In a simple model, the on-chain transaction volume is proportional to the square of the number of participants, so yes I subscribe to the Meltcalfe's law. We are offering the same views from different angles and getting to the same conclusion that the network is growing.

But also in my opinion both the number of transactions and the number of unique bitcoin addresses used (which are the indicators cited by the Meltcalfe's law supporters in rpietila's threads) are probably getting inflated by more mixing going on now than in the past, so to me they are not as reliable indicators in order to size an economy as the estimated USD transaction volume is. The latter is calculated by blockchain.info with an algorithm that keeps change addresses into account. The algo can also be fooled with coinjoin, but fooling it is not guaranteed to inflate the numbers.

The crash happened before Gox insolvency.
On-chain transaction volume lagged a few days behind the bubble pop.

My assumption is that the on-chain transaction volume (the red line in my chart) is the summation of 2 components:
1. Speculation
    - this includes transactions between personal wallets and exchanges
2. Economy:
    - mostly dark markets because they are the only place where non-cultists need to use bitcoin instead of fiat. These transactions are all definitely on-chain not through payment processors.
    - payment for digital goods (e.g. porn) is our next hope (because of insane chargeback ratios in that specific business)
    - remittances are insignificant atm because bitcoins are way too complicated for e.g. sending money to a wife in Nigeria
    - purchases at normal merchants, for cultists only because using fiat is honestly easier than using bitcoins

During price rises, the blue line leads the red line, because in the euphoria  of the moment, the red line is mostly made of speculation not true underlying economy. During bubble pops, the mania is over and many are reluctant to sell, a bit like real estate markets in some countries in Europe: prices are slowly declining because people are reluctant to sell at a loss and buyers are not interested at high prices, so the volume drops to a trickle. So the speculation component in the red line drops fast and the blue line lags a lot behind the red line. This will keep going until the supply can sustain the non-speculative economy, which as of today is still very slowly increasing in size, my guess mostly thanks to the dark markets.

So we will get there. According to the red line, a bitcoin today is worth 234$.

I learnt about bitcoin on November 2011 (but invested much later) so I wasn't there to see the carnage and desolation of the time.
I have been through the April 2013 bubble and took out 100% profit in fiat (and some sanity back) in the aftermath. I have seller's remorse, just a tad. Then during this last bubble pop I have had more success trading, but the prolonged bear market has caught me off guard twice in a row. Then I stopped trading. I still have more coins than I had when the November bubble popped.
So far my reason for staying bearish lies in the coincidence between now and 2011 that I see in this chart I made below.



In a way I made my own cult. It's called "cult of the red line". I believe that when the red line will rise above the blue one, then the blue one will have to follow and bring BTCUSD up. For now my cult says that there still are too many coins around and not enough takers.

Wow, that was the quickest ignore ever.

No. Coins in cold storage. Stopped trading a couple of months ago. My coin count is unaffected since then.

Methinks: if a certain market bottom (or top) is taken for granted by the majority, it likely isn't granted to happen at all.
In fairness I still see a likely bottom around 250 but I don't discount a quick dip below 200.
Not that I'm going to take any coin out of cold storage because of this.

Who knows. Maybe some Chinese have discovered a new way to convert CNY->USD through a combination of Circle and something else...

Never say never.

There could be a quick and painful dip below 266.

Personally I am hodling on cold storage atm but were I not doing so, in order to try and sleep safe at night (lol @ this... as if that's even possible when most of your money is a number in a bitcoin exchange), today I'd leave a catch-all bid at 280$.

Long climb or not, BTC USD price has always been asymptotically proportional to the estimated transaction volume in USD which is slowly rising even while the price is declining. There will be a time when the transaction volume will be enough to sustain the price. That will be the bottom.

The article makes g ood points, methinks. But the reference to bitcoin in that last sentence feels almost forced if not 100% out of the blue.

Just braggin'

Hi guys,

I just preordered one today. It is denominated in USD I think (because Xapo did not really give me an option to choose the denomination). Which is fine for me - I'd use it for buying from non EU-based shops.

Can you share your experiences? How long did it take from preorder to arrival?

Extrapolation from my own stupid chart says $280 is the bottom, in a couple of depressing months from now. This might change, of course.

No, I am not selling any coins. I understand that in order for bitcoins to get legitimacy, they need to be spendable. People need to start thinking of prices in coins not fiat. And I'd love to put some of mine to work e.g. spend some on paying bills and buying groceries. But none of those options are available to me.

Xapo cards are unreliable and hard to obtain atm. Xapo said they will send them out with USD, EUR or GBP denomination but so far they only send them out with denomination in USD. So even if I used one of these to pay for groceries, I'd have to pay currency conversion fees from my currency to USD. Compare to my supermarket (not me) paying the debit card purchase fees to the debit card processor.

With bitcoin I can order takeaway food, which is unhealthy and more expensive than me cooking at home, especially considering I am a good cook   Also takeaway.com does not have as much of a choice of places as a bigger competitor here - which does not take bitcoins.

I can order gadgets from abroad on Overstock/TigerDirect - but I get ripped off on shipping expenses and customs. Besides, I buy lots of non-food stuff in my favourite Chinese marketplaces that don't take bitcoins because stuff is way cheaper over there. Simply put: no one beats AliExpress, once you know exactly what to search for and once you can tell most scams from the good stuff.

Maybe I can buy flights and hotel accommodation with Cheapair/Expedia (I say maybe for the latter because I do not know whether they take bitcoins from EU customers) - but then again I can as well do the same with Skyscanner/Trivago and a credit card and I generally find better deals.

I can go to the only bar in town that takes bitcoin - but in fairness the process is more cumbersome than just using cash, because there is a currency conversion involved. It would be different if the beers were just priced in bits - but I understand they can't do that. Also it is a good bar but not my absolute favourite place anyway.

So the coins stay in the wallets, waiting for better times to be spent.

I was reading the post seriously until I got to the unobtainium part.
I was already preparing to make the classic counterargument that the dollar supply has also inflated about a trillion (through debt) in the same time...

... and then bam! You pump your altcoin.

What a waste of my time.

Oh fuck off.

No... Just fuck off.

Aaand... Pulled (mostly).

Ffs you guys get a room
I have you both on ignore and so do many people here

The ask is about to be pulled, and the downtrend is about to resume. Either that or the wall will be eaten.

 

Or maybe it's just old style manipulation and a dumper is simply selling over 420 with no slippage.

Yeah thanks for quoting it all.  

Oh, they are definitely going at it.
And like magic, 1k has been pulled from it before they could touch it.