Thanks, that is one more good reason to believe that those accidents were not caused by flaws in the physics of nuclear fusion.  

I guess that he means that there will be no more liquidations (redemptions): the only way to get $$$ out will be to sell your shares at OTCQX to someone who would rather buy them instead of BTC.

It is only a guess, because there were 4 consecutive purchases with nearly the same amount (6300 -- 7000 BTC), then a buy of ~500 BTC, and nothing in the preceding and following weeks.

As others pointed out, it is not a single price.  Each miner and each mining rig has its critical BTC price, below which keeping it on does not bring enough revenue, only increases the losses.  This critical BTC price goes up and down together with the total network power.

When the BTC price is stable, the hash rate should keep increasing as miners upgrade their hardware, in an attempt to grab a bigger slice of the constant block rewards.  Therefore, when the hash rate stagnates or decreases (as happened recently), miners must be turning off more total hashpower than what they are bringing online with the new equipment.  That means that the current price has fallen below the critical threshold of that equipment.

If the COIN ETF is approved, perhaps it will open a large market of private investors in the US (savings and retirement accounts, etc.) 

Latin America could be such a market, but there does not seem to be a population of commodities speculators like the Chinese one.  Africa has the same problem, and is much poorer than China.  India seems to be wary of bitcoin (perhaps by memories of Mavrodi's scams).

That seems to be an assumption some people make, but I did not see that stated in the paper.  To be meaningful, that statement would require a defintion of what is a "blockchain" and what is not.  Without such definition, I can give several "stupid answers" to that question:

* The sofa in Bitstamp's lounge is "Bitstamp's blockchain".

* Bitstamp's internal ledger, where the accounts are kept, is "Bitstamp's blockchain".

* Bitstamp can create some junk altcoin, say a bitcoin clone, that can be traded on their site; set up an old laptop to start mining its blockchain; and call that "Bitstamp's blockchain".

And also an answer that may not be so stupid:

* Bitstamp could implement @GMaxwell's scheme for "proof of solvency", using a Merkle tree (not linear, but bushy) of the account balances, updated once a day, secured by strategically inserting some hashes in the bitcoin chain; and call that tree "Bitstamp's blockchain".

The last example may show that trying to restrict what a sidechain can be and do is pointless (because there is no practical way to enforce those restrictions) and stupid (because it would arbitrarily exclude many interesting systems, perhaps even the feared "bitcoin killer")

Well, Ph. D. theses are often like that.   Speaking as an advisor, after I have stolen five of the best years of someone's life, it would be a crime to send him/her away with empty hands.

Seriously, I did not quite understand how Sirer's Selfish Mining attack works either, but I did not spend much time trying to.
Anyway, even if it works, it does not seem to be fatal, but only make life less fair for miners.  Or is it claimed to be worse than that?

I haven't seen the other paper you mention.


Well, I am not so optimistic about those things:

* By my understanding of the past bubbles, a new large bubble would require a new large market, comparable to that of the Chinese speculators who adopted Bitcoin in Nov/2013.

* The cryptographic security of the basic protocol, properly implemented, is assured as long as the basic tools are.  However, people can easily make mistakes when using or even implementing it.  See the recent BCI fiasco, for example.  Claiming that those problems are not bugs "in the protocol" is a weak argument; for prospective users, what matters is the system's security, not the security of the central part.  It is not reassuring to know that Chernobyl, TMI, and Fukushima were not caused by flaws in the physics of nuclear fusion, but to errors in its use.

* The blockchain traffic has been falling recently: tx/day down 18% last week, BTC/day down 44% last month, USD/day down 55%.

* VC investment is almost all in ventures that will make money no matter what happens to the price.  Most merchants who "accept bitcoin", including the large ones, do not want to touch it, they want dollars.  When asked about its future plans for bitcoin, Microsoft dodged the question.  The few minimally reliable data on bitcoin usage for e-payment through BitPay show stagnation in BTC amount over 2014, drop in USD amount.

On OKCoin the price is already a year-long low, back to the value of 13 months ago.

Feels funny for me to be saying this, but I don't think BTC is "done".  Only "BTC in China" seems to be on the way out. Russia may soon ban bitcoin too, but I am not aware of that being a large market. Even with no new markets, Bitcoin will probably survive in the West.

I would not dare guess a price, though, and its potential for e-commerce may remain small.

I did read it, and also the "sidechains for dummies" blogpost that people recommended, and some more posts.

So what you are saying is that I did not understand it at all.  Perhaps.  But then I ask, for example, why Bitstamp is not already a "sidechain".  OK, it is not decentralized nor merge-mined, but does the whitepaper say that a sidechain must be those things?

My impression is that the paper did not want to rule out anything, for fear that it might prevent co-opting a possible "bitcoin killer".

I suppose that pools cannot go bankrupt; if the pool company fails, its miners will move to another pool.  Pool miners will turn off their machines individually, so their "bankruptcy" will be gradual.

The largest non-pool miners may have 10-15% of the total.  If a couple of them suddenly go off-line, the block rate will fall in the same proportion, and ditto for the supply of new coins.  The price may recover for a while.  But in a week or two the difficulty will be readjusted, and there will be again 3600 new BTC entering the market every day.

I have always wondered, but I am too lazy to google up: is the second sentence of that novel better or worse than the first one?

Satoshi's whitpaper is not a "scientific" paper but a good "technology advance" paper.  It specifies a concrete real-world problem (build an e-cash system that does not depend on trusted 3rd parties) and an open sub-problem of that (how to motivate the volunteers to maintain and secure the ledger).  It then describes a proposed solution for that sub-problem, with enough detail that any competent programmer could implement it.  The paper concludes with some logical arguments and computations showing that the proposed solution does not have some flaws that one may think of.  Then Satoshi built an implementation that would be sufficient to prove the soundness of the solution.  He set that implementation running, and recruited enough interested people to make the test meaningful.

The Sidechains whitepaper is nothing like that.  It does not define concrete real-world problem(s) to be solved, and then develop suitable solution(s) for it/them.  Instead, the "problem" that it sets to solve is how to save bitcoin from being superseded by centralized payment systems and other altcoins.  The "solution" they propose is basically to rebrand the best  altcoins plus some unspecified array of other network services as "sidechains of bitcoin",  in exchange for some unspecified advantages involving merged mining and the prestige of bitcoin.  However, there are no details in the paper to even tell what applications could be "sidechains", how the integration would work, what concrete benefits they would derive from that, why other projects could not obtain the same benefits without being "sidechains of bitcoin" -- and why would bitcoin be saved as a result.  Needless to say, there is also no analysis of possible failure modes.

Just as bitcoin reminds me of the Wright Brothers' Flyer One, the sidechains proposal reminds me of their unsuccessful efforts to commercialize their invention.  (AFAIK, the first commercially successful series-produced airplane, still only a toy for aeronautics nerds, was this one.)

"Dear investors, you are all aware of the hard times that Ford Motor Co. has been going through, because of competition from manufacturers of cars that are cheaper, faster, more beautiful, or more reliable than ours.  You know that, while we could incorporate their advantages in our Model T, modifying our assembly lines is very expensive and would take too long.  But we have come up with an idea that will surely save us.  We will allow the other manufacturers to rebrand themselves: "Ford Jeep" instead of "Jeep", "Ford Jaguar" instead of "Jaguar", "Ford Mercedes" instead of "Mercedes", etc..  We will allow them to use our great assembly lines, as long as they don't require any special change or interfere with our production.  We will also build a yard where our customers will be able to safely trade their Model Ts for cars of our competitors, at values established by the latter.  Thus we expect to turn our most formidable competitors into our allies, and, with their help, retain our dominant share of the billion-dollar revenue to be made in the car market."

I am puzzled: if it is a rumor, someone should have warned or queried SMBIT, and they should have promptly denied it.  Such a rumor would scare away any potential client who heard it.

Also, if liquidations were still possible, I would expect to see at least some net sales of BTC once in a while, given that the share value has been on a mostly downward trend since June, and the general mood is quite negative.  The last drop that was clearly not rounding or accounting error or was on 2014-09-03 (-1439   BTC).  And the significant inputs that we have seen since then appear to come from just one entity.  It is hard to see that as "business as usual".

I find it hard to believe too, but there have been two confirmations, no denials, and @jamesg claims to have seen their newsletter.

Perhaps I should ask Barry on twitter.

I bet he would rather invest his money in a plum-picking machine instead.

I don't think he has been charged with any crime yet.  The bankruptcy process is a civil one, formally "against" the company, not the managers.

Isn't it funny how sentences with missing articles seem wrong even when articles are superfluous?

Indeed.  A year ago, that was THE argument that bitcoiners used, all the time, to 'prove' that 1 BTC would be worth a fortune (1 million dollars, often) in the future.

No, by "the bitcoin blockchain with all those appendages" in sentence (1) I meant the bitcoin plus sidechains plus wahetever additions to the protocol are being considered to make sidechains work and to try to co-opt any promising altcoins.

That project is trying to patch extraneous functionality into the already-abused bitcoin protocol in order to turn it into a global production service for a multitude of fuzzy tasks that it was not intended to do.

The bitcoin protocol was frugally designed and implemented by "Satoshi" for a single specifc purpose: namely, to test whether his solution to an old technical problem (motivating a bunch of uncoordinated volunteers to maintain and protect a distributed, decentralized payment ledger) actually worked.  Just like the Wright Brothers' Flyer One was designed and built specifically for one purpose: namely, test whether their solution for heavier-than-air flight actually flew and could be steered - nothing more.  

The bitcoin protocol is already ill-suited for all the things that people want to use it for today -- hedge against inflation, get-rich-quick scheme, internet roulette/dice, global competitior to paypal, visa and western union, ....  And now it is to become the central timestamping and trust management and whatnot for thousands of sidechains.  Such extreme repurposing of an inadequate design is bound to produce a monstrosity that will not stand on its feet.

The second part (2) above refers to the more extreme view that bitcoin would cease to be used as a currency and would become to all cryptos what the gold used to be to all national currencies.  But gold used to fill that role only because of historical and cultural inertia, and it lost it once people got used to unbacked paper money.  Bitcoin does not have such history; on the contrary, the altcoins started out as fiercely independent of it.  Thus, trying to turn it into the 'gold of crypto' and convincing the altcoins to adhere to the 'gold standard' is going against the natural evolution of money.  Worse, if bitcoin stops being used as a currency of commerce, it will lose its value, and then will become useless also as crypto-gold.

You know that the proper thread to discuss sidechains is this one, right? 
I think sidechains became the topic around that point, plus or minus a few pages.