Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 262. (Read 907212 times)
I am arguing that a huge market for using Bitcoin in retail transactions is those who cannot get or use a credit card. This is in many cases an entirely different group of people from those who choose to invest or speculate in Bitcoin.
Blockchain.info has now removed the "holes" from their charts, allowing me to update my Metcalfe Value plot. Although we don't have price data prior to the opening of MtGox mid 2010, I was able to use the Metcalfe model to extrapolate backwards to the genesis block. The extrapolated value of all bitcoins in circulation was approximately $10,000 in 2009, before beginning the now famous trajectory to the moon in 2010.
The constant of proportionality in Metcalfe's law (V ~ N2) was also quantified for each of the two proxies for N. For example, using the number of transactions per day excluding popular addresses for N, the model best fit the market cap data with a constant of proportionality equal to $1.50. In other words, the model predicts that the bitcoin market capitalization is approximately equal to $1.50 multiplied by the square of the number of TXs per day (excluding popular addresses).
I am still stunned that the Metcalfe model so accurately corresponds to the actual market cap over 4 years and over 1,000,000% growth in market cap. The plot confirms for me that the value of bitcoin comes from the network of people who use it. If we keep finding new ways to use bitcoin, the rest will take care of itself.
The constant of proportionality in Metcalfe's law (V ~ N2) was also quantified for each of the two proxies for N. For example, using the number of transactions per day excluding popular addresses for N, the model best fit the market cap data with a constant of proportionality equal to $1.50. In other words, the model predicts that the bitcoin market capitalization is approximately equal to $1.50 multiplied by the square of the number of TXs per day (excluding popular addresses).
I am still stunned that the Metcalfe model so accurately corresponds to the actual market cap over 4 years and over 1,000,000% growth in market cap. The plot confirms for me that the value of bitcoin comes from the network of people who use it. If we keep finding new ways to use bitcoin, the rest will take care of itself.
Thanks. Very important work, as it enabled me to make the log-logistic theory, since money is apparently ALWAYS adopted by power law distribution not Gaussian (bell curve).
Noted it is mcap and not price, yet the are close proxy to each other now, since coin debasement is only 11% per annum now.
My TA. I put a ruler along the bottom of the green line since 2012 and looks it needs to come down to 3/5 current value to meet the trendline again. Which corresponds very roughly to $300.
P.S. Indeed any activity even promoting Bitpay transactions and driving our idealism into the toilet will satisfy our greed (for a while and that is a poetic note).
...
The costs of a credit card transaction can vary widely, from under 1% to even over 50%.
You failed to grasp my point that the credit card holder pays 0% (or even gets cash back). What the merchant pays is irrelevant, unless the merchant is giving that 3-5% discount to the Bitcoin purchaser. Even with a discount, it is bad tradeoff because we are pushing our ecosystem to hell.
...
What fool would lose 3-5% spread (at least) on two times exchanges instead of paying 0% to spend the fiat with a credit card?
The costs of a credit card transaction can vary widely, from under 1% to even over 50%.
You failed to grasp my point that the credit card holder pays 0% (or even gets cash back). What the merchant pays is irrelevant, unless the merchant is giving that 3-5% discount to the Bitcoin purchaser. Even with a discount, it is bad tradeoff because we are pushing our ecosystem to hell.
...
My point is that in some cases the cost the the "credit card holder" can be upwards of 50% or even not be able to make the transaction in the first place. The case of an individual having to purchase a prepaid "credit card" in order to make an online purchase and spending more on "fees" then the amount of the purchase is a real case situation. I have said this over two years ago and will say it again. The low hanging fruit for Bitcoin has a FICO score of 350 or thereabouts or lives in a country that is blocked, or is under age 18, or wishes to purchase goods or services from an "high risk" merchant across an international boundary etc etc.
The cost to the merchant can be very relevant particularly if the transaction fall into the "high risk category". Ever wonder why so many retailers refuse international credit card transactions for example? Not every transaction involves a consumer with an 800+ FICO score purchasing goods or services in person from a large retailer.
So you are arguing that most can't get a credit card or can't use, so they are selling Bitcoin to purchase and then replacing their Bitcoin. I find this so far off the relevance scale. Majority of Bitcoin holders weren't unable to purchase anything online before Bitcoin came along. That is an extreme assumption. We know Bitcoin appeals to tech people who surely had mapped out how to buy online many years ago.
I am arguing that a huge market for using Bitcoin in retail transactions is those who cannot get or use a credit card. This is in many cases an entirely different group of people from those who choose to invest or speculate in Bitcoin.
And that is off topic to the point I was making. But I don't disagree with you on your point, it just doesn't refute the point I was making.
I am arguing that a huge market for using Bitcoin in retail transactions is those who cannot get or use a credit card. This is in many cases an entirely different group of people from those who choose to invest or speculate in Bitcoin.
yes, I agree, this is one of the key purposes for this technology, but sadly such a small portion of what it is used for today.
Peter Thiel's Paypal doesn't allow filipinos to receive payments (or at least didn't until a year or two ago), because the USA wanted the Philippines to first enact laws to end bank secrecy, support anti-terrorism, have an AML and KYC law, give the IRS access to any private data requested, etc.. Philippines has complied, so now they got upgraded by Moody's, Standard & Poors, etc.. So now they get fattened with debt. Lovely world and now we bow like good slaves to Peter and give him control of our Bitcoin.
P.S. the law of unintended consequences a.k.a. chaos when politicians make laws is why you are reading this thread in reverse.
Also I want to add that I understand it is very difficult to get merchants to hold BTC. But I am not in a rush to have merchants and fiat slavery. I am willing to invest in my future freedom for the long-term and be patient. I am not a greedy bastard. I live simply.
Blockchain.info has now removed the "holes" from their charts, allowing me to update my Metcalfe Value plot. Although we don't have price data prior to the opening of MtGox mid 2010, I was able to use the Metcalfe model to extrapolate backwards to the genesis block. The extrapolated value of all bitcoins in circulation was approximately $10,000 in 2009, before beginning the now famous trajectory to the moon in 2010.
The constant of proportionality in Metcalfe's law (V ~ N2) was also quantified for each of the two proxies for N. For example, using the number of transactions per day excluding popular addresses for N, the model best fit the market cap data with a constant of proportionality equal to $1.50. In other words, the model predicts that the bitcoin market capitalization is approximately equal to $1.50 multiplied by the square of the number of TXs per day (excluding popular addresses).
I am still stunned that the Metcalfe model so accurately corresponds to the actual market cap over 4 years and over 1,000,000% growth in market cap. The plot confirms for me that the value of bitcoin comes from the network of people who use it. If we keep finding new ways to use bitcoin, the rest will take care of itself.
The constant of proportionality in Metcalfe's law (V ~ N2) was also quantified for each of the two proxies for N. For example, using the number of transactions per day excluding popular addresses for N, the model best fit the market cap data with a constant of proportionality equal to $1.50. In other words, the model predicts that the bitcoin market capitalization is approximately equal to $1.50 multiplied by the square of the number of TXs per day (excluding popular addresses).
I am still stunned that the Metcalfe model so accurately corresponds to the actual market cap over 4 years and over 1,000,000% growth in market cap. The plot confirms for me that the value of bitcoin comes from the network of people who use it. If we keep finding new ways to use bitcoin, the rest will take care of itself.
Very interesting. We are experiencing a huge surge in growth so hopefully the price follows soon. Thanks for your work on this.
...
The costs of a credit card transaction can vary widely, from under 1% to even over 50%.
You failed to grasp my point that the credit card holder pays 0% (or even gets cash back). What the merchant pays is irrelevant, unless the merchant is giving that 3-5% discount to the Bitcoin purchaser. Even with a discount, it is bad tradeoff because we are pushing our ecosystem to hell.
...
What fool would lose 3-5% spread (at least) on two times exchanges instead of paying 0% to spend the fiat with a credit card?
The costs of a credit card transaction can vary widely, from under 1% to even over 50%.
You failed to grasp my point that the credit card holder pays 0% (or even gets cash back). What the merchant pays is irrelevant, unless the merchant is giving that 3-5% discount to the Bitcoin purchaser. Even with a discount, it is bad tradeoff because we are pushing our ecosystem to hell.
...
My point is that in some cases the cost the the "credit card holder" can be upwards of 50% or even not be able to make the transaction in the first place. The case of an individual having to purchase a prepaid "credit card" in order to make an online purchase and spending more on "fees" then the amount of the purchase is a real case situation. I have said this over two years ago and will say it again. The low hanging fruit for Bitcoin has a FICO score of 350 or thereabouts or lives in a country that is blocked, or is under age 18, or wishes to purchase goods or services from an "high risk" merchant across an international boundary etc etc.
The cost to the merchant can be very relevant particularly if the transaction fall into the "high risk category". Ever wonder why so many retailers refuse international credit card transactions for example? Not every transaction involves a consumer with an 800+ FICO score purchasing goods or services in person from a large retailer.
Blockchain.info has now removed the "holes" from their charts, allowing me to update my Metcalfe Value plot. Although we don't have price data prior to the opening of MtGox mid 2010, I was able to use the Metcalfe model to extrapolate backwards to the genesis block. The extrapolated value of all bitcoins in circulation was approximately $10,000 in 2009, before beginning the now famous trajectory to the moon in 2010.
The constant of proportionality in Metcalfe's law (V ~ N2) was also quantified for each of the two proxies for N. For example, using the number of transactions per day excluding popular addresses for N, the model best fit the market cap data with a constant of proportionality equal to $1.50. In other words, the model predicts that the bitcoin market capitalization is approximately equal to $1.50 multiplied by the square of the number of TXs per day (excluding popular addresses).
I am still stunned that the Metcalfe model so accurately corresponds to the actual market cap over 4 years and over 1,000,000% growth in market cap. The plot confirms for me that the value of bitcoin comes from the network of people who use it. If we keep finding new ways to use bitcoin, the rest will take care of itself.
The constant of proportionality in Metcalfe's law (V ~ N2) was also quantified for each of the two proxies for N. For example, using the number of transactions per day excluding popular addresses for N, the model best fit the market cap data with a constant of proportionality equal to $1.50. In other words, the model predicts that the bitcoin market capitalization is approximately equal to $1.50 multiplied by the square of the number of TXs per day (excluding popular addresses).
I am still stunned that the Metcalfe model so accurately corresponds to the actual market cap over 4 years and over 1,000,000% growth in market cap. The plot confirms for me that the value of bitcoin comes from the network of people who use it. If we keep finding new ways to use bitcoin, the rest will take care of itself.
Which graph can you point me to for the 5.25-year exponential trend line?
Code:
https://i.imgur.com/ycT9ulP.png
Thanks.
The beauty of the 5.25-year trendline with exponential fit (R^2=0.93 which is pretty darn good) is that it takes into account every worry of every person who has ever owned or not owned bitcoins. I put more weight on that than the individual worries of a single person.
You put a lot of weight in your humongous pride, as if someone presenting analytical discussion is worried. I am not worried about the BTC price. I could careless because I don't own any BTC nor am I itching to buy any. And you put a lot of weight in arbitrary curve fits.
And people who think they know every thing for sure (and you don't even enumerate the arbitrary assumptions in your model), eventually get a lesson in respecting chaos. Maybe not this time. No one knows. But eventually yes.
I hope you realize the following chart is arbitrary BS.
Which graph can you point me to for the 5.25-year exponential trend line?
Code:
https://i.imgur.com/ycT9ulP.png
And why not drawn like this? A least squares fit is an arbitrary choice of slope, because the curve you are fitting is not very linear. The 2011 outlier is your big problem with choosing this arbitrary fit. And we can't really trust that early data back in 2010.
The green line looks much more accurate to me. It removes that bubble from 2013 and follows a trendline from before the bubble started. Or we stay with the purple trendline, in which case the price is almost down to the purple line.
You need to update your chart. The price is now lower than shown.
Also refer to my upthread post quoted below pointing out that adoption (and thus BTC ≅ adoption^2) is likely log-logistic, not logistic. Thus we see the first slope to 2011 was higher, then the slope from 2012 to 2014 was the purple line, and now we may be ready to transition into an even lower slope, such as the green line.
We should now shift into yet again a lower adoption slope than from July 2011 to December 2013.
What a heck makes you think so at a face of universal awareness that is just achieved?
Math Risto. You can't deny math. Here is the shocking revelation...
Because if you put a ruler on the chart along the bottoms of unique addresses on the log 10 chart, you see the slope was higher before the July 2011 crash, than it has been since 2012.
Also it is very likely that Bitcoin adoption is not logistic where the maximum rate of adoption is at 50% of the adoption as follows:
http://en.wikipedia.org/wiki/Diffusion_of_innovations
Because Bitcoin is not adopted for utility, rather the probability distribution of the adopters is power-law because that is the distribution of money[1] as follows.
http://en.wikipedia.org/wiki/Power_law
Thus Bitcoin adoption is log-logistic as follows. Note that for B=1/2 which is the power-law distribution, that the slope of the log-logistic function gradually declines for the life of the curve. And that is exactly what we are seeing happen thus far as I stated above.
http://en.wikipedia.org/wiki/Log-logistic_distribution
[1] A. Dragulescu and V. Yakovenko. Exponential and power-law probability distributions of wealth and income in the United Kingdom and the United States
The reason is that people who buy on overstock or tigerdirect are just buying more bitcoin to replace what they spent. They originally bought the bitcoin as an investment, they are excited to be able to use it for something, but they don't want to exit their position.
I always buy back the same or exceeding the amount I just spent. It's a rule I've always stuck to over the years.
Yes. We gave some away at Christmas and just bought back what we gave. It is nice to end up with the same amount or more Bitcoin at this stage of it's growth for sure!
Actually, I got those for free on a trade selling high on the impending China news and buying low afterward (in December).
Which graph can you point me to for the 5.25-year exponential trend line?
Code:
https://i.imgur.com/ycT9ulP.png
Our timelines on the next launch are almost the same. I still stand by my prediction that Bitcoin will see a new ATH by the end of July 2014. End of the year I predict $5000 will have been hit at least.
The crash from the $32 ATH scared me pretty bad. I almost cashed out back then. The crash from $266 ATH was a little uncomfortable, but didn't really scare me. Now the slide from the $12xx ATH has me very excited. The next runup is going to be awesome!
Waves and cycles as well as trader psychology and market SENTIMENT.
Our timelines on the next launch are almost the same. I still stand by my prediction that Bitcoin will see a new ATH by the end of July 2014. End of the year I predict $5000 will have been hit at least.
The crash from the $32 ATH scared me pretty bad. I almost cashed out back then. The crash from $266 ATH was a little uncomfortable, but didn't really scare me. Now the slide from the $12xx ATH has me very excited. The next runup is going to be awesome!
So Risto, What are your feelings at the moment? I assume now is a great time to buy. When do you think the next rally will take place and what is your estimation on when we will reach the next ATH? What do you think the next ATH will be?
I was thinking that I was surprised, yet again, that you were right about how the price was too high and that we would correct down to $400 or so. Yet here we are. When do we just shut up and stop questioning you?
I was thinking that I was surprised, yet again, that you were right about how the price was too high and that we would correct down to $400 or so. Yet here we are. When do we just shut up and stop questioning you?
- I think it is much more probable (70%) that 400 will hold vs. not. Even if it goes lower, it does not change anything except that price is better for buyers and worse for sellers. There is still exactly the same number of bitcoins in the market and the viability of the technology is exactly the same.
- Yes, it is a great time to buy. If you are thinking of buying bitcoins, you should do it now. Even if you were not thinking, the price is good.
- The tribulation is likely over in a week, at most the sub-500 prices persist until past April 15 (tax sales). In the end of the month we are definitely over 500, probably about at 600.
- We are now at -0.3 log-units in the long term trendline. This situation will persist until the next uptrend launches. Note that the trendline ascends 23% per month and it drags the price up with it.
- After about 2-3 months, we are near 1000 and there is a hurdle to get over it. It succeeds and the rally is ignited, catapulting us to a new ATH of 3000-7000 in July-August. From taking the old ATH of 1163 to making the new, it is only 20-40 days.
Always happy to help
Our timelines on the next launch are almost the same. I still stand by my prediction that Bitcoin will see a new ATH by the end of July 2014. End of the year I predict $5000 will have been hit at least.
Moderator action - this thread is now proceeding at a rate of 200+ posts per day and it affects readability.
I will impose a 10 posts per 24 hours limit on everyone, which lets everyone decide for themselves which posts are most important.
For those with an account less than 6 months old, the limit is 3 posts per 24 hours.
Although I like the high level of discussion, there is a certain amount of repetition here. This measure allows us to take some time off reading and writing to this thread, makes it easier for the lurkers to be up-to-date, and is not intended to lessen the quality at all.
I will impose a 10 posts per 24 hours limit on everyone, which lets everyone decide for themselves which posts are most important.
For those with an account less than 6 months old, the limit is 3 posts per 24 hours.
Although I like the high level of discussion, there is a certain amount of repetition here. This measure allows us to take some time off reading and writing to this thread, makes it easier for the lurkers to be up-to-date, and is not intended to lessen the quality at all.
Would it not be better to use the OP at the beginning of the thread to highlight the main points discussed as a way of referencing material/data for new comers?
Just a suggestion.
Oh fuck look what just happened under our nose while we were not paying attention!
https://www.goldsilverbitcoin.com/bitpay-worlds-first-zero-transaction-fee-payment-processing/
So who is paying those high fees? We the customers in the exchange rate!!! And liquidating our investment!
Fuck we've been sucked into a fiat vortex by that same bastard Peter Thiel who angel funded Facebook and Paypal.
https://www.goldsilverbitcoin.com/bitpay-worlds-first-zero-transaction-fee-payment-processing/
So who is paying those high fees? We the customers in the exchange rate!!! And liquidating our investment!
Fuck we've been sucked into a fiat vortex by that same bastard Peter Thiel who angel funded Facebook and Paypal.
(The article is from the beginning of 2013-11-11, so almost a complete boom-bust cycle ago). I don't see the evil here. Everybody is free to liquidate their investment or use bitcoin as a currency, or do both.
Money has different functions, among which the important ones are:
Store of value
If you have a wealth management plan (I had ever since I made my first FIM 10,000, and it has been very elaborate since EUR 40,000), you allocate your assets to different categories that serve different purposes and provide upside and security in different scenarios. What you use as payment is completely different, although it is usually practical to have at least a small balance in the currencies you transact with.
Means of payment
Payment amounts are quoted in different currencies and you can typically pay in any currency with the use of conversion, which may be automatic or manual. What you own does not determine your means of transaction, unless it is a very big one in which case it might carry additional liquidity, tax or hassle considerations. You are free to use whatever currency as your unit of accounting, regardless of the country's fiat, or the allocation of your assets.
Thus, the rise in the use of something as a quote currency or a transaction currency, can at most be irrelevant to its value, but typically is positive, and the following statement
The more success Bitpay has, the worse for Bitcoin. Because Bitpay is all about liquidating BTC from investors (not bringing in proportionally new customers to the ecosystem).
is absurd and wrong.
Quote
Bitcoin is pointed down now and it will be a vicious cycle that feeds on itself. It is structural and we have to go down and restart from a low equilibrium.
It is impossible to be 100% certain of anything. But a tendency in your writings seems to be that once you recognize something that in your assessment is a threat to Bitcoin, it means that the price action should follow immediately following your enlightenment. Since the Bitcoin economy is composed of perhaps a million actors, with many holding significant Bitcoin and/or fiat balances, your individual timing in understanding matters is not actually that important.
The beauty of the 5.25-year trendline with exponential fit (R^2=0.93 which is pretty darn good) is that it takes into account every worry of every person who has ever owned or not owned bitcoins. I put more weight on that than the individual worries of a single person.
It almost sounds like that you are first time experiencing a major low in bitcoin exchange rate.
Which graph can you point me to for the 5.25-year exponential trend line?
I really don't want to post, but I am compelled to point it out some corrections.
Besides even if you are 100% correct, your point is irrelevant. If those merchants were increasing their savings of BTC instead, then there would be more upwards pressure on the fiat price of BTC.
Also remember M x V = P x Q. Thus increasing V increases P or Q (in our case we want Q which is quantity of merchants who hold BTC). You make the mistake of thinking value come from a equilibrium of stock. Rather value comes from flows. If the flows are actually occurring in the fiat, then the value from those flows is lost from BTC because there isn't an apparency of more money stock (M x V). Risto apparently can't do this level of math. In short, we increase the # of merchants who accept fiat, not who accept BTC. The switcheroo will later be trivial.
And there was also the issue that miners have razor thin margins now and must convert more to fiat.
The bigger issue is that we are building a merchant base that converts everything to fiat. This is what you are incentivizing. And it is compounding faster than adoption. Once you have a single service provider controlling all merchants, then no altcoin can be accepted (once they do the blacklisting on coins that don't carry full identity). And that provider will be controlled by the government. You say you want to get away from Paypal, then you hand control right back to Peter Thiel again.
Just go ahead 'tards to your centralized hell.
Any one serious about liberty is welcome to come help on something serious. Not this BS.
Bitpay and coinbase are on the edges of the bitcoin economy. What's important to note is that they continually push the edges outward.
Just as merchants were motivated to accept bitcoin through bitpay (because it's virtually no risk), the same will happen with those merchants' suppliers. And once that happens, the merchants don't need to completely convert to fiat anymore. Eventually the merchant can keep their income in bitcoin, and it's the suppliers who use bitpay.
What's going to stop the edges from moving outward?
Talk about fantastical dreaming. I thought I was really far out there with wanting an anonymous coin.
So in order to stop rape, first we need to rape until everyone is raped, then we can suddenly stop raping because everyone has a rape kit.
You won't get to even 1% coverage before the entire ecosystem has been co-opted by centralization and fiat regulation. Dance with the vampires only if you want to be bitten and converted.
I guess the love of greed can make one think up any kind of irrational excuse to continue in that greed.
If you lose money on the two exchanges, how do you have capital gains?
Do most people in Bitcoin have only 3 - 5% gains.
The costs of a credit card transaction can vary widely, from under 1% to even over 50%.
You failed to grasp my point that the credit card holder pays 0% (or even gets cash back). What the merchant pays is irrelevant, unless the merchant is giving that 3-5% discount to the Bitcoin purchaser. Even with a discount, it is bad tradeoff because we are pushing our ecosystem to hell.
The bigger issue is that we are building a merchant base that converts everything to fiat. This is what you are incentivizing. And it is compounding faster than adoption. Once you have a single service provider controlling all merchants, then no altcoin can be accepted (once they do the blacklisting on coins that don't carry full identity). And that provider will be controlled by the government. You say you want to get away from Paypal, then you hand control right back to Peter Thiel again.
Just go ahead 'tards to your centralized hell.
Any one serious about liberty is welcome to come help on something serious. Not this BS.
I dont understand how a merchant base that converts everything to fiat will lead to a single service provider controlling all merchants. Could you please elaborate?
Do you see any competitor to Bitpay (or Peter Thiel's Facebook or Paypal)? Do you know how to compound 3X monthly growth (or thereabouts) and realize how few months before that is the entire value of Bitcoin (thus no room for another player)?
And on what feature could a competitor compete? Bitpay already offers 0% fees, because we the customer pay Bitpay when they fudge the exchange rate slightly.
Do you see my name on anything in the altcoin list.
Agreed I have no skin in whether the price drops or not. My concern is whether I end up a slave or not.
Welcome to the forums, Vinny. I enjoyed your piece. And to answer your almost-question: very little, especially in the long term, because the selling pressure from merchants is only half the equation. The other half of the equation is "where did those bitcoins come from that are being sold?" Most people have to buy them, so the selling pressure is nearly balanced by the buying pressure on the other side. The other way is mining. Years ago mining was a signficant part of the market. Now, very little coins are mined compared to volume of coins bought/sold/traded.
Nonsense. The demand of buyers doesn't increase when the amount of selling through merchants increases. It increases only if the people buying at merchants are all replacing their coins. You completely dunced the math that I explained upthread. Remember demand and supply meet at price. Go back to Economics 101 and don't forget marginal supply and demand sets price.
The crash from the $32 ATH scared me pretty bad. I almost cashed out back then. The crash from $266 ATH was a little uncomfortable, but didn't really scare me. Now the slide from the $12xx ATH has me very excited. The next runup is going to be awesome!
Markets always move in the direction to hurt the most investors. When most of the investors are 100% sure of something, that is when it most surely won't happen. I don't know if you are representative of the majority or not.
Besides even if you are 100% correct, your point is irrelevant. If those merchants were increasing their savings of BTC instead, then there would be more upwards pressure on the fiat price of BTC.
Also remember M x V = P x Q. Thus increasing V increases P or Q (in our case we want Q which is quantity of merchants who hold BTC). You make the mistake of thinking value come from a equilibrium of stock. Rather value comes from flows. If the flows are actually occurring in the fiat, then the value from those flows is lost from BTC because there isn't an apparency of more money stock (M x V). Risto apparently can't do this level of math. In short, we increase the # of merchants who accept fiat, not who accept BTC. The switcheroo will later be trivial.
And there was also the issue that miners have razor thin margins now and must convert more to fiat.
The bigger issue is that we are building a merchant base that converts everything to fiat. This is what you are incentivizing. And it is compounding faster than adoption. Once you have a single service provider controlling all merchants, then no altcoin can be accepted (once they do the blacklisting on coins that don't carry full identity). And that provider will be controlled by the government. You say you want to get away from Paypal, then you hand control right back to Peter Thiel again.
Just go ahead 'tards to your centralized hell.
Any one serious about liberty is welcome to come help on something serious. Not this BS.
Bitpay and coinbase are on the edges of the bitcoin economy. What's important to note is that they continually push the edges outward.
Just as merchants were motivated to accept bitcoin through bitpay (because it's virtually no risk), the same will happen with those merchants' suppliers. And once that happens, the merchants don't need to completely convert to fiat anymore. Eventually the merchant can keep their income in bitcoin, and it's the suppliers who use bitpay.
What's going to stop the edges from moving outward?
Talk about fantastical dreaming. I thought I was really far out there with wanting an anonymous coin.
So in order to stop rape, first we need to rape until everyone is raped, then we can suddenly stop raping because everyone has a rape kit.
You won't get to even 1% coverage before the entire ecosystem has been co-opted by centralization and fiat regulation. Dance with the vampires only if you want to be bitten and converted.
I guess the love of greed can make one think up any kind of irrational excuse to continue in that greed.
Quote
What fool would lose 3-5% spread (at least) on two times exchanges instead of paying 0% to spend the fiat with a credit card?
And cause a premature capital gains event.
And cause a premature capital gains event.
If you lose money on the two exchanges, how do you have capital gains?
Do most people in Bitcoin have only 3 - 5% gains.
What fool would lose 3-5% spread (at least) on two times exchanges instead of paying 0% to spend the fiat with a credit card?
The costs of a credit card transaction can vary widely, from under 1% to even over 50%.
You failed to grasp my point that the credit card holder pays 0% (or even gets cash back). What the merchant pays is irrelevant, unless the merchant is giving that 3-5% discount to the Bitcoin purchaser. Even with a discount, it is bad tradeoff because we are pushing our ecosystem to hell.
The bigger issue is that we are building a merchant base that converts everything to fiat. This is what you are incentivizing. And it is compounding faster than adoption. Once you have a single service provider controlling all merchants, then no altcoin can be accepted (once they do the blacklisting on coins that don't carry full identity). And that provider will be controlled by the government. You say you want to get away from Paypal, then you hand control right back to Peter Thiel again.
Just go ahead 'tards to your centralized hell.
Any one serious about liberty is welcome to come help on something serious. Not this BS.
I dont understand how a merchant base that converts everything to fiat will lead to a single service provider controlling all merchants. Could you please elaborate?
Do you see any competitor to Bitpay (or Peter Thiel's Facebook or Paypal)? Do you know how to compound 3X monthly growth (or thereabouts) and realize how few months before that is the entire value of Bitcoin (thus no room for another player)?
And on what feature could a competitor compete? Bitpay already offers 0% fees, because we the customer pay Bitpay when they fudge the exchange rate slightly.
If I understand you correctly your biggest concern is not short term price drop but that your anonymous altcoin will not be adopted because of all this?
Do you see my name on anything in the altcoin list.
Agreed I have no skin in whether the price drops or not. My concern is whether I end up a slave or not.
The real question is how much selling pressure comes from Coinbase & BitPay.
Welcome to the forums, Vinny. I enjoyed your piece. And to answer your almost-question: very little, especially in the long term, because the selling pressure from merchants is only half the equation. The other half of the equation is "where did those bitcoins come from that are being sold?" Most people have to buy them, so the selling pressure is nearly balanced by the buying pressure on the other side. The other way is mining. Years ago mining was a signficant part of the market. Now, very little coins are mined compared to volume of coins bought/sold/traded.
Nonsense. The demand of buyers doesn't increase when the amount of selling through merchants increases. It increases only if the people buying at merchants are all replacing their coins. You completely dunced the math that I explained upthread. Remember demand and supply meet at price. Go back to Economics 101 and don't forget marginal supply and demand sets price.
Our timelines on the next launch are almost the same. I still stand by my prediction that Bitcoin will see a new ATH by the end of July 2014. End of the year I predict $5000 will have been hit at least.
The crash from the $32 ATH scared me pretty bad. I almost cashed out back then. The crash from $266 ATH was a little uncomfortable, but didn't really scare me. Now the slide from the $12xx ATH has me very excited. The next runup is going to be awesome!
Markets always move in the direction to hurt the most investors. When most of the investors are 100% sure of something, that is when it most surely won't happen. I don't know if you are representative of the majority or not.
The real question is how much selling pressure comes from Coinbase & BitPay.
Welcome to the forums, Vinny. I enjoyed your piece. And to answer your almost-question: very little, especially in the long term, because the selling pressure from merchants is only half the equation. The other half of the equation is "where did those bitcoins come from that are being sold?" Most people have to buy them, so the selling pressure is nearly balanced by the buying pressure on the other side. The other way is mining. Years ago mining was a signficant part of the market. Now, very little coins are mined compared to volume of coins bought/sold/traded.
what is this referring to?
Oyvinds is referring to one (or at least most likely one) investor that has placed big bids at several different price levels. This investor appears to most likley be someone who actually wants to buy and not just push the price up. Keep up the good work Oyvinds.
The beauty of the 5.25-year trendline with exponential fit (R^2=0.93 which is pretty darn good) is that it takes into account every worry of every person who has ever owned or not owned bitcoins. I put more weight on that than the individual worries of a single person.
The trendline is a representation of how people have speculated in the history of Bitcoin. As Anonymint points out we have a large merchant adoption that we haven't had the last 5.25 years. Do you think new factors with a possible large impact like this can make the trendline less accurate?
I do not see a large merchant adoption making the trendline any less accurate, it is simply an indication of the growth of Bitcoin. Furthermore I the find idea that large scale adoption by merchants is bearish for Bitcoin rather bizarre and more an indicator, that we are currently very close to a significant low in the BTC/USD price. Maybe the bears are starting to get a bit on the piggish side here?
As for the trendline it does have some significant limitations:
1) The exponential model makes sense when applied to the market capitalization not the price. The impact of this approximation is to underestimate the price. When applied to 2009 this approximation completely breaks down
2) The data before July 2010 is highly questionable. It also does not include the data from January - June 2010 from http://newlibertystandard.wikifoundry.com/page/Exchange+Rate. This data, unlike the data from 2009 from the same source, is actual trading data in terms of gold (1 gram XAU via Pecunix) from BitcoinMarket and NewLibertyStandard. I do agree with the premise that for a large part of 2009 the USD/BTC rate could have been constant. This is due to the growth in the Bitcoin money supply being approximately equal to the growth in the use of Bitcoin during 2009.
My thoughts on this is that because of the above the trendline errs on the side of being overly bearish. It for this reason that I was aggressively buying in August / September and into October 2013 (where I was proven right) and held rather than sell in December 2013 - March 2014 (where I was proven for the most part wrong). As for the current situation I see a hold and / or long term buy.
Thank you for all the kind words and comments and for linking to my piece.
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