Topic: My theory on why BTC's value is only going to rise and become more consistent (Read 1030 times)

A conservative estimate right now is that around 1 million coins are lost for ever (i.e no one possesses the private keys to spend them). These coins are lost for ever and they can't be "recycled" in any way. I don't think that quantum computing can make it possible to spend these coins. If that is the case, then the other coins also may be at the risk of hacking.

This LBC thingis ridiculous and through just benefitof the doubt any donation of $1/btc or more will be posted to form. Any donation of $20 or more and i'll have PP of variables you want analyzed, options, presentation, whole 9 yards. My legal and political acumen are also fairly high (self-taught) only with working with M.D's all day (neurosurgeon, endo, ID)

Here I fully agree and that's also one of the hopes I have respect to cryptocurrency adoption. But I see it as a hope or possibility, not as a consistent theory ...


In some way, yes. Although I don't know it - it may be the right one. A way to hedge against a "better algorithm" is to observe the altcoin market and invest in all those that do something really different or solve a problem in a different way. It's however almost a full time job as you must be wary of scammers, liers, vaporware and other dangers (above all if you decide to invest in ICOs and cryptocurrencies in a very early stage) .

But as I wrote in the last paragraph, it is even possible that we don't need cryptocurrencies/blockchains anymore in the mid-term future because something better has arrived. Then all hedging was in vain.

TLDR: Don't invest more in cryptos than you can afford to lose (how many times have you heard that sentence? ).

their not random btw, and while I'd love to share more I'm currently using this as a sample of a service I can provide (systems analysist/multi-disciplinary approach)

There is strong evidence of the sharp rise of btc price and current ongoing US legislation (federal appeals on plaintiff vs state, overreach of executive state power) as well one other variable that is strong in it's correlation as far as the dating goes and would love to give more of my thoughts but that takes real work and honestly not worth my time atm.

Thanks for the advice/criticms/support though everyone.

Not next 20 no.. and I do admit this is the optimistic view here. But next 2-3 I do see a sizable potential of honest IT guys out there or just interested parties who just want to say screw you to traditional methods of investing and take up this as a hobby. The trouble is theres not enough sample size yet to internet anything since the idea and currencies are so new and no real legal framework is in place for ANY type of consistent/robust regulation. It's still a niche market I'm interested in and think people turn to more and more as faith in government and big banks decline. hell if anything this can serve as a kind of checks and balances system VS market rigging as consumers now have more options in putting their investments in.

So I take it you then agree with Ray Kurzweil's view that "while futures trading is only bound to increase I just don't think we've found the right algorithm".

A hard fork sounds simple (it's simply a software update with incompatibilities respect to older versions) but in the case of Bitcoin it is a complex operation, because the Bitcoin community itself is complex and there are many views and interests, some of them conflicting.

Take the current Segwit "war", for example. We have had a stalemate over two years because two groups (some developers and some big mining pools) could not agree on the way to update the software.

So I think there will be much space for altcoins trying out things that are controversial or experimental. In this case, if the altcoin proves to be better than Bitcoin, it could attract a part of the users and the ecosystem (businesses, merchants etc.). And then the possibility of a "takeover" and a declining usage (and as a consequence, price/value) of Bitcoin itself does exist.


It's definitively possible that there won't be negative cycles in this case. But here you are already assuming a best-case scenario. Legal framework, for example, can get worse or more complicated because of interest conflicts in governments (cryptocurrencies put in danger some of the business models of banks, but governments have often close ties to banks).

But the worst scenario for Bitcoin would be a better technology that makes it obsolete. It could be another cryptocurrency with better scaling, less environmental cost etc., or - even worse, because then no hard fork is possible - a new currency system based on complete unknown technology (e.g. artificial intelligence?) or even an economic system which works in other ways than current "money", which is a pretty simple tool.


I am also relatively optimistic about innovation, but Bitcoin's scaling problems have shown that there could be certain limits that could not be solved in the next 10 or 20 years if we don't want to sacrifice decentralization.


This "betterment of living conditions" is an interesting point: What if many of the basic needs of humanity can be solved without any intervention of money - e.g. if food after further technology advances being so cheap to produce that its basically costless? What would be the price of Bitcoin if that scenario applies to more fields, e.g. housing? But even if Bitcoin would crash in this scenario, wouldn't it be a better world than today?

That are all complex questions, but that is the reason why I don't think we can now predict that Bitcoin will grow forever, or even for the next 20 years. I for myself am pretty bullish for cryptocurrencies for the next 5-10 years - in part, because of the mechanisms you cite in your theory, e.g. better knowledge - but I can't predict what will happen in the long term. There are too much variables.

No need to be so complicated.

Thereotically, bitcoin price is going to be rising because it has a maximum amount of coins that will ever exist. The amount is 21 million, and the currency supply of bitcoin will get infinitely closer every single day, but will never actually touch that figure.

I would expect that hyperinflation in fiat currencies is going to happen. It's just a matter of time. Bitcoin's inflation rate will slow down every 4 years whilst fiats will likely inflate more and more, therefore, the longer you hold your coins for, the more you'll yield.


It is possible that Moore's law will be broken in several years if traditional means of processing and storage doesn't get replaced by a completely new medium. It's just not physically possible to get transistors any smaller, otherwise electrons will experience some real weird shit and the whole thing just won't work.

Bitcoin price drop takes place now and then, same manner this has happened at present. So by the years to come the users who trusted it gets benefited, because the one who always panic of the price decrease sella low and moves towards something else. While the trusted users keep hold of the patience and earn the best out of it.

thanks for the honest criticism, i'm still learning so any type of elaboration into more laymen terms would be appreciated. moore's law was more of corroborating evidence and that's why i was asking about the basic structure of btc's algorithm (sha-2 base with hexadecimal from what i'm garnered) compared to eth or ltc if what cafu said was true about the ability of btc's algorithm to completely change or modify via this "fork" then what is the point of using altcoins at all if u have the capital to dump into btc?

also yes exponential growth on an infinite timescale ofc is impossible but over lets say a 10-20 or even 50 year sample size what would really slow down the overall long-term trend in growth if you can still assume my basic assumptions.


while you are spot on about the possibility of these negative feedback cycles wouldn't these cycles either decrease or even possibly be NON-EXIST once better exchanges, more consumer friendly regulation, legal framework are finalized and then perfected over time?  

And btw Moore's Law has been predicted to decline for years now only to see new innovations in hardware (transistors, microchips, nano to silicon based and now quantum computing) simply verify his theory over and over again. I just don't see how human beings would stop innovating, yes WW3 can break out you can speculate all you want but maybe it's just the idealist or optimistic in me that just doesn't allow me to think we are inherently "greedy" or "evil" and that there is any "growth limit" on our capacity as human beings to grow, adapt, think and evolve. Now with AI making philosophers re-defining/re-thinking the term "sentience" and "self-awareness" as well as theories such as https://en.wikipedia.org/wiki/Flynn_effect being better understood I don't see BTC being replaced anytime soon especially if the algorithm is as adaptive as that one user said it was. Also this doesn't even take into effect breakthroughs that we've seen throughout history  that have led to massive betterment of living conditions for everyone in the world.

Although I think that your assumptions could be true in some periods of Bitcoin's adoption, I don't believe you can generalize them to form a theory about an eternally rising value.

The reason is that there are also Bitcoin users having bad experiences. Examples are those that did not well with their speculation intents - e.g. bought BTC in late 2013 for $1000 and then sold for <$500 one year later, or those that used Bitcoin as a currency in early 2017 (remittances or as merchants) and got hit by the high fees (and/or slow confirmations), letting them feel that other solutions are better. These users can leave and some of them won't return.

So there could be also a negative feedback cycle that leads to a decline. Also, the theory does not handle the case that another cryptocurrency could emerge as a competitor and take users away from Bitcoin.

Last, this statement ...


is too optimistic; that was only true in the 1950s and 1960s and since about 1975 it is 50% cheaper every two years, now, since about 2015/16, even this mark (25% per year) could not be held anymore (Moore's Law is dead, now what?).

Your theory is better than most bullish statements from Bitcoin speculators, but you should not ignore the possibility of  negative feedback cycles.

Thanks for the explanation, so from how I understand it bitcoin's algorithm could be changed completely through this "fork" you speak of? Also this SHA-256 algorithm you refer to (laymen at the hard IT behind this, did quick wiki review) is your opinion of the best algorithm?

I guess then my question is why the increase or change at all from btc to eth to litecoin? I take it eth and litecoin are on a completely different system or the variation of the system is so great than it was just easier to create another e-currency? Sorry for the newbie questions it's just the digger I deep the harder the science becomes (a good sign to me of robustness of the system).

You seem very well versed in security/blockchain matters so if i may ask a second question: I've read some things on how this algorithm relies on hexdecimal? Is this because it MUST be hexadecimal or something that can be converted into binary or what was the reason?

It could through a fork. Anything could be achieved through a hard fork. For example max block size could be increased through a hard fork, basically the whole bitcoin network can be changed through a fork.

Thing is though, it's best to stick with SHA-256 for now. Lifting the block size has generated enough controversy already and to change the algorithm altogether would be a whole another level. Also by implementing an algorithm such as Scrypt, bitcoin will basically succumb to altcoins such as litecoin and doge which both you Scrypt as well. So whats the point of using bitcoin anymore?

But with quantum computing possibly becoming mainstream it could very much be possible that such a change has to be done in teh near future. But that's probably not gunna happen for a long while.

thanks for the reply, I tried to simply as much as I could it's just hard to get into the pure science (inner workings) of it all without a lengthy type of post.. Also just trying to do the diligence required to establish myself as an analyst.

Sorry about the lengthy dissertation.

One question.. can the logarithm of BTC be improved as well? cause if it can than that should do away with any speculation as to whether any e-currency can compete with BTC.

Ray Kurzweill was recently quoted as saying (phrasing) "while i do see long term potential growth in e-currency I just don't think we've found the right algorithm"

https://cointelegraph.com/news/ray-kurzweil-embraces-blockchain-technology-cites-instability-in-bitcoin

You should really add a TDLR; version of your posts. They are way too long for a read, took me around 10 mins to read all the replies here.

Thereotically, bitcoin should stablilize over time as mass adoption happens. Mass adoption leads to market capitalization expanding, therefore harder for traders to manipulate the price of bitcoin. Mass adoption also will lead to more merchants accepting bitcoin as what it is instead of having to calculate the fiat currency value of bitcoin every single transaction, because they know they have others that they can pass on the btc for at the same value. This also lead to price stabilization.

It's all very psychological, as more people use bitcoin the perceived value of bitcoin becomes concrete, and therefore the actual value of bitcoin becomes in line with inflation as well due to its disinflationary model.

I don't see altcoins ever overtaking bitcoin because without bitcoin, no altcoin would have ever existed. Simple as that.

Right but why is gold still the reserve currency when there are other such precious metals that are much more valuable and useful? Historically gold was the first and since systemically it serves the same purpose as any other precious metal I don't see us switching to having diamonds or platinum as being the reserve standard simply because of practicality.

Wouldn't this be true of BTC. Systemically speaking nothing any of these altcoins are really any different than bitcoin in that as long as the 1. decentralized, 2. transparent (blockchain) 3. (not sure if I have full conceptualization) but 0 inflation rate?? don't change nothing else of value is really being created in terms of innovation. They are simply other mediums of exchange for smaller or larger transactions or a way for speculators to make money off the volatility of the futures market. Plus the tech of BTC is constantly being updated all the time.. segway, more streamlined blockchain updates, etc.


See: https://bitcointalk.org/index.php?board=52.0

my services as a broker and portfolio manager

as well as hiring: technical analysts. Don't worry though this one is on the house. I'm a neophyte here.


It's a combination of things, see: legal precedents and bitcoin growth or look at my post history for more free analysis. Pretty much the latest trend we are seeing I've noticed has a lot to do with

https://bitcointalk.org/index.php?topic=96118.120

Pretty much the opposite of the silkroad bust and successful prosecution (criminal).. this time an appeals case against the brokerage regulatory body of the state of NY (trading capital of the world) against the overreach of the executive branch to "arbitrary"  target a BTC NY based exchange to use them as "guinea pigs" to test the waters of how much regulation the public will allow from federal/state regulatory agencies.

Basically to me sounds like a bunch of combined private/(government) interests wanting a piece of the action by charging fees for some "arbitrary" license just to be able to trade in BTC. That's the gist of the defense from what I've read (very surface level, not going to start looking up discovery yet since I'm providing real value here and have a stake in the game (BTC's invested already)

Just a taste gentlemen of what I can provide. This is all in the public record so anyone can look it up by gl trying to piece it together.

If regular updates can be done to the network according to the needs and changes in the technology then it can be surpassed.A future digital currency which would perform better have to find a better technology which is not available right now,so if we find a new technology then we can always upgrade keeping the basic principles.

but effects of these "random events" have always been short. for example the latest panic sell ended as fast as it started. or as an older example i remember all the halvening hype and the big rise of that time followed by a very similar drop like this recent one. and again that lasted very short.

so it must be something else that is driving bitcoin price. like the growing demand. and as Torque said it is getting easier to buy bitcoin these days with all these services such as Coinbase which only need one click!

You're not the first one to come up with such a theory on huge prices for bitcoins. Anyways thank you for joining the club of bitcoin optimists. Fundamentally we can see many evidences that bitcoin was designed to have huge prices so that it will be adopted by all the people across the globe.

At the same time, we need to remember bitcoin will become "a pure currency" one day, on that day it might not fluctuate much and will be having some stable prices and we can hope that price would be in millions.  I mean to say bitcoin will be having huge prices but there will be a saturation point too.

Op, while you have awesome job of analyzing concept of bitcoin price, and its growth, you have forget about one major factor.
Random worlds events and internal bitcoin problems - these two seem to be key force influences bitcoin price.
Like that dip/correctlion/crash from 3 days ago, when investors panicked at the very first sign of internal scaling dispute among mining pools.

Meh.

I think the growth is just that exponentially more Average Joes have figured out how easy it is to log into a Coinbase, Gemini, or BitPay acct, set up a form of payment, and hit the 'Buy' button.

Done.

Really not that hard, lol.