Topic: Monthly average USD/bitcoin price & trend - page 12. (Read 118242 times)

The trendline is recalculated every time a datapoint is added. This changes its starting point and slope (kx+b).

As the recalculation happens so frequently, and adds only less than 2% of new data, the changes are very small.

The predictive power of the trendline is under constant evaluation. If the price fails to go below the trendline before enough time has passed (perhaps because of a new bubble), it is already more expensive to buy in absolute terms, even if the price later tumbles well below the trend. We are talking at most a few months of waiting that could still be profitable.

On the other hand, even after such a black swan event as the rise from 0.005 to 32 in less than a year in 2010-2011, the trendline was duly visited before uptrend resumed, and the low predicted with considerable accuracy. This gave me an entry point of about $3, which of course is much worse than in the beginning of that year, but very good compared to May-Oct

This is guesswork, but I give greater odds (perhaps 65-35) that we continue the correction now (as an alternative to reinflating the bubble). Even if the bubble reinflates, it will pop so quickly that buying at <1000 is a very reasonable chance.

So if this trend line is based on assumption of exponential growth phase of adoption curve has there been any consideration to modelling when we begin to approach the saturation level?

I'm just wondering what a sigmoid curve will look like on this log plot (actually I know) but want to see it plotted ... and if there is any sign that the exponential growth may be starting to level off will we be able to see/anticipate that?

Would the event of skipping this final capitulation imply the trendline has to be adjusted upwards or do you consider possible a scenario where we could go through two consecutive "bubbles" and only then come back to the trendline?

Oct 31 2008
Reformation day.

The official December update is coming at the end of December. My current trendline which is calculated from daily prices until 15.12.2013, shows that we are at $469 now. We have not yet had any daily breaches of the trendline since the latest bubblepop.

Many have wondered, whether the trendline approach was able to cope with the extreme price movements of the 2011 bubble. It is true that during the move up, it was not possible to deduce anything from the trendline, which had just started to form. But during the move down, it called the bottom with almost deadly precision: the trendline was crossed down in 7.10.2011 (note: 4 months after the top) when the price was $4.29. The buy-level, which is -0.2 log units below the trend, was reached 17.10.2011 at $2.85. On a daily level, the bottom was reached 2 days after, at $2.28. At that point we were -0.341 units below the trend.

In 2013 April bubble, the final capitulation played out as follows: trendline was crossed in 3.6.2013 at $119, buy-level of -0.2 was reached in 1.7.2013 at $90, bottom was in 6.7.2013 at $69 at -0.341.

I am sure that -0.341 as the daily average of the most opportune day to buy, months after the bubble, is pure coincidence Nevertheless, it gives confidence to those who do not decide to invest all after a runup, fearing to be left behind. If we expect the final capitulation to come on the red candles' day (14.2.2014), it is still possible to buy back in between $308-$427 if the previous bubbles are any guide.

late 2008 I think.

This is correct, it does not make it more valuable but it places a floor on the market price at which point production scales back when price drops below cost .... stickiness in difficulty complicates the calculations further than this though.

Edit: are we going to get a December update?

Wrong.
Definitions.
Higher cost, makes for less value.

Which would you pay more for: a 1TH rig that costs 1000/year to run, or one that costs 2000/year to run?

Running more expensive mining isn't what makes bitcoin valuable either.  The incentive runs in the opposite direction.  A valuable bitcoin gives reason to run expensive mining, but less costly is still always better. 

The earlier point is that the electricity costs are a part of the bitcoin cost, but that cost does not make bitcoin more valuable, it does the opposite, it makes it more costly.

Semantics, if it's costly it's valuable.

Costing more does not make anything more valuable, it just makes it more costly.  Energy saving measures can reduce the cost, but these do not make it less valuable.

Thanks for responses guys. I'm pretty sure this belongs elsewhere.

I am quite familiar with white paper and how/why bitcoin uses POW. I am trying to get to my own understanding of whether so much energy is required for the POW in the long-term. It may in fact be essential, as RP suggested. However, as we go forward the energy expenditures become absolutely massive, and something about that seems "wrong" and "unnecessary" to me. Maybe it is what a global universal ledger/blockchain requires and it will displace many other wasteful energy expenditures, but I think there must be a better way. I understand POS is another way to go, with its own challenges/limitations. Anyway I need to dive deeper.

I'll bring these questions to another thread.

Those factors exist to create difficulty in creation which turn controls the supply and distribution.

Basically it makes bitcoins rare and difficult to produce and because they are hard to produce or counterfeit they are useful as a medium of exchange. If you could mint a bitcoin by simply taking a piece of paper and writing bitcoin on it anyone could make them and would, rendering the unit of account useless for exchange.

That's untrue. Bitcoin would work even if no energy was consumed by mining. Look up Proof of Stake, for example.

FYI: http://bitcoin.org/bitcoin.pdf

The basics are all on the original whitepaper.

Hey RP, may be a little off topic, but can you point me to a thread that explains this more thoroughly? I think I understand why the miners need to be there - what about the energy?

Bitcoin is the best coin in the eyes of rich people like me. The energy and miners need be there (the coin economics do not work without it), the confirmations are not reliable if they are much faster than Bitcoin's. "Have more coins" is a joke.

It is possible that there are fringe uses for other coins in the future, but to me it looks unrealistic that all the other coins combined would reach even 25% of Bitcoin's market cap. Main reason why anyone would think otherwise is that they don't have as many bitcoins as they would like to have, and want to amend that the easy way.

The problem with your estimate is, is that you forget Bitcoin isn't the best coin.

The other altcoins like Feathercoin and Peercoin use less energy/need less miners/have 30times faster transaction times/have more coins/better in every category. Might take another year or two, but the coins with the most benefits will be the higher echelon coins, specifically not Bitcoin(unless someone completely changes everything about it to make it better in every way shape and form).

Bitcoin is only extremely more popular for it's capitalization on early mover and early promoter in the beginning. Other coins will easily be worth more.

Maybe more.

And what would be a "fair value" (as analyst tend to call it) for 1 Bitcoin? $100k? $300K?

BOA says $1300, but that looks as a number pulled from their asses.

That really wowed me as well. I mean waiting til almost all of the coins are mined before accepting them.  That is a shrewd move, I hope it pays off for overstock.