Topic: OK, THIS IS FUCKING INSANE (Read 9990 times)

Yep, I also am spending my coins. I used bitspend to buy a memory card and a guitar and will use 9flats to make my way around europe this summer.

Just to be clear, I do think people will spend their BTC as the price rises. The higher it goes the more digital millionaires appear who in fiat terms are only middle class, nervous as hell that any glitch or hack could dash their chances at financial freedom forever. They will progressively sell and also spend more and more as their wealth grows, even if that's only 10% off the top. The more spending options they have the less they will need to sell off directly.

So the more merchant adoptiont the better. I only mean to say that it may be a mistake to look for transactional value to increase in lockstep with the price. Store of value is HUGE right now. Any billionaire in the know (about Bitcoin) would be insane not to convert at least a small portion of their assets into bitcoins. Gold, Swiss bank accounts, property, offshore holdings - none are completely safe anymore, and neither are secrets held by others. With Bitcoin you can have your own secret stash that NO ONE will ever know about if you simply know what you're doing.

I see running a business accepting BTC as a similar speculative investment atm as buying and holding BTC. Yes the price is fluctuating widely and bound to continue doing so in the near future methinks. Accepting BTC for products/services/work seems like a speculation that while the value of the payment received may fluctuate and go down, ultimately it's probable that it will go up. I think the owner of Bitcoinstore gets this, when he keeps all the BTC he earns through his business.

I think BTC will become more and more feasible as a medium of exchange, when the price gets more stable (this might include a steady predictable rise in price, not just a level price), which imo will happen when the market cap is growing, which happens not so much due to Bitcoin being used as a medium of exchange, but Bitcoin being used as a store of value. Thus people screaming "bubble" and no way to tell if it is or not.

Another use: third-party-less escrow.

bingo.

Stage 1: store of value
Stage 2: value exchange

Some are trying to force it now (bitcoinstore) and I personally dont think its ready for such a thing. I sure hope I'm wrong, but we will see I suppose. It doesnt need to be a perfect value exchange mechanism yet... It has so much functionality left under the hood that we havent even scratched the surface yet really.

I'm actually starting to doubt the importance of Bitcoin being used for a wide range of transactions at this point.

Look at gold! It's got just a few interesting non-store-of-value uses where no substitute is feasible, and the rest of the market price is all accounted for by its store-of-value functionality. Well, so does Bitcoin. Gold shows that only a tiny fraction of use value is needed to back the store-of-value value. Right now the world may need the latter far more than the former, and bitcoins have some huge advantages over gold as a store of value, especially in these times.

If you ask me, this big growth is good for getting Bitcoin in the picture.
But it's not good for the Bitcoin economy itself.

1) Cause of value growing this fast its making people to not purchase anything with Bitcoin right now.
Why buy that 2 gram of weed or memory module of 2GB with 0.15 Bitcoin if i can but it tommorow for 0.10 Bitcoin?
This is counts also for the oposite direction; why buy 5 bitcoins today if maybe tommorow the so called 'bubble' pops and I can buy it 25% cheaper then today.

2) No company wants to step in with Bitcoin either.
"Cafe Awesome Joe" earns 5 Bitcoins in a day. Today thats worth ~700 bucks.
But maybe tommorow when the so called 'bubble' pops it would be worth 550 bucks.
What are they gonna do then? I mean, there profit of that day just vaporized in a couple of hours.
This is to big of a risk for a small company to accept a currency that fluctuates this hard right now.

You can say things about the above statements.
But thats just how people unfamiliar with bitcoin are thinking about this. (Its' true I asked alot of people and companies.)
The value is just to unreliable right now.
A stable Bitcoin value, thats what we need now.

(the growing value is good for my fiat wallet though. ^_^)

Basically the curling up from the standard exponential we're seeing now is either froth being introduced or a second exponential factor being introduced (the advent of double exponential growth - that is, exponentially higher and higher percentage increases). It could just be a outlying whale buying in in tracts, but that's outside the purview of this kind of trend analysis.

Merely the fact that the line is straight on a log chart of course does not mean there is no bubble, but as I mentioned we are seeing exponential growth in almost all other indicators as well. I don't think that was the case in 2011.

Note also: /r/Bitcoin is seeing increasingly high percentage growth in new subscribers right now. That might even be double exponential growth.

There are many things to take into account, though, and until I see sustained double-exponential growth for at least a month* and/or some reason to think that a second exponential factor has been introduced, I'm going to read this upward curling on the log chart as mild bubbling action entering the mix, albeit alongside much real growth.

One can abuse a log chart or any chart, but it remains the better tool for analyzing phenomena that - if they are to legitimately grow - will grow at exponential rates. For example, right now if there is an overreaction in response to some fairly moderate bad news, it won't be a mystery why. The log chart gives a ready explanation: anytime we float above the exponential trend line we are "cruising for a bruising" and any little problem can spook the market. That is a working hypothesis based on historical trends and the fact that other indicators appear to be "merely exponential" (not double exponential).

*This would of course be insane-level growth that would thwart all attempts at analysis, from weekly doubling to eventually daily doubling...either ending in mainstream adoption completely or release of one or both exponential factors as "shit starts to break."

Yeah well, but if you make it 3 variables, then it either can be 1 and then you have a normal exponential. The point is that it does look correlated to a double exponential on 2 constants.

It is just an acceleration of the growth rate... Instead of one new user per 1000 existing we are getting three, for example (made up numbers).

This is an increase of a in

e^(a*t)

Technically your formulation is equivalent since i^j^k = i^(j*k).

We're going to need slope fields to plot that

https://en.wikipedia.org/wiki/Slope_field

Looking like a doubly exponential function, but not on a big exponent. Something like 1.6^1.2^x.

True. Though that last graph could be considered as two fairly reasonably constant growth rates followed by some craziness over the last couple of weeks. Certainly it seems that the recent accelerated growth may be unhealthy.

Then again, a government did just reach into peoples savings accounts and helped themselves so....

This is not a straight line either (1 year graph of btc/usd on a log scale):

http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=360&i=&c=0&s=&e=&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=0&ps=0&l=1&p=0&

Nor is this (6 month graph of btc/usd on a log scale):

http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=180&i=&c=0&s=&e=&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=0&ps=0&l=1&p=0&

Regardless, the point is that looking at something on a different graph doesn't make it a safer investment.

log scale is starting to look exponential, so I am thinking y = (a^b)^x

Best thing ever.

Not a straight line so exceeding exponential growth. It'd be interesting to see what function would fit that. Geometric growth?

It would look exactly the same but with different numbers down the side. That's kind-of the point.

Not sure if troll. Bitcoin dropped to like 8% of it's value after that crash... Obviously USD valuation hadn't changed that significantly in that time period. Also the price of bitcoin dropped by a gigantic percentage compared to every currency as well as gold and silver at that time. Clearly a crash.

I'm still btc bull at this point, but that was a bubble, and this current rise may be another one (but might not be).

And now its many times higher than that price. Maybe, just maybe, that wasn't a bubble in Bitcoin price, but the time between then and now was just a bubble in USD valuation. 

Here's the thing, though. While there is value to using log charts in some cases to analyze growth, it's obviously not what is happening on this forum in general. What IS happening on this forum is that people are using log charts to reassure themselves that the current growth trend is not out of control and is completely fine and normal.

I bet in June 2011 people were on here posting this log chart:

http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=60&i=&c=1&s=2009-02-04&e=2011-06-06&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=0&ps=0&l=1&p=0&

Instead of this chart:

http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=60&i=&c=1&s=2009-02-04&e=2011-06-06&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=0&ps=0&l=0&p=0&

to reassure themselves that it wasn't a bubble as well, which it quite apparently was. So, I just don't want people to use it to make themselves feel safe for no reason.

I've even heard people on here say that it wasn't a bubble in June 2011 because bitcoin has EVENTUALLY come back to those prices. That's clearly a ridiculous statement, ESPECIALLY since it might just be back above those prices because we're in ANOTHER BUBBLE. Maybe it is, maybe it isn't, but either way June 2011 was a bubble, and I don't want people to just blindly put a lot of money into btc at this point when it's a reasonably high risk investment.

I'm still invested myself, but people on this forum definitely need reality checks. Bitcoin is very unlikely to turn hundreds of thousands of people into millionaires in 6 months, which everyone seems to think will happen.