Gold collapsing. Bitcoin UP.

[Matthew Light]

When you are talking about it in terms of investments, it's an alt.

You're perfectly welcome to lash yourself to the mast.

As for me, I don't have the luxury of going down with the ship. I have a family to support as I get older and the economy groans under the assault of the financial central planners and their NIRP, ZIRP and other idiocies. There is a real danger that the small-blockists prevail and that Bitcoin fails to scale and grow and loses its pole position. If that happens, I need to be financially prepared for that eventuality and I need to pick the winning horse.

Ethereum can do an enormous amount of things that Bitcoin cannot, but in addition to all of those things, it's also a technologically newer and more refined platform.

I don't think it is unreasonable for people to be discussing the possibility that we might fail to fix the governance problems besetting Bitcoin, and what will unfold if that happens. It's simple prudence.

I still have the majority of my BTC investment. I still support Bitcoin Unlimited, XT and Classic. I hope sanity prevails. But I also realize that's not guaranteed. It's entirely possible that we fail to save Bitcoin from the neo-luddites and I'm not going to fail to prepare for that eventuality too.

 

[cypherdoc]

I know this entire blocksize civil war was giving me ulcers for weeks until I investigated Ethereum and decided to diversify my cryptocurrency investment.

that's ok. Bitcoin has been shedding tons of bulls the last several weeks. the more the better.

cuz when the next ramp comes we need a light ship.

 

[albin]

Ethereum undoubtedly has some impressive potential in smart contracts, but I'm very skeptical of whether ether itself will have significant upside as a speculative asset, because I'm not really convinced that the Ethereum mainnet necessarily has the same compelling network effects that Bitcoin has achieved focusing on being simply money. We may realistically end up seeing several forked instances of an Ethereum system, especially if and when the codebase goes POS. There are also a lot of less ambitious and less intellectually-robust approaches to solving the same smart contract use cases that might end up getting ubiquitous use.

 

[Zangelbert Bingledack]

If the hard fork happens much later than would be optimal, it wouldn't crush my faith in markets, because I concluded several years ago that all natural orders - including markets - take time to work their magic. That time can be reduced by further innovations such as futures markets, but we don't have fork-futures set up yet. Bitfinex, Bitstamp, and maybe even Shapeshift (Erik Voorhees) may want to get in on this, as there should be a lot of fees to collect from the traders.

 

[sickpig]

@cypherdoc

Soft forks, all of them, are hacks/tricks by definitions.

That said, even if PT is, maybe, helping killing SegWit as a SF, it is worth noting that at the same time he is saying that activation threshold for a any HFs should be 99%+ "measured over multi-week timespan".

http://lists.linuxfoundation.org/pipermail/bitcoin-dev/2016-January/012309.html

edit: grammar

 

[sickpig]

The decoupling of mining from relaying/validations functions, i.e. the separation between mining full nodes and notary-only full nodes, was one the most underestimated event in bitcoin history.

 

[Zangelbert Bingledack]

I decided to give Core a little help in retaining their reference implementation status. I'll just copy the content here so I don't get accused of brigading.

--

How Core can Defend its Turf against Classic and Other Forking Implementations using Futures Markets

The strategic move here is simple, and it pretty much prevents any other implementation from dethroning Core for the foreseeable future. As an example, here's how Core can make sure Classic can never gain a foothold:

1) Counsel an exchange like Bitfinex to set up fork-futures trading for Classic's proposed fork, where investors can buy and sell future coins (call options) on the Core side vs. coins on the Classic side. The trading would commence well in advance of the proposed fork.

2a) As long as Core is winning in the trading, do nothing. Core's position is safe.

2b) If Classic is winning, simply announce that Core will raise the blocksize limit to 2MB in 3 months. Classic will lose and again Core is safe.

Note that this could even be refined further: if Core wants to wait a year for a blocksize increase, it could announce that instead and check how the futures market reacts. If Core pulls well ahead on that announcement, Core could rest assured that they can stay more in line with their preferred roadmap without risking their dominant position. (You might say, "What if things change during the year and people again itch for a fork?" Then futures trading would start anew, and Core could reassess in the same way, always maintaining its leading position with minimum compromise.)

Alternatively, if that announcement is not enough to pull ahead in futures trading, Core could change it to 9 months or 6 months, testing the market's reaction each time.

Result: Core makes the absolute minimal changes necessary to retain its position. It doesn't risk overreaching and losing its reference implementation status, and it doesn't under-reach by compromising on its vision too much in an effort to please the market. All because it has the best tool available for ascertaining the market's reaction in advance - a futures market.

 

[BldSwtTrs]

https://blockchain.info/charts/estimated-transaction-volume-usd?timespan=all&showDataPoints=false&daysAverageString=7&show_header=true&scale=0&address=

According to this chart (I welcome critics on its reliability) there is $140m of value transfered daily on the network. The market cap is $5 700m. It's a ratio of 40.

In October 2013, it's look like there was $20m of value transferred daily on the network. The market cap was roughly $1 500m. It's a ratio of 75.

In January 2013, $3m of daily transferred value and market cap of roughly $145m. Ratio of 48.

I am too lazy to check other points in time but it's look like the fraction of the price of one BTC that comes from its speculative value is near an all time low.

I let you connect the last dots.

Edited because I initially butchered the calculation of January 2013, but conclusion remains the same.

 

[Inca]

Interesting @
Zangelbert Bingledack

Now the long awaited negative interest rates are coming for major economies I am interested to hear what people think the effect will be on bitcoin attractiveness in macroeconomic terms.

 

[BldSwtTrs]

@Inca negative interest rates are functionnally identical to inflation (ie. money lose purchasing power over time).

They failed to create inflation by expanding the monetary base so they are trying another way.

Zero inflation is the worst macro set up for Bitcoin. Bitcoin will thrive either with inflation or negative rates.

 

[Erdogan]

It's not that that free markets are less able to be net-optimizing/rational, it has to do with comprehending information in the market place.

I used to believe anyone capable of complex speech had the ability to understanding complex ideas, I think that's just less true people who don't understand the interrelationship of those ideas are being manipulated. The rationality of markets is falling victim to propaganda, and mental shortcuts in understanding and trust. We're witnessing an intentional propaganda war for the next step in the organizational hierarchy of society.

Given enough time (even generations), this will sort itself out Bitcoin may improve the status quo just enough to keep the old power structure in place or we may get a quantum jump, it is entirely dependent on enough people understanding the interrelationship of complex ideas. Bitcoin having lasted this long gives me hope.

Personally I'm humbled by the number of insightful posts popping up, what I'm not sure of is if its confirmation bias on my part, or if I've fallen victim to ignoring ignorant trolls, or if progress is being made. I may be delusional but I think collectively the bitcoin network is making progress and building up an immune response to a centralized control authority. (looking at you Adam and Greg)

I think the public has always wanted sound money, (savers, not so much broke spenders who would like to spend other's money). Gold, but paper money is easier to handle, and the money managers always promised sound paper money in the beginning. Now we have sound money that is also practical. The market will take care of keeping it sound, not consensus or democracy or whatever. In the market, we get what we want, others get what they want. Let them have a galloping money quantum, I don't care as long as I, and a sufficiently large number of other people can keep our sound and practical bitcoin, with as much transaction capacity as we need.

 

[cypherdoc]

Interesting @
Zangelbert Bingledack

Now the long awaited negative interest rates are coming for major economies I am interested to hear what people think the effect will be on bitcoin attractiveness in macroeconomic terms.

Screw all of you:

http://www.marketwatch.com/story/bernanke-says-fed-likely-to-add-negative-rates-to-recession-fighting-toolkit-2015-12-15

 

[Erdogan]

If the hard fork happens much later than would be optimal, it wouldn't crush my faith in markets, because I concluded several years ago that all natural orders - including markets - take time to work their magic. That time can be reduced by further innovations such as futures markets, but we don't have fork-futures set up yet. Bitfinex, Bitstamp, and maybe even Shapeshift (Erik Voorhees) may want to get in on this, as there should be a lot of fees to collect from the traders.

Worst case in my mind, is that segwit comes first, thereafter the blocksize increase, then removal of segwit. We end up having some fluff in the blockchain that we must keep, and have code in the nodes to verify it. But eventually, the market will return to the simple sound money, with a lot of transaction capacity.

 

[Zangelbert Bingledack]

I was thinking about the Litecoin marketing promise today: Silver to Bitcoin's gold. Well the new "settlement layer" movement by Core makes this start to have some superficial plausibility. Despite Charlie Lee's statements, Litecoin would almost certainly capitalize if Bitcoin remained at low blocksizes.

However, the worst-case scenario for Bitcoin holders in this blocksize rigamarole actually seems to play out quite well, because each step seems to follow inevitably from the previous one:

1. Core refuses to increase blocksize, fees rise, commerce starts to be hindered, yet somehow we cannot get a fork to happen (I can't see how, but let's just assume).
2. Litecoin starts to, or even just seems dangerously likely to, eat away at Bitcoin's use in commerce, and temporarily surges in market cap to 20% of Bitcoin's.
3. Noting the threat, bitcoiners either finally fork to increase the blocksize cap, or if they still don't, someone announces a Bitcoin ledger spinoff of Litecoin.
4. Sensing the party is finished as a stronger network-effect but identical version of their coin now exists, LTC holders run for the exits to buy Bitcoin-spinoff LTC, which basically brings the market cap Litecoin was borrowing right back to BTC holders.

What happens after that is hard to tell since this is already a weird scenario where people are refusing a fork for some reason, but as far as I can tell, either

a) people use Bitcoin-spinoff LTC more and more in commerce due to the lower fees and it continues gaining in market cap and overtakes Corecoin (benefitting original BTC holders since they own equal coins in the spinoff by default), with Corecoin surviving as settlement layer or not, or

b) Core recognizes the threat and ups the blocksize cap, or

c) a fork finally goes through, probably because people don't trust the Litecoin codebase and faster blocktimes as much (but recall it was already at 20% of Bitcoin's market cap in this scenario, so it would have been fairly well trusted).

In any case, the market cannot be held down. It all boils down to what we knew intuitively all along, and hodling (Bitcoin!) is a virtue. The only question is if the remedy happens via a hard fork initially, or by a circuitous path entailing an altcoin pump and dump before getting spun off into Bitcoin's ledger again. (Note @Matthew Light that the same applies to Ethereum )

 

[Norway]

Just in from China:
"They are worse that the Chinese Communist Party."
https://www.reddit.com/r/btc/comments/43e27c/the_rbtc_china_dispatch_episode_6_the_chinese/

 

[lunar]

@sickpig

The decoupling of mining from relaying/validations functions, i.e. the separation between mining full nodes and notary-only full nodes, was one the most underestimated event in bitcoin history.

In a rather fumbling manner, I was trying to understand the new incentive structure here. Any input would be appreciated.

 

[Richy_T]

I don't think it is unreasonable for people to be discussing the possibility that we might fail to fix the governance problems besetting Bitcoin, and what will unfold if that happens. It's simple prudence.

Discussion is one thing. Pumping is another.

 

[Erdogan]

Best case scenario for the immediate future, is 2 MB blockchain first, and no segwit, core reduced to a second tier player.

Replace by fee is not so bad, because every individual miner or pool can refuse to implement it, no concensus needed.

 

[cypherdoc]

core dev unfolding their plans to proceed with SWSFHF hybrid which addresses not the recommendation from PT that HF's have a 99% consensus (which was his way of apologizing to core dev via throwing them back a bone for his latest bombshell post):

On Thu, Jan 28, 2016 at 01:51:24PM -0500, Peter Todd via bitcoin-dev wrote:
> While Pieter Wuille's segwit branch(1) doesn't yet implement a fix for
> the above problem, the obvious thing to do is to add a new service bit
> such as NODE_SEGWIT, and/or bump the protocol version, and for outgoing
> peers only connect to peers with segwit support.

If I'm following the code right, the segwit branch has a fHaveWitness
flag for each connection, which is set when a HAVEWITNESS message comes
from the peer, and HAVEWITNESS is sent as part of handshaking. BIP144
suggests maybe this should be changed to a service bit though:

https://github.com/bitcoin/bips/blob/master/bip-0144.mediawiki

If you've got a limit of 8 outgoing connections and >4 of them don't
support witnesses, would it be enough to just drop a non-witness
connection and try a new one? Or is anything less than 8 of 8 outgoing
witness supporting connections likely to be bad for the network?

this solves nothing b/c SW nodes will still have, at best, a simple majority of the p2p nodes with this change and more likely, a minority. nowhere near the 99% HF consensus that PT recommends and what this SW change does.

 

[AdrianX]

that's ok. Bitcoin has been shedding tons of bulls the last several weeks. the more the better.

cuz when the next ramp comes we need a light ship.

It's part of distribution process it helps new users get bitcoin. It has to happen. While ones total bitcoin holdings go down the total value increase when these "bulls" buy back in ( I'll join once Cores authoritarian stronghold have bean diminished.)