Topic: Metcalfe's Law: Bitcoin Price and Adoption Analysis for the Future (Read 14808 times)
what about 2018
July 07, 2015, 03:01:26 AM
Hi, can you please post update for 2015 
?
?I doubt it. It will look totally ridiculous.
July 07, 2015, 02:57:16 AM
Hi, can you please post update for 2015 ?
? November 10, 2014, 08:30:43 PM
Quote
Any model for price should take this into account.
That is already priced in to the real price. We don't need to adjust anything.
It is not in your model that is supposed to give an estimation of the price.
You should think first. Read it again.
October 28, 2014, 11:46:38 PM
Quote
Any model for price should take this into account.
That is already priced in to the real price. We don't need to adjust anything.
October 28, 2014, 10:26:48 PM
Relating (Unique Addresses ^2) to user adoption would become flawed with the increased use of HD wallets. Or at least the prediction will probably be increasingly skewed from this point onwards. ?
October 25, 2014, 08:43:20 PM
What would be the purpose of dividing adoption-squared by number of coins? I don't see how that is useful.
This is basic. Imagine that the number of coins doubles. Then the price is divided by two.
Therefore the objective price is inversely proportional to the number of coins in existence. Any model for price should take this into account. Indeed, one could only consider the number of coins that are not lost, but the estimates on these differ.
This will give a small correction to your formula, that may be irrelevant now but not in 1 or 2 years.
October 24, 2014, 03:59:08 PM
What would be the purpose of dividing adoption-squared by number of coins? I don't see how that is useful.
October 24, 2014, 11:37:47 AM
Sounds like you'd rather use market cap than coin price. I use coin price because that is what everyone in this subforum is interested in.
If I have time I will update with most recent data tonight.
If I have time I will update with most recent data tonight.
No, this is not what I mean. I mean coin price, but it has to take account of the creation of new coins.
Read again:
Quote
The formula will be:
Price = C x (Unique number of addresses used)^2 / (Number of bitcoins created) x C
where C is the appropriate constant (different from the one you used but approximatively equal to the one you use multiplied by 13.000.000).
Price = C x (Unique number of addresses used)^2 / (Number of bitcoins created) x C
where C is the appropriate constant (different from the one you used but approximatively equal to the one you use multiplied by 13.000.000).
C/C = 1. So you are just proposing dividing by number of coins. Why? Price is already per coin. As number of coins increases, it is reflected in the price.
No my friend, it is C/(Number of coins created) that is not constant equal to one since "number of coins created changes over time (C stays the same).
The constant C has to be found by historical interpolation (in the same way you found your multipicative constant).
Sorry, there was a typo in the formula (just multiply once by C)
Price = C x (Unique number of addresses used)^2 / (Number of bitcoins created)
October 23, 2014, 06:40:32 PM
Interesting thread. Thanks, for the thorough analysis, raystonn.
I guess you know the posts by Peter R., who is also tracking price/mcap as a function of network size under the metcalfe assumption (MA).
Here's one funny idea I had on this topic when I looked at it myself a while ago (it's not fleshed out yet, just did some imprecise calculatios "by hand" on this, so be forgiving please...)
When modeling price/mcap as a function of network size under MA, the empirically determined parameter is the exact coefficient that determines the ratio of network size to price.
Here's the idea I had... perhaps there need to be /two/ (largely unrelated) parameter sets: one for "bubble times", and one for "regular market time". It seems that price is strongly related to network size both in normal times and in bubble times, but with different parameters determining the exact price at the time.
I guess you know the posts by Peter R., who is also tracking price/mcap as a function of network size under the metcalfe assumption (MA).
Here's one funny idea I had on this topic when I looked at it myself a while ago (it's not fleshed out yet, just did some imprecise calculatios "by hand" on this, so be forgiving please...)
When modeling price/mcap as a function of network size under MA, the empirically determined parameter is the exact coefficient that determines the ratio of network size to price.
Here's the idea I had... perhaps there need to be /two/ (largely unrelated) parameter sets: one for "bubble times", and one for "regular market time". It seems that price is strongly related to network size both in normal times and in bubble times, but with different parameters determining the exact price at the time.
October 23, 2014, 11:39:14 AM
Sounds like you'd rather use market cap than coin price. I use coin price because that is what everyone in this subforum is interested in.
If I have time I will update with most recent data tonight.
If I have time I will update with most recent data tonight.
No, this is not what I mean. I mean coin price, but it has to take account of the creation of new coins.
Read again:
Quote
The formula will be:
Price = C x (Unique number of addresses used)^2 / (Number of bitcoins created) x C
where C is the appropriate constant (different from the one you used but approximatively equal to the one you use multiplied by 13.000.000).
Price = C x (Unique number of addresses used)^2 / (Number of bitcoins created) x C
where C is the appropriate constant (different from the one you used but approximatively equal to the one you use multiplied by 13.000.000).
C/C = 1. So you are just proposing dividing by number of coins. Why? Price is already per coin. As number of coins increases, it is reflected in the price.
October 23, 2014, 03:02:03 AM
Thanks for the chart and Hope Bitcoin prices will be higher...
and Hope Bitcoin prices will be higher... October 23, 2014, 02:57:35 AM
Sounds like you'd rather use market cap than coin price. I use coin price because that is what everyone in this subforum is interested in.
If I have time I will update with most recent data tonight.
If I have time I will update with most recent data tonight.
No, this is not what I mean. I mean coin price, but it has to take account of the creation of new coins.
Read again:
Quote
The formula will be:
Price = C x (Unique number of addresses used)^2 / (Number of bitcoins created) x C
where C is the appropriate constant (different from the one you used but approximatively equal to the one you use multiplied by 13.000.000).
Price = C x (Unique number of addresses used)^2 / (Number of bitcoins created) x C
where C is the appropriate constant (different from the one you used but approximatively equal to the one you use multiplied by 13.000.000).
October 22, 2014, 07:08:31 PM
Sounds like you'd rather use market cap than coin price. I use coin price because that is what everyone in this subforum is interested in.
If I have time I will update with most recent data tonight.
If I have time I will update with most recent data tonight.
October 22, 2014, 06:26:15 PM
Hi,
May I suggest that you improve the model dividing by the number of bitcoins created and adjusting the multiplicative coefficient?
If you think about it, this will give a better estimate. It gives a little correction to your graphs.
For example, if the number of bitcoins is twice, then the price will drop by half...thus we should keep track of the creation of bitcoins overtime.
The formula will be:
Price = C x (Unique number of addresses used)^2 / (Number of bitcoins created) x C
where C is the appropriate constant (different from the one you used but approximatively equal to the one you use multiplied by 13.000.000).
September 09, 2014, 09:43:05 AM
Minor suggestion: in the zoomed in graph, keep the axes labeled (I would find that helpful, anyway)
September 09, 2014, 05:04:43 AM
2017 looks promissing 
ya, why not 2027 2037 or 2047?
Good question. It all depends on how much money you need to be set for life (buy a nice house, etc.)
If I can buy a nice house for 2-5btc I will, thus making 2017 promissing
Ofcourse I will be holding on to btc all the way to 2047 and higher long after the final capitulation of the USD
September 09, 2014, 04:55:25 AM
2017 looks promissing
ya, why not 2027 2037 or 2047?
September 09, 2014, 04:52:03 AM
2017 looks promissing
September 09, 2014, 12:08:57 AM
We have now hit an all time high for Bitcoin adoption, and it looks to continue its upward trend. As you can see, Bitcoin's price is heavily correlated with the Metcalfe's Law value of Unique Addresses ^2. I see no signs of this correlation changing, nor of adoption slowing. This implies a continuation of the exponential rise in Bitcoin's price. Sometimes adoption leads price, and sometimes price leads adoption. You can see this if you analyze the long-term trend in the top chart. At this point it looks like adoption is going to lead price.
Here is the chart zoomed into the right side of the chart for better analysis:
Edit: Updated 9/8/2014 with latest data.
Here is the chart zoomed into the right side of the chart for better analysis:
Edit: Updated 9/8/2014 with latest data.
I have updated the first post of the thread with the latest data.
An all-time-high for adoption should come with an all-time-high for price soon. Deviations from correlation are generally due to speculation and short term technical market movements. Price and adoption do eventually converge. In the past when adoption rose without price, you can see that price eventually rejoined adoption and began the next bubble.
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