Here is my take.
The model (black curve) is based on the following steps: 1) Use a logistic model of number of users of BTC (from blockchain.info (proxy of real numbers but ok). Graph of logistic model not shown here.
2) Assume 1 billion users for saturation point of number of users.
3) Derive from empirical data relationship between price and number or users (according to network theory). Observed relationship with R=0.92--> price=C*users^1.4
4) Use Fourier Analysis to detect periodicities of bubbles. Use 4 main peaks in the spectrum to determine frequencies.
5) Add sine waves oscillation with above determined frequencies (and phases) to price trend model described in 1-3. Days are from Bitstamp opening. Red line is a simple exponential fit. Black curve is the complete model.
http://i.imgur.com/W1ynjfH.png
Topic: Stephen Reed's Million Dollar Logistic Model - page 11. (Read 123165 times)
Either way the big picture is - the more people using Bitcoin and the more value/wealth being stored and transferred using Bitcoin - the more value a single unit of Bitcoin has. So evangelize the masses and put all yo' monies in BTC! 
Metcalfe's law was proposed for telecommunications networks; Bitcoin's might be a better fit for Reed's law:
http://en.wikipedia.org/wiki/Reed%27s_law
which predicts exponential growth due to the number of potential sub-groups - essentially 'sub-networks' - in a given network. (Sort of like how you went from hearing about Facebook, to Facebook being opened to everyone outside of college, to dot dot dot now your mom uses Facebook to view pictures of her grandkids?)
In the interest of providing some dissent, Andrew Odlyzko wrote a great paper refuting both Metcalfe and Reed, and saying that growth in telecoms networks is more like n (log n). http://www.dtc.umn.edu/~odlyzko/doc/metcalfe.pdf
http://en.wikipedia.org/wiki/Reed%27s_law
which predicts exponential growth due to the number of potential sub-groups - essentially 'sub-networks' - in a given network. (Sort of like how you went from hearing about Facebook, to Facebook being opened to everyone outside of college, to dot dot dot now your mom uses Facebook to view pictures of her grandkids?)
In the interest of providing some dissent, Andrew Odlyzko wrote a great paper refuting both Metcalfe and Reed, and saying that growth in telecoms networks is more like n (log n). http://www.dtc.umn.edu/~odlyzko/doc/metcalfe.pdf
In trying to reconcile the two models, It is important to keep in mind, that this logistic model is based on "investment adoption" not "fundamental adoption". The trend here refers only to the speculation process. The fundamental adoption will likely take much longer and the "fundamental value trend" - if you can call it that- is likely much less steep - at least in these very early years. Separating these two different "adoptions" was I think a great insight and contribution on Slippery's part.
If this model is right (or even close to right), there may be a massive speculative bubble toward the end of "investment adoption" - within the next 5 years-after which the price could crash back to a much lower "fundamental" long-term value trend, which might be much closer to that predicted by the WBN model. Just possible...or not
If this model is right (or even close to right), there may be a massive speculative bubble toward the end of "investment adoption" - within the next 5 years-after which the price could crash back to a much lower "fundamental" long-term value trend, which might be much closer to that predicted by the WBN model. Just possible...or not
What about hti slinear model released by world bitcoin network yesterday, which predicts bitcoin will not reach a million per coin
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
Badass link, thanks for posting that.
Hoping the trendline continues and we take off again once the auction results are released. Anyone still optimistic we can get into the +.3 or +.4 log delta range this summer/fall?
I don't think 0,3 is optimistic actually, have have been at -0.5 for a while so in order for the trend line to remain valid we should see 0,5 to balance out. Otherwise we have to re-calibrate the trend line. The lower it will go below 0.5 the worse it is. I hope to see at least 0.45
I certainly hope you're right. The trendline will be at 1798 tomorrow... seeing it peak in the .4-.5 range this year would be amazing and a great sign of things to come. I'd love to see one more ATH before Wall St. gets involved.
Seriously. That range would solve a lot of problems for me if we see it this year. I've been considering going back to school for mathematics/cryptography after following bitcoin the last 18 months. One more hard rally and I would feel comfortable focusing on school full time and not working full time.
What about hti slinear model released by world bitcoin network yesterday, which predicts bitcoin will not reach a million per coin
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
Badass link, thanks for posting that.
Hoping the trendline continues and we take off again once the auction results are released. Anyone still optimistic we can get into the +.3 or +.4 log delta range this summer/fall?
I don't think 0,3 is optimistic actually, have have been at -0.5 for a while so in order for the trend line to remain valid we should see 0,5 to balance out. Otherwise we have to re-calibrate the trend line. The lower it will go below 0.5 the worse it is. I hope to see at least 0.45
I certainly hope you're right. The trendline will be at 1798 tomorrow... seeing it peak in the .4-.5 range this year would be amazing and a great sign of things to come. I'd love to see one more ATH before Wall St. gets involved.
What about hti slinear model released by world bitcoin network yesterday, which predicts bitcoin will not reach a million per coin
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
Badass link, thanks for posting that.
Hoping the trendline continues and we take off again once the auction results are released. Anyone still optimistic we can get into the +.3 or +.4 log delta range this summer/fall?
I don't think 0,3 is optimistic actually, have have been at -0.5 for a while so in order for the trend line to remain valid we should see 0,5 to balance out. Otherwise we have to re-calibrate the trend line. The lower it will go below 0.5 the worse it is. I hope to see at least 0.45
What about hti slinear model released by world bitcoin network yesterday, which predicts bitcoin will not reach a million per coin
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
Badass link, thanks for posting that.
Hoping the trendline continues and we take off again once the auction results are released. Anyone still optimistic we can get into the +.3 or +.4 log delta range this summer/fall?
What about hti slinear model released by world bitcoin network yesterday, which predicts bitcoin will not reach a million per coin
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
that's some cool shit, though.
What about hti slinear model released by world bitcoin network yesterday, which predicts bitcoin will not reach a million per coin
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
First, growth of networks and technology is never linear
Second, this thread is not about predicting the end result, it's about the way there, so we can make educated long-term trade decisions other than HODL. It would be pointless to predict what the end price of bitcoin will be, as it can be anything between 0 and infinity. The OP just assumed 1 million in order to be able to draw a chart, but it could easily be 30.000 or 5 million as well.
/edit I didn't look at it before commenting, it's actually a pretty nice tool, however I'm not sure about its accuracy.
What about hti slinear model released by world bitcoin network yesterday, which predicts bitcoin will not reach a million per coin
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
http://worldbitcoinnetwork.com/BitcoinPriceModel-Alpha.html
So if the trend is correct and if it continues, now is the time to buy.
If we go from .50 below trend to .50 above trend in the next couple months...
If we go from .50 below trend to .50 above trend in the next couple months...
Either we do and the trend holds, or we go to only 0.3~0.4 above trend and we may need to slightly readjust the curve to fit again.
If we start having waves of -.5 to +0.4 it means the mean is not the mean anymore. Which could either mean adoption is slowing or the mean that was drawn here was too optimistic.
Hopefully we will hit +0.5 log delta though it would mean a nice value for bitcoin. Depending on when the peak hits it would be somewhere around $6000~8000
So if the trend is correct and if it continues, now is the time to buy.
If we go from .50 below trend to .50 above trend in the next couple months...
If we go from .50 below trend to .50 above trend in the next couple months...
is there a reason the spreadsheet has stopped being updated?
I just arrived at my summer home in the Colorado mountains, where I will escape Austin heat for a month.
The spreadsheet has been updated. Interesting that the trend price is growing at $25 daily.
I have one in Mind - Stephen is at Malla conference now;) just a guess.
You can always count yourself, just open the spreadsheet calculations, copy few formulas and enter market price. Vuola.. and you are independent
You can always count yourself, just open the spreadsheet calculations, copy few formulas and enter market price. Vuola.. and you are independent
is there a reason the spreadsheet has stopped being updated?
Interesting thread especially for newcomers 
Great thread Stephen. Thanks for starting it.. it's helped me really investigate what's possible, and encouraged me to add BTC permanently in my portfolio.
Bubble is not the correct terminology to be using for these upswings since the lows have never gone below the previous cycle high, yet.
They are more correctly waves, or super cycles, hype cycles perhaps ... but not bubbles, that's just plain wrong.
They are more correctly waves, or super cycles, hype cycles perhaps ... but not bubbles, that's just plain wrong.
You're technically correct of course, but the term bubble became pretty entrenched in our little group's sociolect, so it is well defined and means the right thing in this context one could argue.
I personally like to refer to it as "bubble cycles" to make clear that they are not bubbles in the conventional markets' sense, but that it's a repeating pattern.
Don't remember who posted about this ~6 months to a year ago, but he suggested to refer to it as "growth spurts". I liked that term/metaphor, but it never caught on, so "bubbles" it is for now.
I once wrote a post about this proposing the term "growth spurt". It was positively received but somehow the term didn't stick. I still use that term though.
That's a great term, I'll adopt it (will try to remember).
Specially because there is a lot of confusion about whether someone is calling bitcoin itself a bubble, or talking about temporary bubbles - growth spurts.
lets hope "history repeats itself" holds true.
Yeah, history repeats itself, first as tragedy, then as farce...
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