Rats, I thought that avoiding double-space-after-punctuation was enough.  Does anyone out there know of some other open-source document prepration system that is not much worse than Latex?

Indeed, the first part of @Adrian-x's summary of my posts is quite correct, if a bit depressing. (Like realizing, at a conference, that the significant contributions of your 9-year  Ph.D. work fit in two slides and can be explained in 20 minutes, including "let's thank the speaker, we have plenty of time for questions".  )

The second part is silly, though: what effect could my posts here have on the mood of the Chinese fermented tea bitcoin traders?

I belive that the odds of this game are unknowable, but it is not certain that it will be zero-sum (or negative-sum) in the strict sense. It depends on whether bitcoin will survive for a sufficiently long period.


I told the paper plate and plastic cup supplier to be ready to deliver in mid-June, but warned him that I have absolutely no space left in my office, so he may have to hold them a little longer if The End gets delayed for some reason. 

I did not claim that the Chinese market's dominance affected the functionality of bitcoin as a currency of commerce outside China (except perhaps indirectly, by affecting volatility).

China's dominance seems to be quite relevant for the usefulness of bitcoin as a store of value in the medium term (1-2 years), and therefore for bitcoin-based enterprises, such as investment funds and bitcoin-funded ventures.

It seems to be essential for day traders, since it means that predicting the price changes, both sudden and gradual, requires understanding the Chinese market and monitoring the Chinese news sources.    For example, the following prediction of yesterday's rally (made on Mar/29) was quite banal in that context:

https://bitcointalk.org/index.php?topic=178336.msg5970832#msg5970832

I find it bizarre that Coindesk had the first interviews with the CEOs of major Chinese exchanges only six months after the October rally, and three-four months after the December crash.

And the (apparently) best-informed description of the Chinese bitcoin traders that I have seen was not on Coindesk or Bloomberg, but on the Christian Monitor, of all sources.

I see what you mean... 

However, while the N&B news posted so far would not pass the "academic journal standards" (which are themselves rather low), they are at the same level of the news that we must rely upon to know most of what we know about the world.  It is hard to believe that an established media source based in Nicosia would write a bogus article about an arrest warrant, issued against the CEO of a company with headquarters in Nicosia, entirely based on anonymous posts to this forum, without minimal facts-checking and without being contradicted by some other local news source.

I have little dobt that the media reports about Neo & Bee are basically correct, and it is obvious that the only denials came from Danny or from anonymous posters who are trying to lift the price of the N&B stock.  (Note that these posters all assert that the company can recover; but  they cannot possibly know that, even if their "first-hand testimonials" were true.)

While a smear campaign on this forum may have harmed N&B capitalization, it cannot have had any efffect on the company after that. If the capital raised at the "IPO" was insufficient, N&B should have postponed their plans until it raised more.  Negative propaganda could turn clients away, but that is not relevant since they were never open for business.

But then, if N&B's failure cannot be blamed on those negative posts, that failure would, in hindsight, fully justify those negative posts -- whatever their motivation.

No, the "Slumber Method" is just a highly speculative (not in the trading sense) attempt to predict price ~20h in advance, assuming that there are no sudden exogenous events affecting the Chinese traders.  It is wildly off when there are such events, which of course cannot be predicted from the price history -- that information is simply not there.

My purple conviction above is due to observation that all the major and persisitent price changes since october, except one, are easily explained a posteriori by events in China and news that concern the Chinese traders, cannot be explained otherwise, and seem completely oblivious to developments in the West that do not affect China.

The Western exchanges may contribute short-lived spikes, and may lag behind when the price in China is changing to fast; but when looked at the 1d scale, especially at timeswhen China is quiet, they track the Chinese price very closely, apart from slight changes in the effective CNY/USD rate.  And, more importantly, they too react to Chinese developments, but not to Westen ones.

The only price event after Octover that does not seem correlated to events relevant to China is the sudden jump on Mar/03.  It may be that Bitstamp led that change, reacting to the Bloomberg ad-news,  However, Bloomberg News is carried worldwide, and it may have caused the jump directly in China.  Or there may have been some other local development that I could not identify.

The two exchanges decoupled only when MtGOX essentially blocked BTC transfers, which stopped arbitrage trade between them and the rest.  After that point there were two separate commodities, "bitcoin" and "goxcoin", with independent markets.

The Western exchanges would surely decouple from China if arbitrage was somehow cut off (I can't imagine how).  Which ways they would go, I have no idea. 

One of the several things that make me skeptical of bitcoin's future is that its community resembles more a religious sect than a bunch of sane, rational nerds.

In order to sustain belief in their initial ideal, bitcoiners have developed a network of dogmas that is becoming increasingly intricate and increasingly disconnected from reality.

A substantial part of that theological edifice is meant to allow denial of the single most important fact about bitcoin:

CHINA SETS THE PRICE

To make the denial of this fact possible, bitcoiners pretend to believe, e.g: that almost all of the Chinese trade volume is fake; that BTC-China is the most important Chinese exchange (and the only honest one); that the November rally was due to some magical property of bitcoin that generates rallies at regular intervals, with exponentially increasing magnitudes; and a number of other bizarre dogmas.

Because of these dogmas, the main bitcoin chart sites still omit most or all the large Chinese exchanges (but they all carry the insignificant BTC-China).  Even when it is obvious that price changes are clearly due to Chinese traders reacting to Chinese news, the deniers blame "stupid sheep" in the Western exchanges for "paying attention to China" -- when in fact the Western exchanges are tied to China by arbitrage, and follow China no matter what their clients think, wish, or do.

I can't understand how people hope to succeed in day trading or long-term investment without taking this basic and all-dominant fact into account.   

On the other hand, it is easy to see why bitcoiners desperately need to deny this fact. Bitcoin entrepreneurs would not find investors and clients if they admitted that the value of their fundamental asset is decided and sustained by a legion of fickle amateur traders in China, who, a year ago, were all speculating on fermented tea or some other kind of tulip.  Libertarians do not want to know that their main "anti-government weapon" was taken over by a country that they see as the epitome of oppressive government -- and was reduced by that government to a harmless hobby, in one day, with a single decree.  And the old-timers, in particular, will never admit that "their" beloved bitcoin is no longer "theirs".

But that is the American writing, yes?

I am not an investor, but I read and post mostly to the "Wall Observing" thread.  Until now, all I knew about Neo & Bee was from reading some posts in this forum (generally enthusiastic) and occasional articles in Coindesk and other media (generally glowing, apparently based on N&B press releases and Danny's  statements).

But I did criticize N&B on two occasions, in that thread.  First, some months ago, someone posted links to the first N&B TV ads.  I watched one, and complained that it seemed directed to believers in the US/UK rather than to the Cypriot public, e.g. for using the bitcoiner slang "fiat" (which to Cypriots can only mean the Italian car maker).

Anyway, the second time was when the Central Bank of Cyprus issued a warning about the volatility, lack of backing, and other risks of bitcoin. It was merely the same factual warning that most other central banks have been releasing.  Danny wrote a response, and I commented that it too read like a libertarian manifesto rather than an attempt to change the Central Bank's mind.  Specifcally, implying that "bankers are the biggest criminals in the world" was not the best argument to use when trying to convince the Central Bank to authorize the opening of Danny's Bank.

I don't think that my skepticism about bitcoin (specifically, of the "Satoshi bitcoin") are affecting my evaluation of the Neo&Bee situation.  Obviously, their failure had nothing to do with bitcoin itself.

I must admit, however, that my opinion of the bitcoin community is influencing my evaluation of these news, and vice-versa.  Yet another "bitcoin hero" that turns out to be anything but a hero...

Yes.

Well, to me the entire history of the price since October makes sense, even if it is not predictable.

Since October, the bitcoin market has been like that of oyster sauce or tai chi chuan: namely, a Chinese thing, with a few aficionados in the rest of the world.  (This does not apply to the bitcoin-based services and big investors, but only the exchanges, where the price is set.)

Last time I looked, the Chinese exchanges had something like 95% of the total trade volume.  Even if 3/4 of their volume were fake (and I have not seen evidence for that claim), they would still have 80% of all the volume.  On the other hand, it may be that half or more of the volume in the Western exchanges is merely arbitrage with China.

Further evidence that China is the market  is that (as you note) the price seems to solemnly ignore all the positive news and developments in the West, reacting only to news that matter to the Chinese.  For starters, I haven't seen any plausible explanation for the October/November rally other than the opening of the market in Mainland China.  The collapse in December was clearly due to the Chinese government's restrictions; the recovery up to January, to the recovery of Huobi and OKCoin; the lull in the first week of February, to the Chinese new Year holidays; and so on. 

More recently, all the major drops and jumps since march/26 were clearly due to the Chinese market reaction to Chinese rumors and developments related to the Caixin leak.

Even today's mini-rally (which, so far, has only undone part of the Caixin article's damage) can only be explained by the lack of negative news on the conjectured April/15 deadline. (I wonder whether the enthusiasm is warranted.  "Gee, the plane has been falling for five minutes, we should have crashed by now.  That story about 'ground' must have been only a false rumor.")

So, the explanation for the gradual drop from 600 to 400 must be sought in China, too.  It may be a combination of the input of coins by Chinese miners, gradual exit of traders from the market, and insufficient entry of new players.  (Since the Chinese cannot use bitcoins for commerce, they cannot believe in the long-term valorization, and their only attraction must be day trading.  But, on any day, some fraction of the traders will lose so much money that they will give up and never return.)

Well, this story seems a repeat of MtGOX in a sense: long after it was obvious like the sun that the company was insolvent, there were still those who furiously insisted that everything was basically OK, the problems were small and would soon be over.

For me it is obvious that not only Neo&Bee is as dead as a Norwegian parrot, but that from the start it was guaranteed to fail.  Worse:  its non-viability should have been obvious to would-be investors who read the prospectus with critical care.  The "profit-only shares", for example, were almost guaranteed to be a 100% loss even if the company succeeded and made a raw profit for the first two years.  Is there any room for doubt about this?

That being so, why should one "stay away from this mess"?  Public interest requires that the truth about this case be found and widely published, with all the relevant details.  The bitcoin community should have that position too.  Media exposure of this case will surely harm the image of bitcoin, but any attempt to minimize or hush it up will do even more harm, not only to the image of bitcoin but to that of the community as well.

It may well be that those who are pointing out Danny's sins here are no better than him, and are motivated by greed rather than public interest.  If that is the case, their turn will eventually come up.  But obviously it was not their posts that caused the N&B collapse.

Another thing I noticed at Huobi right now is that the order book seems to be almost completely static, except very close the spread. In my recollection, their order book is usually quite dynamic during the day, even far from the spread.  Is that so?

Does that mean that all the trade going on this morning is generated by a few runaway robots, trading with each other?

In my understanding, a trade happens at price X when the seller thinks that X is a bit too high, and the buyer thinks that X is a bit too low.

During periods when the sentiment of all buyers and all sellers about the item's value is unchanging, trading quickly stops and the market price remains mostly constant.

Conversely, when something causes the general sentiment to change, the market price changes, and volume usually increases -- because each trader usually changes his evaluation by a different amount and at a different time, so the above condition is often satisfied, possibly more than once for the same pair of traders.  (If all the traders changed their perceptions in perfect synchronism, the implicit market price -- that is, the midpoint of the ask/bid spread -- would change without any trades.)

If these premises are correct, then what is happening now at Huobi?  For the last 4 hours, I see quite substantial volume (~5kBTC/hour), but the price just wanders in the narrow range between 3230 and 3280 yuan, about 4 dollars up or down from the midpoint.

What is going on in the heads of those traders?  Why can't they find the equilibrium?  Their perceptions could not be changing constantly like that, up and down by a few dollars, at random.  Are their robots locked in a bogus feedback loop, each endlessly over-reacting to the small over-reactions of the other robots?

Let's not exaggerate.  Bitcoin may be a terrible disease, and spreading it intentionally may be a heinous crime; but I don't think it can be compared to genocide.

From the "other" thread, may be of interest:

Google does not decide whether the things it finds are truths or lies.

Google now shows that all media outlets report that Neo&Bee has collapsed, so now Google is a source of truths.

We now know that Neo&Bee was inviable from the start.

Therefore, back when Googe was reporting hype articles that said that it had enormous possibilities, Google was a source of lies.

So what?


And MANY THANKS for that.  If another con man tries to pull a similar stunt somewhere else, hopefully someone will throw the Neo & Bee saga on his face, would-be investors will be wiser, and the police may be called in sooner.
.

Chinese Slumber Method prediction for Wednesday April 16

Prediction valid for: Wednesday 2014-04-16, 19:00--19:59 UTC (not before, not after)
Huobi's predicted price: 3345 CNY
Bitstamp's predicted price: 529 USD

(NOTE: This is the Method's prediction, not my prediction.)





Plot legend

Today's data point was only passable (S = 0.0049, W = 0.619).  Anyway, with two points, we can try a straight-line trend, namely A + B*(d-d0), where d-d0 is the number of days since Apr/14, A = 2919, B = 213.

The Bitstamp prediction, as usual, is the Huobi prediction divided by the currency conversion factor R, which was assumed to be 6.32 CNY/USD. It was 6.32, 6.38, 6.21, 6.24 at the last four Slumber Times.
 
Checking the previous prediction

Prediction was posted on: Tuesday 2014-04-15, 23:11 UTC
Prediction was valid for: Tuesday 2014-04-15, 19:00--19:59 UTC (~13 hours later)

Foiled again by the devious Chinese:

Huobi's predicted price: 2919 CNY
Huobi's actual price (L+H)/2: 3132 CNY
Error: 213 CNY (~34 USD)

Bitstamp's predicted price: 469 USD
Bitstamp's actual price (L+H)/2: 495 USD
Error: 26 USD
 
NOTE:
  "Si sa che la gente dà buoni consigli,     
  sentendosi come Gesù nel tempio,   
  si sa che la gente dà buoni consigli,       
  se non può più dare cattivo esempio."
    --Fabrizio De Andrè, Bocca di Rosa

Epa, o bitcoin então vale seu peso em ouro? 

Falando sério, não sei nada sobre o mercado de ouro.  Mas sei que os "vendedores" de ouro (e de bitcoin) pintam cenários apocalípticos de crise econômica, colapso da bolsa, hiperinflação, confisco bancário etc.  para vender o ouro (ou bitcoin) como proteção contra isso.

Of course I have heard of Enron. And of Worldcom, and Madoff... 

Did you know that a dozen managers of those companies were found guilty of criminal offenses, and many (I don't know if all) of those went to jail?

Perhaps that is why, among thousands of companies of similar size, there have been relatively few such scams.

By "relatively" I mean "compared to bitcoin-related enterprises".  Here is an outdated and incomplete list of bitcoin scams and thefts.  How many of those have resulted in convictions? 

Why would a bitcoin entrepreneur (say, the owners of BTC-e) refrain from doing what those people did?

Correct. 
I amost agree with the first item, only I would say:  don't think of bitcoin as a chance to get rich, or as a way to keep your savings safe. Think of it  as gambling on a game with unknown and unknowable odds. 

The other items are gambling strategy; I have nothing to say on that.

I will put my reply in small font in the hope that the jorge-bashers will miss it: Bitcoin will not be a ponzi if, and only if, it succeeds -- and in that case it may be someting even worse than a ponzi.  But I remain skeptical about its chances of success.  I don't know what you mean by "binary", but I perceive that most bitcoiners see the issue as all or nothing: either the bitcoin protocol AND the bitcoin mining network AND the Satoshi blockchain become the dominant cryptocurrency in use on the internet, or the cryptocurrency idea will be dead and the world will forever be condemned to use government-printed cash and bank-issued payment instruments.  Perhaps for being a latecomer, I do not see why these two are the only possible outcomes.

Scammers and thieves are a problem as old as mankind, or even older.  Governments were invented and evolved over millennia for the purpose of fighting them, among other things.  They don't always work as intended, but in most places people would rather have a bad government than no government (or a toothless one).

Somewhere I read this quip, "bitcoin is the tool that the devil invented to teach Economy to the nerds."   The impressive list of bitcoin scams and failures may perhaps serve to teach them also the importance of professional accounting and financial regulations -- and why government is a good thing.