p = price
n = number of unique addresses (a more relevant proxy for and than number of users)

If n at 150,000 is 33% too high above the bottoms trendline since 2012 (use a ruler on the "All time" plot), and if p is tracking n^2 per Metcalf's Law and Peter R's chart, then a 0.67 x 0.67 = 0.45 of recent price could be expected.

If I understood Aminorex's point, the correlation that Peter R's chart upthread showed is predominately n^2 driving p, because n^2 has more structural significance than p.

In other words, either just purely mathematical a n^2 term in a polynomial has more weight than a n term (because for example in the first derivative the n becomes constant, i.e. no velocity only position and I think Aminorex is also looking at it from a statistical math framework), or I added some real world interpretation noting that network effects (e.g. the creation of Bitpay and Coinbase) is reflected in those n^2 connections. Reed's law says that as n is nodes in network, maximum connections is n^2. Changes in price can't make Bitpay and Coinbase disappear. Thus n^2 has more significance than p.

Yet I am pointing out that probably p has some reverse feedback on n (the number of unique addresses, i.e. proportional to users), because some users react to price and sentiment considering that they entered because of a pumped up media blitz in November. So as p declines, n can decline on the margins.

And the correlation of the charts seems to say this is true on all the prior p crashes the n dropped (did Peter R show a chart back to 2011 so we can see if it is always proportionally to n^2 on the p declines?).

One could argue that something else beside p change caused n to drop which caused p to drop. I find that intuitively difficult to support because p is so important to the feeling of the users especially at this stage when Bitcoin is primary a speculation vehicle and not a utility vehicle like a washing machine or the internet. Do we want the internet to go up in price? No we use it because of utility. Bitcoin is not at that stage yet.

creekbore, I am now convinced by aminorex's explanation (changed my mind) and I now think my point about unused addresses is irrelevant, as it is just part of the n^2 network effects.

However, I am still thinking p has some reverse feedback on n on the margins.

I understand n^2 has more structural significance than p because it represents network effects. (connections between nodes are indicative of network effects at play)

I am thinking p has some influence on n on the margins, specifically the weak hands speculators.

The degree of this feedback would be proportional the overextention of weak hands due to irrational exuberance.

High IQ statement.

The trendline on the bottoms of your chart since Jan 2012 is below 100,000. Probably need to come back to that before we can move up again.

We are 33% too high.

Not if p is driving n. I think confidence and sentiment drives n, at least on the margins (there is probably a fundamental low frequency trend on n on which the marginal higher frequency is superimposed). Everyone was super bullish, now they are in the process of denial and trying to adjust to the new sentiment. Some of those n will throw in the towel, but they will be replaced by the stronger hands from the lower frequency trend. Then eventually those weak hands come rushing back in again.

Okay then you agree that chart is inconclusive for us at this decision point?

Note your chart correlated with the prior major crashes.

We already saw a decline on your chart correlating with the dump from $1200 in December. And now we see another decline on your chart starting recently. So now all aspects are corroborated.

So as I wrote upthread, the marginal price drives the adoption not the other way around. In other words as the speculative sentiment shifts, the adoption follows.

Edit: The number of unique address on your chart has diverged from the BTC price since February. One of the two has to capitulate to the other soon. Perhaps that is the confusion (Risto referred to) that has been holding the market up (or down depending on your perspective).

Isn't value more important than quantity.

The longer I used Bitcoin starting in 2013, the more addresses I had. I think I may have left dormant addresses with very small BTC balances and have since forgotten about them. Possibly more and more transactions to self in different accounts, or more and more smaller accounts, e.g. remember Coinbase has a feature where someone can email someone some BTC and that person claims it by signing up with Coinbase.

Did Peter R's Metcalf law fit use value of transactions or number of transactions?

I don't think the fundamental adoption has any correlation with the dives in the price as you can see on your chart above. Actually your chart does show a correlation in April 2013.

Ah I just looked. Exactly as expected. There are the two spike bull traps, then the third crash down to below the prior bubble's peak. Same chart pattern.

You just provided an example of my point about the market psychology, "It is different this time, this is unique so don't apply usual market analysis".

No offense intended, I used to be a silver tinfoil hat dude too.

For silver when the Fed started the massive QE in 2009, that was the Koolaid the silver bugs needed to run the price from $9 up to $49 (and run the silver to gold ratio down to low 30s). Now the reality has hit that hyperinflation has never and will will never occur in a reserve currency.

For Bitcoin when the press pumped out the news of the USA Congressional hearings lovefest and China's growing interest past Fall, then the Bitcoin bugs took that to mean it was going to the moon. Now the reality has hit that China Inc. is trying to suppress Bitcoin and Bitcoin can't become a currency without governments agreeing not to tax it with capital gains (as if we didn't know that before, but if I tried to tell people they told me to shut up and got nasty with me).

I suggest to Risto that he run his trendline fit on silver and see if the trendline was predicting silver would be several $100s by now? Trendline fitting is like any TA, it is correct about 50% of the time.  

I expect a U bottom on Bitcoin, not a V. So every time we see a V, I will expect it is another bull trap. Perhaps the V traps are because everyone is thinking along the line-of-thought as if Risto's trendline is gospel and we are already behind where the price "should be".

First rule of speculation, never ever tell yourself something is impossible. That is when it will bite you in the arse. We have to look at all the possibilities especially when the only evidence we have is some arbitrary trendline fit.

Again I could be wrong about all of this. Just sharing. Don't sell based on what I wrote then get angry at me if I am wrong.

I should take a look at the shape of the chart for the crash in 2011 where all the early adopters were sure Bitcoin was going to moon.

One thing I've learned is don't be in a rush to buy bottoms that come after big bubbles, because there will be many bull traps.

Since no one answered, I took a moment to look at the long-term BTC chart with volume turned off:

http://bitcoincharts.com/charts/bitstampUSD

And the 2000-2014 silver chart:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

I see a correlation wherein the mini-bubble 2008 crash of silver V bottomed, but the much grander bubble of the 2011 made two spike bounces off of $26ish, then on the third time down it crashed through to $18 which is below the prior high of the 2008 peak at $21 (and lately it has made two V bull traps and I bet preparing to go lower than $18 because the dollar will be getting very strong as Fed tapers and capital runs from emerging markets to dollar in a virtuous, symbiotic upward spiral).

We see the same with BTC comparing the 2013 crash from $270 to $50 where it basically V bottomed up to $170, then U bottomed at $70 going into the bubble later in 2013. This second bubble has spiked twice off of $400.

So folks, my bet the bottom is going to be below $270.

The reasons I think it is valid to compare these two markets is because:

• Both tiny market caps.
• Both more or less the same white male retail investors who hate central banking.
• Similar psychology of an irrational expectation, with silver based on expectation of hyperinflation and BTC on it becoming a currency.
• Similar media amplification between crashes leading to more greater fools on the second one.
• "It is different this time, this is unique so don't apply usual market analysis".

I don't know what probability to access to my expectation. I will think about it perhaps. Certainly correlation doesn't prove anything and this is not a certain outcome. Just sharing.

sgbett I agree entirely. We have the same philosophy. The masses should be free to enslave themselves. I want a way we can opt-out (and opt-in to the free market) as an alternative option of joining the power trippers who capture the authority.

My frustration should be only when I think discussion has turned from debate of falsifiable statements into reputation battles. I prefer not to entirely opt-out of all discussion.

I agree with you when people use religion to deny reality. Religion can also be a form of mind control, i.e. propaganda. However you might not agree with the following. The Bible also seems to be all about respecting property rights and avoidance of idoling collectives. Even Jesus said don't pray in church rather in your closet (Matthew 6:5). It seems the problem is people conflating wisdom and religion. The Bible is about the former in my opinion and speaks against religion, but many or most interpret it other ways, e.g. as a crusade to browbeat and look down on others. And atheists are so frustrated with that, they've closed their mind to the wisdom therein. Both ridicule each other, but the atheists I think do it with more venom lately (e.g. "is Dumbo the Flying Elephant your creator"), although let's not forget the brutality of the Inquisition. I have no problem with atheists nor Christians (Muslims, Hindus, Buddhists, Taoists, etc), for as long as they don't stomp on diversity nor be overly judgmental. Jesus said he hung out with the sinners because that is where the most benefit could be attained. There is no perfect. We are all different so the ecosystem can anneal to diverse scenarios which are ongoing simultaneously.

And isn't it neat that we are all different. Always something new to meet and experience.

(I don't want to get into the woman's rights issues that revolve around Muslims, etc, as it is more complex discussion that I don't have time for right now. Just suffice it to say I am all for both men and woman being happy and excelling, but science and actual measured performance also informs us that the genders are not equally suited to all the same things and remember I want both genders to be happy and excel, not fail because we expect them to be the same. There is much discussion of this here, such as how feminism is really a way to be economically privileged, i.e. towards totalitarianism.)

Question: Will it be a U or V bottom, i.e. will the bottom be there only for a very short duration or will it slowly rise off the bottom?

What did it do last time?

sgbett, perhaps we may find we agree more than we both realized on our initial exchange.

I don't view this as one aristocratic lineage in control. There is much competition and failure amongst those who vie to capture the power vacuum of democracy. And they may fail entirely during epochs, e.g. the Dark Age returned it to feudalism so warlords had more power than Kings.

Rather I think the NWO is the natural evolutionary outcome of human desire for collective governance. This power vacuum of democracy forces centralization of power.

I covered this process in more detail (made an analogy to organisms in a Petri dish) in my essay which CoinCube referred to in his Economic Devastation thread:


In any case, this is why I am trying to eliminate (or reduce is more realistic) the ability of society to tax. I think that is the only way to break free from that power vacuum and arrive at a society based on free market competition.

There is much fear and misunderstanding from readers who think this would be worse. For example they conflate crony capitalism with the free market, etc..

This is all covered in great detail in my past writings on this forum. And I don't have time to repeat the discussion again.

Hope that helps our misunderstanding and apologies for losing my cuth upthread.

I am hoping CoinCube will write a book on all this, because I am obviously not patient and articulate enough to prevent misunderstandings.

P.S. perhaps you can detect from my writings today, I am not feeling ill today. Happy productive day and I can concentrate.


Add: I forgot to insert this motivation in one of my posts today. If we become wealthy, we can avoid the terrorism tsuris when we travel. A free market is developing to serve us.

There are percentages (not all) who overextended or lose confidence. This is human psychology in all markets.

Also there are those who think they can get back in at a lower price and lower their average basis. Like playing chicken, who will blink first and last.

You are ignoring my point about marginal supply and demand sets price.

We can't use fundamental demand arguments during a speculative move.

The lower the price goes, the more panic selling among those who bought at higher nosebleed levels during the 2013 bubble.

At what price did the huge surge in new buyers come last year? Looking at a volume x price chart from 2013 should tell us where the bottom should be.




You ignore and did not address the point.

Also all jurisdictions are classifying Bitcoin as a commodity or property that is subject to capital gains tax. (It is irrelevant to my point, but Obama and EU are planning to raise taxes to 70%).

Bitcoin will continue to have value because it is an ignorance bubble among white male fanatics. It will also have value because it is the liquid backbone of exchange for an ecosystem that will solve the above problem with altcoins that are superior to Bitcoin. Bitcoin will also grow in value because it is the NWO coin and the governments are going to be promoting it and the institutional players will chime in with government compatible offchain services that eventually get the blessing from the government and exclusions to tax hurdles in order to increase mass adoption. At that point, Bitcoin will be effectively a fiat system. Any way, Bitcoin is already controlled by a few people.

Bottom line is Bitcoin will bottom and then the price will go up again. It is an investment but not a solution to what we wanted idealistically. But it is a necessary stepping stone.




Those bad guys wielded widespread power to pull off what they did and get the entire world to change into a police state against terrorism, yet you attribute relative impotence to them.

Have you not seen the billboards for example in London urging citizens to report anything they see, because of the threat of terrorism. Have you not traveled and seen that nearly all public venues (malls, airports, etc) have security guards that have hissy fits if they see even a hang bag laying unattended.

Or I guess that global coordination was just a random outcome.  

You ignore the overt efforts of for example David Rockefeller who travels the globe working on the global coodination, such as his Trilateral Commission, the Council on Foreign Relations, and the Bilderberg group. These are all real institutions for global coodination.

You ignore that corporations and media all over the world push this junk science of man-made global warming. Just a random, uncoordinated outcome eh?  




Stay away from that thermonuclear idea. That is outlandish and planted to make us look like kooks.

The best hypothesis I've seen thus far is the buildings were brought down with detonated Thermite cutting charges planted on the steel beams. There is much evidence of this, in spite of the steel was quickly shipped to China to be melted to destroy the evidence. The Thermite (which melts steel) is why it burned hot for weeks as can be seen by aerial IR photography. The melted angle cuts can even be seen on photos of beams from the rubble.

One problem I have with the Thermite hypothesis is that how could timing of the cuts be so tightly coordinated to obtain the free fall implosion onto self. Perhaps the Thermite was combined with traditional demolition charges. I haven't followed the detailed developments much in many years because the evidence is mostly destroyed and my understanding is satisfied based on other analysis that the government's story was impossible. Knowing we've been lied to and that it required some form of demolition is sufficient to prod me into the activities I am doing now to defeat this slide into totalitarianism.

Wall Street Journal Online - The Coming Financial Crisis


Reply here:

https://bitcointalk.org/index.php?topic=455141.msg5990966#msg5990966

If you feel the need to comment on this post, you can click the link to the following thread to reply there. For the moment, I am discouraging replies by keeping this thread locked because I am trying to not get involved in long debates. Have work to do.


Let's differentiate between anonymity and privacy.

Anonymity means that no one can know some aspect of your identity, e.g. you might decide to reveal the name of your company but never who runs that company.

Privacy means only some people know some aspect of your identity, e.g. the merchants you buy from may know your account number but otherwise not public unless revealed by one of those merchants.

Anonymity is a more secure form of privacy because there is no trust involved, because no one knows what you have not revealed to anyone.

So I can choose to trust a merchant who reveals its name and stakes its reputation on that name, without needing to know who owns that merchant. The key here is that prior bad outcomes don't follow the owner to new ventures. So history of performance of a merchant becomes paramount.

If I don't want to trust a merchant to deliver the goods, the merchant and I can agree on a 3rd party escrow agent with multisig on payment (both I and escrow agent must sign for payment to be transferred to merchant). Again no need for the escrow agent to reveal his/her true name rather the historical reputation of a pseudonym will suffice.

Ditto on contracts, arbitration agents can be chosen on contract signing.

In short, our personal identity can be orthogonal to our business performance identity.

This allows us to fail and start over again. It is very forgiving. And it keeps the government, conniving attorneys, and the Kangeroo court system out of our business.