My trendline says 4900.

It is a bit rough, but these are the classes I could agree on (serial number, LOG(price_min), price_min). There are 30 of them but most of them are not really happening in 1 month timescale. Based on last year, I estimate that going over 100,000 USD/BTC is so unlikely that it can be represented by a single class. In the lower part, cutting the range short at 10^2.2 seems a good choice.

This way the entries to the competition can be standardized. Less work for organizers and ability to forecast multiple months at once, since the classes are fixed anyway (each month guess each month, for the total of 8 rounds and 36 predictions). We will get a host of interest rate curves and everything as a result of this!!

But it is getting so mathematical that I should perhaps incentivize people by offering 1,000mBTC to the prize pot + all the 50mBTC participation fees. So in any event I will do all the work + pay 1,000mBTC OR $1,000 whichever is higher. (I knew this would happen.. )

Well what a heck - let's do it, unless we can iterate the rules to be even better before it starts!

The first event to be forecast is price in 31. May, and the deadline will be in the beginning of May, once I get back from celebrating Labor Day.

If miners mine at a net zero gain (as is now the case; they don't earn excessive returns as defined by economic theory), then there is really no inflation. The new coins do not dilute the value of existing coins because thay have been paid for upon arrival. Somebody has wanted the coins so much that they have been mined and the cost has been paid.

With PoS, new coins are a bonus that are just created without paying anything (or at least full price). If we simplify the case and move the Bitcoin decimal place 3 points, calling the resulting unit "bitcoin", and the process "proof-of-stake", have we fooled anyone? No. This is 1000-fold inflation, and its effect is that the price of the new bitcoin is only 1/1000 of the old.

I don't see at all compelling the idea of valuing something that has a built-in inflation which is not based on some useful work. Owning currency is useful work, but the hoarders should be compensated by opportunities to invest their coins, loan at interest, or declining general price level, not gimmicks such as increase in the account balance without work or risk.

Yes:

I heard it at $0.25 (per bitcoin), and various times after that. Sometimes there was an opportunity, sometimes not. Generally not.

Yawn. Bit is an option to a brave new world. Some of its characteristics:

- Assuming 10 billion people, everybody has a quota of 2,000.
- No inflation
- No storage cost
- No confiscation
- Does not expire
- Your quota costs $1, or a little less. Previously it was $2, some time last year $0.05.
- If you want to be shrewd, buy the quota of others because they scorn it, and sell it to them when the price is right.

Anything that happens before just has to happen.

Actually, no.

Think it this way: Bitcoin has been raking in consistent 1000% gains for years now. Has it done better than expected, to achieve these remarkable returns. NO! Actually I am facepalming every other day how childish the community is, how fickle the services, how early the adoption, etc. And how long everything takes. 5 years is an eternity, Rebecca Black got 100 million views in 6 months!

Information asymmetry is the thing that keeps the price depressed. The ones who are not in, don't see more than the problems mentioned above. The ones who are in, can calculate that Bitcoin is best that has happened or will happen to them, and become millionaires in 2-3 years.


Okay, I'll do it (->50). The reason I want to keep it sufficiently high is also to keep the participants interested over the whole contest and put enough effort in the predictions.

Nice game you have. Was close, ha?

I will have to postpone the opening of this one over the Labor Day, because that is such a big festival here that I cannot commit myself. So the May forecast deadline will be a few days into May.

Found this remarkable thread 2 days too late, but read it all nevertheless My thoughts:

The economy is what ultimately gives value to any coin (or other currency). The economy consists of using the coin in its typical monetary roles as:
A) unit of account (in contracts and pricing, etc.)
B) store of value (deferred spending, investment, speculation)
C) means of exchange (transactions on-chain, off-chain).

To get to a functioning economy, there has to be an incentive to use the coin in some of the roles, ie. it must fulfill at least some of them better than the other alternatives.

Jumpstarting an economy is very difficult, even if the coin is superior in many aspects (like now, Bitcoin is far better than fiat in B) and potentially in C) but mostly dysfunctional in A) - after 5 years, its marketcap and # of transactions is <0.01% of fiat.)  

The coin can receive initial value by fiat, backing, or free market.

One of the novelties of Bitcoin was the mining concept, which among other effects, balanced the rewards of new coin generation to exactly equal the value of the coins (in times of boom, you could get +EV, during declines you would run at a loss).

Therefore, Bitcoin money supply has totally been paid for by expending effort to create it, according to its daily value.

Therefore, all the increases in Bitcoin marketcap are not early miner or early adopter unfair advantages but a reflection of the growth in Bitcoin economy, mainly the aspect B).

Trying to give value to something that you don't have to work for is very difficult.

Network effects are crucial in economy. You only get to that point if your coin is perceived legitimate. Auroracoin tries to achieve this by distributing coins equally in a limited area with a homogenous population. Bitcoin burns the equal amount of resources to acquire new coins so that there is really no inflation, nor has ever been.

In an optimal economy, there should be as little barriers as possible for hoarding and dishoarding wealth (converting income to wealth and vice versa). If this process is reasonably unhampered, it leads to higher value for the coin.

Proof-of-Stake

With the proposed model, the expenditure that is now spent in developing, manufacturing, delivering and operating ASICs, is cancelled.

Instead, there is an expenditure that people who own bitcoins, need to purchase, configure or operate generic equipment, to receive the reward. This reward would not accrue according to the work, and would not be equal to the value of the new coins.

People with many coins would gain more (in proportion to the effort required).
People with less coin would gain less (same work, less reward).
People with the least coins would not gain at all, because there would be a cutoff, below which people do not care to setup the PoS.

The total cost (effort) will be less than the cost (effort) of PoW (because the marginal holder will not work for -EV), but this would end up being a regressive scheme, enriching the rich.

It does not change the price any way, other things being equal. Proof: If we assume that at present supply = demand, which means that newly mined coins must be exactly absorbed by somebody. Mining cost = price, so all of the new demand is "burnt" as expenses. In the PoS case, same amount of coins is generated, but it is doled out to existing holders, inflating the money supply. New demand must buy the coins from them. By buying the same number of coins, it is able to keep their price stable. Net difference is that previous owners get the money.

The above paragraph may sound lucrative. It is what Quark, Blackcoin &co are doing. It has been observed to lead to extreme volatility and be inconsistent with increasing adoption, problem of confidence, necessity of a short premine period, etc. I believe it will only work in "mark of the beast" type environments, where:
- accounts are 100% connected with humans
- buying and selling using this system is compulsory.

Bitcoin's novelty is that each and every coin has been mined into existence, at a 100% cost in open markets. Nobody has got them at preferential terms. All the subsequent gains in value have been because of economy building. The ideas presented do not yet seem compelling enough to me to work on changing this. The idea that a parallel fork would be made instead of an altcoin is an interesting one and warrants careful consideration.

In single digits, I will approach parity with Satoshi.

Welcome to the forum!

Since we are so bored, how about remembering 2012?

What were the news and developments that pressured the price back then? Is it possible to repeat?

Is it just that a certain % of existing holders sell every month out of boredom, to keep the newcomers supplied, price is sticky, nothing happens, it can go on and on, until it doesn't.

Notable sticky periods would be 2009-6/2010 (<0.01 all the time, violently broke upwards when MtGox), early 2012 (5), actually all of 2012 (5-13) and mid-2013 (100-130).

If we are not out of the woods by July, perhaps that would trigger more selling. In the end, it does not matter, because adoption will decide the value of bitcoin, and nothing is more powerful than an idea whose time has come.

Yes, but in my thinking if it goes low enough, I can buy 5,000 or 10,000 more coins. That would affect the market

It does not really matter because if it turns decisively, I'll be rich. If it does not, I'll be OK nevertheless.

Oh, remember that I was talking like this when I sold at 700 and price was at 1100 and everybody was pressuring me that I made a bad trade  

The following 2 months I was a bear and still everyone ridiculed me.

Now I'm a bull for 2 months already, and all scorn me (price is up 10% from the point I turned bull in 2014-2-25).

Being contrarian is the way to make money.

There are not so many markets for bitcoin derivatives (tell me if you find any). It is tricky to organize them, the following reasons come immediately to my mind:

- Instead of speculating with going long, you should just buy bitcoins. Much less counterparty risk, guaranteed effect in the economy, like an option that never expires.

- Shorting would be a useful option for many (eg. ones who don't want to trigger capital gains, or not relinquish control of their coins even for the duration of being less than 100% long) but the harder part is to find a matching long. If it is done with actual loaning of coins and selling them to any buyers in the market, it works.

- Betting against the book (MPEx) requires the book have an enormous stash of coins or good risk mgmt (preferably both).


Derivatives would give a lot of important information to the markets though. With this competition I was hoping to construct this information artificially as an aggregate of the guesses of the participants. To make it possible to lower the handling fee, the system should be totally automatized and parametrized. Is there anyone who sees what should be done and knows how to do it?

Exempli gratia:

- web interface with username,passwd login

- prediction tab, which lists each maturity (1,2,.. months) in the columns and each price range (30 in total) in rows

- in each cell you can add probability by "+", reduce by "-" or write a value. Auto-adjustment to total 100.00%.

- API, with which you can auto-update the probabilities.

- Every day the system checks what are the current probabilities and they will be matched against each other at maturity. You don't need to update them every day of course, not even every week or month but only as you want. (In detail: when the month closes and points are awarded, they will be awarded differently from each day, starting perhaps up to a year in advance. So every day you forecast every future month. Every day will count as 1/360 of you score for that month.

- Publishes all aggregate info in a public sheet which both the contestants and market players can read

How much you asking? 

Well no need as I have a dedicated Bitcoin hotel only about 100km from them!


I meant the CEO of Haikko who personally made me feel very unwelcome. (WTF as if I did not tell beforehand - spent a week there before the summit(!) - that we only come to hotels where things work, with a very clear insistence of VIP service. If you can't deliver, how about not making a contract?!! Or at least understand that mistreatment is an offense that never expires.)

Media I did not even care but hospitality industry is something else. Sad.

No I am not in a position to do that now. The market is stable and going more long would not be prudent. It's good to have cash always with which to buy at dips. This is not a dip, this is an accumulation zone, and my accumulation was done in February already.

I mean I could play more in the top formation phase, even go short if there is a service that would allow doing it with 10,000 bitcoins.

They would not do it if they did not believe that it will go vastly higher, so...  Just make sure you always buy low and sell high, we absolutely need more such people because the current volatility is so high (and buying low, selling high reduces it!)

Definition of "we"?

At the time of the thread there was about 5 million non-Satoshi coins circulating. How many of them belong to the same owners still?

My guess is 2 million, max. Could be way less.

So out of the current non-Satoshi coincount of 11.6 million, only 5...20% belong to the same guys as the then wealthy elite.

Irritating is the current situation. But that is a human emotion. The longer time down, the higher up it goes afterwards (coins exclusively in very strong hands).

Full faith is something that you should not attribute to any investment. Trust in God alone.

Waiting for "this long" I mean several months, maybe close to a year - is something so irritating that I am thinking of rewarding myself with 50% more coins instead of 10-20% when the next opportunity comes.

You mean like Haikon Kartano is the premier country manor hotel in Finland, and because they humiliated me last spring, I bought a manor twice as big and am building a hotel more luxurious. My rooms are bigger and cost more, and my largest suite beats theirs 5:1 by floor area. Also my sauna will not be snooped by hotel staff in the middle of the night, my patrons will not be treated as criminals by the management when the only criminal is among the hotel employees, my patrons receive the services that they have been promised, can pay the bill upon leaving, and if they dole out tips worth 1/1,000,000 of the bitcoin supply of the world in 4 days, the recipients at least care to redeem them for cash. (I will notify perhaps when the sum of the tips exceeds $100,000)

No I am not buying them. I am waiting for them to apologize.

Yes, it truly is as if nobody would be able to see more than a few days into the future, and that the price today would have no correlation to expectations of long term value (and only be a product of buying and selling pressure in a given day, in exchanges that lack liquidity).

It is somewhat irritating in the short term but gives an opportunity in the next bubble. I might aim to increase my number of coins not by the usual 10-20% but by 50% with a little more aggressive play. Is anyone with me? PPT?  

I will not be organizing or attending any sex parties there. What the others do at their leisure, should conform with the hotel rules of course.

The "funny" thing with the yellow press is that they accuse people of doing something that is as far as possible from what they actually do and believe, to create the atmosphere of confusion which in the reader's mind gets attributed to the victim of the smear campaign.

Eg. All the media is smearing Vladimir Putin. Constantly the articles write about Putin thinking, scheming, and doing something irrational. When there is a chance for a sheep to actually hear something directly from Putin, and it is totally level-headed, rational and patient, it is dismissed as confusion, because what they already "know" is that Putin is a nutcase.

Why is it that all the millionaires, politicians, and public persons are "crazy"? Anyone thought that possibly the consumer of mass media is just receiving a daily fresh dose of urine to his eye which hinders seeing clearly?  


I might have lost, because the paper published my "counterargument" in the following day from the bullshit article. The court would have considered that:
- the lying was not that bad (compared to everything else written on them, this is correct)
- it was corrected at the earliest opportunity (the following day).