Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 226. (Read 907212 times)

At a minimum, being anonymous is good, e.g. hiding in plain sight. I am years away from the problem anyway.

This is why we have told very few people about our investment, and if we have we do not tell them how many Bitcoins we have.  Let's say it does get to 100K per coin or more, we can give a sob story of how we sold "quite a few" before it got to that point so no one really has to know what we have.

I think the wise thing to do would be to not change our lifestyle that much.  As tempting as it will be to buy a new house, new cars and trips to space, perhaps it is best to just pretend we don't have much money.

My big goals are to fund a mission trip I am taking to India in the fall and pay for some humanitarian type things while I am there (water wells, medical camps, Aids outreach, funds for an orphanage).  If the price spikes this Summer I should be a in a great position to do so much more.  

Plus, when I was younger, I was joking that my "dream job" someday would be to become a philanthropist!  Maybe this will be a way to fulfill that dream!    (I also said that the only way I would ever get a doctorate degree is if I could get an "honorary" one.  Perhaps it goes along with philanthropy? LOL  We will see. . . )

Ah yes, but my wife and I share a frugal lifestyle that belies what we can already afford. A lifetime of virtuous, unrelenting frugality does not prepare one for the sort of upheaval I foresee coming for me.

Supposing that we are three years away from the half way point of adoption, then there will be over ten thousand new bitcoin millionaires and tens of bitcoin billionaires - rpietila notably among them. Part of the mind-bending part of getting bitcoin, as in understanding it, is realizing how many folks around the world will have sudden wealth, and ten times more each year until . . .

Then stay anonymous? No-one is forcing you to stand on a roof top and shout your net worth is $1B or something.

Those rich housewives on that tv show sure do seem to have a hard time    Sexing the pool boy and buying whatever they want.

http://www.complex.com/pop-culture/2009/07/curse-of-the-lotto-how-the-millions-can-ruin-lives

The gravest danger from sudden wealth, e.g. 1000x your current net worth, is how unprepared one could be with regard to the safety of the household and loved ones. We take for granted the enormous amount of security provided by simple anonymity when living in a developed country with an average amount of cash.

Here in Austin however, we have a world famous billionaire Michael Dell. From a distance I have seen a couple of his estates which are patrolled by private, armed guards. There is no way that Mr. Dell or his family could enjoy the sights and street life like I can. So much of what I enjoy about life would be interrupted if everyone stared at me in public, or my bodyguards, or my armored car.

What of all the beggars and solicitors that would seek my attention?

I need great wealth to fund greater goals and am old enough that the majority of my happy ordinary life is behind me. If I must move away from my less-than-secure but lovely and loving neighborhood to a compound, so be it, and live with guards, so be it. But I know that my dear wife will never be as happy and will blame me for the rest of my life when she fully realizes what I have done by simply holding on to bitcoin.

If I can live of $10k a month indefinitely without working there is no way in hell I'm complaining

Good spread.

I think this is a very good price range estimate...  I would put us in the $562-630 range in 30 days as well.  I find it interesting that you predict prices of 1778-2817 with equal probability as 251-315

I am willing to predict where the price is 2014-5-17 (30 days from now) volume weighted average Bitstamp price:

Price in USD range; probability

4466-100000; 0.1%
2818-4465; 0.4%
1778-2817; 2.0%
1413-1777; 2.0%
1122-1412; 3.0%
1000-1121; 2.5%
891-999; 3.5%
794-890; 5.5%
708-793; 8.0%
631-707; 14.0%
562-630; 18.0%
501-561; 17.0%
447-500; 9.0%
398-446; 6.0%
355-397; 4.0%
316-354; 2.0%
251-315; 2.0%
0-250; 1.0%

I will start with this post From NewLibertyStandard from January 19 ,2010. It is clear he was buying and selling based on his prices.  


Here is a thread wondering why the price went up between late 2009 and early 2010, from February 2010 https://bitcointalksearch.org/topic/confused-on-exchange-prices-37

Here is a post indicating the cost of electricity seen and the major cost in mining Bitcoin with no mention of equipment https://bitcointalksearch.org/topic/m.40324

The indication that NewLibertyStandard was an exchanger buying and selling based on his posted prices. There is more one has to go through the earliest threads on this forum looking for references to price, exchangers etc.

EDIT1: The announcement of Bitcoin Market https://bitcointalk.org/index.php?topic=20.0;all

EDIT2: This thread refers to NewLibertyStandard as a price indicator https://bitcointalk.org/index.php?topic=25.0;all

EDIT3: Another early thread with references to NewLibertyStandard, Bitcoin Market and later MTGox! https://bitcointalk.org/index.php?topic=30.0;all

EDIT4: Reference to NewLibertyStandard and his pricing methodology. https://bitcointalk.org/index.php?topic=42.0;all

EDIT5: This thread from satoshi indicated that the first automatic difficulty adjustment occurred on December 30, 2009 from 1 to 1.18. This is crucial since before then Bitcoin mining was not competitive equipment wise and it came down to how much electricity does it cost one to generate x number of BTC with equipment that would otherwise be idle. https://bitcointalk.org/index.php?topic=43.0;all

100K ruining people's lives?  (now or in 18 months which really is not that much longer)  Is the thinking that it will be like those that win the lottery and are not in the position to handle such wealth so quickly?

Ha. Our log trend models predict an average price of $100k per bitcoin in about 18 months. What difference does 12 months make when it comes to ruining people's lives?

We may see posts like this then:

I am ready to do it your style, although there will be scaling errors if the forecaster uses wide bands. But that is not my problem

The scoring system I proposed is good unless somebody invents a better one. I like the bonuses and penalties

It is really important to be able to handle the tails of the probability distribution. Not many are in real life prepared for $100k per bitcoin this year, even though it is possible. It may ruin many people's life more than bitcoin going to zero.

It depends on the degree of accuracy.

In contrast to your point of view, I have intensely studied bitcoin bubbles, personally experienced watching all of them in real time, developed a trading heuristic, and located academic research to support my tactic. Only when a significant proportion of speculators adopt this tactic will bubbles cease to characterize bitcoin prices.

Bubble peaks in general and bitcoin bubble peaks in particular have the property of super-exponential price acceleration up to the peak. On a linear price chart this feature is lost in the general parabolic appearance of the price line. But on a log chart, super-exponential growth is obvious because it curves upwards.

When the bubble starts, I keep track of how long it takes for prices to double. It is astounding what a brief time that can be. In the great June 2011 bubble, prices doubled from 15 to 32 in five days. In April 2013, prices doubled from 130 to 260 in seven days. And in November 2013, prices doubled from 400 to 800 in six days.

My peak timing heuristic is this . . . When the price looks to double within the following week, then that is a good time to place a spread of sell orders centered on twice the current price. The price doubling times get shorter as the peak approaches. From the preceding low there have been typically three or more price doublings to the peak.

The academic research on bubbles notes that the super-exponential price growth is self-reinforcing yet unsustainable, and that is why my heuristic works.

If enough speculators make this sort of trade, then the bubble peak will be lower and the subsequent bottom will likewise be higher than it otherwise would be as previously sold bitcoin is bought back.

Do you think an argument can be made that recent price data has greater predictive power than old price data and should therefore be given greater weight when calculating the trendline?  Two arguments:
1. More recent price data, in theory, has more market information to draw upon. ie, any interval changes in market fundamentals are reflected in recent price data but not older price data.
2. The volatility as measured on a log scale is expected to decrease with time. IOW, recent price data should be modeled as having a better signal to noise ratio than older price data.

Okay, please unload the evidence here! I've been searching for it for 6 months so am very grateful  

Depends, but USD 0.06/kWh (approx. Washington State?) and 0.9 J/GH (Spoondoolies/AM) suggest an electricity cost of USD 5.53 per XBT.