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I’ve been watching this actively, and have a few theories: The last major forks (ETH:ETC, BTC:BCH) both created net positive value; that is, the total value he

I’ve been watching this actively, and have a few theories: The last major forks (ETH:ETC, BTC:BCH) both created net positive value; that is, the total value held after the split was greater than the value of a single chain. So, I think the so-called ‘smart’ money ahead of the fork has been to buy BTC, since history seems to show it will be worth more post-fork. Fork looks more likely -> more buying. And of course the rising price creates its own momentum. There are three general outcomes from the fork: one or the other side ‘wins’, and there’s a shit-chain spawned, or they both coexist. In the coexist world, we have a pretty interesting set of market moves ahead; if the debate is as divisive as it looks on twitter, then the whole crypto world will be holding ‘shit coins’, but not ones others think are shit, along with their preferred fork. It seems possible that they may turn some of those into Ethereum, and it seems likely to me that some traders will ‘get back’ to Ethereum post-fork; all those would indicate some cautious optimism about ETH prices later this fall. And of course if BTC just totally nukes itself, then I think you’d see a major flippening back to ETH.

panarky 9y ago
1) The gargantuan Chicago Mercantile Exchange says they'll start trading futures contracts on Bitcoin later this year. 2) There's a "flight to safety" quality to Bitcoin. It's proven secure in the face of 9 years of constant attacks. Ethereum is newer and not as proven yet. 3) Bitcoin has a much more powerful mining network, currently cranking 10 exahashes per second and growing fast. Ethereum is at 100 terahashes per second (about 100,000 times less), and growing slowly. 4) Bitcoin is scarce and deflationary. Ethereum is abundant and inflationary.
- mrfusion 9y ago
  Why is it inflationary?
  - panarky 9y ago
    The bitcoin network rewards miners with 12.5 new BTC every 10 minutes or so (~1,800 per day). The ethereum network rewards miners with 5 new ETH approximately every 15 to 30 seconds (~18,000 per day). Bitcoin's total supply is now about 17 million BTC, and will never exceed 21 million BTC. Ethereum's total supply is now about 96 million ETH with no upper limit.
    - endangered 9y ago
      > The ethereum network rewards miners with 5 new ETH approximately every 15 to 30 seconds (~18,000 per day). This is not true. After the last hard fork, the reward for miners went down to 3 ETH.
      - panarky 9y ago
        It's a little complicated with uncles, etc., but the net result is more than 20,000 brand new ETH created every day. Here's a chart of daily block rewards. https://imgur.com/a/JG9W5 https://imgur.com/a/JG9W5
  - tiki12revolt 9y ago
    because that's how it was built [1] [1] https://en.wikipedia.org/wiki/Ethereum#Ether_supply_increase_rate https://en.wikipedia.org/wiki/Ethereum#Ether_supply_increase...
- iMYof 9y ago
  But only (1) is a logical explanation for _recent_ price movement, no?
- andrewla 9y ago
  I don't think any economist would consider Ethereum's growth to be "inflationary" -- the rate of marginal increase of money supply tends to zero, just like Bitcoin's. To be considered "inflationary", it would have to increase the block reward exponentially over time, rather than just keeping it constant -- linear growth is insufficient. And all that is assuming a non-existent fixed relationship between inflation/deflation and monetary base. Note that I say "monetary base" and not "money supply" because the two are related but not equivalent. No mainstream (Keynsian) economist would really consider "monetary base" to be a critical economic indicator, and even monetarists would quibble. Only Austrians would consider it important, but they use the terms "inflation" and "deflation" to refer to money supply, so they would not consider Bitcoin deflationary either.
- fishnbits 9y ago
  When proof of stake comes to ethereum in a year or less, the total supply of ethereum will actually decrease very slowly over time. Bitcoin will always continue to add coins to the network, albeit in smaller amounts. Eth will subtract coins from the network.
- etaty 9y ago
  3) apple and orange. They are not using the same (Proof Of Work) algorithm for mining.
1_2__4 9y ago
Or it's because more shady merchants (drugs dealers) accept BTC. Why does anyone think it's more in-depth than that?
- iMYof 9y ago
  Because something interesting is going on recently, which is what prompted OP's question. Making an observation that was just as true 6, 12, 18, etc months ago doesn't make for a compelling argument about current, new developments.
- wmeredith 9y ago
  Because the BTC ecosystem has enough moving parts and varied actors that there's no way you can explain anything useful about its behavior in such a glib manner.
- oxide 9y ago
  The people you're talking about DO NOT BUY and HOLD. EVER. The entire idea is to expose yourself to variable risk as little as possible. so the coins are sent literally the second you can send them. you don't sit on them for a day, even for a few hours. you also pay through the nose for decent confirmations with BTC leading to forked coins like LTC/ETH being the de-facto way today, because you pay pennies instead of dollars to get a decent confirmation time. Last year? Maybe, but not in Nov 2017 ;) Basically, you're wrong and should feel ashamed for being so ignorant.

panarky 9y ago

1) The gargantuan Chicago Mercantile Exchange says they'll start trading futures contracts on Bitcoin later this year. 2) There's a "flight to safety" quality to Bitcoin. It's proven secure in the face of 9 years of constant attacks. Ethereum is newer and not as proven yet. 3) Bitcoin has a much more powerful mining network, currently cranking 10 exahashes per second and growing fast. Ethereum is at 100 terahashes per second (about 100,000 times less), and growing slowly. 4) Bitcoin is scarce and deflationary. Ethereum is abundant and inflationary.

mrfusion 9y ago
Why is it inflationary?
- panarky 9y ago
  The bitcoin network rewards miners with 12.5 new BTC every 10 minutes or so (~1,800 per day). The ethereum network rewards miners with 5 new ETH approximately every 15 to 30 seconds (~18,000 per day). Bitcoin's total supply is now about 17 million BTC, and will never exceed 21 million BTC. Ethereum's total supply is now about 96 million ETH with no upper limit.
  - endangered 9y ago
    > The ethereum network rewards miners with 5 new ETH approximately every 15 to 30 seconds (~18,000 per day). This is not true. After the last hard fork, the reward for miners went down to 3 ETH.
    - panarky 9y ago
      It's a little complicated with uncles, etc., but the net result is more than 20,000 brand new ETH created every day. Here's a chart of daily block rewards. https://imgur.com/a/JG9W5 https://imgur.com/a/JG9W5
- tiki12revolt 9y ago
  because that's how it was built [1] [1] https://en.wikipedia.org/wiki/Ethereum#Ether_supply_increase_rate https://en.wikipedia.org/wiki/Ethereum#Ether_supply_increase...
iMYof 9y ago
But only (1) is a logical explanation for _recent_ price movement, no?
andrewla 9y ago
I don't think any economist would consider Ethereum's growth to be "inflationary" -- the rate of marginal increase of money supply tends to zero, just like Bitcoin's. To be considered "inflationary", it would have to increase the block reward exponentially over time, rather than just keeping it constant -- linear growth is insufficient. And all that is assuming a non-existent fixed relationship between inflation/deflation and monetary base. Note that I say "monetary base" and not "money supply" because the two are related but not equivalent. No mainstream (Keynsian) economist would really consider "monetary base" to be a critical economic indicator, and even monetarists would quibble. Only Austrians would consider it important, but they use the terms "inflation" and "deflation" to refer to money supply, so they would not consider Bitcoin deflationary either.
fishnbits 9y ago
When proof of stake comes to ethereum in a year or less, the total supply of ethereum will actually decrease very slowly over time. Bitcoin will always continue to add coins to the network, albeit in smaller amounts. Eth will subtract coins from the network.
etaty 9y ago
3) apple and orange. They are not using the same (Proof Of Work) algorithm for mining.

1_2__4 9y ago

Or it's because more shady merchants (drugs dealers) accept BTC. Why does anyone think it's more in-depth than that?

iMYof 9y ago
Because something interesting is going on recently, which is what prompted OP's question. Making an observation that was just as true 6, 12, 18, etc months ago doesn't make for a compelling argument about current, new developments.
wmeredith 9y ago
Because the BTC ecosystem has enough moving parts and varied actors that there's no way you can explain anything useful about its behavior in such a glib manner.
oxide 9y ago
The people you're talking about DO NOT BUY and HOLD. EVER. The entire idea is to expose yourself to variable risk as little as possible. so the coins are sent literally the second you can send them. you don't sit on them for a day, even for a few hours. you also pay through the nose for decent confirmations with BTC leading to forked coins like LTC/ETH being the de-facto way today, because you pay pennies instead of dollars to get a decent confirmation time. Last year? Maybe, but not in Nov 2017 ;) Basically, you're wrong and should feel ashamed for being so ignorant.