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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 29/11/2015, 11:52:00 UTC
Does anyone know why blockchain.info is down?
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 04/05/2015, 07:54:36 UTC
Tim Swanson thinks transactions cost 25 BTC divided by the number of transactions in a block. That's a complete misunderstanding of not just what the block reward does but of what Bitcoin even is. He has gathered some interesting data, but his analysis is unlikely to be of much use as he has no fundamental understanding of Bitcoin in the first place.

Tim Swanson (who understands bitcoin's economy much better than most bitcoin gurus) is looking at the miners as an entity that performs a service to the "bitcoin system" (validating and securing transactions) in return for a payment (the block rewards and transaction fees).

Right now, that entity gets 25 BTC (~6000 USD) for each validated block, and the average block contains 750 transactions.  So the miners are being paid ~8 USD for each transaction that they process, on average.

In percentage terms, the transactions in a block move about 280'000 USD, on average (excluding presumed "return change" outputs); so the miners' revenue is about 2% of the money that they move.

There is not much room for misunderstanding there.  Right now,  the bitcoin network is way too expensive for the service that it renders.  If the price were to rise to 2'400 $/BTC before the next halving, and the volume numbers doubled until then (which is what they barely did over the last 2 years), the miners would be paid ~40 dollars per transaction , or 10% of the transaction amount, on the average.

As you all know, those 8 bucks (or 40 bucks) come entirely from the pockets of new investors -- the people who are buying bitcoins today to increase their holdings.  For the price to increase to 2'400 $/BTC over the next year, there would have to be a 10x increase in the money brought in by those investors.  I hope that everybody here is aware of that.

The money earned by the miners will never get back to the system; therefore, the only hope that those new investors have of recovering their money is that there will be enough new investors' money coming in tomorrow to pay for tomorrow's mining and to buy those bitcoins that they are buying today, hpefully with some premium. 

Thus, at current prices and rewards, the bitcoin protocol is creating every day another million dollars of naked debt: money which the bitcoin holders have put into the system, and expect to get back from it --- but which has been given to the miners, and will not be returned by them.

By pushing the cost of the network to those new investors, the protocol allows the users and entrepreneurs to entertain the illusion that transactions have almost zero cost, and therefore are cheaper than international bank payments and remittances.  This whacky "business model" cannot go on indefinitely.



Thanks!
I wish you were wrong...
Within the big picture as described above, do you believe is still possible to have another future hype (fueled maybe by the interested actors and human psychology) or rather a continuous series of crashes/resistance?

Please keep up the good work!
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 01/05/2015, 08:23:31 UTC
its been an eventful week in BTC world. High Five to all that chose 240$ as the level for may 1st

ummmm... how high?
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 28/04/2015, 15:37:42 UTC
It wouldn't doesn't take much to push the rest of the world out of mining if that were, which is the case.

Edited that for you.

Thanks. Smiley

Doing too many things at one time.

Welcome.
How do you think anyone can compete in long-run mining with a country where electricity is already very cheap and may be obtained even cheaper? (like 2-3-5x or more times cheaper...)
If our cost is 220$ (give or take), what would be their cost then?
I'd bet mining farms in China grow like mushrooms after a rain. On the other hand, I also suspect that ASIC companies keep the hefty profits under control, mostly for themselves and maybe for a small group of investors. That's why global hash-rate is relatively stable.
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 28/04/2015, 15:21:34 UTC
It wouldn't doesn't take much to push the rest of the world out of mining if that were, which is the case.

Edited that for you.
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 06/01/2015, 18:13:28 UTC
So, what do you think betstamp's customer will most probably do once the biz resumes?
Carrying on with their trading as before
Move onto another exchange
Pull out from trading in btc
Pull out from trading in fiat

I know what I will do but I'm curious. Maybe a pool would be useful?
Thanks
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 06/01/2015, 18:08:40 UTC
I told you all bitcoin had no underlying value, but did you listen? Of course not. A fool and his money.

Invest in low cost index funds. It's not pretty, but this slow growth is the key to wealth. Do you think I was born a billionaire? No. You need to *loose money before you know how to make money. Hopefully you *learned your lessons good and will make wise *decision from now on.

*lose
*learnt
*decisions


Nobody illiterate ever became a self made billionaire.


Warren Buffert is not an Englishman, so I do not use "learnt". I also don't use colour or wear braces instead of suspenders.  Roll Eyes

What a looser...



 Grin Grin


So you wear suspenders?  Grin

I wear a mother fucking bull costume & I will be smoking a pipe, wearing a monocle soon gentlemen.

Please say it's true.Please say it's true.Please say it's true.Please say it's true.Please say it's true.

Maybe it's true, I really don't know.
But still (as I probably didn't get it well; it must be one of those language barrier issue): wouldn't be better instead to take good care of his both eyes?!  Wink
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 29/12/2014, 22:01:33 UTC
Well, I'm stuck here: http://bitcoin.stackexchange.com/questions/22/is-it-possible-to-brute-force-bitcoin-address-creation-in-order-to-steal-money
The math posted there is ok for me but I'm not familiar with crypto so those parts are over my head for now, Anyway, as one can see, there is no consensus among experts. Interesting enough, it seems that one post there clearly reads "It is possible to brute force some Bitcoin addresses, because some people generate their private keys in an insecure manner." and further the author even gives some practical cases!

Well, yes, if the private key was not generated at random, it is possible to crack it.

[...]


Many thanks for your comprehensive answer!
It seems, as I've found in the last couple of hours, the use faulty PSRNG's might pose a threat, maybe significant enough to drive the price further down.
The unfolding story is here: https://bitcointalk.org/index.php?topic=107172.msg8939173#msg8939173 I hope you'll find it interesting enough to consider including it in your great work (I'm closely following your posts) that you're doing on studying/documenting the whole ecosystem.
Anyway, because I was invited so kindly by a smart a** to basically gtfo, I will stop here. I better go&check how do I create a more secure wallet and move my coins there. I look forward to meet you again soon and also let's hope my hunch is unjustified.
Oh, I'm a miner for more than a year now. So, I'm noob but, sadly enough, I see many old members here who seems to know a lot less than me.
Best regards.
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 29/12/2014, 18:18:53 UTC
So, is it theoretically possible to reconstruct those lost wallets and to get ahold of coins?

Not that we know of. Even if all the network's computing power could be devoted to the task, it would take bazillion years to find the private key of one address by trial and error.

In theory, there may exist some magic algorithm that allows one to do that in a viable amount of time.  That would not only break bitcoin but also a lot of e-commerce and e-banking systems.  But no one has published such an algorithm, and apparently no one knows how to even start looking for it.  

[ ... ]

The bitcoin protocol gives about 3600 BTC (about 1.2 million USD) every day to the miners, no matter what.  The fraction that one miner gets from that bonanza is the same as the fraction of the total hash power than he controls.  Therefore, each miner who is making profit will want to have as much hashing power as he can, to maximize his profits.  That is the reason for the mining race.

Well, I'm stuck here: http://bitcoin.stackexchange.com/questions/22/is-it-possible-to-brute-force-bitcoin-address-creation-in-order-to-steal-money
The math posted there is ok for me but I'm not familiar with crypto so those parts are over my head for now, Anyway, as one can see, there is no consensus among experts. Interesting enough, it seems that one post there clearly reads "It is possible to brute force some Bitcoin addresses, because some people generate their private keys in an insecure manner." and further the author even gives some practical cases! Please have a look at it. Most answers says it's totally impractical if not entirely impossible while few seems to point that it is doable, in principle, but it would require a lot of hashing power (my concern exactly: where is all the missing hashing power going?!) and instead of attempting an attack  it would be more convenient to mine directly (yeah, but now the reward is halved so things significantly changed). So... what shall I get out of it?

As about the variance in hashing power, please see my above post (and graph). Maybe I was not clear enough as we may have a slight language barrier on my side.
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 29/12/2014, 17:33:16 UTC
What if I told you that the real monetary inflation for BTC is actually even higher than most people think?
That's because a lot of BTCs from the early days are totally lost (so nobody owns the private keys anymore, it's like they never existed).


2 million BTCs (minimum) are very probably lost:

http://onbitcoin.com/2013/12/07/bitcoin-spoilage-2-million-bitcoin-likely-lost-old-hard-drives/




The supply of BTC in circulation is actually smaller than believed, that means that the inflation is actually higher.


Hmmm....
So, is it theoretically possible to reconstruct those lost wallets and to get ahold of coins?

Sorry if it sounds so noob-ish (my excuse is I am a noob by all applicable criteria  Smiley) but I can not imagine many holding-water hypotheses for explaining the craziness of mining race. An attempt to crack the wallets (and I assume that for doing the trick a large pool would be needed too) would explain the completely irrational hash-rate increase.
Also, power companies selling their electricity at 3-5x (for now; it used to be a lot higher, maybe 10-15x) market price would explain the hash-rate increase.
And also, another explanation would be the old 'ponzi' etc etc. but I'm not buying that kind.

Please, I'm really interested to get a knowledgeable answer and I'll try to do my best following any references, if provided. I'm asking because for a long time the hashrate is having wild variations, often over 50% in 12-36h and it seems to me that it can not be pure coincidence or statistical variance but rather that someone big is maybe trying something important...
Many thanks!



if you want to reconstruct wallet then you should go for the rich list
http://bitcoinrichlist.com/top100

not some unknown smallish lost coin and even if its possible. 

I know that, many thanks! But those are, on one hand, heavily protected wallets and, on the other hand, imagine the consequences if you were to steal one...
I'm asking if it's possible to divert from time to time some hashrate from a large mining pool and to silently crack old lost wallets (very easy passwords, most probably) and so to get 50 easy btc at a time. Clean and repeat, at the expense of pool members... And those would come as free 'bonus' to the actual reward of 25btc..
Have a look at hashrate variation here: http://bitcoin.sipa.be/speed-lin-2k.png
Where does it go approx. 200Th/s?!! Who does it in such a short time and most important why? (It's not so easy to underclock/overclock a mining farm neither to power it on and off) And why does it seem to repeat so frequently and it looks so much like a pattern?!
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 29/12/2014, 17:03:55 UTC
What if I told you that the real monetary inflation for BTC is actually even higher than most people think?
That's because a lot of BTCs from the early days are totally lost (so nobody owns the private keys anymore, it's like they never existed).


2 million BTCs (minimum) are very probably lost:

http://onbitcoin.com/2013/12/07/bitcoin-spoilage-2-million-bitcoin-likely-lost-old-hard-drives/




The supply of BTC in circulation is actually smaller than believed, that means that the inflation is actually higher.


Hmmm....
So, is it theoretically possible to reconstruct those lost wallets and to get ahold of coins?

Sorry if it sounds so noob-ish (my excuse is I am a noob by all applicable criteria  Smiley) but I can not imagine many holding-water hypotheses for explaining the craziness of mining race. An attempt to crack the wallets (and I assume that for doing the trick a large pool would be needed too) would explain the completely irrational hash-rate increase.
Also, power companies selling their electricity at 3-5x (for now; it used to be a lot higher, maybe 10-15x) market price would explain the hash-rate increase.
And also, another explanation would be the old 'ponzi' etc etc. but I'm not buying that kind.

Please, I'm really interested to get a knowledgeable answer and I'll try to do my best following any references, if provided. I'm asking because for a long time the hashrate is having wild variations, often over 50% in 12-36h and it seems to me that it can not be pure coincidence or statistical variance but rather that someone big is maybe trying something important...
Many thanks!

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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 16/12/2014, 19:38:12 UTC
Not a single word about LTC, how it's going down and how apparently it wants to take BTC with it?
Seriously now, is was just me expecting a decoupling from LTC and some transients along?
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 16/12/2014, 17:18:43 UTC
Then I will try to figure out who will provide the necessary 335-350 billions USD for that to happen...
13,6 mil (bitcoins in circulation already) multiplied by 24650USD (25000/target price -350/actual price)
Don't forget to add 3600 fresh btc/day (from mining) multiplied by 200...350days

However, only a fraction of those 13.6 M BTC are available in the market (in the exchanges, or out in wallets of traders who would move them in if the price starts to rise).  The rest is being held by long-term holders who may have rather high "sell thresholds".

I would guess that a convincing "next big bubble" could be pumped up with much less than that.  Perhaps 100 M USD would be enough to buy those "loosely held" bicoins and  lift the price to a point when other opportunistic speculators would rush in and bring further millions.

How much would it take to buy all the coins on the ask books of all exchanges up to (say) 1500 $/BTC?  

(Of course that number would be only a very, very rough estimate, since the asks will be pulled up once the price starts to rise, and on the other hand there will be more bitcoins entering the exchanges.)

Perhaps the June/2014 mini-bubble was an attempt by some whales to do just that -- a pump that was meant to get the "next big bubble" started?


Let’s see:
On 27th May, bitstamp issued its proof of reserve at https://www.bitstamp.net/article/Bitstamp-BTC-Proof-of-Reserves-May-2014/ stating they have 183497 BTC in their cold wallet. At that time, price was around 580-590USD. There is a catch: they never disclosed their fiat proof of reserves (afaik not one exchange ever disclosed such info). I suspect fiat reserves were much lower than expected and if they did disclose it, the market would’ve crashed instantly.
Ok. 183497 BTC at 580 USD/BTC is about 106M USD. Since no other info is available, I guess an acceptable assumption one can do is that half (by value in USD equivalent) of accounts were in btc and half were in fiat, i.e. about 91.7k BTC were available for sell at any time if their holders wanted to press the “Sell bitcoins” button.
On the other hand, Bitstamp is only having around 4k BTC in asks at most times, while Huoby somewhere between 10-14k. So, for Bitstamp only 4-5% (4/91.7) BTC seems to be visible in asks while the majority (95-96%) waits on the sidelines. If same ratio applies to Huobi it means the total amount of BTC available for selling on their exchange would be around 240k-335k.
At 1500USD/BTC, to buy what is visible in asks on Bitstamp and Huobi would be like 4+14=28K = 42M USD.
However, the available BTC on the sidelines may jump in and that would require up to 91.7k+335k BTC = 640M USD.

Now, I don’t have data for finex, okcoin, btce and other exchanges but they surely would add quite something to that amount.
Also, I’m not sure if I recall correctly that someone posted the stamp wallet a couple of times since May and it was at around 260k then it grew close to 300k. That would require revising the above figures upwards.

Maybe someone will take it from here but I don’t think 100M USD will do anything visible to the price. Remember that finex has more than 22M in longs and it seems that it couldn’t even stop the downtrend let alone to increase the price even so slightly. So, to get a 4-5x increase in price I suspect we need on the order of 1B USD or more. Yes, there will be a rush in of fresh money but also a rush in of old coins too…
Good part is I think it is still doable of having 100k newcomers each bringing in a fresh 10K USD (in average).
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 15/12/2014, 22:40:34 UTC
I don't get it?!
That's marketcap. Nothing more, nothing less.  
See here: http://www.investopedia.com/articles/basics/03/031703.asp or here http://en.wikipedia.org/wiki/Market_capitalization if you're not familiar with it.

Edited to fully respond to the above:  Sorry, but it was simply not implied anywhere that "all 13.6 million bitcoins are traded daily on the exchange".

1. The bitcoins traded for fiat are what determines the price. 2.When the market cap of Bitcoin went from $1 billion to $5 billion do you honestly believe that $4 billion worth of money flowed into Bitcoin? 3.Or was it perhaps a small percentage of the coins on the exchanges that were purchases raising the price?

On points that I've added to your post for clarity:

1. Yes, that's market price. However, judging by the last 12 months charts and by the very last auction it seems that market value is still bellow (possibly significantly bellow) market price, isn't it? In other words, market is not in a state of equilibrium. http://en.wikipedia.org/wiki/Economic_equilibrium
Please note that apparent stable price (apparent price consolidation) has very little to do with equilibrium.

2. A year ago market cap was almost $14 billion. Did $14 billion flow into Bitcoin? Clearly not. Do market participants believe $14 billion will flow into it? Maybe, maybe not but as we speak it seems not many believe it will do so in the near future. So to respond: no, those 4 billion did not flow into bitcoin at that time but some of the money did flow and that was enough (in terms of amount and flow rate) for many market participants to believe/anticipate/speculate that the rest of the money will flow into, in a reasonable amount of time. We are not far from finding out if their belief was justified or not...

3. Artificial scarcity and low market depth on exchanges can only manipulate the price that much. No, that's not the driving factor. On contrary, why do you think the big stakeholders didn't distribute part of their shares so as to help the ecosystem? Please don't tell me it's because of greed because I won't buy it. Well, so perhaps because they couldn't sell? What's sad imho is that if they can't do it very soon, considering there are a max of 650.000 wallets (possibly only 2-300.000 active bitcoiners as per the excellent recent analysis of Jorge Stolfi) after about 5 years, bitcoin won't have any chance to catch up with mass adoption. We are already lagging well behind the historical growth of mobile phones http://addictivelists.com/top-10-countries-with-most-cell-phone-users-in-2014/ but remember those were back in the 1985. We should have a growth comparable with internet, FB etc. Practically mass adoption is pretty much busted imho and only a strong move followed by a hyper-exponential growth in no. of users can bring us back on track. What strong move? Huge collapse of price & major coin distribution...  toward hoards of new users bringing in yet more people and their fresh money... A huge reset of that kind  is much needed. Each passing day without that happening is exactly the opposite of success but mere a slow move toward fading-out.  That's my view. I don't think bitcoin will die but if it remains a niche product for 5-10-50-100 millions users will be much like failing when compared to it's potential...

To understand my rationale, I've used the equation of enterprise value http://en.wikipedia.org/wiki/Enterprise_value together with some simplifying assumptions there. (Bitcoin ecosystem is an enterprise, albeit a very unusual one). On major assumption I've made is the enterprise value of bitcoin is growing and will continue to grow (albeit slowly imho). I don't have the proof it is true but I believe you'll accept it. Anyway, throw some figures at it and hopefully you'll agree that at equilibrium a heck of a lot of money will be needed to go from 350 to anything above 2-3k.

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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 15/12/2014, 16:49:31 UTC
Think again: 13,6 mil (bitcoins in circulation already) multiplied by 24650USD (25000/target price -350/actual price)
Don't forget to add 3600 fresh btc/day (from mining) multiplied by 200...350days

So all 13.6 million bitcoins are traded daily on the exchange?

Did I say or imply that somewhere?!


Yes, it was implied in this equation:
13,6 mil (bitcoins in circulation already) multiplied by 24650USD (25000/target price -350/actual price)



He doesn't get it still, crazy !!


I don't get it?!
That's marketcap. Nothing more, nothing less. 
See here: http://www.investopedia.com/articles/basics/03/031703.asp or here http://en.wikipedia.org/wiki/Market_capitalization if you're not familiar with it.

Edited to fully respond to the above:  Sorry, but it was simply not implied anywhere that "all 13.6 million bitcoins are traded daily on the exchange".
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 15/12/2014, 16:06:47 UTC
Think again: 13,6 mil (bitcoins in circulation already) multiplied by 24650USD (25000/target price -350/actual price)
Don't forget to add 3600 fresh btc/day (from mining) multiplied by 200...350days

So all 13.6 million bitcoins are traded daily on the exchange?

Did I say or imply that somewhere?!
Maybe my English is not good enough...
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 15/12/2014, 15:34:16 UTC

Lol. Nice math you have there...

Think again: 13,6 mil (bitcoins in circulation already) multiplied by 24650USD (25000/target price -350/actual price)
Don't forget to add 3600 fresh btc/day (from mining) multiplied by 200...350days

I was trying to give you a hint but it did not work. Who said all 13.6mil coins have to be sold for the price to reach any value Huh I gave 25k$ as an example as if everyone removes their ask, and one btc sells for 25k$ (or even a fraction of 1btc) then the price IS 25k$/btc.
You're welcome.

Sure. The price may be whatever you want it to be for a small duration of time. Up or down equally. For a fraction of a second you may push it above the last ask. So what? In the next fraction of a second will return back, where is sustainable.
I was talking about equilibrium...
I fully understand you may not like it.
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 15/12/2014, 15:23:35 UTC
Good to know!
Then I will try to figure out who will provide the necessary 335-350 billions USD for that to happen...
Any help would be appreciated.

Ok I am going to help you, there is only 25k$ needed for the price to reach 25k$/btc, how did you get your 350bn$ figure from ?

Lol. Nice math you have there...

Think again: 13,6 mil (bitcoins in circulation already) multiplied by 24650USD (25000/target price -350/actual price)
Don't forget to add 3600 fresh btc/day (from mining) multiplied by 200...350days
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 15/12/2014, 15:15:08 UTC
I check BTC price every day, but there is simply not enough mass adoption yet to push price higher. Speculators are not jumping in mass because they see future weakness in the price.

The day is coming though, when adoption starts to put price pressure on bitcoin and investors will sense an opportunity. I think it is September 2015, then we don't stop until 25k.

Until then i try and figure out ways to buy more.

Good to know!
Then I will try to figure out who will provide the necessary 335-350 billions USD for that to happen...
Any help would be appreciated.
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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aliro38
on 29/11/2014, 16:07:50 UTC
Be wary of that wall just below 380 on stamp.

Looks fake as hell.

I don't think so. That wall was there yesterday too for quite a long time. It moved a little as it was trying to get the best possible buying position given the price fluctuation but in the end the owner didn't have the chance to get dumped into it before the small take off of today. Now it's slightly lower higher (srry, my bad) than yesterday.
My 2bits...