Gold collapsing. Bitcoin UP.

[satoshis_sockpuppet]

With the assumption, that no Bitcoin economy exists (because it isn't feasible with 20$+ fees) apart from drugs and luxury goods:

- perfect tax evasion for the wealthy

Only in countries with property tax and only if it holds value.

- easy money laundering for drug cartels

Exchanges are heavily monitored. Definitely not easy.

- Silk Road for large supplier-dealer purchases

No idea if the need is there. But I'd guess for high profile drug dealers, the transportation of tons of drugs is the problem and not the transportation of a suitcase filled with a million dollars.

- easy capital control evasion for Chinese and Venezuelans

If it holds value Also not easy if you actually want to use your capital someday...

- easy hedge against hyperinflation that no one can even know you hold

Everybody knows if you buy today (if you don't use localbitcoins, which doesn't work for not-peanut money). Also, we might see hyperinflation in the next weeks for everybody who is buying above 5k.

- easy ability to send very large amounts to anywhere in the world with no red tape, etc.

I'll have to convert fiat to BTC to fiat. I have to pay fees three times. Bitcoin is far more expensive and definitely not easier than a SEPA transfer.


Even in your scenario, where Bitcoin doesn't face competition from cryptos (btw, it still faces competition from banks and fiat) it isn't a product that's worth that much. It has value as a currency. Not as a toy.

 

[awemany]

@Zangelbert Bingledack : This is about what goes through my mind as well. I just think the bear market after that crash will make it *very* hard to get the public excited about crypto again.

 

[Zangelbert Bingledack]

@awemany Well we saw this movie in 2013-2015, but the public got excited again. Just could take a few years. Meanwhile we can use our winnings from this bull run to build. Rinse, repeat at the next orders of magnitude.

@satoshis_sockpuppet I think you may be downplaying those use cases just a wee bit. There are always examples you can give where it won't be useful, but if you think creatively there are plenty of people for whom even this crippled BTC (in the fantasy scenario where it's free of crypto competition) is literally their only viable option, or massively preferable to the alternatives. I wouldn't call it a toy by any stretch.

 

[solex]

Bitcoin Unlimited Membership vote on BU Improvement Processes

A major list of proposals for which members are invited to make their views count!
Twelve BUIPs are open for voting for five days - ending 17:00 UTC, 12 December 2017
Check out the voting system improvements at https://www.bitcoinunlimited.info/voting/

Articles of Federation BUIP
BUIP081: Unambiguous definition of 1 year membership period

Development BUIPs
BUIP070: Support BitPay's new Bitcoin Cash address format in BUCash
BUIP076: Support Base32 address format in BUCash
BUIP077: Enable representative tokens via OP_GROUP on Bitcoin Cash
BUIP078: Enable Binary Contracts in Bitcoin Cash via OP_DATASIGVERIFY

Operational BUIPs
BUIP068: Satoshi's Vision 2 - Conference
BUIP071: Make Bitcoin Cash the "Release" Version of Bitcoin Unlimited
BUIP072: Partially re-weight BU's funds towards BCH
BUIP073: Fully re-weight BU's funds towards BCH
BUIP074: Sell the Bitcoin Gold portion of BU's funds for BCH
BUIP075: Counter BUIP of BUIP071

Membership BUIP
BUIP080: New Members for Election #8

 

[humanitee]

I've had a slight perspective shift after talking to some people who get the big picture of the world situation of why Bitcoin is a revolution but are Bitcoin newbies and currently really excited about small blocks. This debate has got us so focused on all the terribly wrong things Core has done that I think we've forgotten how much of a massive revolution even Core's crippled Bitcoin would be...if it didn't have to deal with competition for its network effect...which for the next few months it probably doesn't.

Plenty of time to reach $100,000 if nothing pricks the bubble in the meantime.

Copying from my reddit post today:

Imagine for a moment that spinoffs and altcoins were impossible, and BTC with low blocksize (and maybe layers on top) is all that could ever exist. No competition from altcoins or from Bitcoin Cash.

Would it be a revolution? Would it be worth investing in at these prices?

After a few minutes' thought, the answer is obviously YES. Most here will know me as an outspoken anti-Core guy, so hear me out...

Even at $20 fees, BTC - *with the benefit of no competition from other crypto* - allows many things that were never before possible in the world:

- perfect tax evasion for the wealthy

- easy money laundering for drug cartels

- Silk Road for large supplier-dealer purchases

- easy capital control evasion for Chinese and Venezuelans

- easy hedge against hyperinflation that no one can even know you hold

- easy ability to send very large amounts to anywhere in the world with no red tape, etc.

These are gigantic use cases, and even an ultra-crippled Bitcoin performs excellently at them *if free of competition*. It's not a ponzi as long as it has these amazing use cases backing it, which it does as long as it is *free of competition*. The BTC price would and should go to $1 million per coin on those uses alone, again, *if free of competition*.

And in that fantasy scenario, things like LN are just gravy. If they work, awesome. If they don't, these other use cases are still amazing.

But BTC most definitely isn't free of competition, you will say. There's Bitcoin Cash, or even other altcoins. That is the fatal flaw in Blockstream's plan. Indeed, BCH can come in and take all that commerce use that BTC left behind, take the commercial network effect for its own, and then get all those other uses cases for free and do them *better* than BTC.

In other words, sure, a horribly crippled Bitcoin is still revolutionary, but an uncrippled Bitcoin is far more revolutionary.

The problem for prospective investors is this: most people simply cannot take in the full awesomeness of Bitcoin. The fact that it didn't go to a million dollars in 2013 is proof enough of that.

They just see one or two benefits and they're sold on it, if they're going to be sold on it. BTC has plenty for that, and it is currently far in the lead by price and name-brand history, so since most even relatively savvy "smart money" investors will be clueless by the standards of the oldtimer bitcoiners that are common on this sub, they can easily end up piling into BTC for the revolution it iswould be if free from competition.

The kind of mania that can take BTC to $100,000 generally happens over the course of 2 or 3 months (look at historical logarithmic charts), which would likely be before a flippening has had a real chance to happen.

This is why I'm not selling all my BTC, despite finding the current state and apparent policy direction of the BTC chain preposterous.

All that has to happen for BTC to skyrocket (I mean *real* skyrocket, 2013-style, which we haven't seen yet) is for competition from BCH to take a few more months to kick in, and for LN to simply look like it *might* work to stave off competition long term (nevermind that Bitcoin Cash could just adopt LN if it worked; again most even smart-money investors aren't going to perceive such things, and there are network effect complications as well).

Long term it seems clear that Core's plan cannot work, but the market may need to ramp up in sophistication far more before it realizes that, and the impetus for that realization can probably only be a massive crash. In the meantime, a huge surge in BTC is still a possibility, despite it being a bubble in desperate search of a pin.

I disagree with all of this.

Bitcoin is unusable if enough people want to use it. Sure people can evade taxes, launder money, etc., but none of that matters unless they want to stay in BTC, and they don't, they all go to fiat in the end. Also you can't tumble now without it being prohibitively expensive or downright impossible, so it's easy to track all that because Bitcoin isn't anonymous.

If we were living in a world where Bitcoin could be spent easily at stores, maybe then I could believe it to be valued at $100k.

I also disagree we haven't seen an actual skyrocket yet. It went up $8000 over the course of 48 hours on GDAX. If that isn't skyrocketing, I don't know what is. That was a 40%+ move.

 

[Zangelbert Bingledack]

The same could be said for normal purchases: people only get in for a time. That still contributes to the price, both through short-term holding and through providing a backing. Ergo, not a complete ponzi scheme if there is no competition. If you were scared of your government or needed to cross borders, would you really want to move back into fiat or gold?

Regarding price, in actual fact we are only just starting to see 2013-level slopes on the ramps:

https://ibb.co/hjAdNw

I expect a correction here, and wouldn't be surprised by a huge crash, but neither would I be surprised by $100,000. That would put this two-year run on par with what happened in the run from $5 to $1200 in 1.5 years in 2012-2013.

 

[adamstgbit]

i guess we're now at the "delusional" phase.

#thistimeitsdifferent

 

[79b79aa8]

@Zangelbert Bingledack on the other hand, bitcoin has already doubled 3 times in 2017.
- start from the first ATH at ~1.5K
- 3 doublings puts us at 12K
- there have been at most 3 doublings per cycle in the post 2011 era (right?)
- so we may not reach 24K.

 

[humanitee]

"If you were scared of your government or needed to cross borders, would you really want to move back into fiat or gold?"

Depends where I was going, but quite possibly. Most countries that have governments to be immediately scared of also have small incomes per capita. Your comment presupposes that people from Argentina or Zimbabwe would have already been in Bitcoin, when in reality the fees would destroy their net worth, so they wouldn't be in it. Same goes for cashing it out. I would need to get to a country that has high enough net worth individuals so that the individual buying off me could afford the outrageous fees.

"I expect a correction here, and wouldn't be surprised by a huge crash, but neither would I be surprised by $100,000. That would put this two-year run on par with what happened in the run from $5 to $1200 in 1.5 years in 2012-2013."

Sure, but people aren't buying it for the technological reasons you are trying to outline. They are buying it because of greed and FOMO. Most people don't know how it works, that there's a transaction cap, how to store it properly, best privacy practices, etc.

We are lucky Coinbase doesn't expose private keys because if they did you would have to use the actual blockchain for all these payments and transfers, and Bitcoin would already be totally unusable for most people. Bitcoin really has no utility with a hard cap limiting its throughput, and therefore shouldn't have a high valuation. It has too much friction already. The whole system is inherently unstable, not "antifragile" as people like to say. It's entirely fragile unless people don't use it.

 

[Zangelbert Bingledack]

@79b79aa8 We went up 250x in 1.5 years from mid-2012 to end of 2013.

250x from where we were 1.5 years ago ($400) is $100,000.

We have to note what is possible and what has happened before, before we can have the right mindset for determining what will happen this time. There are many reasons why it probably won't go that high, but it remains a fairly easy possibility.

Especially with spinoff-topia. $60,000 BTC might even be enough to reach $100,000 total for the Bitcoin ledger complex. That's less than two doublings from here. Two doublings ago we were at $4000, late summer.

As for the cycles, yes it could be that we go sideways for a few months before the final surge, like in mid-2013. This time has been much smoother overall though, so it may come in one giant, super-exponential explosion.

 

[79b79aa8]

so it depends how you slice it . . . we are all shooting in the dark here, you can find some basis for any extrapolation you wish to make.

i am looking at mania cycles. like both ZB and adam have said, this looks a bubble waiting for its pin.

 

[Zangelbert Bingledack]

@humanitee I think there are enough people with sizable money in places with high inflation and capital controls to make it revolutionary if people knew about it and there was no crypto competition.

As for why people are buying, in these runs it's always a combination of real reasons and FOMO. At this point the buying is probably mainly/largely FOMO while those with real reasons mainly just hodl but in doing so create a springboard for the FOMO, like in the second run in 2013. But FOMO at the tail of a 2-year steady huge exponential run can be like the orgasm at the end of a 2-hour hugely intense sex session. With spinoffs in tow, we're looking at another 4x to 6x from here to scrape $100,000.

On the downside, of course, we could crash at this very moment and slide down to $1000 or $2000 over several months, maybe with a flippening and even BTC death spiral as well.

 

[adamstgbit]

 

[molecular]

I bought a steam key on Keys4Coins. It was really a pleasure, but the payment sucked. No block in more than 90 minutes. Than 3 blocks in 5 minutes, before it most blocks needed 20 minutes. I observed this before, and it seems the new EDA is not really working fine. I hope there will be a better one after the next hard fork.

I don't think there's a problem with the new DAA.

https://www.coinwarz.com/difficulty-charts/bitcoincash-difficulty-chart

Could the block times you reported be just variance?

My transactions get mined in a timely manner in Bitcoin Cash. For a low fee no less ;-)

 

[Christoph Bergmann]

Maybe it was due to it falling on Bitcoin's bull run ... It's just my subjective take on random looks at the block intervalls. My impression is, that blocks with very short intervalls (<5m) and very long intervalls (>20m) are happening more often than with Bitcoin Core and the classic DAA. It is subjective and random and could be totally wrong. Is it possible to plot the intervalls in groups, like >2m, 2-5m, 5-8m, 8-12m, 12-15m, 15-20m, >20m, and compare this with Bitcoin Core?

I never had a Bitcoin Core block of 1.5 hours. I also never saw on Bitcoin Core what I saw yesterday looking at Jo-hoes Mempool: 2 hours with every block either >20min or <5min.

Thinking about this, btw, I started to like the idea of shorter block intervalls a bit more, as it produces more predictable confirmation times and a finer configuration of your security assumptions. For example, everybody who is not in fear of a miner spending a block reward to double spend the sell can easily accept small payments after 1 confirmation with 1minute blocks. Or, in case of having an orphan, 2 confirmations ...

Another btw: Yesterday I chattet with Olav from keys4coins, while waiting on the confirmation. Nicest game key support ever He said, that he's sorry, he can't accept zero-conf with Bitcoin Cash, because BlockCypher does not support Bitcoin Cash. BlockCypher has some kind of heuristic to determine if a payment will go through or not, which allows the acceptance of 0-conf. Maybe it will help to lobby BlockCypher to support Bitcoin Cash, or copy the feature, for example in blocktrail, or directly into Bitcoin Unlimited ...

 

[molecular]

@Christoph Bergmann, let's bring some objectivity into this discussion...

code used: https://pastebin.com/yJ6vSCb0

Caveat: block time is measured using the "time" header minus the "time" header of the previous block, so this data is possibly distorted by miners setting this value not close enough to the "real time" (intentionally or not)

The first thing I notice is that in general, the two distributions look very similar and like I would expect them to look.

However, we have to note that the bin with 59 or more minutes (the right-most one) has a lot more blocks (13) for BCH. In BTC there's only one such block. I don't have a good explanation for this, but I'm pretty confident it's not the new DAA. The chart I posted previously (BCH difficulty) shows that there are no wild difficulty swings (as there were with the EDA), so the reason must be fluctuations in hashrate or variance (bad luck in this case).

Any ideas / comments? Should I dig in deeper?

----

So I looked at early bitcoin block time (first 100k blocks) and it seems having 0.675% of block take 59 minutes or longer was the norm back then:

It's a "long tail" and I guess it's inherent to the process generating this distibution. Looks like Bitcoin Cash is "the real Bitcoin" from this viewpoint also, then, doesn't it ;-)

So the question becomes: why does BTC have an exceptionally low count of such blocks in the last 2016 blocks (only 1)? Maybe a block not being found for a long time increases the profitability (mempool fees rise) and miners hop over from BCH?

 

[Christoph Bergmann]

Wow, cool, I asked for charts, you print charts. Thank you. This seems to confirm the subjectivity of my attention selection. If there is some difference, it is very weak. Very short and very long intervalls happen most often on Bitcoin Cash, but only minimally more often, maybe below the threshold that it is felt.

To have a better overview, maybe analysing more blocks, 10,000, can help. Maybe the long tail abnormaly of BTC is just volatility.

To build a better DAA, you could ask, what is the perfect shape of this chart? I think swinging between 2 and 20 minutes is very ok, but the 13 very long blocks are around 20 annoying hours in two weeks. So I think that reducing the number of these incidents should be a goal.

The more I think about the block intervalls, the more I like the option to reduce blocktime, maybe to 1 minute, because it reduces the effect of abnormal slow blocks on the user experience. With 1 min blocks you might need 6 minutes or 20 minutes to get 10 confirmations, but you'll never need 90 minutes.

 

[molecular]

Here's the complete bitcoin block times:

Regarding reducing target to 1 minute: I like the idea and I think the upsides outweight the downside.

Whenever I think about this, I come back to what someone (I think @Peter R ) planted into my head: why have a target block time at all? But certainly a reduction to 1 minute is easier to implement, get consensus for and roll out.

EDIT: replaced image with correct one

 

[awemany]

@molecular: Incidentally, I am working on weak blocks for BUcash (and eventually ABC as well) right now.

Interesting graphs, thank you very much!
Nitpick: I think a simple exponential is not called a long tail distribution?

What I find really interesting is that there's a drop and what looks like another exponential at the 25min mark in all of your curves where the statistics are large enough to show this effect? WTF?

I also like to point out (@deadalnix) that I am positively surprised by the stability of the new difficulty algorithm, especially since we have two controllers (BTC and BCH) fighting each other.

 

[Richy_T]

Store of Value seems to work.

Not yet proven IMO. So far, we see FOMO seems to work.
[doublepost=1512751726,1512751085][/doublepost]

And at the same time on the other end of the spectrum we get more adoption:
Buy a private yacht, buy a Lamborghini, fly with a private jet.

The guy who sells the Lambos doesn't want to buy those things. He wants to pay his employees, pay the overheads on his business, buy groceries. What would he want Bitcoin for? Would he take payment in $400k worth of gold?