Topic: Stock-to-Flow Model: Modeling Bitcoin's Value with Scarcity - page 2. (Read 5758 times)

Even PlanB came out with a concession speech and proclaimed that his interpretation of stock to flow has been invalidated by the facts, the various underlying foundational principles of stock to flow still seem to be correct, even if some of the market dynamics contributed to BTC's price performance towards having peaks that were way lower than expected and then subsequent dips that went quite  bit beyond expectations.

Perhaps some real world events contribute towards facts that the establish that the projection axis has been shifted downward, but the model still might not be broken.

I consider the model to still have a quite a bit of validity in terms of figuring out various ongoing pulls on the BTC price that relate to ongoing adoption that has continued upwards price  pressures based on bitcoin's supply issuance, and sure maybe the rainbow chart captures various ongoing upwards pressures in similar kinds of ways.. but the stock to flow model still has some specific cyclical aspects that are built into it that show a bit more directionality within Bitcoin's spot price relationship in connection with changes in the supply. where as the rainbow chart just attempts to explain magnitudes of deviance from the mean..but does not have attempts to show how the halvenings might have some specific influences on some of the BTC price pressures.

I am no where really close to wanting to completely negate stock to flow - or to suggest that PlanB is some kind of a god or less than a god now because he is emotional and a bit of a waffler.. hahahahaha..

I can understand some of the frustrations with his changing the model so frequently and then understanding how that might defeat the purpose of suggesting that the model had any predictive power merely because it keeps getting changed.

For sure PlanB seems to have had incorporated quite a bit of predictive power to how the 200-week moving average tended to give some guidance regarding how far the BTC price might go up, but if we end up experiencing diminished BTC price peaks, then even the 200-week moving average is not going to be moving up at as fast of a pace as had been anticipated.  Even now, within the past week we had the 200-week moving average breached when it was about $22,300 and then movement 21% below the 200-week moving average with a so far price bottom of $17,953 but also seeming to take place at a weird place on the stock to flow cycle anticipations. .. including the breach of the 100-week moving average at $35k from nearly two months ago. 

At this time, the 200-week moving average is still moving up at slightly less than $30 per day and is at $22,371, and for sure the BTC spot price likely has a dragging down effect on that too.. and the 100-week moving average continues to move up too (at least for now) since it is a bit over $36k, but surely we know that the longer the BTC spot price stays below either of those two averages, there is going to be dragging down effects on them either in decreasing their rate of going up and also even per haps causing them to get closer to being flat.. so it seems to me that traditional assets do like to use those kinds of longer time-frame moving average indicators, yet it also seems that PlanB's incorporation of the halveniungs into his attempts to present what is going on in bitcoin had been (and has been) an attempt to tailorize some of those traditional financial tools into bitcoin.. so for me, even if some of the specifics of the magnitude of the movement ended u being off in a variety of ways, we likely still can be informed by what the model had been showing and how far the BTC price is deviating from some of the parameters of the model.. including whether the pattern might look the same as expected (or not) while at the same time appreciating whether there might be some additional phenomena that might be existing that might need to be plugged into the model or can that additional phenomena (to the extent that it can even  be identified) help to create a better model.. or do we give up completely and call planB, his model , and anyone defending either of those (including yours truly) a bunch of loonies.

I continue to have difficulties appreciating why so many folks get so worked up about the various ways that plan B is wrong and has been wrong and suggesting that bitcoiners had been mislead by information contained in his model and assertions that PlanB made i connection with the model.. blah blah blah... Oh and by the way, Plan B was not the ONLY one expecting BTC prices to go to $100k and beyond in 2021..and whether the planB ideas had subliminal effects.. I have my doubts.. even though all the time we see people putting too much credence into predictions that are intended to have probability assignments, and we also know that even if a model were to come out with 80% or 90% numbers, the 10% or 20% scenarios could end up playing out, but still would not necessarily take a way the value of having had the model/predictions..

so sometimes people will end up attributing 80% or 90% as if it meant 100% and 10% or 20% probabilities as if they were to mean zero.. hahahaha.. people can be simple (and short-sighted) like that sometimes.. but still does not mean that the model was not valuable and good even if people misunderstood it and even if the author of the model might have gotten some of the probabilities wrong or maybe even if the author seemed to have had exaggerated some of the numbers of the model because he was trying to incorporate some of the parlance of his speaking to be like normal people in their everyday speech patterns. which happens to be.. frequently speaking in absolutes.. that's what many normal people prefer to hear and want to pressure scientist into speaking the same way.. even if there might be probabilities contained therein and also when there might be some qualifiers contained therein, too... .but who wants to hear about the qualifiers?  People want the punchline, even if it might end up misleading them into failure refusal to prepare (psychologically and/or financially) for scenarios beyond just the punchline scenario(s).


Of course, there are links in terms of both BTC value and BTC price towards how various things in the real world might also be limited, and surely some things in the real world are more scarce than other things, and some things in the real world are more desired than other things, too.

Bitcoin has established a price over the years that could be undervalued or overvalued in terms of what some satoshis might buy you in the future or even today depending on where and how you might try to use it.

It is not even that the current value or the future value will be agreed upon, so some folks might be battling to attempt to establish current BTC prices or even to attempt to profit if they see a difference between value and price that they believe that they can get advantage from that or if they might find some usage of bitcoin in the present or even in the future..  There are going to be differences of opinion about both value and price, too..

There are also some examples of some use cases for bitcoin that might be somewhat price neutral so for example, maybe if someone wants to send $100 to El Salvador, they might find some value in using bitcoin/or lightning network to send that value because they believe that it saves them fees over other options that they have available, but they might not care too much about the current BTC  price if they are going to convert from dollars to BTC on the sending side and then back from BTC to dollars on the receiving side. Still has a connection to the real world but maybe not as dependent on bitcoin's scarcity in regards to figuring out value.

Even miners might have some of their incentives to mine based on bitcoin's scarcity, even though some of them might just want to mine bitcoin because it is profitable in their jurisdiction based on energy costs and other considerations, and the input of energy and other resources into bitcoin does also connect with the real world scarcity (or price) of energy and the availability of equipment to set up such an operation that also does not get set up on its own.. so scarcity of time and labor is actually another real world scarce input that can cause calculations regarding whether the current BTC price or expected future price (or future value) might motivate to continue to engage in mining or to conclude that the activity is not profitable enough or a way that such person wants to spend his/her own time, energies, and the various cost of inputs.

That’s deep and factua analysis on how the “pricing” and “minimum cap” might have been decided by Satoshi. Obviously we never calculated the factor of increased rates per item over the time since from raw materials to logistics, everything will become costly. This would be based on world economic growth, worlds GDP and many more things right?
Definitely we do not need unlimited Satoshi because we don’t want to stabilise the prices like stable coin so surely it’s limited, so prices would hike as the time will pass on.

A little bit of debate about Stock to Flow lately.

Firstly, PlanB showed a long awaited tweak on his model, plotting the price not against a lagged Stock to Flow, but agains an average stock to flow:



The fit is remarkably good in the past cycles, but of course at the moment it is still high undervalued according to model.

Is this an incredible buying opportunity ?is the S2F a broken model that should be forgotten?
I hope we will have a go at the model line, but this is only my gut feeling.

To be honest, considering how smart PlanB is, it doesn't seem to me to be a very wise decision on their part.

When the facts dismantle your theory, or model, the sensible thing to do is to write it off as invalid, not to keep remodeling it constantly. Although I understand that he will have invested a lot of time and effort in this issue, and giving up all that time and effort as useless is not easy emotionally.

Link or it did not happen.

 

At the moment the S2F model is having a few difficulties, and PlanB itself is finding new narratives to keep it alive.
Hopefully, we will be able to cross that S2F line again in the future!
(it's not a gamble, it' s a strategy)

Hello everyone and fillipone!

I would translate this topic created by you on the portuguese board (but they were faster than me lol)

Anyway, i'm sending this message to congratulate you for this excellent topic you created to share your knowledge 

A few years ago, I was studying technical analysis and discovered two relevant "types of indicators" which are the Stock-to-Flow Model and "2 Year MA Multiplier"
I don't know if in fact these types of indicators are 100% assertive! But I believe there is a possibility that we can get a sense of how this works (generally speaking)

If anyone wants take a look:
Please don't negative me or criticize me, I'm just sharing this topic that I created because it might be useful for another user

best,
gagux123

Gráficos p/ analise técnica - Stock to Flow / 2 Year MA Multiplier

I doubt that there is any reason to get overly anxious in terms of wanting the future to be rushed.

Seems to me that there are reasons to attempt to enjoy life as we go and the process as it goes.

I am not going to doubt that so many people get anxious in terms the NGU (number go up) technology to play out... yet not even that NGU technology is guaranteed.

Individuals vary so much, and frequently, I am not sure what our presumptions should be - except that if we are still in stages of accumulation than there should be some gratefulness that the price is staying down below expectations somewhat.  Maybe some guys believe that if the number just goes up, then they don't need as many coins, and in that case, they already have enough coins.  But is that really realistic to expect the BTC price to go up without any suffering along the way.

Some guys might just be inclined to suffer, and going to complain no matter what.  For example, "we only got a 3x to 6.5x and we have been stuck in the 3-5x territory for like forever.  I wanted moar!!!"

It's not good to have too many expectations, even though many of us likely realize that this bitcoin thingie is going quite well (even if it could have gone better) so far.

By the sure we "always have two years left" but depending upon what is being talked about. If there was a claim two years ago about the peak of the price likely happening at the end of 2021.. then there is a claim that 2 years has passed.  Now, there is a claim that there is a need to account for the average BTC price for the whole havening period, which ends up being two years from now.. but then there might be a question about did the peak happen or not.. No one is going to know, except to proclaim that the odds still remain pretty good that we still could get some kind of price peak that will bring our average price for the whole halvening period up to get closer to what either the old model or the new model predicts.  The old model said $100k.. so why back off of that unless you believe that the price has already spiked.. but then if the new model proclaims only an average of $55k, that will be easier to reach.




There gotta be some humor in some of this.



hahahahahaha - especially if we are talking about it could be model 1, or if not model 2, and if not model 3 might be o.k.. ; too...

By the way, the 100 week moving average is currently at $35k (which would be the average for the whole of this halvening so far), but if we take the average of the last 4 years, then we end up with the 200-week moving average which is currently at about $21,700, so can that average of the 200week moving average get up to $100k in the next to years, and if not the back up would be to say that we think that it may well only get up to $55k within the next two years.

In other words, PlanB's seeming flip flopping is not really helping matters... let's just continue to see what happens.. and actually I have no problem or gripe if the model ends up having an average that is either right on, underperforming expectations or overperforming expectations... .. directionally, both our 100-week moving average and our 200-week averages continue to move up... so everything seems to be working out fine, even if we cannot really know specifics with any kind of precision.. but what else is new?



Sometimes I am not sure if those "moving of the goalposts" claims are fair - or maybe sometimes PlanB has some presentation issues.

There has always been a kind of range of expectation, so if the ultimate price ends up falling exactly within the range of expectation, then Plan B looks like a genius, and if he reframes the expectations to attempt to conform with data as it is playing out, he is accused of both not being sufficiently scientific and also to be maintain a kind of rolling model rather than sticking with his earlier claims.

More moving of the goalposts.

This tweet was shared yesterday. PlanB just missed one day. He should tweet that post on May 3rd, 2022. We have always seen a smooth pump after halvings. He also wants to watch what Bitcoin does in the next two years. The following estimated halving time is May 3rd, 2024 (Exactly two years). Only 105,029 Blocks remain until halving. I am excited. I want to take a sleeping pill and wake up on 4th May 2024.

Finally PlanB returns tweeting about Stock to Flow!



Coming back to an older version of his graph, that better adapt to this delayed pump!
Mixed feelings.

I didn't have this understanding of the model, but it might be my fault on this. After all this is pretty reasonable looking at the graph, but he actually said first:"100K by December!"

As per the "Floor Model" that one is dead. PlanB himself admitted it failed and he won't use it never again.

I completely relate to this and I agree 100%.

I get confused too about what the hell PlanB had been saying at various points in time because he did get caught up in some seeming flaming wars and then too many specifics in his interpretation, sometimes.   

I believe that the S2F model has always said $100k as an average for the period.. but he mixed up his discussion of his "proprietary" floor model with his S2F model when getting into some of those specifics. .and I was never really any fan of getting into specifics..

Of course, staying within 1 SD is way better than getting into 2SD.. and probably if the BTC price spends too much time outside of 2SD or the edge of 2SD, there is some kind of tweaking that is needed with the model. 

I know that a lot of people say bitcoin is math and all that bullshit, but there are still a lot of weak aspects that cause BTC price to be both influenced by human behavior and to be manipulated by human behavior, so in that regard, I have no problem with any kind of model to be tweakable to account for actual facts as they play out... ... and I know that since my early days on the forum I would criticize quite a few members who had similar models to the S2F model and seemed to be too overly reliant upon math and trying to lock bitcoin price into some kind of exact (rather than loose) formula.

At the sake of redunancy, I still think that S2F remains amongst the best of the models that are out there, and even if there ends up needing to be some tweaking of what the average ends up being for this halvening period to have to reduce it from $100k to $80k or even to $60k, I doubt that there is any major issue from my point of view regarding those kinds of tweakings, if they were to have to take place.  I already mentioned that a mere ongoing trajectory of 75% annual increases in the 200-week moving average (which is completely consistent with overall historical numbers - and even low as compared with the 2021 performance of 130%), bring the BTC average price at the end of this halvening cycle to $88k... so the model is really not very far off, if we end up getting something like $88k - but even if it performs lower than that, we surely have to see how such performance ends up playing out before getting too upset about the model ... and even having problems in which we believe that there is some model that is actually in existence that would have come closer to being more accurate.

I do understand why you are less than excited about some of the ways that PlanB had been talking about his model, especially some of his arrogance in mid to late 2021, and then some of his seeming shifting of the narrative in late 2021.... and sure maybe he had been getting too caught up in absolute statements (which he is not completely innocent of that currently), so surely sometimes it does seem that he needs to take some of his emotions and some of his getting too caught up in specifics out of his model presentations and discussion of the model... in order to represent the model better.

Plan B is desperate to keep the S2F model alive, and I think he has a point, but as long as we keep on the 1sd+ Of the chart, the narrative can be hard for him.

Also I think it’s not completely fair to change the model conclusions: the said “100K by Dec 2021”, not 100K as Halving Era Average.
You all know how I like the man, but this delusional changes of perspective don’t make him honour.

Nothing too much going on with S2F recently - except that PlanB is still expecting the reversion to the $100k anticipated mean, and now he is saying "by 2023"... Interesting, no?

His most recent tweet:  "Both S2F and logarithmic regression point to $100K in 2023."




https://twitter.com/100trillionUSD/status/1493207617820315650

The main reason that I came to this thread was because I had been thinking about my earlier post regarding any coin/project/protocol would need to be more than 10x greater than bitcoin to displace it - like what I said here:


Today, I had been thinking further about this idea that any challenger has to be at 10x better than bitcoin in order to overtake it, because there are probably 100s or even 1,000s of shitcoins that have made various improvements upon bitcoin that would have been better than bitcoin if those features had been in bitcoin at the time of bitcoin's implementation, and if they are wielding features that are 50% better or some multiple better than bitcoin, whether we are talking about transactions or blockchain management, then surely bitcoin can absorb/adopt those features on level 1 or some other 2nd or 3rd layer, and part of the criticism of bitcoin may well be that it is NOT going to be able to implement/absorb or adopt such new and improved features because such features were not "built-into" bitcoin at the beginning... yet since there are people building their businesses around bitcoin (network effects), that particular feature is going to need to be 10x better in order to attract the network effects over to it, rather than bitcoin. 

Getting back to stock to flow, part of the criticism that S2F is not correct happens to have some presumptions that bitcoin is not strong enough in order to really have the empowerment of the scarcity that it says that it has, and shitcoins/projects are taking away from some of this scarcity (and going to displace bitcoin).

Hey, I have no problem moving myself over to some other project or coin if it is actually going to become the bitcoin displacer (and the new incumbent), but many of us already likely realize the reality of the matter to be that so many touted features in various shitcoins (supposed bitcoin killers) might appear "on paper" to actually be 10x better than bitcoin, but still those features have to be so clear and convincing to lure bitcoin's network effects over to them... which many of us likely can recognize the difference between touted features (snake oil salesmen - or on paper features) versus the real deal application of such features..

We also, likely realize that nothing is either close to bitcoin or even close to actually having 10x or better features than bitcoin that would inspire even laypersons to gravitate over to it (beyond those laypersons who are temporarily deceived into going over to such shitcoin project hoping that they will become a rich early adopter, just in case the network effects are coming over to their shitcoin rather than staying on bitcoin)..

BCH and BSV have served as pretty decent examples of how much better the BIG block ideas have been... and got a lot of normies (and even smart people) reckt who believed in the BIG blocker ideas.  Furthermore, their dreams of getting rich quicker through their new innovative BIG blocker coins have been snuffed out.  BIG blocks was not a better idea.. and surely not anything close to 10x better.

We are not going to quibble about which word to use are we?  You have already asserted your opinion that there was something wrong with bitcoin prior to the addition of LN.  I don't agree with you, but you have your right to whatever assessment you want to make, even if it leads you into what I believe is a ridiculous way of assessing the matter...

From my perspective, that kind of thinking has a lot of muddled with BIG blocker nonsense talking points, and they were wrong about a lot of things - even if you want to continue to carry some of their underlying values by perpetuating some of their talking points, that's up to you.



First, our reality is that we do have a world with LN and a variety of other potential second layer solutions, so I see little need to speculate in this regard about the non-existence of LN and various second layer solutions.. they are a reality and a part of bitcoin's progressive journey in development (and not even necessarily any kind of outrageous surprise, either).

Second, maybe it can be helpful to consider bitcoin in terms of hypothetically what if this had not happened.. sure I will give you that..even if it is not seeming to be very in touch with actual on the ground facts.

Third, perhaps you have listed most of bitcoin's possible use cases absent LN/second layer solutions, and sure we agree that bitcoin is a success just with those.... if that happens to catch everything.


Maybe.  Perhaps.

Seems like a bit of a nonsense and detached from facts speculation, and I don't see how fruitful it is.

Maybe I have been too traumatized by too many trolls and disingenuine posters in the past.  They post about so many pie in the sky outlandish possible scenarios that could happen, and sure it is true that those things could happen, but we have more likely scenarios 1, 2, 3 and 4 and they are not even discussed, instead we devolve into talking about pie in the sky scenarios 5, 6, 7, and 8.  I don't find that as very good use of my time.. and it seems to devolve into thread cluttering.. taking us away from the more important and more likely scenarios 1, 2, 3 and 4.


Ok... no problem.  Bitcoin has more use cases with LN (and other second layer solutions) than without LN (and other second layer solutions).. agreed.


Hard to know.  There was a particular path that the 2015-2017 block wars took, and at some point in late 2015, Peter Wuille suggested Segregated Witness, which had been a problem that he had already been working on for another context, and it seemed to end up fitting well with resolving some of the blocksize and transaction issues that were perceived in late 2015.. and furthermore, Luke DashJR had made some kind of proposal to be able to accomplish such upgrade as a softfork rather than a hardfork, so that took bitcoin's development in that direction..

Whether the blocksize and scalability wars during that time were serious or trivial, they were about more than just scalability  and there were governance issues in the mixed way in which the matters were resolved and the solutions came about. It seems a bit weird to just attempt to talk about those kinds of resolution of the problem matter and about how bitcoin ended up resolving without putting it in the proper context and merely suggesting some kind of abstract problem about scalability - because scalability resolved in a direction in which it is never really completely resolved, but seems to be something that is going to continue to come up from time to time in terms of whether some adjustments might need to continue to be made along the way... and whether they are dramatized in the future or not is still to be seen.. I would imagine that there is going to continue to be some drama around these issues because not everyone agrees with how bitcoin is going and there are also ongoing attacks from within, too.



For sure, open source is interesting, and some proposed solutions might be before their time, but become more relevant at a later date.. and yeah, sometimes the funding is questionable, and sometimes developers might be lured towards projects to get paid rather than not paid, but we do have some seemingly benevolent funders in bitcoin, too... and we have a lot of people working on solving matters that they perceive as problems (issues) for free too.  Maybe aspects of our discussion here fits in this category, too?  Perhaps?



We have to see where the price goes first.  So I don't see how fruitful it is to say that if the price goes down instead of up, then we have to reassess S2F and perhaps pronounce it as dead at that time.  O.k... fine no problem...


but you seem to really be saying that "I am already anticipating that we are going to need to proclaim S2F to be dead by next year, so I am going to get ahead of the game, and pronounce it dead early."

Surely, you can pronounce it dead early if you like.  That's up to you.  I would rather just wait it out, and see how the data plays out before proclaiming it to be dead, and so at this time, from my perspective, we seem to have a valid S2F model that happens to currently be in a status of underperformance of expectations.  Maybe it will catch up?  maybe it will not?  I give few shits.. If it does it does, and if it does not it does not, but it seems to still be fairly on course, even if there is some current underperformance, so I am not going to be throwing it out and making up some other pie in the sky bullshit when S2F still remains quite explanatory.. even with its current underperformance status.  You are free to assess however you like and to prematurely throw it out and then have to come running back with your tail between your legs because you had been too rash.. I don't know if that will happen, but still I will proclaim those throwing out S2F and spouting out all the various ways S2F is dead don't even understand what the fuck they are talking about.. that's my continued perspective.



Yes... we seem to be beyond getting repetitive on this aspect.



Yes.. we have beaten this whole thing to death a bit more than either of us might be able to further tolerate and either of us could keel over if we continue.   

Well, I didn't really want to say something like "inadequate". However, we don't know what Bitcoin's final niche will be. Without LN, its best case scenario could have been a popular Internet currency for remittances, international e-commerce and some saving/speculation. This would also have been a "success".

But with second layers like LN, the maximalist and ultra-maximalist scenarios (i.e. Bitcoin as the main value mechanism of the world) have become possible, which before weren't, at least not if we assume that users should use decentralized mechanisms.

So what LN changed is not a question of "success" / "not success" or "adequate" / "inadequate" but a question of the maximum "grade" of success Bitcoin can achieve, which largely depends on the user base it can attend.

The problems related to Bitcoin's scalability aren't trivial at all, so it may have been possible that something like LN was never discovered. For example, second-layer development initially centered on sidechains, but even 6-8 (or more?) years after the first sidechain concept we haven't a working decentralized model for Bitcoin (Drivechain is cool, but its still, after several years, in its absolute infancy and has still to prove its usefulness). However you're right that "developer network effect" matters and there are a lot of incentives to find solutions for Bitcoin's problems (Bitcoin millionaires can fund development, etc.).

OK.

I even agree here with you that it's still premature, perhaps I wasn't clear enough in the last post. The scenario where the S2F-based price prediction diverges fundamentally from the real price evolution is a long term scenario. The next year we can't say its prediction has failed, purely from analyzing price.

But what we can, is look at its basic hypotheses which sustain it, and that's where I think it fails. But yeah, I think my point was already made clear enough.

You could make a blockchain where all coins are mined in the first year, and then miners only collect transaction fees. I think these things were already attempted (albeit mostly with premined shitcoins, which changes a lot I think). But I totally agree here: it will be 99,9% fail because of Bitcoin's already big advantage. And yeah:

Completely d'accord.

Agree here too, mostly - Bitcoin's incentive model is very well thought out, and I think the way the halving cycle is designed is also a component of its attractiveness. The only problem I have is with the predictive value of a model which only (or mostly) takes into account the supply fluctuations originated by halvings, and not other (imo more important) factors.

I believe we can close this discussion, we simply disagree on the weight we would attribute to the halving cycle (and thus, S2F) for price predictions.

Sure, I am personally familiar with such history, including the blocksize wars, and I really doubt your thesis that LN saved bitcoin from itself as a potentially deficient network.

Of course, LN brought additional value to bitcoin, yet a vast majority of the power of bitcoin was already embedded in its original design.. and sure, over the years, the various software updates have brought additional value, utility and abilities to continue to build on such an innovative and paradigm shifting phenomena that had already gone live in 2008 with the issuance of the whitepaper, and January 3, 2009 with the mining of the first block.

I am not very receptive to your assertions that bitcoin was materially and sufficiently inadequate prior to LN, segregated witness, taproot or any other subsequent and ongoing incremental innovations.. and for sure over the years, bitcoin's software development in terms of both power and useability are just part and parcel of one of the network effects related to development of the software, developers and ongoing developments that have been ongoingly taking place over the last 13 years + of bitcoin's existence.



You can see it how you wish, and I don't even feel inspired to battle you further on these matters because I believe that I have already largely responded.


From my perspective, that seems like a pretty lame explanation, but hey, you are free to believe what you like.



No reason for me to even address these... and like I said, you and a variety of other people have the right to get on whatever various tangents that you like in terms of attempting to understand where we are at, how we got here and where we might be going....


Fair enough.


Your deeming of the models failure does not mean that it failed... Again.. do what you like, but it seems quite far from failing, like I already asserted several times.



Maybe?  We are not even two years into this particular halvening period that S2F projects to average $100k for the whole halvening period.. so yeah.. perhaps the BTC price is going to continue to diverge, but as far as I can tell the model seems to be pretty much on schedule, or pretty damned close to being on schedule.

Maybe it is worth it for me to reiterate this one more time.  Largely S2F is attempting to project that BTC prices will average $100k for the whole of this particular halvening period.... so for sure, half way through the halvening period the actual price is way undershooting the projected $100k BTC price for the whole period..

Looking at the 104-week moving average (which is the average BTC price for the past two years), we can see that currently the 104-week moving average is at about $32k..

And if we look at the 208-week moving average (which is the average weekly price for the last four years), we see that it is at about $19,500, so for sure, the 104-week moving average already shows an already existing average that is way below $100k, and the 208-week moving average has a decently long way to catch up to get to $100k by the next halvening (during this halvening period)...

From my perspective it is way the hell too premature to be writing it off as if it were impossible or if it were a lost cause, blah blah blah... Even if we were to stick with a relatively historical average of how the 208-week moving average has been moving up, we are seeing that the 208-week moving average has historically moved up about 75% per year (and last year the 208-week moving average moved up around 130%)(look at my projection of the 208-week moving average)...

You can also look at specific dates of the 200-week moving average as compared with spot price on this website.
seems like a bunch of S2F deniers wanting to both de-emphasize S2F and to cause people to get distracted by a bunch of non-grounded whimsical nonsense who keep wanting to denigrate the importance of S2F, and as I already said several times, there is a lot of factual price movement that still lines up with S2F, but likely S2F is not the only reference to explain factual/logical based context for where we are at, how we got here and where we are likely going.



By the way, if we continue to get something like 75% appreciation of the 208-week moving average in the coming couple of years, that will still get us to around $88k by May 2024, which would hardly cause me to want to throw out S2F as if it were broken in any kind of meaningful way... even if it may well need to get tweaked to account for the data, rather than the projection of the data... .

I will also admit that it may well be a bit too presumptuous to project that the 208-week moving average is going to continue to move up at an average of 75% per year, but hardly seems as if there is any kind of urgent need to rush out and fix it.. because surely we can watch the data as we go and to see if the 208-week moving average continues to move up at that pace or a likely lower pace as bitcoin continues to mature and its overall market cap continues to grow... 


Nothing wrong if you can figure out ways to project the future BTC price more accurately.. no one is going to denigrate you for that.. but still seems to me that S2F is going to end up playing some kind of ongoing meaningful part, even if it might become lesser and lesser of a part.


Well.. attempted to be explained in a kind of everyman way, even though still based on attempting to scientifically plot out the data points and to describe the underlying logic in scientific terms that are framed also in layman ways of expressing it.


He plots out the weekly moving averages.. or is it the monthly?  whatever... it accounts for enough in my opinion.. why overcomplicate matters with too much (if any) irrelevant baloney.


Still seems that S2F would play a part, but of course, miners might have a variety of ways of calculating their business considerations and some miners likely cash out on a regular basis and other miners save more of their coins.  I believe the last couple of years, some of Saylor's ideas have become more pervasive in mining in terms of contributing to more of them attempting to hold onto more of their coins... and of course, there are going to be quite a few variables in terms of size of operation or even how long that they have been in it and even some of their geographical/jurisdictional concerns with the miners.


Sure.. Several have tried over the years, but there does not seem to be a whole hell of a lot of evidence of long term success of any of the shitcoins in that direction, so far... and you are free to bet on whatever horse that you like, including getting involved with various ongoing smoke and mirror sham imitation snakeoil projects.  Lots of folks get diverted in to such nonsense, and some make money through it too... again, seems like further noise to me, but lots of rich snot-nosed 14 years olds would laugh in my face regarding all the money they made in their baloney ponzi schee or money printing "creative" projects.



Hard to get even more scarce than bitcoin, even though some of the bullshit NFTs like to market themselves as such... but likely to find out that there is something about security through bitcoin as compared with whatever various chain some of that supposedly scarce baloney is propagated and marketed...

By the way, scarce is important, but liquid is important too.. and bitcoin has both and still building.


Seems that miners building around bitcoin have some better assurances than if they build around other projects, even though there are some miners who are creative in their switching abilities.. and so yeah, it could take 10, 20, 50 years to wind out a variety of these bouncing around of hashpower.. even though it seems that bitcoin is not even close to having anything with something close to rival it. the china mining was a good test of bitcoin's hashpower fluctuations in 2021.. and now bitcoin is back to record high hashpower, which seems to show that incentives to mine bitcoin seem to be working.. unless it is some kind of BIG ploy.. which it seems to NOT be because bitcoin mining hashpower does seem to have quite a bit of geographical diversity and even diversity in those controlling the mining.. even though it is not 100% transparent, either. 

Bitcoin mining does not seem to be broken in any kind of substantial or meaningful way, and I will again venture to assert that it is quite likely that there are a lot of very strong incentives that have already been designed into the reason that miners want to mine on bitcoin, including its openness, scarcity and difficulty adjustments that help for the measuring and monitoring of the network.

I'll try to explain why I think that these details matter. To be brief I'll center on one example: Lightning Network.

Bitcoin until 2018 (when LN was first implemented on mainnet) had a massive scalability problem. This would have limited its use cases a lot - only 1-2% of the world population, in the most optimistic scenario (nobody spamming nor using BTC more than a handful of times) would have been able to make a single transaction per year (be it for commerce, or savings, or speculation) if a second layer solution wasn't available.

LN changed that, to the extent that it is now possible to "onboard" the whole world (with some trickery like channel factories and user management, but it will work eventually). This means that a technical achievement, which can't be explained by S2F or other simplistic theories, immensely enlarged the potential user base. This changes the potential maximum value of the network and thus the whole potential price growth equation.

In my opinion even these small examples already invalidate a mostly S2F based approach. I'm also pretty much sure that the price increase of 2021 was only possible because of the positive scalability situation LN has generated. Scalability issues are no longer a threat to Bitcoin's overall viability.

Here's an article (not by me) that mentions other examples:

I don't rule out to eventually build such a model. But first I'd like to investigate if there are other models already made which go in the same direction.

The "noise" has the potential to make the whole model more robust. PlanB has published his model in 2019. Basically his model "worked" until mid-2021, thus for two years (because the events before are better explained by his magical constant). If the price now continues to diverge from the S2F model, we can conclude that it's not an adequate model, to say it friendly.

If we find, however, the correct "noise" components then the model could be more flexible, in the sense of reacting to a slower or faster demand curve.

Yep, you're right - this is what I mentioned as the "post-halving rally expectation". Basically the idea is very simple.

And here I disagree again. His model is too static to be "meaningful", in my opinion.

That's good.

If I say to a newbie "Invest in Bitcoin, it will has an inmense adoption potential" instead of "Invest, because of S2F", then I'm not "witholding information". I would of course not withold the information about the scarcity model itself (halving cycle etc.), as I've stated already in this discussion, I consider a solid scarcity model a basic requirement for every "currency" or "asset". But why should I mention a model I consider wrong?

I however agree with the rest of what you wrote in that section about DCA/newbies.

For me "why so many folks are fighting to get int (mine it)" has a much simpler answer: because mining is a profitable business model. Bitcoin's scarcity is, again, the requirement for that to work. Miners obviously know about Bitcoin's scarcity model. But not necessarily because of S2F or generally a rising price prediction. They would be also happy if the current price/profitability simply continues.

I think it wouln't be easy for any altcoin operator to "steal" relevant hashpower from Bitcoin, because of all the advantage (above all regarding brand image and network effect) it has accumulated over the years. But if I wanted to try hard, I would focus on demand stimulation. Because the other way around (providing an even "more scarce" coin, e.g. one with completely fixed supply) has failed every time it was attempted.

So no, I don't see scarcity as the main incentive for providing hashpower. It is only the pre-requisite for any potential demand increase/adoption to work (because only if it's scarce, it's an asset), but it isn't the dominant price-predictive indicator for me.

As I read through your above description, I was considering whether I should attempt to critique point by point or to even go into my own attempt at an overview perspective regarding various causal factors, and overall, I just find it too self-selectively problematic to be attempting to be going through those various single/multiple causal factor explanations when they are better overviewed the three dominant prominent and currently credible BTC price dynamics models of: 1)  stock to flow curves, 2) hype cycles (such as 4-year fractal - which is redundant with S2F) and coupled with 3) exponential s-curve adoption based on Metcalfe principles and network effects.  

To me, it continues to make little sense for you to be wanting to continue to be getting caught up in the various nonsense short-term explanations regarding how demand might have increased or decreased at various points in time including how public sentiment might have also changed based on various fluctuating macro factors and even the behaviors of various rich people/institutions and governments coming into the space to talk up the BTC price and through their own concrete actions of increasingly buying BTC, too... which surely these folks coming into the space - as well as the various shitcoin snake-oil salesmen imitators influencing the bitcoin space (and the
BTC price in various ways) have been kind of inevitable too..and part of network effects in regards to financialization, speculation and developmental experimentations.

In other words, I just see you getting caught up into too many details of various single/multiple cause explanations that fail/refuse to really account for overall dynamics of the three BTC price model considerations/framing that are the most relevant.


Well if no one has made such modifications and modeled it out, then what is stopping you?  personally it comes off as adding a whole bunch of noise that may or may not make much of a difference.

I already stated that I acknowledge that a lot of the ideas of PlanB and his stock to flow model already existed in BTC prior to PlanB coming on the scene in early 2019.. PlanB merely formulated such ideas in a data-driven way that helped a lot of people to potentially consider BTC price dynamics in better ways including considering limited supply dynamics in a better and more meaningful framework.

Personally, I have also never placed all of my eggs in the stock to flow basket - not because I find it wrong, but probably for reasons similar to you, I believe that it lacks some explanatory angles including a need to reemphasize the four year fractal and also a need to supplement considerations of network effects and Metcalfe principles.  I am not placing my overall framework into any comprehensive model, but I do believe S2F remains part of the best of frameworks when coupled as part of a three part package...and for sure some variance in there too in terms of there is an expected mean price, but the actual price can deviate quite far above or below the mean price which would not invalidate the model but only possibly cause it to either need more time for the whole matter to play out (and catch up to the mean) or maybe the men has to be tweaked to some extent.. perhaps? perhaps?  but no need to throw out the whole model when it explains a whole hell of a lot already...

and yeah, you d5000 can add your various variables to stock to flow in order to better explain it - and hopefully you are able to do it in a somewhat comprehensive way because it is pretty damned vague as you are currently explaining what you are going to add and how it is going to be added to perhaps tell us where we have been historically in terms of where we are at now and where we are likely to be going.


Well you can withhold information if you like and provide some vague ideas, and sure of course, everyone has to figure out for himself/herself whether to get into bitcoin and how to go about it.  Another thing is there are various levels of both receptivity and willingness for normies to actually look into any matter that you might spend time presenting/explaining to them.   A lot of newbies and normies out there in society do not even closely know what the fuck bitcoin is, even if they had heard about the name.. and they can maybe describe it from some kind of theoretical perspective, and surely it can take a very long time for them to actually even learn how bitcoin is differentiated from the various kinds of shitcoin projects, IPOs, Meme coins, DeFi marketed nonsense, NFTs - and some people will learn by getting distracted into nonsense, and a few will be able to focus on bitcoin right from the start to learn about bitcoin first - but still might get tempted into various distracting nonsenses about various shitcoins and also various shit theories about how bitcoin got to where it is (price and otherwise), where bitcoin is at currently (perhaps actual price compared to potential price) and where it is likely to go (various ways to attempt to accomplish expected value (ev) calculations).

Part of my point is that we can choose how much to share with folks regarding our own journey into bitcoin and our historical or current practices, and even spending a lot of time with folks in discussing these matters might cause them to remain apathetic or failing refusing to act.. and surely getting started with DCA'ing can at least get some folks started and inspire them to attempt to learn more about bitcoin.. not always but sometimes.  People are busy with their own lives and sometimes it can take a whole hell of a lot of time just to see that someone actually takes an active stance to start DCA'ing into bitcoin and to spend some time learning along the way (might have to move something else out of their schedule, no?.. not easy for any of us.. even if we are a student, for a variety of reasons we might not have bitcoin on the list of topics that we are aiming to learn first).


Seems to be a pretty strong piece of evidence of real world behavior of power behind the idea of securing the network and securing the ideas of bitcoin's scarcity as one of the rules.. of course, there are some other rules too that are enforced.. and if you do not attempt to account for how much power is going into bitcoin, you may well misunderstand (or misappropriate) what is bringing value to it and why so many folks are fighting to get it (mine it) and to have their various ongoing mining operations in place all over the world.. the running of nodes too - enforces the scarcity rules.. you going to try to change bitcoin?  or say some other system can challenge it?  better look at trying to steal (or co-opt) some of that hashpower.. how do you do it? incentives?  scarcity incentives?  cycles of bitcoin issuances and reduction of supply with the passage of time?  incentives for providing hashpower in bitcoin seems connected to the way supply is structured in bitcoin to me.