Topic: . - page 2. (Read 6745 times)

This was an interesting speculative post thanks for posting 

Don't know why it took me so long to notice this thread, I like your analysis and meticulous methods, chodpaba.

I'm just going to put this here before the next wave up happens. (No, I don't know the timing, just saying it will happen eventually...)

If you take the prior traded extreme to the next traded extreme, the high of 31 to 266 was approximately ~758%.

If you use this as a general guide (and it could be utterly wrong in terms of magnitude - as in, not high enough) projection would say from 266 to our next theoretical oh-no-that-is-impossible-high would equal: 2,283

Crazy? Perhaps not. Our original rise from the first 'tick' of when bitcoin traded was ~3,000%+ to the 31 high. Maybe I'll come back later and find out that even extrapolating that lofty number wasn't enough. Or, as some cynics believe, it will be worth zero - but I highly doubt it.

I'm willing to believe that, but the statistics I have access to say otherwise.

I will agree that in terms of goods being produced we are currently experiencing deflation, but the inflation rate of the CB currencies outstrips it as far as I can see.
 

By 'We' you mean Bitcoin right?

Maybe.

I know what you mean, but you said it so subtly I felt that it needed a quote.

Edit: found something else.


In relation to this, how do you take account of lost Bitcoins? (I assume that you can't, which is fair.)

The only upgrade it really needs is Zerocoin.

+1

i don't even know why we're having this discussion, seeing as bitcoin isn't parallel to litecoin, the reason being that supply of these coins will not be what determines the price ratio.

The worth of a coin depends on what you can do with it. Bitcoin is worth $98.9 (or $92) because of the economy underlying bitcoin. The litecoin economy is less comparable. How i see it is that people will likely fork towards the best economy because it makes sense. Why would you choose a smaller economy over a larger one? and as such, bitcoin wlll grow and grow, at a rate much faster than ltc.

Yes Really, you've written an equation describing the relationship between Litecoin and Bitcoin and can't show how you derived it. Makes you look un-credible and I'm calling shenanigans on you!!

You are doing a great job providing blinders to folks.

Thanks for the link how did you work out that equation?

Just to clarify can you confirm if e is the speed of light or not in your formula?

LTC is hardly illiquid, if you define liquidity as ability to convert to USD then LTC is no different from BTC.  If you define it as being able to spend it directly with online merchants it's certainly behind BTC but not by the absurd orders of magnitude that your claiming.  It is also IN NO WAY FIXED and it is not at all clear how its going to change in the future.

Also your mistaken to think that usage is actually what supports the price of ANY of these coins, their values are still massively speculative and the actual commerce volumes can't support prices when all goods are de-factor priced in dollars.

And they can always pull those changes even if they haven't written them, that's basically what every alt-coin dose when its created, copying is always easier then originating.  And frankly BTC developers are being far more conservative in what they will do and what idea spaces they will explore then are alt-coin developers, Sunny King is an example of someone doing stuff that would never done by BTC.

Ok so your admitting you were confusing inflation rates with nominal supply numbers.  This is a really naive mistake to make, after all "1" BTC is a completely arbitrary unit and it's only relevance is to how many units exist or will exist and what the valuation of the total market cap is.  People have been spinning off all kinds of alt-coins with crazy high or crazy low nominal unit counts and people have recognized for ages now that all that matters is valuation of total market cap, inflation rates relative to ultimate max coin base and the rate that you can acquire a portion of that market cap.

Also I see nothing that justifies 1/(e^4) as a formula for the value of 1 LTC relative to a BTC and I think your either trying to Bullshit people with fancy numbers or you have grossly misapplied a formula you found somewhere.  LTC and BTC are separate goods, though their may be a substitution effect in which the broader consumer need for 'crypto-currency' can be satisfied by one or the other, presumably with BTC as the superior good because of it's wider usage.  But ultimately demand will be the determining factor with the coin buyer choosing between an ASIC network and a GPU network which is the main factor differentiating them.  I can't say what people are going to prefer but it sure can't be expressed as an equation like that.

What does that distribution curve look like and how many BTC are at the top? Why is it easy to read the minds of the larger population?

This thread has been an enjoyable read.
I agree with chodpaba that people think linearly and not exponentially, Bitcoin was exciting to start as I saw the opportunity for exponential growth but when I witnessed it in the market in 2011 and the beginning of the 2013 it was hard to comprehend.

It also stands to reason that the halving of Bitcoin's rate of inflation, is known and as such most investors tend to have their coins.  It is only the new investors now who don't yet have coins and creates an opportunity for growth via the "elastic demand".

 As Bitcoin has an almost inelastic supply, and as / if demand increases, we should expect exponential growth in price.  I am left with the following thoughts;  As the price increases, demand tends to wane, as "new" early adopters tend to move on to new things to avoid being laggards, (hence the interest in LC or alts)

So the supply dose becomes somewhat elastic relative to demand by adjusting as old coins go into circulation and this should happen with every magnitude of growth, if it doesn't, the price will stagnate and tend to fall to its utilitarian value, and then grow organically based on the demand and flow of money.

So I understand exponential growth is possible, and have seen it in action, I see the elasticity of demand adjusting radically to the point it actually discourages adoption, so as I don't understand how you model that mathematically, I don't think it can be predicted.

It's like; because the supply is finite, the supply has to be constantly distributed as demand increases, if it isn't then the supply finds a balance based on the excising demand.  (ie wealth extraction has to take place as Bitcoin is adopted, but if it takes place too rapidly it self corrects)

But the similarity ends on the demand side, demand is no where near as constant as in real assets like cotton.

A better comparison would be Rhodium which even has volatility of a similar magnitude to Bitcoins.


The supply side has even more inelastic properties than cotton since it's production is tied as a byproduct of other metals. But the demand side doesn't have the inelastic properties you suggest, I would even say it is highly elastic, like Bitcoins speculation driven by a large extent.

I would argue that elasticity doesn't really apply to Bitcoin because it implies demand based upon inherent value. But Bitcoins have no inherent value, just the network provides utility which is something else.
In other words demand and liquidity are dependent on positive feedback since the utility comes out of distribution which in turn follows the market price.

I've probably missed where you justified this. Could you point me to it?