Topic: Giovanni Santostasi - The Bitcoin Power Law Theory (Read 726 times)

1st quote: "A" is a constant (10^-16.493) "n" is 5.68
2nd quote: "A" is a constant (10^-17.624) "n" is 5.912

doesnt seem constant to me.. so not a power number

A very interesting tweet by Giovanni about one question I already had in my mind: How stable is the relationship he found? How the parameters changed during the lifetime of bitcoin?

Here you have the answer:



You can appreciate how stable the relationship is thought the years.

An organised and well presented list of Santostasi material is far beyond my capabilities.
Too much material, scattered over different medium.
That interview is very good, I did hear as it was linked on some Giovanni’s tweets.

Here's a link to another (a little more than 2 hours) interview with Giovanni by Robert Breedlove on the What is Money? (WIM) podcast.

https://overcast.fm/+AAmNdvouOjU

Lastest feud over the Bitcoin Theory:
Adrian Morris wrote a long-form on the subject on Cointelegraph:

It's time to ditch Bitcoin Power Law Theory


TL;DR:


Obviously, Prof Santostasi has already answered this piece in his style:

It is time Cointelegraph writers pick a book and learn some stuff (same for other Bitcoin analysts)
(I like the title reference)

I week ago I made a post in which I linked two of Giovanni's podcast interviews....

See below:

There is a new material on this article, and the discussion has been quite animated over the last few weeks.
I am going to update this thread with some new Graphs, resources and agitations.


In the meantime here is the first resource:

https://bitcoinpower.law



The graph is made with those constant:

yet again.. its not a constant.. if you look back on the guys numbers over the years he has always been editing and updating the numbers to try to stretch and fit the chart into a line.. and thats the point i have been asserting all this time.. his numbers have been changing they have not been a constant thus you cant make any predictive judgements or assumptions from it if the number today wont be the same as the number next year

it would only be a power law if the number was truly a constant that proved itself over the history of time or where the future path today then becomes true when using patience to wait out the test of time..
his own edits of the number debunk his own narrative that its a power law

also in the twitter link video you linked in recent days. even that number is not a support based number because the price chart has occasions where it doesnt sit within the window, it actually falls outside the line at certain points meaning the number does not sit/contain the support of all bottoms

Love the bullishness & price projections, I truly hope this model turns out to be more accurate than Plan B with his ever changing models full of excuses. Giovanni seems a super smart guy but I’ve been burnt previously relying on models, they all break at one stage, don’t put all your faith in one guys model.

One easy answer is that the two linear are different, as one is price regression, while this is a support.
Of course, this is not a “law”, and the Constance parameter is excellent but not a prerequisite.
But of course, scepticism is necessary when dealing with those kind of models.

-17.3 + 5.82(in the video by apsk32 that fillippone just posted)  is already a different number than the initial topic started just a few months ago.. so the "law" is not fixed thus has no power

Never saw something so bullish:




Scientific evidences might be poor,
Yet this animation points toward a valuation of 1 million between 2031 and 2036.

Are you bullish enough?

@hatshepsut93, I often times see the discussion about how the stock market is not a zero sum game as there is production and dividends involved, but BTC represents a zero sum game for investors. Let me give you another example and you can see for yourself what you think about it:

There is option pricing theory because values can be calculated and assigned to so called options in the stock/options market. But the functionality of options is far more sophisticated than you might think at first glance. It supports price discovery, meaning it can give the average Joe an idea of how the market collectively assesses the risk-opportunity ratio of a certain asset/debt instrument. Then there is the subjective value of an option as investors, traders or any other actors (I will explain that in a second) can have different views on the objectively calculated value of an option. Risk exposure can vary even if the numerical value at risk is objectively the same.

If someone wants to escape from their home country because they are afraid of political persecution, what options do they have to take with them any of their assets without seeing it getting frozen or themselves getting stopped at the national boarder? What option does the average Joe have to anonymously store wealth (not talking about illegal strategies) like the rich guys do in Panama and the Virgin Islands without paying a fortune for tax advisers and lawyers to not make any easy and costly mistakes? What option does someone have to donate to a cause they consider worthy of support without getting politically/socially/financially cancelled (truckers protesting against Corona measures in Canada, Wikileaks etc)? What about escaping an inflationary financial system? And how does anyone make sure whether the published numbers about money supply measures M1, M2, M3 etc. (depending on where you live, definitions can differ) are true?

BTC has a very high and real time price discovery mechanism. You could argue that you own a piece of art or antique thing that is worth a lot and you could take it with you anywhere in the world and sell it there, but you'd probably never know what you get. Markets differ for illiquid things or collector's items. In arts some people pay a premium because they "love" a piece. This doesn't apply to BTC. We have seen premiums being paid in countries with high inflation. There is a reason for that.

The range of possibilities is big here as individuals can have different causes they think can be well served by BTC. Options carry value without paying dividends.

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There are a few things that I don't get when it is said that the BTC price follows Power Laws. There are plenty of examples for natural systems and how they follow Power Laws, like cancer - a tumor. But the difference is that the cancer cells don't listen to mathematicians calculating Power Law distributions and then react to those calculations. Predicting the size of a tumor with no exogenous interventions (aka treatments) does make sense to me. But when we look at economic entities, they do listen to what is propagated publicly and adjust their actions according to their expectations. Assuming that Santostasi's prediction about the price of BTC being at $1 million in 2033 and $10 million in 2045 is now pushed as a public agenda, wouldn't the result be that in anticipation of the law holding true, people would act faster than initially anticipated and buy BTC? What if nobody came up with the Power Law theory and Santostasi kept it secret? Can it still be considered "organic growth according to Power Laws" when now we'd see the biggest financial players sophisticatedly push the Power Law agenda through media that they partially control? What about some dictator going nuts, bombing the world with nuclear rockets, destroying wealth everywhere, good or bad for the price of BTC?

Cancer is already very complex, but I think that the microscopic analysis allows to feed in data into models at every second and then let AI calculate correlation and - where possible - causation. But I think that the world as a whole is probably a more complex organism than a tumor (at least I think so). As I read in some article, there can be viruses and what not and that is why these predictions like BTC price follows Power Laws can backfire tremendously for people who base their decisions on (perhaps) false hopes coming from fancy formulas.

There are so many ifs in terms of what has to hold true over such a long time in order for the Power Law BTC price theory
to be valid that I am doubtful this prediction makes fully sense. If someone asked me what this world will be looking like in six months from now, I have no idea. Could be insane logistic chaos because three more wars broke out by the time or other wars intensified to a level where global logistics collapse with unpredictable consequences.

Yeah franky1 can be a bit of a jerk sometimes, but I did not see any personal attacks that go beyond mostly attempting to beat you up substantively, and yeah maybe franky1 is wrong or he goes overboard from time to time, but he had raised some decent arguments as well.. 

You (BTCdragosfera) did not even chime into the thread until after franky had already posted a couple of times, and fillippone posted the OP in the first place, so it is not even your thread... not that it matters very much when this had been established as a regular thread rather than a self-moderated thread.

If you want your own thread that is not open to debate (or at least you can delete anyone who you believe is perverting your message), then maybe this should have been authored by you as a self-moderated topic. 

Yeah, sure Fillippone could have created this as a self-moderated thread, and then as the owner of this thread, he could have deleted whatever responsive posts that he wants.. .. but he did not... .. and I suspect that fillipponne had made this as an open topic... so that members could chime in and express their opinions. 

Surely when it comes to markets, there is likely more going on than just pure math... so there is going to be a bit of a problem for anyone trying to model out bitcoin's price performance and/or adoption in pure mathematical ways.. even if you might be able to model out past performance to show how we get to the present, then what about the future? I doubt that bitcoin's price performance is going to fall into a pure mathematically predicted curve even if you think you got all the numbers correct, and even though sure your numbers and your curves might well work for a while, but it is going to need to be coordinated from time to time to real world data, too.


Bitcoin is a paradigm shifting technology that brings a lot of new innovations to the world, so it would be problematic to be attempting to overly-simplify bitcoin as if it were not adding additional value to the world. 

Sure, from time to time, bitcoin is going to appear as if it is nothing more than a speculative stock, yet you seem to be missing something if you are pigeonholing bitcoin in that kind of a way.

I could not exactly figure out what BIG beef there is with Plan B's model which has some similar dynamics as the Powerlaw theories, and yeah, I don't claim to know the math exactly, yet I still would say fuck the math to the extent to which there are attempts to try to be precise in regards to how fast various aspects of bitcoin's growth is taking place.  Yeah, sure, no problem some of that can be attempted to be modeled out and captured in math, but it also ONLY goes so far, even if we might be considering the [ur=https://nakamotoinstitute.org/mempool/the-seven-network-effects-of-bitcoin/l]seven network effects that Trace Mayer outlined in 2014/2015-ish[/url].

you got things wrong way round
when no one wants to sell coin for less than 7cents. then 7cents becomes the supported value as thats the stop and non-zero bottom
value is set by no one wanting to sell below 7cent.. not when no one wants to pay more then 7 cents

the premium is the highest amount a community is willing to pay before everyone says and agree's its too much
its the PREMIUM that would be YOUR SCENARIO where no one wants to pay more then 7 cents..

so if everyone on a certain date in the future lost confidence in bitcoin and it dropped to say 3 cents and no one wanted to pay above 7cents. then the premium is 7 cents.. and the value would be somewhere below 3 cents

in the 2022-2024 tests of tops and bottoms..
$70k was premium and $15k was value.. the price then speculated inbetween

remember this..
value is bottom premium is top
buy low(value) sell high(premium)

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as for terms of trader, investor speculator. they can be categorised

a trader knows the underlying cost value and the premium...
take grocery stores and fruit stall traders. they know the wholesale cost of the produce and they know te RRP(recommended retail price) and they trade the goods

a speculator tests the boundaries and guesses. which is a precursor to setting the value/premium they either push the boundaries to create new bottoms/tops or they hit the limits and that reinforces the limits
in a grocery store they would be the retailers purchasing team. trying to find the cheapest wholesale and looking at competition to find the RRP and testing the sales of goods to see how effectively they can buy and sell produce

an investor is the grocery store owner/stocks&share holders that front the money for the retailers teams to then trade and speculate.. where the investor then just takes their profits after a long term via the work of others
investors are different to day-traders and speculators

now in the context of assets, commodity and forex markets

a investor just throws funds into a portfolio/asset and lets it ride. hoarding long term and letting the market play out
a speculator tries to find the bottoms and tops
a trader then knows the bottoms and tops and day trades the differences/swings inbetween

bitcoin doesnt have unknown factors.. it actually does have limits periodically.. so its not so much speculative. we all know that in the last 2 years bitcoin has multiple times tested the $15k bottom and ~$70k tops
its a tradable asset mostly. more so than a speculating asset.. the speculative layer of trying to find new premiums of new highs isnt moving much
above the previous limits so speculation is low right now

i personally see value above the 2022 test of $15k value and slowly moving up in a range of $25k based on mining cost movements.. where speculation is currently trying to test the new highs that are trying to push above the $70k previous tested premium to find new tops. and will probably at some point try to test a new bottoms(after a 2025 ATH correction) where the new bottom will be more than the 2022 value bottom, but most of the time is trading within the range we have all experienced in the last 2 years
we will see the more exciting arena of speculation in the next year when we move far above the $70k range.. but we are not much in the speculative stage much right now. we are still in the safer trading zone of the $15k ~$70k with a small bit of speculation trying to push the $70k limits

It's still speculation by definition:

And you think investors in Bitcoin care about what value they create? Common!
Besides, there is no money "in", the money you invest doesn't go in Bitcoin, it goes into the pocket of the guy who sold you the coins, that's why the zero-sum theory, because you can pay 70k for a coin, but if nobody else is willing to pay more than 7 cents, that's the value of it, the 70k "invested" are long gone!

he is not interested in peer review, look at his reaction when someone looked deep at his numbers ran scenarios and noticed the obvious.. his numbers dont last long and require updating.. thus not a law
his numbers are not constants, they are variables.. thus not a law

he just wants the "publish" part
notice his years of creating different accounts trying to get noticed trying to win a fanbase trying to get people to blindly believe he made a power law by fighting off those that actually reviewed him and then suck up and befriend people that dont check his work long term but just idolise him

as for "he  doing X when nobody was willing to do the same"
loads of people create whitepapers hoping people simply believe they are educated because they call a MSWord doc a "whitepaper" look at all the ICO scams..
thousands of idiots think they can become famous and treated as geniuses just by saying they made a white paper
but they keep failing the test of actual peer review..
they just think "i made a white paper, adore me and trust me, but dont critique, review or scrutinise me as ill claim that as defamation and ill sue you"

Franky1, he said he would send his paper to a peer review.
I think this is a novelty in this field of research, and Santostasi should be credited for this.
He’s stepping up the game and accepting a scientific method when nobody first was willing to do the same.
When he publishes, we will see.

I disagree to say Investment is Speculation. At a tip of meaning, investment, trading, speculation look to be similar because people do it with purpose to get profit but if we look deeper, under the tip, they are different.

Trading and Speculation are more similar than Investment and I would like to put Investment in a different category than Trading and Speculation. With Trading and Speculation, they focus more on short term profit and don't care too much about value creation of what they spend money in.

Like in stock market, people buy stocks to speculate its price will rise and give them profit but they are not investors, they are traders or speculators.

With investors, they invest in value of the company and plan to go with the company for a long term.

Traders and Speculators focus on Price. Investors focus on Value.

Trading and investment is also speculation, because Bitcoin is a speculative asset. The difference is only in time preferences.

And I wasn't talking about market adoption, I was talking about other use case adoption, like payments or store of value. Those other uses are so low that they don't have influence on the price.


Stock market is not a zero sum, because companies manufacture goods and provide services - they create something valuable for society and a lot of people benefit from it. So with stocks you can get dividends, but with Bitcoin you can only get profit if someone buys it.

let me guess.. people dont know that this is not a power law but will now scream with glazed eyes and dreams of finding a new idol "OMG SOMEONE WROTE IN MSWord A DOCUMENT AND CALLED IT A SCIENTIFIC PAPER. IT MUST MEAN HE IS A GOD I SHOULD BLINDLY IDOLISE AND NOT QUESTION"

Giovanni, PlanG, said it was going to organize all the material in a scientific paper, meant to be peer-reviewed.

Apparently, he has been working on this:



I guess having a peer reviewed scientific paper on Bitcoin, is a considerable step forward when compared to medium post.

This is quite a controversial comment, but frankly, going back and forth here would end up in a game of definition, semantics and misunderstandings or lack of knowledge on all fronts.

I think one of the most important things that fillippone pointed out is


I have been trying to wrap my head around the Power Law Theory here, but it is tough to develop a clear understanding of the matter. franky1 has got some valid points and he is pinning it down when he refers clearly to the term "law". Arbitrarily tweaking numbers such that resulting graphs seem as they were adhering to a law isn't a particularly good way that there is a law at work.

But at the same time I get what is trying to be conveyed here in the thread as a whole and there is some agreement on my part although I have difficulties to put it into very good wording, let alone mathematical formulas.

franky1 made the point of retroactive vs. predictive and this fundamentally interferes with laws. While at first retroactively detecting a law can make sense, arbitrarily tweaking formulas to adhere putatively to a law is problematic or plainly false.

I think the term "theory" would be more appropriate here and it wouldn't really undermine Santostasi's points. His remarks could still be very relevant, it is just that the term "law" may go too far. The reason for my stance here goes back to


While there are more and more mathematical models trying to depict "the emergence of cities and urban patterning...", none of these models will ever result in a law as there is a plethora of externalities that could fully undermine mathematical assumptions. The Power of Law would have to hold universally true despite potential externalities. Bitcoin is subject to countless of influencing factors and if it seems to be following a certain pattern retrospectively for a specified period of time, it would be highly hypothetical to derive a law from that.

That's why this remark


should be carefully considered in the context of whether there are laws at work here. Whether it represents a law might rather be a "coherent theory". I somwhere read the sentence that laws usually nail something down in a very concise manner, and if we are dealing with infinitely complex matters like the development of ecosystems, puring these complex matters into laws is probably doomed to fail. Maybe it could make sense for partial aspects of an ecosystem, but it kind of undermines the whole idea when partial aspects need to be considered in isolation only to make sure they could then be following a law while in reality an isolated consideration makes no sense.

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I find this type of discussion very uselful and I wasn't aware of the topic until now. fillippone shared a good one here! In my opinion this will remain a point of contention as there are lots of ways to attack the "law" hypothesis. I don't have a final opinion on this, but I do believe that there is something at work that is at least very approximative of laws (or Power Laws for that matter). I think one of the problems might be that the term "law" raises the bar for universal validity to an undisputable maximum and that's where peope trying to put very complex things into a law will always run into differing opinions. I think there is nothing wrong with someone trying to discern patterns and modelling those into formulas. In a world with ever-growing complexity, the term "law" itself may deserve a less confined interpretation in some contexts. If a pattern were to repeat infinitely, does it make that pattern a law?

Adoption is important and speculators are not all in Bitcoin market. They are only one component in Bitcoin market and they have their roles, contributions, capital in the market but they are not all.

Adoption is important because it brings new people and new capital in the market. With time, bigger adoption, the market will have more people, from investors to speculators and traders, they all contribute to bigger trading volume in the market. With bigger trading volume, big investors have one more reason to join it because they will have less trouble to enter and exit the market with big capital.

Adoption is important for value of Bitcoin and because you said about speculators, they are contributing to price on the market in short term. Value is for long term and more sustainable grows with time.

I agree about zero-sum game. It is true for traditional markets like stock market too.

So this theory tries to tell us that Bitcoin's price is a result of some sophisticated adoption curve, but from my point of view adoption is largely irrelevant for Bitcoin - most of those who own Bitcoin are speculators, some are short-term speculators, some are long-term speculators, but everyone is planning to at some point sell. So instead Bitcoin should be analyzed as a zero-sum investment game. If more money comes in than comes out, the price grows. This growth incentivizes money to stay and wait, basically a positive feedback loop. But this loop can break if too little money will be coming in and those who were waiting will become disappointed and start quitting.

its not harrassment if i am talking about the numbers and showing the guys chart and how his numbers do not match his statements

the chart in my post(which is the guys own chart) shows his purple line does not sit as a median of the chart results even after manipulating the chart. thus the numbers are off(meandering outside of the price data) even after manipulation.. as can be validated by the yellow line which also shows the purple line shifts out of phase

meaning the guy has to change his numbers periodically to try to get things to fit.. thus its not a power law.
his numbers are already out of date

the guy is just upset that he got debunked and takes it as a personal attack rather then realise he has been trying to push his own false narrative which is the failure of the topic

debunking false narratives is not harrassment.. if a spammer keeps spamming a false narrative its the spammer causing more harm to other readers. by him continually trying to push how his number is a power law. is the error, and he cannot just take the revelation and start afresh on a different formulae that could work.. but instead keeps pushing how he feels his numbers are a law, even when they change and thus cannot be used to produce models of future results because the future results will be out of phase

You mean he is something like PlanB, who, when the data did not match what he had predicted, reformulated the theory to fit the data over and over again?


The reasons why franky1's posts could be deleted or measures taken against him are summarized here:
   
Unofficial list of (official) Bitcointalk.org rules, guidelines, FAQ

I don't particularly get into whether you or he is right, as I lack sufficient knowledge, but I doubt very much that if you report his posts in this thread you will get anything.

I can not answer it in math because the model is complicated for me but I believe Hashrate and what contributes to Bitcoin Network Hashrate, ASICs and Power, are important for Bitcoin network and its price.

The Power Law Model is not perfect, as no model is perfect, but I think the author goes with a good idea to build it.

I think it is simple to see Bitcoin future with Lindy effects. Like gold, it has been exsiting long time enough to die as an asset and Bitcoin is growing similarly.

The bullish case for Bitcoin
Bitcoin's Lindy model
Is Bitcoin Antifragile?

I am not a scientist, a physicist  or a statician, but it would have some value computing the following?

Using different subsets of data, progressively adding days, see how some quantities evolve:

• The variation of the parameters
• Hurst exponent
• Size of the state space

I mean: put the hypothesis of Bitcoin is a Power Law at a more serious test than graphically fitting a straight line in a log-log chat.

franky1,
I am not sure about the reporting harassment policies here.
If you continue to do ad hominem, attacking my professional background, my integrity, or other personal attacks I will report you. it is obvious to anybody that you are a troll and have zero understanding or knowledge about these subjects. It is not even worth answering you or addressing any of the things you are saying besides telling you that I would not tolerate personal attacks so if this forum allows me to report this behavior I will.
You even follow me from post to post just to harass me. If you want to have a scientific discussion or you want to ask questions I will answer them but again stop the personal attacks. This is the last time I ask nicely. Thank you.

its not a law or a model

its a manipulation of historic data to appear in a different shaped chart.. and thats it..
its not mathematical genius.. its basic math..
its not predictive its retroactive.. the number only works on old data, and the number has to change in future market cycles
he has already changed his numbers a few times in just 1-2 cycles
yes because there is not much coin left and so the natural log curve doesnt angle as much. so his straightening of the curve doesnt need to adjust much each time. but its not a formulae that will still work with the same number in the future. and as shown even using his image his purple line does not even go through the centre equally of each market cycle so even his purple line is already inaccurate already

he spent too much time promoting the one number for the last year that he didnt stay uptodate with adjusting his number to stay uptodate.. thus he already lost control and debunked himself by promoting a certain number for too long pretending its a law/power number..
yep time itself broke his own number and he doesnt want to admit it, instead he has shown in this last year an egotist arrogance that his number is strong even when time itself proves otherwise

i doubt he is a rocket scientist or neuro scientist. he just thinks he can manipulate data and idiots so called himself a scientist, he is more of a sociology gamer not a scientist

the work done by the professor is truly impressive, I would have the pleasure of talking to him about the topic, (Giovanni, if you're there, give it a shot ) it's always nice to see a mathematical formula in action

Very interesting. What happens is that without having knowledge of so much depth on the subject I wonder if it will not have flaws also as the S2F, which for years was the paradigm of bitcoiners.


I think it is very unlikely that this will happen but what you say is a flaw that many models have, that then there are things in the real world that happen and were not foreseen in the model.

its not a law if you have to change the numbers per market cycle

all you are doing is straightening a curve... thats just chart manipulation not anything to do with economics

yes the adjustments become less massive per cycle due to each cycle having less coins to adjust much like the natural curve becomes less wild per cycle left alone.

Giovanni has not invented or discovered some magical economic formulae that predicts the future,, he just worked out a way to straighten a curve of the past(inaccurately but close enough to then draw a line through it).. but then needs to alter the number in the future. thus not a law

if you were to use his old numbers then you will see how things change and dont fit the new numbers

but lets see him scream back how he is master of numbers coz "rocket science" and to just trust his number now are best for now cos "rocket science"

and wait 4 years for him to change them again and say "trust new numbers coz rocket science"

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screw it.. lets just rip him apart now instead of waiting for him to chest beat his ego


yes he has a set of numbers to bend a standard log from curve to flat-ish of historic data.. thats not rocket science.. is just chart manipulation. even high school kids do that
but look at the purple line and the yellow diagonal-hump-diagonals he added as a overlay

the purple line starts at 20% of market peak and by 3rd cycle is crossing through 50% of peak and using his own yellow diagonal-hump-diagonal it shows the purple being above peaks

meaning the purple line is not centering all the markets at a 50% mid point. nor is the yellow humps (ath) going to be above his purples. which means it is inaccurate and shows no pattern of staying within range of anything he created.

all he has managed to do is manipulate a curve of normal log into a near but inaccurate straight-ish line.. but will need to change the numbers so its not even going to stay straight forever if he just stuck with the same numbers forever

Thankfully, I have a good understanding of the mathematical and scientific aspect of this theory and I must say I found this read most fascinating as it sure puts an ease to my thoughts on the future prospects of Bitcoin. When it comes to power laws, Giovanni sure took his time to make his findings and arrived at his conclusions.

From my perspective, Giovanni has done good job having presented his power law model predictions of Bitcoin and his highlight on Scale invariance which to me, also means that if any or all of the columns is rescaled or resized by dividing or multiplication, the results won't change the power law predictions of scale invariance.

This explains just what and how the halving will happen upon division and still the value of BTC remains intact and keeps growing.

I had an extensive chat with Giovanni.
I added a few materials to the OP based on this conversation, and I am going to dump even more material in the coming days.
I have been literally overwhelmed by his enthusiasm.

I understand hi has quite a unique approach to the subject, which is also quite in contrast with many things we learnt in the past years. So, a lot. to digest.

You my dear have come up with one of the most captivating and theoretical explanation of the Bitcoin Power Law all I can say is a big thank you, I’m no physician neither am I a mathematician nor a statistician but after reading your wonderful thread, I quoted what stood out for me which also for me the main message of this thread.
I’m glad with everything outlined here I was able to pick up some knowledge I’d always keep in mind and apply daily.

This is Giovanni.

It is astounding to me that people do not realize what this is all about.
It is a full theory of how Bitcoin is, how it works, and how it behaves. The predictability of the price is really one of the least interesting things besides the fact that being scale invariant it is predictable.

The Theory is consistent in almost all kinds of questions you want to ask about Bitcoin. For example, answering your question. No, it will not be banned because Bitcoin survived as a scale-invariant system for 15 years.

It is anti-fragile, it is flexible and resilient. All the qualities that people use words to describe Bitcoin are actually proven mathematically (besides being scarce) in this Theory.
And it is a Theory, not a model. A full Theory, the only one I know in existence, of what Bitcoin is.

The Theory tells Bitcoin is not an asset, it is more like a living organism, a living being, a city, a mountain.

An important missing part of the previous post is to show the universality of power laws, how they can describe natural phenomena, social phenomena, and how cities grow.

Every single Bitcoiner should know the Theory and they should try to understand it. If it is true, and so far all the evidence points to be true, then it is the most important discovery about Bitcoin ever.

Saylor can use analogies or metaphors about Bitcoin, the Theory uses science to show what Bitcoin is really about.

It is amazing and weird to me that is it not viral or well known and discussed by everybody, not because I created it, but because it tells an incredibly beautiful narrative about Bitcoin and it is not a bunch of made-up words, but it is based on scientific evidence, logic, math, and physical arguments.

I know it is early and most people do not have a scientific background but it is still amazing that the significance of this discovery is not yet understood by most.
Hopefully, it will happen soon or later.

Congrats on making such a long and informative forum thread. I'm not interested in science, statistics and mathematics, but the theory of this Italian guy makes sense.
OK, so the Bitcoin price will keep growing in the future. So what? This is a Bitcoin forum and most people are convinced that the BTC price will keep growing in the future. Maybe you should post this in a forum full of crypto haters and skeptics in order to convince them about the future of Bitcoin.
Will this mathematical model work if some external factors influence the BTC market? What if Bitcoin gets mass banned globally. Does it mean that the Bitcoin price could still hit 1 million by 2033, even if Bitcoin gets banned?

This morning PlanG (let's call him this way) posted a new update:  





Someone asked a relevant question in the comments:



Lol, I asked a further question about this. I will post an update when I have an answer.

EDIT:
It was quicker than expected:


Here a full preview of the attached image:

Everything you wanted to know about The Bitcoin Power Law Theory, but were afraid to ask!
OP post on Bitcointalk.org: The BTC Scaling Law

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During the last few weeks, I have been increasingly involved in studying a new model by an astrophysics professor turned neuroscientist, which describes bitcoin according to Power Laws.

Giovanni Santostasi, aka  BTCdragosfera described a model where he explains why Power Laws governing price and other Bitcoin metrics (such as Active addresses and hash rate) are not a random fact but actually the symptoms of something else, namely Bitcoin being "not a common asset but more similar to natural phenomena ruled by universal Power Laws due to recursive, infinite feedback loops fundamental to the system".
Bitcoin is more similar to a city and an organism than a financial asset.

Santostasi first posted his mumblings on Reddit more than 5 years ago:



This post went almost unnoticed: Giovanni set it aside a little bit, focusing on other things, namely his new venture on Neurosciences, but kept working on the idea and finally published the following paper:



The Bitcoin Power Law Theory

If you prefer the video format, hear a video Summary of the Theory:



The material is not very well organized, so I will try to explain the ideas better in this thread.

The Power Law is only the first part of his full BTC model, where it also models a range for bitcoin price and a bubble indicator to detect excessive price movements:



Yes, of course, you have already seen that Rainbow Graph, and actually Trolololo chart is a Power Law chart.

The innovation of Santostasi's article is that Bitcoin is considered a financial system that behaves like a natural system according to well-defined laws. These laws are Power Laws. In this sense, the article is not a "model" about Bitcoin but a coherent "Bitcoin theory."

According to Santostasi:
(I made some little readjustments to make the sentences more readable)

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Introduction: What is a Power Law?

According to Wikipedia:


Power Laws can be written in the following form:

Y=10^B*(x+S)^A

or:

log(y)=A*log(x+S)+B

A lot of natural, sociological, mathematical, physical, and psychological phenomena follow Power Laws.

The Power Law has a few important features.

• Scale invariance: Power Laws remain valid when the involved variables change the order of magnitude.
• Lack of well-defined average value: Power Laws have a median but lack a mean value.
• Universality: Power Laws with the same exponent produce similar dynamics.

The first property is that a Power Law drawn in a log-log chart, or a chart where both axes are on a logarithmic scale, is a straight line with slope A, B intercept, and S as a shift parameter.

Please note that a straight line in a log-log plot is necessary, but there is insufficient evidence for Power Laws. Determining a Power Law existence only because there is a straight line fitted in a log-log chart is an unsatisfactory approach to the statistical method.

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