Provocative idea.

Because Bitcoin is programmable money, the hotel in an ideal world, upon arrival has you issue a series of small denomination bitcoin transactions whose sum is slightly greater than what you will spend altogether. Each of these transactions requires the private key of the hotel to spend. FYI, These are called N of M transactions by the protocol. The hotel is the escrow agent in this 2 of 2 version.

N of M transactions are defined by the protocol but not yet a wallet feature.

In the ideal world, the smooth UI you mention simply notifies the hotel of the item particulars and enough of the previously issued transactions to cover the purchased item are spent by the hotel.

Pay as you go.

Hey.

Maybe, we are getting advance notification of a web site change.

I find Metcalfe's Law a convincing fit to the data. Peter_R can best defend it.

Thanks for steering me to Kelly. I found the original paper easiest to understand as I know a little about information theory, and the examples given were clear.


Mostly, I assume what you characterized as asymmetric information flow. You said it better than I.

Chiefly those employed by the excellent site: bitcoin pulse.

We are far from 50% adoption. In a couple more years I expect the economic Ivory Tower to be shaken to its very foundations, and for others to follow, and greatly improve upon, the ideas that have been surfacing here.

Metcalfe's Law and Complete Triumph of Bitcoin Indicate $100 per Satoshi in 2022.


Here is the outstanding chart provided by Peter R that best illustrates the application of Metcalfe's Law to bitcoin prices . . .



And here are relevant daily transaction quantities as reported by coinometrics.com . . .



Peter_R's formula for transactions is V = $1.50 * Tx² , where V is the bitcoin market cap.
Using today's quantity of transactions: V = $1.5 * 58244² = $5,088,545,304 as compared to the actual market cap $6,117,800,905 reported by bitcoin charts. Note that the figure I used for quantity of transactions varies by time of day and day of week, but 58K is a fair approximation.

Here is the weird part, and by weird, I mean the cognitive difficulty of believing the future math given a simple assumption. The assumption is that Bitcoin completely replaces the current financial transactions performed by credit cards and consumer international payments. The arguments in favor of this assumption are that bitcoin is more efficient, is faster to settle, is not subject to fraud, has no danger of identity theft, and that bitcoin technology cannot be adopted by the incumbents without cannibalizing their legacy business model.

Here then is the math. I figure a total of 356,034,000 daily transactions for the incumbents today. Suppose that bitcoin transactions merely replace the incumbents, and ignore the additional quantity of possible bitcoin transactions, e.g. micropayments and other bot-to-bot low-fee payment activity permitted by programmable money,  

Plugging the incumbent transaction quantity into Peter_R's Metcalfe Law model, V = $1.5 * 356,034,000² = $190,140,313,734,000,000. Although the total number of mined bitcoins is currently 12,679,275, assume 19 million bitcoins at the time when bitcoin transactions replace the incumbents.

Accordingly, the price of a single bitcoin as predicted by Peter_R's Metcalfe Law model is $10,007,384,933, which equals $100 per Satoshi, supposing that Bitcoin transactions replace the incumbents.

My logistic adoption model can predict the soonest when that price value can be reached, using the 10x average annual growth expected before the halfway point of adoption. By the logistic adoption model we reach $100K in 2016. To reach a value six orders of magnitude greater would require six more years beyond 2016, namely 2022.

A consequence of this projection is that because the quantity of bitcoin transactions merely increases by 3.2x annually on average, In the year 2020, the Bitcoin Economy would be only one-tenth of so of the size of the incumbents yet would be very, very valuable, priced by Peter_R's model at $1 per Satoshi.

I ask you, how could such a price per bitcoin be justified? What properties of the Bitcoin Economy and human nature would permit such a possible world to exist?

The best idea I have come up with, is that Bitcoin is very precious and holders will be loathe to spend it. The idiom is that everyone has their price. Given the projections of the models, I conclude that for bitcoin that price will be very high. Capital flows to its wisest custodian. It may be then that as the years pass, bitcoin will increasingly be held by those who will not sell, or if they do then it is only the smallest portion of their holdings.

It is helpful to consider the value of the incumbent daily transactions. Again Coinmetrics.com has the data . . .



The sum of the incumbent dollar volume is $37,526,000,000. Given the replacement assumption, what fraction of the projected bitcoin market capitalization is used for daily transactions? I divide  $37,526,000,000 by $190,140,313,734,000,000 which yields 0.0000001973595145.

The Metcalfe Law model, and the assumption of complete replacement of the incumbents, indicates that only the tiniest fraction of bitcoin will transact - less than one coin in a million will suffice.

Here is yet another view of the resistance line on the Huobi 3-day resolution chart, in which I took care to anchor the line on the peak at 8000. In this rendition, it does appear that the breakout may be already happening, as was pointed out above by Todorius.

Here is the Huobi 3-day resolution chart, upon which I have drawn a resistance trendline from the peak of the November bubble using the built-in line tool offered by BitcoinWisdom. I admit that manual trendline drawing is subject to bias. I do not believe that this resistance has been broken, and it is only my growing confidence that April 10 was the bottom that I am paying such attention to a breakout.

On Reddit, an OKCoin representative mentioned that USD / BTC currency trading is coming to their exchange - someplace or somehow. Given what I hope is no-fee trading, then finally we may have a high volume, high liquidity, chart in USD prices. I hypothesize that USD volume would be higher than CNY volume if only there was no-fee trading and convenient USD recharge / withdrawal.

Yes, that is exactly what I have done from the moment I connected with LeaseRig as a provider. I knew that I was in competition with other rig providers and was attempting to optimize renter satisfaction. I monitored my rigs over weeks and adjusted the claimed hashing rates so that I had the cushion you mention. My rigs are never below the claimed rate.

I know that I receive less revenue as a result - but that is factored into my decision to use LeaseRig, another leasing outfit, or to point at some pool myself. Customer satisfaction is the key. Now there are only about 19 scrypt-mining rigs on LeaseRig that have more rented hours than my three GPU rigs.

Typical readings from the provider page for my rigs . . .

Here is a redraw of the upper resistance line using the built in line tool on BitcoinWisdom. For a chartist, the trend is rather scary unless one makes the presumption that I did . . . April 10 at $340 was the bottom of the bubble collapse.

Price action is still near the upper resistance trendline - which goes back to the November 2013 peak. I drew a lower trendline, with much weaker confidence, to illustrate the what I believe is the convergence of trader sentiment regarding fair value. If the lower trendline were accurate and indeed holds, then prices escape from the trendline within nine days. Upwards, or sideways, I reason because the bottom of the November 2013 bubble collapse was at 340 on April 10 - so I think.

Here is the 6-hour chart . . .

 

"sitting on your ass" economics.

Well yes. That is sort of what I am promoting. I hope it gets tagged with a more inspiring phrase. But maybe that one will stick.

For some, there will be a profound guilt that relatively great wealth was achieved by doing nothing - in particular not taking action to dissipate the acquired bitcoin estate. When asked about their vast stash of bitcoin, the Winkelvoss Twins respond that they still have every one of them.

But retention of the estate does not necessarily entail inaction with regard to every other aspect of Bitcoin. The twins are a good example. They appear in public to educate others about Bitcoin; they are organizing Wall Street resources to engage others in the Bitcoin Economy. And they excite the public imagination as they partner with Richard Branson to pay for space tourism via Bitcoin.

The new rich will not spend much bitcoin, thus avoiding capital gains taxes / sales taxes. The new rich will be predominately young, and will not soon die, thus avoiding estate taxes.

The problem is that tax authorities and popular opinion may seize upon property taxes as the precedent for taxing the new bitcoin-holding rich.

"(2020) A US citizen: Its not fair that I work two jobs, pay taxes and the Winklevoss twins bought bitcoin for $11 million back in 2013 that is now worth $1 trillion - and they don't pay any taxes on it!"

Exactly, You spend fiat on necessities. When possible, substitute bitcoin as the payment mechanism even if inconvenient or slightly more costly. Then recharge the spent coin from the fiat that you would have otherwise spent. As the Bitcoin Economy grows, the likelihood increases that the recipient of our coins will hold them or spend them, rather than immediately exchange them back into fiat.

My own idea of balancing social ideals and long term economic growth for everyone, is to favor consumption taxes, not taxes on capital.

Alas, despite the popular belief in the USA that the rich escape taxation, the burden of local, state and federal taxation progressively falls upon the wealthy. Almost half of US citizens pay no federal income tax, and the poor, disabled and elderly especially profit from government transfer payments.

Although capital gains and estate taxes will gain revenue from the sudden new bitcoin $billionaires and $trillionaires, that tax revenue will be realized only when they sell or die. I have a belief, growing stronger, that holders will regard bitcoin as precious to the extent that many large holders will be loath to sell. An analogy would be medieval land estates - never sold, only inherited.

That is why I believe taxes on bitcoin holdings will follow the precedent set by taxes on land property here in the USA.

Hooray.

It is hard to believe, but Peter_R and I calculated that according to his Metcalfe Law model of bitcoin prices, if we increase the permanent number of daily bitcoin transactions by one, then the bitcoin market cap increases by over $100K.

I try to participate in a bitcoin transaction every day.

I am not a short term trader and would not offer any signals. Rather, I am like a farmer in drought stricken Central Texas. I do not make decisions based upon whether it is predicted to rain next week. Rather I track precipitation as it happens, and monitor the increasing probability of an El Nino event that may break our drought this summer.

Log10 regression trendlines maintained by myself and others indicate that the current price is well below the long term trend. Accordingly, this is a good time to postpone spending bitcoin. For example, I plan to triple the capacity of my GPU mining rigs that I lease for bitcoin. The chart tells me to wait a few months and buy 10x more GPU cards for the same coin. The chart tells me to stuff every spare $20 bill into my neighborhood Robocoin ATM - which I will do again in a few hours.

Its almost always a good time to buy Bitcoin. The time not to buy bitcoin begins shortly after the next all-time-high and extends until after prices have collapsed at least 50% from the peak. Simple rules.

If you are building a trading bot for a no-fee exchange, then I recommend the typical volume-weighted return to mean algorithm such as described here . . .

Competitive Algorithms for VWAP and Limit Order Trading.

You need to be an unemotional software bot when you are snatching dimes from in front of a steamroller, as American traders sometimes say.

I loaned bitcoin to short sellers at BitFinex from January to April last year at about 2% annual interest. I was treated professionally and had no problem whatsoever with the website nor the operators. FYI, I saw that the rate of return on dollars loaned for long-position margin traders was much, much higher.

But what made me pull my coins out of BitFinex despite all their assurances, was that the return did not, by my thinking, balance the risk. I was making 1000% on average each year simply holding the coins securely myself. There was a minuscule risk that the exchange could be hacked, or somehow suffer a big market move that would force close the margin positions and leave the exchange at a loss. If I was making 1000% anyway, why try to improve on that by 2% and lose sleep over the chance all could be lost?

Although I am a rig provider and do not compete with rig renters, I understand that coins such as those featured on ipominer.com might be what you are looking for. Occasionally, better known coins may catch your attention on coinwarz.com.

You asked me to make some predictions using technical analysis - which you scoff at. You asked me to make some short term predictions which if true, would prove you wrong with regard to your notions on the efficacy of technical analysis.

Here is exactly what you said immediately above . . .


And here again is my response . . .


I made the TA predictions weak enough to favor proving you wrong, yet strong enough to defy random price movement that you apparently expect.