-X (3622 points, 821 comments)
  2. H0dl (3157 points, 563 comments)
  3. Bitcoinopoly (2732 points, 345 comments)
  4. knight222 (2319 points, 361 comments)
  5. MeTheImaginaryWizard (2043 points, 429 comments)
  6. Ant-n (1818 points, 387 comments)
  7. todu (1756 points, 265 comments)
  8. seweso (1742 points, 328 comments)
  9. awemany (1690 points, 401 comments)
  10. Shock_The_Stream (1647 points, 217 comments)
  11. Helvetian616 (1578 points, 206 comments)
  12. Egon_1 (1478 points, 162 comments)
  13. realistbtc (1299 points, 95 comments)
  14. BitcoinIsTehFuture (1231 points, 139 comments)
  15. LovelyDay (1226 points, 196 comments)
  16. thcymos (1172 points, 117 comments)
  17. BeijingBitcoins (1098 points, 58 comments)
  18. Yheymos (1061 points, 69 comments)
  19. steb2k (1058 points, 238 comments)
  20. ydtm (987 points, 132 comments)
  21. dontcensormebro2 (975 points, 106 comments)
  22. chinawat (972 points, 223 comments)
  23. increaseblocks (934 points, 73 comments)
  24. segregatedwitness (921 points, 101 comments)
  25. Annapurna317 (874 points, 146 comments)
  26. DaSpawn (817 points, 162 comments)
  27. insette (808 points, 91 comments)
  28. TanksAblazment (803 points, 150 comments)
  29. blockstreamcoin (787 points, 133 comments)
  30. MeatsackMescalero (774 points, 95 comments)
  31. satoshis_sockpuppet (745 points, 126 comments)
  32. BitcoinXio (739 points, 50 comments)
  33. jstolfi (734 points, 183 comments)
  34. singularity87 (720 points, 90 comments)
  35. Richy_T (704 points, 163 comments)
  36. redlightsaber (690 points, 138 comments)
  37. Leithm (686 points, 74 comments)
  38. ErdoganTalk (668 points, 252 comments)
  39. BitcoinPrepper (665 points, 89 comments)
  40. reddaxx (664 points, 105 comments)
  41. r1q2 (660 points, 110 comments)
  42. papabitcoin (653 points, 79 comments)
  43. 2ndEntropy (632 points, 76 comments)
  44. FormerlyEarlyAdopter (608 points, 92 comments)
  45. Coolsource (595 points, 116 comments)
  46. Peter__R (589 points, 43 comments)
  47. timepad (570 points, 62 comments)
  48. Rawlsdeep (564 points, 109 comments)
  49. themgp (560 points, 46 comments)
  50. ForkiusMaximus (558 points, 89 comments)

Top Submissions

  1. Dear Theymos, you divided the Bitcoin community. Not Roger, not Gavin, not Mike. It was you. And dear Blockstream and Core team, you helped, not calling out the abhorrent censorship, the unforgivable manipulation, unbecoming of supposed cypherpunks. Or of any decent, civil persons. by parban333 (566 points, 87 comments)
  2. "One miner loses $12k from BU bug, some Core devs scream. Users pay millions in excessive tx fees over the last year "meh, not a priority" by Egon_1 (529 points, 262 comments)
  3. Charlie Shrem on Twitter: "If we don't implement bigger blocks ASAP, Paypal will be cheaper than #bitcoin. I already pay a few dollars per tx. Stop hindering growth." by sandakersmann (472 points, 254 comments)
  4. nullc disputes that Satoshi Nakamoto left Gavin in control of Bitcoin, asks for citation, then disappears after such citation is clearly provided. greg maxwell is blatantly a toxic troll and an enemy of Satoshi's Bitcoin. by parban333 (400 points, 207 comments)
  5. The debate is not "SHOULD THE BLOCKSIZE BE 1MB VERSUS 1.7MB?". The debate is: "WHO SHOULD DECIDE THE BLOCKSIZE?" (1) Should an obsolete temporary anti-spam hack freeze blocks at 1MB? (2) Should a centralized dev team soft-fork the blocksize to 1.7MB? (3) OR SHOULD THE MARKET DECIDE THE BLOCKSIZE? by ydtm (354 points, 116 comments)
  6. LOL - /bitcoin user claims that people aren't being actively silenced; is actively silenced. by BeijingBitcoins (307 points, 142 comments)
  7. Massive censorship on "/bitcoin" continues by BitcoinIsTehFuture (296 points, 123 comments)
  8. Charlie Shrem on Twitter: "You can talk about anything in BTC and it won't be auto deleted" by BitcoinXio (291 points, 69 comments)
  9. Bitcoin Unlimited blocks exceed Core for first time, 232 vs. 231 of last 1,000 by DNVirtual (282 points, 84 comments)
  10. As relevant as it's always been by iopq (276 points, 15 comments)

Top Comments

  1. 151 points: nicebtc's comment in "One miner loses $12k from BU bug, some Core devs scream. Users pay millions in excessive tx fees over the last year "meh, not a priority"
  2. 123 points: 1DrK44np3gMKuvcGeFVv's comment in "One miner loses $12k from BU bug, some Core devs scream. Users pay millions in excessive tx fees over the last year "meh, not a priority"
  3. 117 points: cryptovessel's comment in nullc disputes that Satoshi Nakamoto left Gavin in control of Bitcoin, asks for citation, then disappears after such citation is clearly provided. greg maxwell is blatantly a toxic troll and an enemy of Satoshi's Bitcoin.
  4. 117 points: seweso's comment in Roger Ver banned for doxing after posting the same thread Prohashing was banned for.
  5. 113 points: BitcoinIsTehFuture's comment in Dear Theymos, you divided the Bitcoin community. Not Roger, not Gavin, not Mike. It was you. And dear Blockstream and Core team, you helped, not calling out the abhorrent censorship, the unforgivable manipulation, unbecoming of supposed cypherpunks. Or of any decent, civil persons.
  6. 106 points: MagmaHindenburg's comment in loses 13.2BTC trying to fork the network: Untested and buggy BU creates an oversized block, Many BU node banned, the HF fails • /Bitcoin
  7. 98 points: lon102guy's comment in loses 13.2BTC trying to fork the network: Untested and buggy BU creates an oversized block, Many BU node banned, the HF fails • /Bitcoin
  8. 97 points: bigboi2468's comment in contentious forks vs incremental progress
  9. 92 points: vbuterin's comment in [Mark Friedenbach] There is a reason we are generally up in arms about "abusive" data-on-blockchain proposals: it is because we see the potential of this tech!
  10. 89 points: Peter__R's comment in contentious forks vs incremental progress
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submitted by subreddit_stats to subreddit_stats [link] [comments]

What are the main drivers of the Bitcoin price? Evidence from wavelet coherence analysis

This was posted on /bitcoin via MIT Tech Review, but it didn't make the front page.
The actual paper:
First, even though Bitcoin is usually labelled as a purely speculative asset, we find that standard fundamental factors (usage in trade, money supply and price level) play a role in Bitcoin prices in the long term.
Second, from the technical standpoint, the increasing prices of Bitcoin motivate users to become miners. However, the effect is found to be vanishing in time as the specialized mining hardware components have driven the hash rates and difficulty too high. Nonetheless, this is a standard market reaction to an obvious profit opportunity.
Third, the prices of bitcoins are driven by investors' interest in the crypto-currency. The relationship is most evident in the long run but during the episodes of explosive prices, the interest drives the prices further up, and during rapid declines, it pushes them further down.
Fourth, Bitcoin does not seem to be a safe haven investment.
And fifth, even though the USD and CNY markets are tightly connected, we find no clear evidence that the Chinese market influences the USD market.
submitted by GlorifiedApe to BitcoinMarkets [link] [comments]

[Table] I am Andreas M. Antonopoulos, Author of "Mastering Bitcoin" - Ask Me Almost Anything! (IamAMA AMB AMAA!)

Verified? (This bot cannot verify AMAs just yet)
Date: 2015-01-15
Link to submission (Has self-text)
Questions Answers
You had a tweet yesterday that said, "The most interesting chart in bitcoin right now, and for the next 2 weeks is the hashrate and difficulty chart" Link. If miners cannot afford the electricity, they turn off their equipment. Hashing rate falls, perhaps even precipitously. The difficulty adjust to compensate and find a new equilibrium. However, we have never seen a very large hashrate drop in bitcoin and the difficulty adjustment takes 2016 blocks to happen. A large hashrate drop may result in long block discovery times, delaying the difficulty adjustment beyond the usual two weeks. I'm monitoring those two charts (hashrate, difficulty), to see if this scenario plays out because it is the first time this might happen. This is a very big test of the bitcoin difficulty adjustment algorithm and the mining industry and it is a preview of the upcoming (2016) reward-halving event. In essence we have just had a reward halving event (in fiat value terms) that was unanticipated and unplanned. I think it will all work out well and prove the resilience of bitcoin's dynamically adjusting algorithmic regulation, but it's still the most interesting thing I am watching.
In your opinion, how important is decentralization to the future of Bitcoin? Is it in your top 10 concerns about Bitcoin? What could lead to "bad" centralization, what do we need to do to prevent that and what are the trade-offs in ensuring Bitcoin stays decentralized? De-centralization is one of the prevailing geopolitical and technological themes of this century. The fight for de-centralization of control and information is playing out on the Internet in every country in the world. It is, in my opinion, the most important fight as it will determine the freedom (or lack of) for billions of people. We are heading in a good direction overall. We have replaced kings, despots and tyrants with institutions. Now we are replacing many institutions with protocols and networks, empowering individuals. But those who benefit from centralized control over power will not sit idly by while we take away their power. They use fear and violence to exert control and deepen their power structures. They fool us into submitting to unearned authority and give up our rights and freedoms by exploiting security fears. Bitcoin is only part of the puzzle, but it is a very powerful part.
What do you think about Bitstamp and their lack of proving their reserves and liquidity? What can we do to demand transparency from our exchanges? They can't keep bitcoin offline or easily de-centralize control of keys without severely limiting their liquidity and execution time The most important thing exchanges can do is discourage the use of their accounts as wallets and discourage holding large balances unless actively trading. This of course limits their liquidity, so it is not an easy compromise.
Can you comment on the Silk Road trial? Decentralized exchanges would be best, but despite hard work from many, such a system has not been built so far.
Also, can you explain in more detail what happened with your departure from Blockchain? I cannot comment on the Silk Road Trial.
I cannot comment on my departure from Blockchain further than my published statement.
Hello Andreas, do you think it would be possible for the miners to do productive work instead of just solving hashes for artificial difficulty? Mining on an algorithm that has "dual purpose" is risky. Mining is not "non productive", it serves to secure the bitcoin network and does so very well. The risk of adding another purpose to the mining is that it introduces a price-externality, a secondary source of value that may distort the incentive structure of the consensus algorithm. For example, if you are finding primes and suddenly a new application is discovered that makes primes very valuable, then the consensus algorithm is now subject to a completely external market for prime numbers that has nothing to do with the security of that blockchain.
There are alt-coins that attempt to do this. See Curecoin, Gridcoin, Primecoin.
Since Bitcoin can be as anonymous as we want to make it, can we compromise with regulators to comply with traceability for purposes of trading with fiat? Bitcoin is weakly pseudonymous and can be traced perfectly well in targeted and warrant-based investigations. Bitcoin is somewhat resistant to wholesale and indiscriminate surveillance which is both illegal and immoral. There's no need to weaken it's privacy protections. Privacy is consumer protection and breaking privacy never serves consumers, no matter how hard they try to sell it as such. Financial privacy may be seen as a privilege in some countries but it is a matter of human liberty and life/death in dozens of countries. Bitcoin is theirs too and we can't forget that.
Why should an average user pick up bitcoin? To experience the future of money. To gain a glimpse into an exciting technology. To learn about how money could be in the future and also become aware of how limited money and banks are today.
For the "other 6 billion" who don't enjoy international, control-free banking as we do, bitcoin represents an opportunity to become part of a global economy which up till now did not exist. For those users, bitcoin is more than just a curiosity, it might be a doorway to connect to the world.
For the "other 6 billion" who don't enjoy international, control-free banking as we do, bitcoin represents an opportunity to become part of a global economy which up till now did not exist. I'm curious about what economy you mean by this. The only thing that I can think of that fits the description is darknet sites like Silk Road. What other global economy has been spawned as a result of Bitcoin? Clarification: "The opportunity" did not exist. "The global economy" is the existing one, from which a huge number of people are effectively cut-off.
Hi Andreas. How do you prepare for your speeches? I give speeches.
I've been doing public speaking for more than 20 years. At first I was shy and mediocre. I got better with practice. Nowadays, I speak at events weekly and I try out new concepts and ideas with each speech, extemporaneously. It's all improvised with 80% old content and 20% new "test" content, gradually cycling. A lot of my best ideas are off-the-cuff while I am speaking and I gauge the audience reaction and then repeat them when successful.
I really am a huge fan of your ability to represent Bitcoin and Blockchain, and your energy in doing so. But, I see you frequently make incredibly ageist statements about older people being unable to comprehend Bitcoin and the blockchain technology and their import. So, I have to ask, are you ageist? Don't you see it necessary for older people to be brought on board too? Or what? You have a great point. I was not aware that I was ageist, though I can see how my comments give that impression. I think it becomes harder for most people to absorb change, especially technological change, as they age. That means that most progress happens because young people introduce and absorb change. However, that effect is counterbalanced by the value of experience (and the risks of youthful inexperience and immaturity). I'm 43 now and I'm probably in between the two experiences. I appreciate your question and will think hard about my possible ageist bias and moderate my tone. I don't mean to dismiss or demean anyone and I apologize that I have done so. Mea culpa.
Despite the huge media attention last year at the height of the bitcoin price, using bitcoin is still way too difficult for your average economic agent. It's still far too early. Bitcoin is at the same stage as the Internet in 1992-1993. At that time, it took UNIX command-line skills to send email. No way near ready for mainstream adoption.
The volatility is still incredibly big, and as a result bitcoin still isn't accepted throughout society. Given the lack of media exposure now, where do you see bitcoin heading in a year, as a currency? However, while it took almost 20 years from the day I sent my first email until my mom used her new iPad to send her first email, bitcoin is likely to be adopted on a much more accelerated schedule. After all, there is no need to deploy much infrastructure - you can just download an app.
The book is available in its entirety on github: Link to One of my guiding principles in life is that knowledge must be shared. I am a strong support of open source. Everything I do, in every forum is released under open source licenses, usually CC-BY-SA ( The book was developed on github in an open community-driven project. I still appreciate it if you buy the book, if you can afford to. Code REDDIT30 will give you a 30% discount on the O'Reilly site linked in the OP.
Perhaps a better question than the speculative "how long do you think it'll take" is "What do you think it will take increase merchant adoption?" In terms of actions, practices, legal rules. It will take time. In western developed economies, the use of bitcoin for retail shopping offers only small advantages over credit cards, while being difficult to learn, use and secure by the average user. In the developing world, bitcoin can fill a massive void of banking services but there are infrastructure, UI, device and awareness barriers. These gaps will become narrower over time.
Bitcoin is often equated by its supporters with the early internet and important innovations such as email. There are a number of cryptocurrencies based on the same blockchain scheme as bitcoin, yet people such as yourself seem to exclusively promote use of bitcoin. It is actually very difficult to bootstrap a successful currency that is necessary to back the security of the network. It took 3 years for bitcoin to evolve to a level where attacks against the consensus algorithm became very difficult.
If cyrptocurrency technology is so important, why only promote bitcoin? Supporters of the early internet did not insist that one email client or web browser dominate all communications. Is it because you and others in the bitcoin community stand to gain financially from its use? Bitcoin has a tremendous "network effect", in my opinion, which may give it an insurmountable early-mover advantage. In technology it is often not the best technology that "wins", but the one that achieves broad enough adoption and recognition early enough. Good enough beats best if deployed broadly.
Last updated: 2015-01-19 18:26 UTC
This post was generated by a robot! Send all complaints to epsy.
submitted by tabledresser to tabled [link] [comments]

A few thoughts - Wednesday, August 20, 2014

Good evening! A few thoughts for dinner tonight:

The VC bubble and a domino effect of failures

The latest fad in /bitcoin is that the price of bitcoin doesn't matter. One thread was titled "Sean's Outpost can give meals whether bitcoin is worth $35 or $1200!" That's true, but bitcoin is more complicated than that one use case.
I talked about the insane amounts of venture capital being poured into the industry right now a few weeks ago. The price of bitcoin is important for these people because it affects all sorts of businesses. For example, mining businesses can't profit if there is a crash after they design their chips. Exchanges make less money if the price is lower because a lower price can't support high volume. People who build projects on top of the network and who are sitting on donations can fold. Altcoins that are promising can be forked because it is no longer profitable to mine them.
Even at higher prices, there was not enough money to go around to prevent most of the VCs from losing on their investments. The piece of the pie that the VCs can earn shrinks as the price of a bitcoin falls. These people have deep pockets, so most of them can survive a brief downturn, but as the network expands, the lower bound price that would precipitate a complete collapse is rising.
When bitcoins averaged around $50, there weren't lots of employees getting paid in bitcoins and bankers wanting returns on investment. Now that bitcoins tend to average around $600, the size of the economy has increased significantly. Previously, the price of bitcoins could have dropped to $10 and everyone could still have looked forward to a recovery. Now, the minimum price is much higher (I've said $200) where a cascading chain reaction of business failures would take out the whole industry. In the future, that minimum price will likely rise to $1000, and then to $10,000, and so on.
The price falling below $200 or whatever the minimum is doesn't itself signal anything wrong with the promise of bitcoins. Instead, the low price will cause the failure of some critical part of the infrastructure like a major exchange, which could then cause businesses that depend on the exchange to be taken out, and so on. Even if everyone who owns bitcoins believed that the technology would succeed and there were many people spending bitcoins, the businesses would all be forced into bankruptcy simply because other businesses they need to offer their services failed in a chain reaction.
This VC bubble is dangerous and the best thing that could happen right now is for the VCs to stop temporarily with their investments so that this does not happen. Otherwise, the industry will end up in a fragile state where there are startups depending on other startups that have business models depending on a base price.

The "technology adoption curve"

One of the popular graphs making the rounds nowadays is the "technology adoption lifecycle" graph at According to the people who agree with the theory, bitcoin is currently in the bottom of that huge valley in the middle of the chart. One writer suggested that bitcoin was somewhere near the top of the curve still, with a long ways to fall down the valley before the technology ends up as a fraction of what it was thought to become.
While this chart may be relevant to other technologies, it isn't relevant to bitcoins. The most obvious problem with trying to explain bitcoin adoption using this chart is that there have been many bubbles, but the chart only contains one bubble. It would have been possible to pull out this "technology lifecycle" chart after any bubble in the past few years and state that bitcoins were stuck in the "chasm" and will be permanently damaged. For example, someone could have drawn this graph after the period where bitcoins fell from $50 to $2 and stated that the use of the technology will never be valued at more than $20.
Another reason to ignore this chart is that many of the other technologies that are often compared against it didn't follow the chart either. Some people suggest that the Internet followed this chart, because there was a bubble in 2000 that later crashed, and that the high hopes of the Internet transforming daily life never came to be. The way I see it, the Internet has grown far beyond anything imagined in 2000. Whereas might have failed, Wal-Mart is now losing customers because Internet shopping has become so cheap that it is a bad idea to go to their stores anymore if your goal is to save money. Cell phones have made many people oblivious to the world; I recently compared what it was like to ride the bus when I went to college and what it is now like to ride the same bus system. Now, everyone on the bus is engrossed in their phones and nobody even bothers to look out the windows, and in ten years people will probably be playing video games with their friends in their glasses, oblivious to the world around them.
Bitcoins are also not "just another technology." There are some technologies like bitcoin that can completely change the world. The Internet, television, and radio were a few of them, because the way the world worked was fundamentally changed by these technologies. Most of the other technologies listed on these charts, like facebook, self-driving cars, and virtual reality are not things that fundamentally change the way the world works. The economy ticks on without being changed significantly by facebook, but any company that has no Internet connection is obsolete.

Unbelievable deals on PS4s

Newegg has unbelievable deals on Playstation 4s right now. If you pay with bitcoins, you can buy one for $319.99, almost 30% below market rate. These are brand new and sealed, and it's likely that Sony will not lower prices to this rate for at least a year or 1.5 years. If you want to make quick money, you can buy a PS4 and then undercut sellers on Craigslist to pocket 50 bucks. For some reason, the market of these bitcoin-discounted PS4s and the dollar-denominated PS4s is decoupled and there is significant profit to be made.
I was trying to figure out what the catch is with these consoles yesterday. Newegg must be losing money on these, because they have a limit of 1 per customer. If they were earning money, there would be no reason to have such a limit. If they were simply offering a loss leader to get people to shop at Newegg or to upsell accessories, then they would offer the same price or close to it in dollars.
Therefore, there are three possibilities for this pricing. The first is that Newegg is being killed by so many transaction fees that they can actually afford to discount the PS4s to this insane price rather than give most of their profits to banks. The second is that bitcoins are priced low, and the company is gambling on a 30% loss now to gain more when this panic subsides. The final reason is that they simply want to promote bitcoins as a currency because in the long-run, the money they can save from transaction fees if bitcoin were the world currency far outweighs the losses they are taking on these items now.
I will take a risky position and say that #2 has played a role in this sale. If a company were looking to promote bitcoin adoption, and hold some percentage of assets in bitcoins, then the best time to do it would be when prices are very low. They can sell thousands of these consoles and take $30k in losses, but they end up with 1000 bitcoins in return. In the process, there are a certain number of people who bought accessories that are very profitable, there are new customers who will now return to Newegg in the future, the price of bitcoins is likely to rise eventually, and they have encouraged people who otherwise would never have bought bitcoins to do so, so that the transaction fees they pay in the future are more likely to be lower. Someone in the accounting department was tasked with adding together all these probabilities and came up with how much they can discount the units to make a profit in the long term.

How long a transaction takes

I read an article this morning where someone mentioned that the average time a person needs to wait for a transaction to process is five minutes. The number is derived from the incorrect assumption that blocks occur every ten minutes, so if you picked a random point between these ten minute intervals many times, it would be, on average, five minutes away from the next block.
Some people also state that it takes ten minutes to process a transaction, which, again, is inaccurate. What's alarming is that journalists for big-name newspapers spread false information to the public when they publish articles about the supposed "10-minute confirmation time."
Hashing for the bitcoin network is independent. If people have been hashing for 60 minutes without finding a block, there is no greater chance of finding a block in the next minute than there was 60 minutes ago. Therefore, one cannot say that blocks occur "ten minutes apart," because that isn't always true. Having done lots of work on a block does not mean that the next block is any more likely to be found sooner.
The time until the next block can be calculated using an exponential distribution. If the hashrate has not increased or decreased since the last difficulty change, publishing a transaction right now means you can expect for it to be confirmed in about 6.9 minutes, not 5 or 10 minutes. This calculation does not make intuitive sense, but results from the random nature of independent hashing. This is good news for those who mistakenly believe that it will average 10 minutes for a merchant to receive a transaction.


submitted by quintin3265 to BitcoinThoughts [link] [comments]

Overview of major risks of buying Nyancoins

Version 3 is current as of June 2017.
Edit: Some of these risks are slightly outdated (as of mid October): we have gained an additional exchange, for instance. I need to update this document to reflect these changes. However, this is complete to the best of my knowledge: some risks may be reduced but I'm unaware of any new risks.
Edit 3: Adding notice about the fork bug and time warp bug here.
Edit 4: Updating this page to reflect the final demise of Cryptsy and our current single exchange status again.
Edit 5: I hadn't noted explicitly here yet but I should have: given that this has now gone to archive, please send me a message or make a new post here for any additions or corrections you would like to see in this document.
Executive summary
Nyancoins have weak demand, are vulnerable to being forked, are traded on only one exchange, have inconsistent blocks, do not have a core developer, have the potential for serious bugs, an uncertain legal situation, concentrated ownership, depend upon the Internet, may be addictive, and could make you wealthy, which has been alleged to lead to more problems.
Introduction: This is my best attempt to collect every major risk factor from buying Nyancoins, although I can offer no warranty of fitness for this information for any purposes. I believe in honesty and forthrightness. Having this available and obvious is a simple matter of basic decency. Much, hopefully all, of this information has been discussed previously in /nyancoins, but this document in particular is about being up-to-date and central. This page will be updated clearly as appropriate if situations change.
If you believe that I am missing something, please note any other major risks you see in the commentsin a pm to coinaday or in a new post to /nyancoins (due to post now in archive mode).
Demand: So far, the majority of the buying pressure has been myself. I base this statement on my recollection of the trading history so far this year (all of my trades in NYAN) and the fact that I have acquired more than 50 million coins, somewhere around 25% of the coins, so far, as well as my observations that I have usually had the leading major bid, and usually the leading bid regardless of size.
This is an unsustainable situation in the long-run. For my own sake, and in particular right now, I cannot afford to keep powering nyan's rise financially alone.
Update: there has been a growth in demand from others, in particular as I became unable to add BTC for bids from my own financial pressures. However, the price fell down to ~10 satoshi during that period.
Fork bug: Nyancoins are vulnerable to a fork bug. NYAN2 should solve this, but so far it is only an alpha code draft and not even built. I am stalled on getting a new computer for a build machine for this (or someone stepping in to help with build/test on NYAN2) and expect it may be several months until I can complete this (late Q1 of 2016).
Exchanges: Nyancoins are only traded on Cryptsy. If it implodes, Nyancoins will face very serious challenges. The nyanchain and infrastructure will continue to work, but prohashing at least is likely to drop us without a market to sell their block rewards and we could face a chain reaction which took down the entire coin if no one continued to mine or at least keep a copy of the existing blockchain.
Nyancoins are now listed on Cryptopia in addition to Cryptsy. This adds a pool and a nother market. Although Cryptopia has relatively small volume, I consider it trustworthy and expect we can rely upon them as our core market for the foreseeable future.
There are also questions specifically about Cryptsy, which has some very significant cons along with its advantages (like having a crazy number of obscure coins). Read snarklaser's comment below which pointed out this risk for more information.
Cryptopia is now the only exchange for Nyancoins, given Cryptsy has now finally clearly ceased to be a viable exchange. If Cryptopia were to fail somehow, it is likely that this would have significant consequences for Nyancoins. I am not aware of any other exchange which would be likely to list us immediately or soon or which would be a particularly good option. However, there are decentralized exchange technologies, notably CATE, which NYAN2 should be able to support. On-Reddit exchanges are also possible with tipbots, but require trust as they are not atomic. It should be possible to build an "exchangebot" similarly, although I'm not currently aware of one, but my concept would still have the bot as a trusted central party.
Atomic cross-chain transactions seem to me like a very promising core technology ultimately for building exchanges which can be more proveably secure. They could also allow exchanges to share a common listing protocol as well without having to trust the other exchanges (at least, beyond the core protocol development and maintenance; tanstaafl).
Inconsistent blocks: I haven't done a quantitative analysis of this, but from the beginning of when I started actually using the nyan blockchain, I sometimes noticed that it would be a couple of hours until a transaction went through. When the average block rate is supposed to be one minute, this is pretty crazy. And now we seem to have seen some that are even worse: I had recalled maybe 3-5 hours; these last couple have been more like 12-18 hours. This is obviously a serious deficit. I expect that as we revive we will attract dedicated miners which should prevent this, but it's troubling that it almost seems like so far getting bigger has attracted stronger hit-and-runs rather than attracting long-term miners.
If this is not a temporary anomaly and were to continue to get worse, it could really cripple Nyancoins functionally. In a well-functioning system, I would think that a gap longer than an hour between the blocks shouldn't happen.
Core developer: Although we have good general tech support in this community and have put up supporting infrastructure, there is not anyone officially currently working on core client code. This could be a problem in the long-run. I am currently working to address this through an updated client based on Litecoin (as of this writing I've compared the original diffs but have not yet started to produce the new version). However, I'm not necessarily official yet and wouldn't consider myself to be until that release is done. If I disappeared like the previous developers and did not release this, eventually a lack of updated client would probably be a problem. However, as far as I know, the current client is fine for now. I'm working on a new one primarily to prove the ability and have that experience in reserve for when we really need an update.
Bugs: It is possible that there are bugs in the underlying code. I have never read through all of the bitcoin or nyancoin code, of any version, nor even finished reading the original bitcoin whitepaper (by the way, we oughta make up a nyancoin whitepaper or ten someday), meaning I have no professional or technical knowledge about whether or not the system is fundamentally sound. I've been going based on "it seems to be working, so it's probably fine", which is, shall we say, more of an engineering than scientific approach.
Update: I have heard reference to a "time warp" bug vulnerability in the KGW difficulty function which Nyancoins has. I do not know details and my understanding is a fix to this would require a fork to change the difficulty function, so I do not anticipate a fix before NYAN3 (late Q4 2016 activation at best, Q1 2017 seems a reasonable target). I consider this vulnerability to be similar to the fundamental weakness to difficulty spikes after large amounts of hashing jumps on the network. Hostile (or simply passing interest with large capacity) hashing does degrade the performance of the network. Fundamentally, this class of attack can be mitigated with a transaction to 'unstick' the chain after, since the difficulty function will adjust in the next block after enough wall-time has passed since the last block (so only need one high difficulty solve which can be triggered by a transaction fee).
Legal: Bitcoin faces uncertain legal situations in almost every country. Nyancoin is even more uncertain, as people tend to consider bitcoin and not address impacts on altcoins. Between the potential tax implications and banking regulations and currency laws, there are a wide variety of ways a person could make a felony-level mistake. This can be somewhat mitigated by merely buying and holding, as you won't be responsible for KYC/AML presumably (although arguably an argument could be made in your purchase), and presumably unrealized capital gains wouldn't be taxable (but I am neither a lawyer nor accountant nor any sort of expert on the relevant accounting laws in any country).
Somehow getting legal opinions for Nyancoins in every country would be very useful in my opinion. If Bitcoin and altcoins are well-studied in a given country it should be relatively easy to adapt those opinions and research to Nyancoins, but it would still require some pro bono work in any case. So...hopefully we'll get some lawyer Nekonauts someday who are willing to semi-officially give us an opinion. In the meantime...hope that common sense can save you. If you sell Nyancoins directly, you're going to need to comply with the KYC/AML types of laws of your country. If you're going to do banking operations...may the central bank have mercy on your soul.
I think the best advantage we have is the same bitcoin had for its first years: we're too small for anyone to care. But since we plan to grow significantly, we need to be aware of our legal issues upon scale. Which is to say, whether or not you're allowed to sell 10,000 NYAN to your friend probably has a lot to do with whether your friend legally acquired whatever is being offered in exchange, and whether the value of what you get in return is above a certain level or not. I'm not going to try guessing that level precisely because I know I'll be wrong. $1 is probably fine. $10,000 is probably illegal without some significant licensing. I would suggest either not touching fiat or else deliberately capping it without verification after getting an independent local expert legal opinion.
concentration: The fact that I hold about 25% of the currently outstanding NYAN could be a major risk factor, particularly if I do not act in the best long-term interests of the strength of Nyancoins. For instance, I could pull my bids, sell only a small part of my holdings, crash the market, and potentially buy a lot of volume for a lower price. While I cannot foresee any circumstance under which I would do this, it is certainly conceivable that I could be financially, legally, or morally obligated to do so if I were to become insolvent.
Internet outage: if the Internet goes down, we hit a very nasty scenario. We can't process transactions, and all the miners go into a race to make useless blocks on their own. If the Internet were never to come back up, Nyancoins would be dead. If there is a daylong internet outage, the longest blockchain discovered after, presumably representing the most hashing power dedicated to empty blocks during that outage, will win. So I suppose the block rewards in that case are for having the faith in Nyancoins to keep hashing and storing the blockchain during the day without the Internet.
addictive: This was a curiosity to me when I started. Now it's an obsession for me. I'm constantly thinking about how I can help to smooth the path for Nyancoins to grow stronger and better and more valuable. You may find that once you start to realize the impact you can have upon Nyancoins, and that Nyancoins can have upon you, that you start to become addicted as well. It is possible to substitute another addiction in its place, such as dogecoins or pcp, but it is not recommended.
Nyancoin addictions are considered 'mostly harmless'. The exception is if you go 'full coinaday' and start to accumulate more than 10% of your assets in Nyancoins. In this, this is essentially a variety of gambling addiction. I would argue that it beats roulette because you can tilt the odds in your favor, but then, I would argue that, wouldn't I?
mo' nyan mo' problems: Some people have claimed that more money leads to more problems. Since nyan is money, it follows as a consequence of the conjecture. Should this be the case, your increasing nyan could potentially lead to such problems in the future as: enhanced attention from revenue collection services of all kinds (governmental and private), swarms of fake friends and gold-diggers, excessive risk-taking as a result of feelings of invincibility, an increase in certain varieties of targeted marketing, possible disqualification for asset-based welfare for you (or even your children, for instance college financial assistance), an inability to remember how many houses you own, or other serious problems.
There are a variety of different risks in buying Nyancoins. I believe by far the most serious one, the only one I'm personally concerned about, is the demand issue. If those of us who have found or come back to NYAN abandon it, it could die. Otherwise, I think it can survive anything, even these occasional crazy long block times.
This self-certified infallible message has been brought to you as a Public Service Announcement of the NYAN Public Relations Council, a transparent front organization of notoriously lovable philanthropist and major NYAN hodler coinaday.
Edit 1: Adding exchange collapse risk as pointed out by snarklasers.
Edit 2: Adding lack of core dev as pointed out on BCT.
submitted by coinaday to nyancoins [link] [comments]

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