Stephen Reed's Million Dollar Logistic Model - page 25.

mestar

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Quote from: BitchicksHusband on January 16, 2014, 06:50:54 PM

Quote from: mestar on January 14, 2014, 08:26:38 PM

So, all the electric power utilities in the world start accepting Bitcoin. Still, US uses about 2$ billion worth of oil daily, and that is approximately how much energy would Bitcoin network use. In other words, an ecological catastrophe.

There wouldn't be 1 billion miners. I mean there are probably over 1 billion credit card users today and it's not "an ecological catastrophe".

That's because all the card processors in the world put together don't use 1 billion dollars worth of electricity, do they? Which is what would happen to the Bitcoin network, if price rises to 1 million dollars per Bitcoin.

BitchicksHusband

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Quote from: mestar on January 14, 2014, 08:26:38 PM

Quote from: BitchicksHusband on January 14, 2014, 08:00:49 PM

You do realize that this situation would be full adoption, meaning that there will be 1 billion users and every store would take bitcoin, right?

OMG, everybody has to come up with $1 for bitcoin every day on average.

So, all the electric power utilities in the world start accepting Bitcoin. Still, US uses about 2$ billion worth of oil daily, and that is approximately how much energy would Bitcoin network use. In other words, an ecological catastrophe.

There wouldn't be 1 billion miners. I mean there are probably over 1 billion credit card users today and it's not "an ecological catastrophe".

SlipperySlope

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Stephen Reed

Quote from: pungopete468 on January 15, 2014, 08:49:20 PM

One point I would like to make is that there aren't 20 million Bitcoins available at this time nor will there be in 2018. So given this information the chart would need to be adjusted accordingly to account for a given market capitalization figure.

If there were a 2 trillion market cap with 12 million available coins the value would have to be more like 166,666 per BTC.

Right!

The logistic model merely tracks bitcoin price not market capitalization. The latter comes into to play when figuring out a plausible probability distribution for the maximum high price when bitcoin speculation is fully adopted.

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One point I would like to make is that there aren't 20 million Bitcoins available at this time nor will there be in 2018. So given this information the chart would need to be adjusted accordingly to account for a given market capitalization figure.

If there were a 2 trillion market cap with 12 million available coins the value would have to be more like 166,666 per BTC.

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Quote from: SlipperySlope on January 15, 2014, 01:37:16 AM

Quote from: mestar on January 14, 2014, 07:47:33 PM

Ah, the cool $1 million per Bitcoin in 2018. Let's see what this means.

If miners decide to sell all their mined Bitcoins, (or 50%), this is how much daily fresh money is needed on the exchanges for the price to be stable:

2014-2016 : $3.6 billion ($1.8 billion if 50% sold)
2017-2020: $1.8 billion ($0.9 billion)
2021-2024: $0.9 billion ($.45 billion)
etc.

So, if Bitcoin is $1 million in 2018, good luck in finding that daily one billion dollars. (0.3$ trillion in a year). Dr. Evil would be proud.

I too wonder about the consequences of what the log trendline suggests. If and when bitcoin prices reach $1 million in 2017 and top out, there should be 50% adoption by the population of speculators. By way of clarification I mean not full adoption by the underlying economy, rather of the people and institutions that will ever purchase bitcoin as a speculation, half of them will have done so by 2017.

In 2017 the block reward will be halved from the current 25 to 12.5. At the rate of 6 blocks solved per hour, the daily block reward totals 1800 bitcoin, thus requiring $1.8 billion to buy all mined coins at $1 million apiece.

Total daily retirement savings in the US is about .5 to 1 $billion according to the Investment Company Institute. And given that only a fraction could reasonably allocated to Bitcoin, the majority of the daily required $1.8 billion will come from other sources including non-US retirement savings and especially I believe - merchant trade and the foreign exchange market.

Just a note, this looks like it could be northern hemisphere summer (or fall) 2016 vs 2017.

BitDreams

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Quote from: David Rabahy on January 15, 2014, 03:25:18 PM

*If* every newly mined coin were immediately sold then the exchange rate won't be as high as if they are held instead.

*If* the Bitcoin exchange rate runs up to $1,000,000/BTC then I sincerely doubt a significant fraction of newly minted coins are being sold at that time.

Can we measure the proportion of newly minted coins being moved through an exchange?

Thanks for pointing that out. Trade Volume vs Transaction Volume Ratio @ https://blockchain.info/charts/tx-trade-ratio is something I'm going to start watching.

A detailed explanation here: http://codinginmysleep.com/measuring-bitcoin-speculation/ which I've only given aa quick read.

That might help?

Newly minted coins would likely be originating from the large mining pools but they change those addresses. Receiving addresses of miners are less likely to change and probably exhibit specific behaviors that might help to quickly identify the pool addresses.

I agree, especially when the hashing power race is mature, the more Bitcoins are worth, the more likely people want to hold them.

A bit off topic, but his site has many interesting statistics not tracked anywhere else: http://www.bitcoinpulse.com/

SlipperySlope

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Stephen Reed

Quote from: David Rabahy on January 15, 2014, 03:25:18 PM

Can we measure the proportion of newly minted coins being moved through an exchange?

I believe that mining pools obscure the transaction trail that originates with the new block reward. If payments to participating miners were sent from a well-known pool address, then an analysis of the blockchain should be able to figure out what proportion of the block rewards are rapidly spent.

I suppose that lacking a sound analysis, a poll of miners might suggest the proportion that you requested.

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*If* every newly mined coin were immediately sold then the exchange rate won't be as high as if they are held instead.

*If* the Bitcoin exchange rate runs up to $1,000,000/BTC then I sincerely doubt a significant fraction of newly minted coins are being sold at that time.

Can we measure the proportion of newly minted coins being moved through an exchange?

FiatKiller

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Quote from: SlipperySlope on January 15, 2014, 01:49:09 AM

Quote from: el_Tico on January 15, 2014, 12:13:48 AM

The energy expenditure would be distributed throughout the world. Also it would be necessary to support such a large network.

I would think that the network would save energy in comparison with the current system.

Agreed, and I believe that to forestall action by efficiency-minded governments, the bitcoin proof-of-work mining algorithm could be re-engineered to save electricity. One naive notion I have is that a finite number of digital medallions could be sold by consensus miners which entitle the bearer to mine bitcoins. Or jurisdictions could forbid or otherwise restrict mining, e.g. no mining anywhere electric power is government subsidized, or mine off-peak hours only.

I agree that the "waste" of electricity will come to a head at some point. Did you see more and more places won't even let you warm-up your car? It's getting ridiculous. Not sure how they will police this - mandatory inspections if you use over a certain amount maybe?

SlipperySlope

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Stephen Reed

Quote from: el_Tico on January 15, 2014, 12:13:48 AM

The energy expenditure would be distributed throughout the world. Also it would be necessary to support such a large network.

I would think that the network would save energy in comparison with the current system.

Agreed, and I believe that to forestall action by efficiency-minded governments, the bitcoin proof-of-work mining algorithm could be re-engineered to save electricity. One naive notion I have is that a finite number of digital medallions could be sold by consensus miners which entitle the bearer to mine bitcoins. Or jurisdictions could forbid or otherwise restrict mining, e.g. no mining anywhere electric power is government subsidized, or mine off-peak hours only.

SlipperySlope

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Stephen Reed

Quote from: mestar on January 14, 2014, 07:47:33 PM

Ah, the cool $1 million per Bitcoin in 2018. Let's see what this means.

If miners decide to sell all their mined Bitcoins, (or 50%), this is how much daily fresh money is needed on the exchanges for the price to be stable:

2014-2016 : $3.6 billion ($1.8 billion if 50% sold)
2017-2020: $1.8 billion ($0.9 billion)
2021-2024: $0.9 billion ($.45 billion)
etc.

So, if Bitcoin is $1 million in 2018, good luck in finding that daily one billion dollars. (0.3$ trillion in a year). Dr. Evil would be proud.

I too wonder about the consequences of what the log trendline suggests. If and when bitcoin prices reach $1 million in 2017 and top out, there should be 50% adoption by the population of speculators. By way of clarification I mean not full adoption by the underlying economy, rather of the people and institutions that will ever purchase bitcoin as a speculation, half of them will have done so by 2017.

In 2017 the block reward will be halved from the current 25 to 12.5. At the rate of 6 blocks solved per hour, the daily block reward totals 1800 bitcoin, thus requiring $1.8 billion to buy all mined coins at $1 million apiece.

Total daily retirement savings in the US is about .5 to 1 $billion according to the Investment Company Institute. And given that only a fraction could reasonably allocated to Bitcoin, the majority of the daily required $1.8 billion will come from other sources including non-US retirement savings and especially I believe - merchant trade and the foreign exchange market.

el_Tico

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"Fly you fools"

The energy expenditure would be distributed throughout the world. Also it would be necessary to support such a large network.

I would think that the network would save energy in comparison with the current system.

mestar

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Quote from: BitchicksHusband on January 14, 2014, 08:00:49 PM

You do realize that this situation would be full adoption, meaning that there will be 1 billion users and every store would take bitcoin, right?

OMG, everybody has to come up with $1 for bitcoin every day on average.

So, all the electric power utilities in the world start accepting Bitcoin. Still, US uses about 2$ billion worth of oil daily, and that is approximately how much energy would Bitcoin network use. In other words, an ecological catastrophe.

BitchicksHusband

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Activity: 378

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Quote from: mestar on January 14, 2014, 07:47:33 PM

Ah, the cool $1 million per Bitcoin in 2018. Let's see what this means.

If miners decide to sell all their mined Bitcoins, (or 50%), this is how much daily fresh money is needed on the exchanges for the price to be stable:

2014-2016 : $3.6 billion ($1.8 billion if 50% sold)
2017-2020: $1.8 billion ($0.9 billion)
2021-2024: $0.9 billion ($.45 billion)
etc.

So, if Bitcoin is $1 million in 2018, good luck in finding that daily one billion dollars. (0.3$ trillion in a year). Dr. Evil would be proud.

You do realize that this situation would be full adoption, meaning that there will be 1 billion users and every store would take bitcoin, right?

OMG, everybody has to come up with $1 for bitcoin every day on average.

mestar

sr. member

Activity: 407

Merit: 250

Ah, the cool $1 million per Bitcoin in 2018. Let's see what this means.

If miners decide to sell all their mined Bitcoins, (or 50%), this is how much daily fresh money is needed on the exchanges for the price to be stable:

2014-2016 : $3.6 billion ($1.8 billion if 50% sold)
2017-2020: $1.8 billion ($0.9 billion)
2021-2024: $0.9 billion ($.45 billion)
etc.

So, if Bitcoin is $1 million in 2018, good luck in finding that daily one billion dollars. (0.3$ trillion in a year). Dr. Evil would be proud.

SlipperySlope

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Stephen Reed

Bitcoin Merchant Adoption - Influence Diagram

Here is a diagram of the situation resulting from more merchant adoption of Bitcoin, that I drew. Each of the situations could be measured, i.e. observed. The directed arrows indicate a postulated causal relationship in a Bayesian inference model.

The diagram is shared here.

SlipperySlope

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Stephen Reed

Quote from: wobber on January 08, 2014, 05:05:01 AM

What software have you used to graph this?

Google Drive is a cloud based facility for shared documents. I used their spreadsheet function - familiar charting operations and very easy to share via a URL. The one drawback for my purposes is that Google charts do not directly support log axis scaling, so I must compute log 10 values for charting.

https://docs.google.com/spreadsheets/d/1VoVBIO0WDMRnB_GzjykZ5iAR4Bd7ODyPaPTDGh3LeMo

wobber

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What software have you used to graph this?

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BitDreams

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Re: "users are more willing to bid up the price of bitcoin" -- I'm in this camp. I started buying Feb in 2013 if I recall with my most recent purchase in December. I'm pretty sure that any coins I purchase this year will be used to replenish what I spend.

Re: 'SWIFT' -- could adopt Bitcoin and campaign with 'All the money in the world handled by all the nodes in the world'.

Topic: Stephen Reed's Million Dollar Logistic Model - page 25. (Read 123190 times)