And here is the 6-hour resolution chart from Bitstamp, showing the 10 day rally reaching prices not seen since March . . .  |
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According to Peter_R's Metcalf Law model, the bitcoin price is proportional to the square of the number of transactions. An increase of 3.2x in bitcoin transaction quantity supports a 10x increase in bitcoin price. Currently, transaction volume is about 60,000 daily. To support prices 1000x greater than today we need transaction growth 31.6x greater. That works out to 1.9 million transactions per day. Is that doable in three years?
You mean like 22 transactions per second, or 13200 transactions per block, with about 6.6Mb each? Not possible by this metric alone, so maybe on-chain Bitcoin will not reach 1M USD in the next 3 years? Also current price growth suggests a price of 3.67M USD in exactly 3 years, something has to change for this to be possible. Even if scaling like that was accomplished "easily", what would have to change is the rate with which fiat is issued: 3.67mn USD per BTC x 3600 per day = 13.2bn USD per day to buy daily supply = 4.82 trillion USD per year to buy annual supply. The monetary base of USD/EUR etc wouldn't be able to cope with that - even if conversion is taking place at just 25% of BTCs (>1trn USD per year required). The Bitcoin wiki has an article on scaling here that addresses 2000 transactions per second. That is doable. And I have a project to re-engineer the Bitcoin network that makes it even more doable, should I succeed. Currently, I suppose that the mining reward is mostly spent on new mining equipment and power. The equipment manufacturers may accept bitcoin payments. So a portion of the mining reward may stay in bitcoin and not be exchanged for fiat. In the summer of 2016 the block creation reward is scheduled to again halve to 12.6 bitcoins per mined block. My logistic model has a trend price of about $840,000 for July 1, 2017. So three years from now, 1800 daily block creation reward bitcoins would have a fiat value of $151 million. Even if converted entirely into fiat, I think that figure is achievable by worldwide investment. |
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You could possibly attribute this entire chart to the advancement of tumblers.
And the growth could also be attributed to the payment of mining rewards to hashers. I perform a couple of transactions each day. One of those is a daily purchase of fractional bitcoin from my local ATM, and the second is a small bitcoin payment from someone who leases one of my three GPU mining rigs to mine altcoins. I am postponing Bitcoin spending during what I believe is the run up to the next, widely expected, bubble. The Bitcoin Pulse web site tracks numerous fundamental Bitcoin adoption statistics. |
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^^^
SS, what does this transaction volume extrapolate out to on the chart over the next 3 years? Is this a linear growth rate transaction volume, or exponential?
The number of transactions has fallen off in the last couple of months, but over the past two years transactions have grown exponentially at the rate of 3.2x annually. Some think that off-blockchain transactions are responsible for the recent fall-off. Off-blockchain transactions would be those performed between accounts at Coinbase for example. |
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I believe it is ridiculous to think that in 3 years bitcoin will be
-As big in market cap as the U.S. dollar.
-Fully intergrated with all merchants and all consumers
-Full integrated into wall street
-The currency of choice in the mainstream with all consumers clearly choosing bitcoin over fiat
-All employees salaries are paid in btc, all bills are paid in btc, you pay your rent and taxes in btc, etc.
This is the type of thing that the $1,000,000 mark would imply, and I think it would take a lot longer than 3 years. I think it would take it 10 years at least.
That would mean that the 'trendline' needs some serious adjustment - perhaps it is a different shape altogether than a simple exponential increase.
I don't think BTC has to actually have achieved all that you list above. Just the possiblity that it might will propel the price massively upwards. That said I don't think it will take it anywhere near $1m within 3 years. According to Peter_R's Metcalf Law model, the bitcoin price is proportional to the square of the number of transactions. An increase of 3.2x in bitcoin transaction quantity supports a 10x increase in bitcoin price. Currently, transaction volume is about 60,000 daily. To support prices 1000x greater than today we need transaction growth 31.6x greater. That works out to 1.9 million transactions per day. Is that doable in three years?  |
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We are now two weeks after the breakout of the resistance trendline from the November 2013 peak. It appears the next resistance could be at $650 where prices stalled for a while on the way down. This is the 3-day resolution chart from Bitstamp.  |
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IHere's a quote I read (from Goldman Sachs, I believe):
"Much of the cost of the current payment system is attributable to security and legal requirements that Bitcoin providers will eventually need to confront."
Goldman Sachs is wrong and is spreading FUD because part of their business model is threatened by Bitcoin. What makes the current payment system expensive is that transactions can be reversed and the system accepts a certain amount of fraud from customers and merchants both. The current payment system has a pre-Internet legacy workflow. Bitcoin is non-recourse. When Bitcoin becomes the common currency, there will be less need to exchange it into fiat to make or accept a payment. |
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[I chose the maximum value of $1 million because there a plausible arguments by others that justify such a price. My model is about the adoption by people and organizations buying bitcoin. Perhaps in three years half of all such investors/speculators will have made their respective investments. There is a provocative model of bitcoin prices as the realtime unfolding of Metcalf's Law, well charted by Peter_R. I reference it Metcalfe's Law and Complete Triumph of Bitcoin Indicate $100 per Satoshi in 2022Suppose that it takes until 2022 for complete adoption. The Metcalf Model price is $10 billion per bitcoin, and $100 per Satoshi. Hard to believe that now, but I am working on a change to Bitcoin that helps move us in that direction - I believe. Visit my thread in Alternate cryptocurrencies for the whitepaper. That would be a bit weird, that would make bitcoin (in total) be worth over 100 quadrillion or something. You're talking about today's dollars? I wouldn't mind if that would happen, but I seriously doubt it. I think 1 to 10 million is plausible, and possibly even 100 million. But beyond that just doesn't seem likely. But I would definitly not mind being a billionaire. In some possible world in which a Satoshi is worth $100, holders almost never sell and the world economy runs on a tiny fraction of the Bitcoins mined. |
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Bitcoin Cooperating AgentNothing that the core developers maintain will be touched. The agent code, in this case a Relay Agent, will run the non-generating bitcoind instance. Bitcoind communicates with the reference wallet, bitcoin-qt, and also with the optional command line interface. Simplified Payment Verification wallets communicate with the listening bitcoind. The notable change is that the bitcoind instance is configured to communicate with other full nodes only via the Relay agent.  -Stephen Reed
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i missed the whole HODL explanation...
can u fill me in
Get a cup of coffee or a stronger stimulant and read the now classic thread I AM HODLING. The original post was written in the crash that followed the November 2013 peak. The author, GameKyuubi, is admittedly drunk on whisky, sharing a tale of woe, yet his impaired judgement says to hold on, not sell. In his honor, the term HODL has entered our forum lexicon. One of my favorite posts on that thread was just a few days ago. Bitcoin then @ $581 . . . Now that bitcoin's looking up, let's remind people that nothing has really changed: https://www.youtube.com/watch?v=KhhlPRGrwQI&feature=kpHodl on tight to your dream Hodl on tight to your dream When you feel your rocket's launching When you feel your heart is breaking Hodl on tight to your coins. It's a long time to be out Inflation goes on and on When you need champagne to open When you get so sick of losing Just hodl tight to your dream. When you get so down that you can't get up And you short so much but you're all out of luck When you're so downhearted and misunderstood Just over & over & over you could Hodl-toi à ton rêve Hodl-toi à ton rêve Quand tu sents ton fusée partir Quand tu sents ton coeur se briser Hodl-toi à tes monnaies. Hodl on tight to your dream Hodl on tight to your dream When you see the candles falling When you hear bitalert calling Hodl on tight to your dream. |
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You believe that in only 3 years, bitcoin will reach "full adoption" and achieve its full potential in which it becomes larger than a fiat currency. That seems like too little of an amount of time for that type of development (if such a thing could even happen at all).
I chose the maximum value of $1 million because there a plausible arguments by others that justify such a price. My model is about the adoption by people and organizations buying bitcoin. Perhaps in three years half of all such investors/speculators will have made their respective investments. There is a provocative model of bitcoin prices as the realtime unfolding of Metcalf's Law, well charted by Peter_R. I reference it Metcalfe's Law and Complete Triumph of Bitcoin Indicate $100 per Satoshi in 2022Suppose that it takes until 2022 for complete adoption. The Metcalf Model price is $10 billion per bitcoin, and $100 per Satoshi. Hard to believe that now, but I am working on a change to Bitcoin that helps move us in that direction - I believe. Visit my thread in Alternate cryptocurrencies for the whitepaper. |
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The short term triangle I present below lacks the drama and importance of the recently broken trendline down from the November 2013 peak. I suppose that it will break out to the upside in a day or two. Or conversely drop down to test $550 again. My logistic model trendline value is $1404 rising over $10 each day. This is the 2-hour resolution chart from Bitstamp drawn with BitcoinWisdom . . .  Did we break out of this wedge to the downside? Yes, I suggest that we have. I hope for consolidation at this point, not a retracement back to $510 or so, where the price previously stalled for a couple of days. |
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I see. I would have to think a retracement lower will happen prior to another jump up to and beyond $600. But we shall see.
Now...your 'logistic model trendline value' of $1404...is this number a forecast for a future date?
No it is simply the trendline value, in red below, for this date. The model is here. Note that I simply guessed at a maximum price of $1 million at full adoption.  |
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The short term triangle I present below lacks the drama and importance of the recently broken trendline down from the November 2013 peak. I suppose that it will break out to the upside in a day or two. Or conversely drop down to test $550 again. My logistic model trendline value is $1404 rising over $10 each day. This is the 2-hour resolution chart from Bitstamp drawn with BitcoinWisdom . . . |
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The "network effect" argument for Bitcoin... is almost always made in a vacuum, disingenuously.
Bitcoin is a microscopic part of, in order:
(1) the internet
(2) PC/cellphone industry
(3) commodities
(4) commodity/securities exchanges
(5) banking and financial services
GLOBALLY, none of these economic sectors has a strong "network effect"... except for unusual outliers.
I suggest the opposite of what you say is true. Wikipedia . . . In economics and business, a network effect (also called network externality or demand-side economies of scale) is the effect that one user of a good or service has on the value of that product to other people. When network effect is present, the value of a product or service is dependent on the number of others using it (1) The Internet began as ARPANET which was a method to interconnect numerous incompatible networks - none of which survive today because users were drawn to the largest compatible network. (2) mobile phones, I suggest that Android is move valuable than Windows phone for developers because more people use Android. (3) commodities, I suggest that sugar is more valuable than stevia for bakers because more people use the former. (4) commodity/securities exchanges, I suggest that the NYSE was more valuable than the Philadelphia Stock Exchange for traders when the latter was still independent becuase the NYSE had more traders using it. (5) I suggest that JP Morgan Chase Bank is more valuable than the local bank down my street for customers, because more people and businesses bank at Chase. |
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There is no spoon
Indeed. There is no intrinsic value. |
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Guys, we need to post developer's update on the blog. The last update was on April 11th. Not enough noise around the coin when scrypt ASICs are weeks away.
Thank you!
I lease three GPU rigs for script on LeaseNet and am feeling pressure from Gridseeds right now. |
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But how will we enslave the evil fiat believers?
The chains are already on them. With debt. |
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. . . Also dust in a single address evaporates completely after 6 months. The evaporation goes to the miners (plus the fee)
In the case of Bitcoin, what is considered dust today is result of the relatively high transaction fee required to prevent blockchain spam. I suppose that there is a possible world in which current dust becomes quite valuable as Bitcoin appreciates to prices that are inconceivable by most observers today. 224 TB disk drive cost $
0.000000000224 $ per byte
225 Bitcoin transaction bytes
0.0000000504 $ per bitcoin transaction
600 $ per bitcoin
0.000006 $ per Satoshi
119.047619 Bitcoin transactions stored per Satoshi
I can imagine a possible world in which the blockchain is the primary ledger for machine-to-machine microtransactions - given inexpensive widely replicated storage. |
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