Price Volatility vs. System Volatility

Miners are just one stakeholder. They can't act in isolation. It's a point that's often forgotten.
 
Is there a point where the halvings mean it's no longer profitable to run anywhere?

The bitcoin network It is a self regulating system.

Until now every halving has caused a raise in the price and made what was non profitable before profitable after. The ecosystem is a complex adaptive system and as such there is no way of predicting its future behaviour.
 
The ecosystem is a complex adaptive system and as such there is no way of predicting its future behaviour.

That's not really correct though. The operational parameters of the system are very well defined and understood. As a result, modelling any number of scenarios isn't actually all that complex. The linked calculator is a useful tool in that regard.
 
That's not really correct though. The operational parameters of the system are very well defined and understood. As a result, modelling any number of scenarios isn't actually all that complex. The linked calculator is a useful tool in that regard.

The bitcoin ecosystem is a complex adaptive system and as such one of its characteristics is that a perfect understanding of the individual parts does not automatically convey a perfect understanding of the whole system’s behaviour. Don’t trust what i say, trust complex systems theory that is science.
 
The bitcoin ecosystem is a complex adaptive system and as such one of its characteristics is that a perfect understanding of the individual parts does not automatically convey a perfect understanding of the whole system’s behaviour.

It's not really clear what you're trying to say there, but the controls that govern how Bitcoin functions and the whole system's behaviour is very tightly governed via open source software. As a result, the rules are published for all to see, making modelling of various scenarios eminently possible.

What is it about the system that you feel precludes modelling?

Don’t trust what i say, trust complex systems theory that is science.

So trust science that is science!
 
the controls that govern how Bitcoin functions and the whole system's behaviour is very tightly governed via open source software. As a result, the rules are published for all to see, making modelling of various scenarios eminently possible.

The ecosystem is not limited to the software, the people that interact with it make it complex adaptive.


What is it about the system that you feel precludes modelling?
You are free to model all you want, science tells us that the behaviours are unpredictable

So trust science that is science!

I’d rather trust science than random people on the internet, hence i suggested you go read about it instead of trusting me
 
The ecosystem is not limited to the software, the people that interact with it make it complex adaptive.

People who use the system are outside the system, they interact with it strictly according the the rules of the system. That does not preclude modelling in any way.

You are free to model all you want, science tells us that the behaviours are unpredictable

No, science through numerous studies tells us quite the opposite! There's a whole field of science dedicated to behavioral analytics, Google for example have made billions from it. In fact, one of the compelling facets of Bitcoin is the obvious deep understanding of human behaviour patterns and game theory that went into designing the mining/reward structure.

I’d rather trust science than random people on the internet, hence i suggested you go read about it instead of trusting me

Don't worry, I don't trust you.
 
According to systems theory they are agents of the system, but only according to science

Systems theory is a pretty loose multi-disciplinary approach to analysing complex systems. It's not really of much value when looking at an IT based system with very well defined rules, Regardless, if you want to call the users agents, that still does not preclude modelling. User modelling is applied on IT systems all the time.

Feel free to disagree with science

This isn't the first time on these pages where you have resorting to suggesting people just don't understand something when they point out an error in what you say.

Feel free to quote some of this science.
 
Systems theory is a pretty loose multi-disciplinary approach to analysing complex systems. It's not really of much value when looking at an IT based system with very well defined rules
Do you have any source for this distinction, i’m interested

User modelling is applied on IT systems all the time.
True and it has been proven unable to predict the future, unless you have some source which i would be very interested in
This isn't the first time on these pages where you have resorting to suggesting people just don't understand something when they point out an error in what you say.
Should i stop talking about things i know?

Feel free to quote some of this science.
I happily oblige
 
Caitlin said:
Bitcoin is the opposite of fiat currencies, which generally exhibit price-stability but are susceptible to periodic bouts of financial system instability. By extension, stablecoins that track fiat currencies, such as Facebook’s new cryptocurrency (Libra), fall into the same category as fiat currencies—they’re designed for price stability, not systemic stability, and are exposed to the same risk of periodic instability of traditional financial systems.
This is nonsense! I have no axe to grind for Libra; it is not for me, and I have no idea whether it will live up to the aims of its promoters. But there is no a priori reason at all why Libra should not be every bit as secure and systemically stable as bitcoin. I will allow her to call fiat systemically unstable and so by extension Libra's price has potential instability (vis a vis the price of eggs for example) but of course nothing in the same league as the instability of the price of bitcoin.
So what Caitlin should really be arguing is that bitcoin was designed to have stability of supply, that's what differentiates it from Libra not systemic stability. Stability of supply is not quite as sexy as systemic stability.

There is an Uncertainty Principle at work in prices determined by supply and demand (as opposed to diktat). The more certain you are of the price the more uncertain you are of the supply and vice versa. Since with bitcoin the supply is 100% certain its price is doomed to be highly unstable. Bitcoin price will never, ever be stable unless it reaches its true worth of zero.
 
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But there is no a priori reason at all why Libra should not be every bit as secure and systemically stable as bitcoin.

From a systemic point of view, Libra is centralised and susceptible to problems with the owner (facebook) similarly to Lehman Brothers.
Also it is susceptible to change of laws in any of the 195 countries.

These 2 issues do not affect the bitcoin network.

From a security point of view, the bitcoin network has proven with 10 years unbroken history to be quite resilient to attacks. Thousands of Facebook accounts get hacked daily as far as i can see


Libra will compete with the banks, not with bitcoin

My 2 cent
 
Should i stop talking about things i know?

You haven't been able to back up your assertions here yet...

True and it has been proven unable to predict the future, unless you have some source which i would be very interested in

Are you deliberately misunderstanding what I said? I never suggested we predict the future, simply analyse and model the behaviour of the Bitcoin system based on a number of possible scenarios. If you don't understand that, and IT capacity & performance testing methodology, then why comment on my post in the first place?

I happily oblige

Let's stick with this one.... Please quote your sources. Once we sort that out, we can move on to the other aspects and I'll post research articles for UBA and references for IT systems performance testing.
 
Thousands of Facebook accounts get hacked daily as far as i can see

There's a very significant difference between hacking an account, and hacking a system!! I'm aware of one successful attack on the system. When '123456' is still the most commonly used password, the hacking of an account on many systems is a pretty trivial matter.
 
But there is no a priori reason at all why Libra should not be every bit as secure and systemically stable as bitcoin.

Libra will be backed by a reserve basket of fiat currencies. Themselves, subject to price manipulation, in turn systemic instability.
Im only assuming that the Euro, for instance, is to be in this basket? The euro of sovereign state bankruptcy.
Its not me that is saying this, im only relaying the views of numerous economists that have warned against fundamental flaws inherent in the mechanics of the euro ever since its inception - which incidentally can be traced back as far as the 1960's.
 
Since with bitcoin the supply is 100% certain its price is doomed to be highly unstable. Bitcoin price will never, ever be stable unless it reaches its true worth of zero.

But it will never, ever reach its "true worth of zero", because it is doomed to be highly unstable.
It cant be both? Both stable and doomed to be highly unstable?
 
You haven't been able to back up your assertions here yet...

My assertion are backed up by research and science, you can find them within complex adaptive systems literature

Are you deliberately misunderstanding what I said?

No. That seems to be your strength. Give caesars what’s caesars.

I never suggested we predict the future, simply analyse and model the behaviour of the Bitcoin system based on a number of possible scenarios.

Well, you got short memory, in fact my answer to your message only quoted this question you asked:

<leo\>Is there a point where the halvings mean it's no longer profitable to run anywhere?</leo>

To which i replied it can’t be known

If you don't understand that, and IT capacity & performance testing methodology, then why comment on my post in the first place?

Wasn’t me the one that implies other people don’t understand things? Kettle/pot?

Let's stick with this one.... Please quote your sources. Once we sort that out, we can move on to the other aspects and I'll post research articles for UBA and references for IT systems performance testing.
You can start from here and follow the references

 
But it will never, ever reach its "true worth of zero", because it is doomed to be highly unstable.
It cant be both? Both stable and doomed to be highly unstable?
Wolfie I am going to bully you with a bit of math.
Fishers Equation:
MV = PT
Here M is the supply of money and P is the price of goods in that money. V and T constitute demand.
If M is fixed then as demand varies, as it always will, P has to take up the slack. Central banks target a stable devaluation of the price, they do so by tampering with the supply of money and its demand.
When M is fixed there is only one possibility for stability of the price and that is zero, when of course the demand attributes also become zero and Fishers Equation becomes M x 0 = 0 x 0

Of course Fishers Equality is in the context of money as a medium of exchange. Bitcoin is 99% a medium of speculation, which only serves to make the price even more unstable until it reaches ultimate RIP at zero.
 
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My assertion are backed up by research and science, you can find them within complex adaptive systems literature

You are misunderstanding your own weak references so. You suggest Bitcoin is 'a complex adaptive system'. I'm not arguing that point, but you go on to claim that means 'as such there is no way of predicting its future behaviour.' It is here you are mistaken. Bitcoin in its entirely is governed by strict rules, that makes if very easy to model how that system will function.

Such modelling and testing of complex IT systems is commonplace, tools like LoadRunner, NeoLoad, jMeter, etc. are used in large development houses every day to test various load scenarios for the software they produce. Various scenarions for user behaviour patters are all configured via scripts and input parameters.

Your Wiki reference states complex adaptive system 'is a system in which a perfect understanding of the individual parts does not automatically convey a perfect understanding of the whole system's behavior.' I don't see how that is relevant? The entire Bitcoin system is very well understood, go to GitHub and look at the source code for yourself.

You also suggested that science says human interaction with systems like Bitcoin is unpredictable. You haven't backed that claim up with anything.


Well, you got short memory, in fact my answer to your message only quoted this question you asked:

<leo\>Is there a point where the halvings mean it's no longer profitable to run anywhere?</leo>

To which i replied it can’t be known

Hint, take a look at the calculator I linked to previously. That'll give you a good indication.
 
Thanks Duke. But would I be correct in saying that bitcoin supply is not fixed until 2140?
Arguably, the supply of oil and gas is fixed, or at least along way short of being replenished to levels that would in anyway adequately meet current demand. Hence the "true value" of oil and gas must be zero. Correct?

If M is fixed then as demand varies, as it always will, P has to take up the slack. Central banks target a stable devaluation of the price, they do so by tampering with the supply of money and its demand.

Nobody is disputing the tampering with the supply of money and its demand. What is being relayed to you, is that such tampering is obviously artificial and is set to a series of changeable rules that basically are in the hands of a few dozen decision makers at best.
In turn, the bauld Caitlin, pointing out that this will result in investor misallocation of capital, serving to destabilize the system at future points. Such misallocation is, from my perspective is at an all time high, given the level of frequency in which banks throughout the developed world are being caught with their pants down in some shady and fraudulent activities.
So central banks can target price stability all they want, the inevitability of their shortcomings is system instability. This system instability is easily recognizable in a number of ways. House price inflation v wages stagnation, bond yields and negative interest rates, all time record high stock markets in the US, sluggish or moderate growth rates, increasing debt levels - sovereign, personal, corporate.
The CB's traditionally use the interest rate as a tool to control the inflation rate. These days however, CB's are trying to manage inflation in order to control the interest rate.
Its all a bit back-to-front these days, but I don't make the rules.
 
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