You are fooled as most humans are by confusing nominal growth with rate of growth. Thus you can't see when something is slowing down and dying.

As Bitcoin has become more centralized, they will strangle it, which we can see happening if we look at any metrics that measure the rate of growth, e.g. the market cap rate of growth has slowed which is what I showed that it is log-logistic not logistic as should be normal for technology adoption. (note Risto doesn't accept or agree with my curve fit, so we will have to wait to see if it was correct or not)

It is so tiring (and wasting my time which takes away from doing real work that could help us) to respond to slander by ignorant posters due to their ignorance.

kbm, ty for confirming a 1% number. Is that 1% of the current supply or of the 10 year supply target?

Sometimes spending more doesn't get more in return, and in other cases it does. I guess it depends a lot on who is involved. I think if you have someone like Satoshi, then you want him well vested and hyper-motivated. But you don't want him to own 10% of the world, as it would be ridiculous to put that much control in one person's (or a few core devs) hands, because no one is that omniscient and indispensable (relative to the world of possibilities, not just considering the coin's future). Then again, maybe no coin can ever be adopted by the whole world any way.

On the issue of Bitcoin dying, it is a long way from being used by most people in the world and looks like (to me) it won't get there. Logistic technology adoption (e.g. cell phones, personal computers) is not like that. Can another coin do what Bitcoin apparently can't? I don't know. The unknown and the possibility makes competition exciting. I don't think the goal should be to #2 to Bitcoin, nor even to equal Bitcoin, rather I think it should be to accomplish what (I am postulating that) Bitcoin can't (because it became centralized, has tx Tragedy of Commons, the current version of the longest chain rule can't scale, etc, etc, etc).

Many people say they are annoyed by my posts. Well it is mutual. I am annoyed by people who have no clue how far we are from having a coin that could really scale.

As for the current development effort for Monero, I am not really tracking it too closely. But I am referring to the overall vision and sometimes how paradigm shifts invalidate a lot of work. I think the only way to really compare this sort of thing is to compare real coins in the market. We could waste a lot of time talking theory. Practice is better.

And your implied point is the % of bounties may continue at that rate as the money supply increases, since it was not taken as a premine then we don't have to compare it to the long-term money supply rather as an ongoing percentage.

My 'scattershot' criticism is about the declining nominal block reward, as this shifts more of the debasement earlier than a constant nominal, which has two theoretical disadvantages:

1. The faster the mining reward declines, the more pressure to mine and pump another coin[2].

2. Distribution is declining faster.

If you took the money for development in a premine, then you don't need to 'scattershot' the money supply in order to get enough coins into the core developers pockets (early on) to make the coin a reality.

There are counter arguments of course, but none that I've found compelling. If anyone can't counter, please do.

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Here comes the censorship...

1. This seems to be true with regard to darkcoin, which is showing signs of a declining hashrate for the last few weeks. They hit 5 DRK/block, the low limit (i believe in May sometime). But back in march, there were still around 15-20 DRK/block IIRC. The point I'd try to make is that the value reward takes precedence over the actual number reward, and is showing to be independent of the total coins in circulation/to be in circulation. This falls back on keeping the value of the coin closely tracking the value of the/added by the demographic. The value seems rooted heavily in core development, known competition and apparently a slight bit of speculation (there's more - I believe aminorex addressed fundamental valuation far upthread). Two of three of these points are weighted by external forces to the currency(speculation can be driven by proposals like this: http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf), which can lead to an increased value reward from mining.

Furthering the point, the value reward is something that is going to fluctuate based on many things outside the proposed emission and core development - and your point that competition becomes present is one of them. My point is that there will be more than just other competition to worry about (and you've stated it many times as well), and in these cases the value reward can positively correlate to legislation. Whether that will be a driving factor for adoption for a currency(specifically Monero) I think remains to be seen. If these currencies were outlawed in the coming months, adoption may decline (temporarily or permanently) but value reward might just become exponential depending on what is available. I don't think this is entirely compelling, but if a high emission were to be coupled with an event that would require the currency to be capable of handling (and mostly sustaining) a massive influx of both value and adoption in a short period of time, then the two events may be a suitable match. A worst-case scenario type currency. I would consider that a large percentage of the world is on the brink of adopting cryptocurrencies, even if they are unaware of it yet; however, this point does not address debasement (nor do I believe beyond doubt that it's going to happen, only strong belief to this date).

2. Again breaking this down. I'd have to look at many different points of distribution. Value distribution, % held by person relative to total supply distribution, comparisons to other failed distributions. While I would feel uncomfortable with even one person having control over 1.84 million of these, I would feel even more uncomfortable with 1% of the users in control of 18255600 XMR. I'm currently in a position where I can say that that is not happening yet (in that 1% of the people here do not own 2151021 XMR), as I feel confident that there are much more than 21727.5 XMR collectively in the hands of 99% of the people here. This is only taking into view the current distribution compared to the current world distribution of value.

Even if that 1% (in control of the vast majority of wealth) of the world were to currently purchase and hold every Monero from here on until 4-10 years from now, then they would still collectively have less than 90% of all Monero (provided everyone else held). This is currently a favorable outlook to me, even though it may lead to the cycle repeating (In which case I would consider the effectiveness of having a cryptocurrency in the first place nullified .. no matter how far ahead or behind I ended up -- as I would have potentially defined as being in a 1%). I do agree that a high rate of emission will correlate to distribution declining faster -- to which I'd say that 100% penetration (or at least ideal penetration) would likely be impossible, but the extent of distribution still has yet to be completed (and even then, does it yield a 1% in control of 99% of value scenario?). Anything that does not lead to that scenario, has the possibility to serve as a useful method of exchange until something better comes along. I would think the worst case scenario here would be that the cycle repeats for a length of time that can be correlated to how concentrated the value is, until it's done right. My participation will be given to the extent that I can provide in the meantime.

As I stated before in a private message on this subject, I do not think the majority of people are collectively ready (on so many different levels) to deal with an ideal cryptocurrency (outside of a very small minority). I also don't know if I am. We can't even get New York to say that they don't want the entire world to see the exact amount of money inside of everyone's wallets, along with every transaction that was ever made. I don't think they will be ready for an ideal one within at least my lifetime, as the only way I can see an ideal one taking root and achieving full penetration is with a revolutionary force (can't even get most of them to adopt a non-ideal one without bribery - 'hodl this for me now, it'll be worth a lot some day'). If that does not manifest, then it will be one that is evolutionary.

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Here comes the censorship...


If only we could guarantee the moderation was intended to be used to deter abuse, rather than actively ever using it to abuse, or prevent abuse .. without alerting the abuser in suit.

Your log-logistic fit would have been perfect in late 2012, showing the slowing of growth and maturation of the technology. So having this analysis, you would have sold all your bitcoins at $13 or at least never bought any. Right?

So one of us now holds bitcoins at $623, because his model was correct and already has an astounding 94.5% Rsq-coefficient (far higher than any log-logistic fit to the bitcoin 5-year price data).

Bad models have real world consequences to those who choose to follow them. The weakness of yours is that it is obvious that the saturation point of bitcoin is in 100s of millions or billions of users, and you are interpreting random noise to mean a secular slowing of trend at the point when the actual slowing of the adoption rate is still 3 orders of magnitude away!

Some of us read them with great interest.  Especially when you write something with which I disagree.  Often however I agree, but not always.

Constructive criticism, by someone who is well meaning in that you really want to make the crypto currency project work, is difficult to hear for many reasons. 
People may disagree because they disagree with an assumption, or a conclusion, or because they have a vested interest in the conclusion being wrong.  In any of these, we have the opportunity to learn something.  In a disagreement, typically at least one side is wrong and can get corrected.  The other side, the side that was right, also gets to learn something as they have the opportunity to refine the message and delivery and also have the opportunity to have that discussion in public where the elements of the arguments are made plain.

At a certain point, we run out of time explaining, and need to move past the [problem identification and discussion] and into [problem solution].

How do you calculate that my fit predicted that in 2012? Here is the crude fit graph I did (notably after 2012). It seems that even if I did that fit before the run-up in 2013, it would be impossible to fit it such that it wouldn't have shown the price was far too low before the run-up in price in 2013. This is because of that spike up in the price in the early stage (which is characteristic of log-logistic).

I didn't try to make the data to fit my model. I was trying to find a math model that fit that data. Logistic doesn't fit, go compare to SlipperySlope's graphs.

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Please show me the math you claim, because I am lazy (lacking time) to go figure it out myself?


Bitcoin might indeed reach a few 100 million (but only via some Thiel service such as Bitpay, Coinbase, Facebook WhatsApp, etc), but that doesn't mean its adoption rate wouldn't slow on the way there. You seem to be assuming the adoption rate wouldn't slow until that point, and then suddenly so. Continuous curves can't do that. Either you have S logistic curve or you don't.

The global population is 6+ billion and will be 7 - 8 billion by 2020. So Bitcoin scaling to 1/10 or 1/50 of the global population is not the same penetration as cell phones, computers, and internet which will likely reach 80% (8/10) of the population.

Please realize that WhatsApp is more important to most users than Bitcoin. Thiel can do a money transfer service in WhatsApp to address most of Bitcoin's thrust for most users (who don't need some crazy volatile technological thing). He is merely pulling Bitcoin into the fold of his overall control over money transfer globally with his also Paypal in his stable.

If Bitcoin is programmed by design to fall away, it is no big skin off Thiel's back:


I view Bitcoin as a Trojan Horse planted to keep us geeks preoccupied while the powers-that-be consolidate the global financial system. In any case, Satoshi out smarted them. He revealed to use the Longest Chain Rule solution to the Byzantine General's problem. And hackers don't need to stand by and let that innovation go to waste.

Now I will slam-dunk my point.


How do you explain away the following then?

http://en.wikipedia.org/wiki/Technology_life_cycle


Notice that all those that were decentralized have an S-curve (logistic) and those that were not decentralized are more log-logistic. The airplane isn't even log-logistic because it is so investment controlled and thus top-down centralized (regulations, etc), although its curve could be the very early portion of logistic (see the one end of the S at the beginning) which would predicts perhaps that decentralization of aviation is coming, see my blog essay on flying cars.

Yeah, I've seen that image quite a bit, thanks. Surprise surprise, it's like a bunch of random noise blew differently through all those curves (which, yes, are generated by some sort of similar underlying human phenomena). And yet what you're basically doing is zooming in on the early part of one of them, where there's likely to be especially big noise, trying to fit a nice elegant little curve anyways, and then making investment decisions based upon that. Sometimes what gives the elegance-seeking part of our intellect great satisfaction just doesn't matter. This particular domain is one where qualitative fundamentals analysis actually seems better than quantitative attempts.