Would it be impertinent for me to write again "the Chinese set the price, and they don't give a damn about Bitstamp"?

What are turtles doing in a country where no one likes them?

Are arbitragers  warming up still?

Thanks! But I can only read French, not speak it. 
My parents were from Veneto and I spoke Venetian at home as a kid.
I learned Portuguese at school, Italian and Spanish starting at 10 or so,
from magazines that my parents bought.  Some French a bit later.
Then English at school and from reading technical stuff.
That's about it.

Predictions of Wizard Houellebecq

In 2015 I will lose my teeth

In 2022 I will do Ramadan

Lots of money, but at least he was consciously gambling, with know odds.  To me it is not as bad as that other guy who deposited 50 k$ into MtGOX, just before it died, to buy those bitcoins at 80% discount from market.

EDIT: on the other hand, maybe he will get 20% of his money back, so it was not that bad...

I accept that there may be exceptions.  I believe my analysis above applies to most of what people call "pump-and-dump" or "junk" cryptocoins.  (I called them "altcoins" out of laziness, it is easier to type.)

PS. I find this discussion bizarre, because until a month ago bitcoiners claimed that altcoins would die because they did not have the huge mining network that bitcoin has.  Now it is the number of users that matters?  Then Auroracoin must have been a success -- didn't they "airdrop" some AUR to every person in Iceland? 

Options 1 and 2 are different coins, that will have different market prices and different expectations of survival.  Each old bitcoin user starts out with the same number of coins in both chains.  There is no option for him to take: if he does not spend or sell the coins in one chain, they will simply sit there, as if he had decided to hoard them.  He could burn them, but that would mean throwing some value away -- and would make the price of that coin to rise.

So the question is not "which coin would the users choose", but "what will happen to the market price of each coin".

Coin 1 is just the same old bitcoin, with the same network and protocol, minus a reward halving that was scheduled to occur and will be postponed.  It will keep working smoothly through the transiiton. Its price may fall considerably, but it is unlikely to become insignificant.

Coin 2 is a brand new coin that happens to start with the same coin assignments, but has yet to build its network.  There is a bunch of rich guys out there -- the old bitcoin miners and their investors -- who have hundreds of millions of dollars at stake invested in coin 1, and therefore are quite interested in having the price of coin 2 crash so that it will not steal market value from coin 1.

So, except for the ideologues, if someone wanted to invest some money in "bitcoin" after the change, which of the two bitcoins would he choose?

Except for the ideologues, once the cartel has announced his plans, how many bitcoiners would still wish for the Red Button to be pressed?  If the button is pressed, how many will do whatever they could to kill coin 2?

Perhaps, as you say, there will be smart guys who will wait for the cartel to stop jamming coin 2 and then will start mining it, or buy tons of it as penny stock, counting on its recovery.  But, if that strategy turns out to be profitable, what would stop other people from forking other Red-Button-style clones of bitcoin?  

Note that altcoins are created not because they can be better than bitcoin (which in some cases may be true), but because their creators think: "Why should I buy an existing coin, and see its early adopters become filthy rich at my expense, when I can create my own altcoin, and become filthy rich at other people's expense?"

It seems that you believe that the Red-Button coin 2 will prevail (or at least survive) for a similar reason, namely it would give to ordinary PC owners the opportunity to become early miners of "bitcoin" again, and amass a hoard of "bitcoin" with little cost. That cloned "bitcoin" would have a low price perhaps, but all users of the old bitcoin would automatically be its users too, and (by your belief) it would have a nonzero chance of conquering the bitcoin market.  

But, if so, what will stop people from creating more such clones, independently of any 51% threat?

These possibilities with two or more clones of bitcoin are already too confusing for me to reason about them.  After all, I am already unable to see why bitcoin would survive in the long term, even with no clones and no 51% shenaniigans.   Lucky for you that your beliefs a priori exclude the possibility of protocol changes, 51% attacks, hard clones, and anything that might be a problem for bitcoin.  

Please go back and read the plan I outlined.  The one with chains (1), (2), (3). Then please show me how the non-conformant cartel would be "removed from the pool" (?).

Could you name them please? I am not aware of any minimally developed society that would not have some sort of government backed by some sort of police.

I have seen people cite ancient Ireland (which seems to be false, false, the tribes had chiefs and there was even a "High King" at some point) and Iceland (where the population was all isolated farmers and the first village formed in the 18th century).  Do you mean some other?

And, again, I never said that they would be a cartel of rebel-chain miners.  They would still be a cartel of miners of the old chain and the cartel chain.  In fact they would have 100% of the active ASIC miners on their side, because the old chain miners would have no other viable option except join them.

Come on, you know that "the cartel" there means "the cartel of old-chain miners who want to force a change in the block schedule".  It is not "a cartel of rebel-chain miners".  

Assuming that "the cartel" wants to kill the value of the rebel chain, it will try to put enough CPU power working on the rebel chain to jam it.  That should not be hard at first, because the rebels and opportunistic miners will not all start mining all at once.  If the cartel acts quickly, then the rebels who try to use or mine the rebel chain will be frustrated, and (so the cartel hopes) they will give up before others join the rebellion.

Note that, while this struggle is going on in the rebel chain, the cartel's chain (with old protocol except for halving) will operate normally all the time for everybody who upgrades to it, except perhaps for some temporary variation in the block rate.

Know nothing about PoS or PoI (or PoB), sorry.

My understanding of Ripple is that it is two things:

* The Ripple Network is a system for interbank settlements that uses some cryptocoin technology, but is centrally managed by RippleLabs and/or a bank consortium;

* The Ripple Coin (XRP) is a cryptocurrency, also managed by RippleLabs.  The coin could be used by the Ripple Network as an intermediate step when converting between two minor currencies, but the same role could be performed by a major currency such as UDS or EUR.  Success of the Network does not imply success of the coin, and vice-versa.

Is this understanding correct?
 

Yes, it is school vacations here.

Even if it breaks that one, I bet that we can find two other points on the chart that will define a long term uptrend that still supports the price. 

Wait, are you saying that there is an Authority that the bitcoiners must trust?  

You must be referring to the The Shrem Karpelès & Friends Foundation, and/or Gavin Andersen who works for it, as the source of the Red Button upgrade B. But why do you presume that an entity that has Sergei "Ponzi King" Mavrodi and Brock "RealCoin" Pierce on board, as well as many of the big miners, would not side with the big miners' cartel?  How can you be sure that Gavin will not be employed by the cartel at the time?

The Red Button threat may serve to protect the user's interests against miner abuse, if it is credible.  However, actually carrying out that threat would be extremely damaging to the users, because it would inevitably split the coin and cause the total price to drop.  Whoever calls for rebellion and releases that code will not be "protecting the users interests", but telling them to sacrifice their money for the sake of the PoIotPUGTiiaGI (Principle of Inviolability of the Protocol Unless Gavin Thinks it is a Good Idea).

Perhaps the Red Button solution should be renamed "the Jim Jones solution"?

You meant 12.5 rebelBTC per block.  (It is the ex-bitcoin miners who will earn 25 cartelBTC per block.)  But it doesn't matter.

Correction: until the electricity and equipment costs are Pr*1800 $/day, where Pr is the market value of the rebelBTC coin; that is, at most (Pr/Po)*75 MW, where Po is the BTC price before the cartel's announcement.  Even if the rebel's bitcoin were to retain the full value of the old bitcoin, that would be only 75 MW.  But it doesn't matter, either.


Well, the cartel will want to be the first in that line.  As soon as John Connor releases the rebel mining code, the SkyNet cartel will download it and set some rented CPUs to the task of jamming the rebel blockchain (and warn users that it will be doing that).  The cartel will keep increasing their CPU power as needed, so as to retain a majority of hashpower in that chain too.  So, the users who upgrade their wallet software to the rebel protocol will not be able to use their coins; and any opportunistic miners who try mining the rebel chain will get nothing.  This attack may cost the cartel a lot of money, but the stake for them is half a million dollars a day for 2 years, so they will try all they can to preserve the value of their coin. How long will it be, before the rebel users and miners give up?

(By the way, I meant that the cartel can rent cloud computing, not cloud mining as it its usually understood.)

Note also that, since the goal of pressing the Red Button is to destroy the value of bitcoin, the cartel could also justify the jamming of the rebel chain as an action to save bitcoin by preventing the disastrous split; and call for all good bitcoiners to come to the help of their cause, by cooperating in the jamming.

But it doesn't matter either.

I hope you kept reading my post beyond the first half, specifically beyond this sentence: "But let's say that a substantial number of users do join the rebel ranks, and the cartel leaves the Red Button chain alone, or fails to jam it."

Note that the effect of the Red Button would be to create a new crypto, the rebelBTC, that is a cloned copy of the original Bitcoin (oldBTC), including its state.  Namely, every owner of N oldBTC receives a gift of N rebelBTC, sitting in the same address of the rebel blockchain, which is accessed with the same private key.  Meanwhile, the cartel will give N cartelBTC to the same user, in the cartel's blockchain, while blocking further use of the oldBTC.  From that point on, each copy of each original satoshi can be hoarded, sold, spent, or burned independently of the other copy.

(For example, the USMS will suddenly find themselves owning 94'000 rebelBTC and 94'000 cartelBTC, as well as 94'000 oldBTC that they cannot move because of the cartel's jamming.  They could auction each separately or (more likely) bundle them together in lots of (say) 2000 rebelBTC plus 2000 cartelBTC.  In this second case, they would need to duplicate each transaction request for both chains as they deliver the coins to the winning bidders.)

The point is that the Red Button does not "steal" the users from the cartel's chain.  It does not even give the unhappy users the option of taking their BTC out of the cartel chain and into the rebel chain.  All bitcoin users would become users of both coins.

So the cartel chain will continue to have all the bitcoin users, as well bitcoin's 500 PH/s network; whereas the rebel chain will have all the users but only a nascent CPU network.  

This would be a very interesting experiment.  Has this ever happened before -- somebody creating an altcoin that duplicates bitcoin's protocol and its state, namely a persistent fork of the bitcoin blockchain?

The first question is what will happen to the prices Pc and Pr of the two coins, cartelBTC and rebelBTC, and how would they compare to the price Po of bitcoin before the split.  It seems unlikely that Pc + Pr will be more than Po. (If that were the case, people would rush to press the Red Button now, without waiting for any attack!)  Most likely, some of the old value would be lost, and the rest would be split between the two chains; so that Pr + Pc << Po.  

The next question is how the remaining value will be split between the two chains.  That depends on the credibility of the two coins in the eyes of prospective buyers (bitcoiners and non-bitcoiners).  If the cartel sets out to jam the rebel chain, and manages to keep it jammed for sufficiently long time, then Pr will soon be zero.  Since normal users will see no diffrence between oldBTC and cartelBTC, Pc will probably retain a significant fraction of Po. (I would guess Pc will be almost equal to Po, actually; but I know that I live in a fantasy world where bitcoiners care more about their money than about the ancap ideals.).


As I said before, I am not predicting anything.  You and other people claimed that a miner cartel cannot force a change in the protocol.  I tried to show that it can, by providing a step-by-step plan that they could follow.  That plan would obviously work, just as it always works for any cartel that can deny an essential service to its customers.  But that would be an unpleasant fact, so you prefer to believe the fantasy that the 300 Spartan bitcoiners would rally at Gavin's call in a suicidal stand against the army of Persian money-chasers…

If Gavin could really do that, then who would put money into bitcoin?

Next Christmas, maybe?

So, they should be ignored because they set the price? 

Could you please post a worked-out example of how that fake-trade-plus-arbitrage would move the price?

Freudian slypo / pun of the month: