Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 26449.

wachtwoord

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Quote from: Dump3er on August 17, 2014, 11:47:19 AM

It's time to launch the rocket, guys! Look! We are building up our launchpad!

This time everything will be different (saying this since 1200, but hopefully nobody has taken notice.) C'mon guys, last chance for cheap coins!!! (as every day). Buy, buy, buy! (Sounds like promotion for a pyramid scheme but, yeah, you know...)

Boooom!

Please lockup the definition of a pyramid scheme so perhaps you look less foolish in the future.

blade87

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Quote from: ShroomsKit on August 17, 2014, 10:55:57 AM

Quote from: blade87 on August 17, 2014, 10:06:05 AM

Quote from: Wandererfromthenorth on August 17, 2014, 09:33:13 AM

Quote from: Patel on August 17, 2014, 09:29:57 AM

Bubble's flight has been delayed. Scheduled arrival: November

These are my thoughts exactly. If a new bubble/rally ever comes that is.

Yes if. I wonder the same. Because if everyone is expecting another bubble, can one happen, at least so soon? It's like the perfect trap. And the longer the delay, the worse things will get in this market. It's looking by the end of September, if we're either going to be at $500-$550 (right on target to approach the next bubble) or somewhere around $400 and looking to fall below that.

At some point this bubble trend will break and when it does it's going to be a long bear market. The last two bubbles did have some very large sell offs before they began (as in very temporarily breaking the long term trend) so it's just so hard to predict right now.

What bubble trend? We are already in a bear market. We have been for 8 months now.

Convert the entire price history of BTC into log scale and you will see. There are 3 very giant steps (bubbles) that have occurred with BTC periodically. We are right about now crossing the long term low trend line of all of it. This is what pretty much everyone is expecting - that BTC will bounce soon (sometime within the next 2 months) and begin a new giant step somewhere to $2000-$5000. But the majority reasoning is that "because it has happened before it will continue to happen" type of mentality is not good reasoning.

With that said BTC has had some great adoption this past year, so I am leaning towards it will happen again, as I hardly consider a few companies accepting BTC anywhere near full potential adoption. BUT, every single past bubble has had a major sell off that occurred right before it took off. That's why it's going to be so damn hard to predict and get right no matter what happens over the next month.

Dump3er

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It's time to launch the rocket, guys! Look! We are building up our launchpad!

This time everything will be different (saying this since 1200, but hopefully nobody has taken notice.) C'mon guys, last chance for cheap coins!!! (as every day). Buy, buy, buy! (Sounds like promotion for a pyramid scheme but, yeah, you know...)

Boooom!

mmitech

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things you own end up owning you

Quote from: justusranvier on August 17, 2014, 11:36:01 AM

Quote from: mmitech on August 17, 2014, 11:19:00 AM

what does that mean P= (M * V)/T assuming that the velocity will be much lower and transactions much higher then the price will:

a) stay somehow stable if transactions and adoption are almost equal.
b) rise slowly, with no bubbles whatsoever if the adoption is slightly more than the transactions.
c) can even drop a bit if adoption slow down and current holders start using it as a currency

which confirm the theory above "the use of bitcoin will increase 1000x, therefore the price will rise 1000x, I believe the first part, but I don't think the second part follows necessarily", dont you think ?

First of all, you're doing it wrong.

P is not the exchange rate of the currency - it's the price of good and services.

With M approximately constant, and with V approximately constant, increasing T means that the cost of good and services priced in Bitcoin will fall, a.k.a the purchasing power of a bitcoin has increased.

ah so with P he meant a price of a good... mmmmm let me try to read in wikipedia the whole definition.

mmitech

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things you own end up owning you

Quote from: oda.krell on August 17, 2014, 11:33:24 AM

Quote from: mmitech on August 17, 2014, 11:22:24 AM

I still dont get how the price will rise if V is low, P= (M * V)/T means the greater V is the greater the price is, isn't it ? the case when the price will be high: if Transactions are low and both or one M or V rise greater than T.

Velocity of money is defined as: V = T / M

(see: http://en.wikipedia.org/wiki/Velocity_of_money)

For simplicity, we assume no. of coins in circulation to be constant, so we equate price with M. We can rewrite the above as: M = T / V, so it becomes clear that M ("price") decreases as V increases.

Or maybe I misunderstood the question?

the OP said M * V= T * P

M is the money supply which is 13 million and right now inflating with the rate of 10%.
V is the velocity or the frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period
T represent the number of transaction in the network.
P represent the price of a Bitcoin.

everything else just Math: P= (M * V)/T so in order that Price raise the Velocity has to grow faster than the number of transactions, this means adoption has to grow really fast and number of transactions must stay lower than the rate of velocity in order for the price to raise.... this is what I thought ?

justusranvier

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Quote from: mmitech on August 17, 2014, 11:19:00 AM

what does that mean P= (M * V)/T assuming that the velocity will be much lower and transactions much higher then the price will:

a) stay somehow stable if transactions and adoption are almost equal.
b) rise slowly, with no bubbles whatsoever if the adoption is slightly more than the transactions.
c) can even drop a bit if adoption slow down and current holders start using it as a currency

which confirm the theory above "the use of bitcoin will increase 1000x, therefore the price will rise 1000x, I believe the first part, but I don't think the second part follows necessarily", dont you think ?

First of all, you're doing it wrong.

P is not the exchange rate of the currency - it's the price of good and services.

With M approximately constant, and with V approximately constant, increasing T means that the cost of good and services priced in Bitcoin will fall, a.k.a the purchasing power of a bitcoin has increased.

oda.krell

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Quote from: mmitech on August 17, 2014, 11:22:24 AM

I still dont get how the price will rise if V is low, P= (M * V)/T means the greater V is the greater the price is, isn't it ? the case when the price will be high: if Transactions are low and both or one M or V rise greater than T.

Velocity of money is defined as: V = T / M

(see: http://en.wikipedia.org/wiki/Velocity_of_money)

For simplicity, we assume no. of coins in circulation to be constant, so we equate price with M. We can rewrite the above as: M = T / V, so it becomes clear that M ("price") decreases as V increases.

Or maybe I misunderstood the question?

Threebits

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Is it saying, the more bitcoin is used, the more pressured price is?

mmitech

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things you own end up owning you

Quote from: oda.krell on August 17, 2014, 11:10:43 AM

Quote from: mmitech on August 17, 2014, 11:03:07 AM

Quote from: oda.krell on August 17, 2014, 10:56:45 AM

Quote from: mmitech on August 17, 2014, 10:43:27 AM

I couldn't explain it better than a member of the Slovenian Bitcoin Association, so I am quoting his post.

Quote

The conclusion is that price will stay unstable due to increasing adoption? I'm not so sure. At least it need not rise proportionally to adoption... One quite simple way to look at this is Fisher's formula for velocity of money: M * V = P * T.

M is money supply (fixed in case of bitcoin), T is num of transactions (rising in orders of magnitude). So to keep the equation balanced, the price (P) can rise but so can V (velocity of money, "frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period"). Velocity has so far in history been rather stable, but given the usefulness of bitcoin for transactions (not very disputed even among critics), I wouldn't dare say V for bitcoin is going to be stable or at the same approximate level as for regular fiat money.

That's why I'm uneasy about projections like "the use of bitcoin will increase 1000x, therefore the price will rise 1000x". I believe the first part, but I don't think the second part follows necessarily.

Not a completely bad point, but in order to compensate for growing adoption, V would need to keep on rising. Exponentially, to compensate for exponentially rising adoption/usage. Not likely. Probably impossible in fact, considering the technical limitations and tradeoffs of the network.

In a thread a while ago, I made a (relatively simplistic) argument that, if Bitcoin is used as a method for Internet payments (and only for that) on the order of yearly Paypal volume today - a comparably modest goal, I'm sure you'll agree - and making a few extremely conservative estimates for the necessary parameters involved (including V), we arrive at a valuation of around $2000 per unit. The single biggest not-so-conservative assumption I am making is that those transactions are actually taking place on chain, not off chain, which could be an (unfortunate, because trust requiring) development.

(Link to my post, the calculation is under Addendum #2)

Back to the topic: I set V_year = 10, which is a conservative value considering that actual velocity of Bitcoin is probably a lot lower currently. M1's V_year seems to be able to reach into the range of 10 (WP link), but usually is lower, so if the Bitcoin network would be stable anywhere 10 it'd be a) pretty efficient, and b) the argument you mention, that increased adoption and usage doesn't lead to proportionally higher valuation, doesn't hold.

the only way to know how this theory will work in reality is to sit-back and watch how things will develop, although it would be really hard to get "real" numbers, but estimates could do as well.

Agreed. But to highlight the main point of my argument (like you did in yours Cheesy

) - we don't know yet exactly what V_year for the network will be, in the long run. If it's very low, theoretically per unit price would go up - only, it wouldn't because it would mean the network is too inefficient (at least a payment method). If it's very high, that'd depress unit price, but it'd be an incentive to use, because it would be efficient. The only thing that is unlikely enough to call it impossible is that V could somehow "outgrow" even moderate adoption - considering that right now, we are actually seeing the opposite problem, that is: the unsolved question how to make Bitcoin scale to size as a global transaction network (block size limit being the main point here, to my knowledge).

I still dont get how the price will rise if V is low, P= (M * V)/T means the greater V is the greater the price is, isn't it ? the case when the price will be high: if Transactions are low and both or one M or V rise greater than T.

Wandererfromthenorth

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Whatever happens to BTC and cryptocurrencies, whether you're rich or broke, it's interesting and exciting to be a part of this whole thing.

Painful Truth

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Quote from: adamstgBit on August 17, 2014, 11:14:00 AM

last chance to buy below 500?

That´s the spirit!

It is still weekend though.

mmitech

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things you own end up owning you

Quote from: justusranvier on August 17, 2014, 11:07:52 AM

Quote from: mmitech on August 17, 2014, 10:43:27 AM

I couldn't explain it better than a member of the Slovenian Bitcoin Association, so I am quoting his post.

Quote

The conclusion is that price will stay unstable due to increasing adoption? I'm not so sure. At least it need not rise proportionally to adoption... One quite simple way to look at this is Fisher's formula for velocity of money: M * V = P * T.

M is money supply (fixed in case of bitcoin), T is num of transactions (rising in orders of magnitude). So to keep the equation balanced, the price (P) can rise but so can V (velocity of money, "frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period"). Velocity has so far in history been rather stable, but given the usefulness of bitcoin for transactions (not very disputed even among critics), I wouldn't dare say V for bitcoin is going to be stable or at the same approximate level as for regular fiat money.

That's why I'm uneasy about projections like "the use of bitcoin will increase 1000x, therefore the price will rise 1000x". I believe the first part, but I don't think the second part follows necessarily.

V will be lower in a Bitcoin world than in a fiat world.

Right now inflation artificially increases V by encouraging currency holders to spend today rather than lose purchasing power tomorrow.

what does that mean P= (M * V)/T assuming that the velocity will be much lower and transactions much higher then the price will:

a) stay somehow stable if transactions and adoption are almost equal.
b) rise slowly, with no bubbles whatsoever if the adoption is slightly more than the transactions.
c) can even drop a bit if adoption slow down and current holders start using it as a currency

which confirm the theory above "the use of bitcoin will increase 1000x, therefore the price will rise 1000x, I believe the first part, but I don't think the second part follows necessarily", dont you think ?

abercrombie

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óÔÔò ʕ·͡ᴥ·ʔ óÔÔò

Threebits

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That's why I'm uneasy about projections like "the use of bitcoin will increase 1000x, therefore the price will rise 1000x". I believe the first part, but I don't think the second part follows necessarily.

-----------
That's quite advisory. Increasing user was not the only element for price, velocity is as well. If user increases and circulation quickens, price will not necessarily increase! Anyone comment on this?

Phillis

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Quote from: adamstgBit on August 17, 2014, 11:14:00 AM

last chance to buy below 500?

likely, i'd like to see a nice short squeeze and i am anticipating one.

adamstgBit

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Trusted Bitcoiner

last chance to buy below 500?

oda.krell

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Quote from: mmitech on August 17, 2014, 11:03:07 AM

Quote from: oda.krell on August 17, 2014, 10:56:45 AM

Quote from: mmitech on August 17, 2014, 10:43:27 AM

I couldn't explain it better than a member of the Slovenian Bitcoin Association, so I am quoting his post.

Quote

The conclusion is that price will stay unstable due to increasing adoption? I'm not so sure. At least it need not rise proportionally to adoption... One quite simple way to look at this is Fisher's formula for velocity of money: M * V = P * T.

M is money supply (fixed in case of bitcoin), T is num of transactions (rising in orders of magnitude). So to keep the equation balanced, the price (P) can rise but so can V (velocity of money, "frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period"). Velocity has so far in history been rather stable, but given the usefulness of bitcoin for transactions (not very disputed even among critics), I wouldn't dare say V for bitcoin is going to be stable or at the same approximate level as for regular fiat money.

That's why I'm uneasy about projections like "the use of bitcoin will increase 1000x, therefore the price will rise 1000x". I believe the first part, but I don't think the second part follows necessarily.

Not a completely bad point, but in order to compensate for growing adoption, V would need to keep on rising. Exponentially, to compensate for exponentially rising adoption/usage. Not likely. Probably impossible in fact, considering the technical limitations and tradeoffs of the network.

In a thread a while ago, I made a (relatively simplistic) argument that, if Bitcoin is used as a method for Internet payments (and only for that) on the order of yearly Paypal volume today - a comparably modest goal, I'm sure you'll agree - and making a few extremely conservative estimates for the necessary parameters involved (including V), we arrive at a valuation of around $2000 per unit. The single biggest not-so-conservative assumption I am making is that those transactions are actually taking place on chain, not off chain, which could be an (unfortunate, because trust requiring) development.

(Link to my post, the calculation is under Addendum #2)

Back to the topic: I set V_year = 10, which is a conservative value considering that actual velocity of Bitcoin is probably a lot lower currently. M1's V_year seems to be able to reach into the range of 10 (WP link), but usually is lower, so if the Bitcoin network would be stable anywhere 10 it'd be a) pretty efficient, and b) the argument you mention, that increased adoption and usage doesn't lead to proportionally higher valuation, doesn't hold.

the only way to know how this theory will work in reality is to sit-back and watch how things will develop, although it would be really hard to get "real" numbers, but estimates could do as well.

Agreed. But to highlight the main point of my argument (like you did in yours :D) - we don't know yet exactly what V_year for the network will be, in the long run. If it's very low, theoretically per unit price would go up - only, it wouldn't because it would mean the network is too inefficient (at least a payment method). If it's very high, that'd depress unit price, but it'd be an incentive to use, because it would be efficient. The only thing that is unlikely enough to call it impossible is that V could somehow "outgrow" even moderate adoption - considering that right now, we are actually seeing the opposite problem, that is: the unsolved question how to make Bitcoin scale to size as a global transaction network (block size limit being the main point here, to my knowledge).

dropt

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Quote from: fonsie on August 17, 2014, 11:06:33 AM

So this is another scam account from fallling?

i would say so.

justusranvier

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Quote from: mmitech on August 17, 2014, 10:43:27 AM

I couldn't explain it better than a member of the Slovenian Bitcoin Association, so I am quoting his post.

Quote

The conclusion is that price will stay unstable due to increasing adoption? I'm not so sure. At least it need not rise proportionally to adoption... One quite simple way to look at this is Fisher's formula for velocity of money: M * V = P * T.

M is money supply (fixed in case of bitcoin), T is num of transactions (rising in orders of magnitude). So to keep the equation balanced, the price (P) can rise but so can V (velocity of money, "frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period"). Velocity has so far in history been rather stable, but given the usefulness of bitcoin for transactions (not very disputed even among critics), I wouldn't dare say V for bitcoin is going to be stable or at the same approximate level as for regular fiat money.

That's why I'm uneasy about projections like "the use of bitcoin will increase 1000x, therefore the price will rise 1000x". I believe the first part, but I don't think the second part follows necessarily.

V will be lower in a Bitcoin world than in a fiat world.

Right now inflation artificially increases V by encouraging currency holders to spend today rather than lose purchasing power tomorrow.

fonsie

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Quote from: Chuckee on August 17, 2014, 11:00:24 AM

Quote from: Hunyadi on August 17, 2014, 10:56:35 AM

Quote from: Chuckee on August 17, 2014, 10:54:01 AM

bulls still don't get it! the bubble has not been "pushed back". it's not going to happen!

people aren't going to magically start investing billions of dollars into bitcoin in November or whenever you'd like to believe just because of some bullshit numerology.

Yet another newbie knows it better! Shocked

http://www.firstpeople.us/pictures/bear/1600x1200/High_Five-1600x1200.jpg

I clearly do since I've been warning you all for weeks about the impending downtrend and nobody listen!

So this is another scam account from fallling?

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