The Million Dollar Bitcoin S-CurveI added an S-Curve graph to the bitcoin logistic model for 1 million USD maximum price. The midpoint at $500K occurs in late 2016. 
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A transient post on Reddit r/bitcoin consisted only of this prophesy. I dream of a day where useless fiat is burned to create electricity for bitcoin Envision a possible world in which the legacy archaic financial infrastructure has been swept aside. In such a world fiat would be worth only the paper it is printed on. This is a call for disruptive innovative action. |
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Bitcoin price doubles about three times a year on average, and will keep going up at this rate until the final growth slowdownWish I had Bitcoins in 2009...
I urge you to invest whatever more you think is prudent NOW. You can ask Bitchick, we have invested as much as we can afford to lose (and probably a little more than she is comfortable with). You both are so fortunate to completely share this amazing adventure. When I performed parameter sensitivity analysis on the hand-fitted logistic model, I found that the rate of logarithmic growth is the about the same regardless of the value of the maximum-bitcoin-price parameter. So no matter where it ends up maxing out, the price will get there doubling about three times a year on average.
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May be interesting to compare to smartphone adoption s-curve and the total population. Slope is likely to be similar from a technology adoption perspective. If you assume all fiat replaced then not sure 1M is enough.
In my application of the model, the population consists of all speculators who will ever buy bitcoins.
Problem is that speculators sell, and adopters of washing machines didn't (c.f. the linked chart of technology adoptions over the past 100 years). Wrong model. You are right insofar that speculators sell. To clarify, my model assumes that bitcoin prices climb higher over time to a guessed-at maximum price due to increasing numbers of speculators. The logistic model is justified because eventually the number of new speculators taper off, e.g. limited by the global adult population. The motivation and behavior of these speculators affects price action - but I am abstracting these properties by simply counting speculators as the modeled population. When I guess at a certain maximum bitcoin price for the model, that translates to a certain degree of speculator commitment and resources. |
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Some Plausible Estimates of Maximum Bitcoin ValueWhat is the $100.000,- target based on? Wishfull thinking? Very well possible that 10k is the limit right?
Indeed wishful thinking, but also an acceptance of the most plausible estimates, such as those of Rick Falkvinge circa. 2011, when bitcoin transaction volume was one tenth of today's. . . . Bitcoins Four Drivers: Part One - Unlawful Trade - estimates $60 Billion of bitcoin capitalization Bitcoins Four Drivers: Part Two - International Trade - estimates another $600 Billion of bitcoin capitalization assuming 10% market penetration Bitcoins Four Drivers: Part Three - Merchant Trade - estimates another $600 Billion of bitcoin capitalization assuming 10% market penetration Bitcoins Four Drivers: Part Four - Investment - estimates another $600 Billion of bitcoin capitalization assuming 0.1% market penetration An estimated total $2 Trillion market capitalization, implies $95 thousand valuation per bitcoin. Falkvinge shows how bitcoin is superior with regard to current financial practice in four realms, and estimates bitcoin valuation at a 10% penetration rate. He sidesteps the role of bitcoin as a deflating store of value. I also accept another widely held point of view that bitcoin will either fall to a relatively very low value, or totally disrupt the current financial infrastructure. Thus I extend the probability distribution of maximum bitcoin price to well over one million, covering cases where bitcoin achieves 80 - 100% market penetration.
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Not included are all the efficiencies Bitcoin will introduce into the economy if it goes mainstream. A fully internationalized, frictionless division of labor will be an incredible boon to the economy. And there's so much more. I think a price target of $100 million, conservatively, is more realistic.
If Bitcoin goes big, it pretty much has to go whole hog. We are witnessing nothing less than a global transition from physical goods and trust-based money to an unimpeachable universal asset ledger. Anything else will look archaic by comparison, and the value added to the economy in the next 10 years will blow even these first 20 years of the modern Internet out of the water.
If bitcoin went to $100 million, according to the logistic model fitted to that maximum price, that would add only about two more years of exponential growth beyond the $1 million point - to 2018-2019. |
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I think we are closer to the stage of Winmo. Lots of fragmented approaches etc... Either innovators or early adopters is my guess. Agree that "speculators" are pretty heavily engaged already. I wonder how many of them there are?
For adopting the technology the mobile phone chart seems to indicate 10 years or so till we get to laggard adopters and the curve begins to settle. We have a long way to go!
Interestingly, the technology of smartphone apps enables a much faster adoption than that of the hardware smartphone. An well funded app, launching on iOS and Android, can swiftly be adopted, e.g. Google Maps - months to full adoption, not 10 years, which is relevant provided point-of-sale devices are upgraded. |
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Wish I had Bitcoins in 2009...
I urge you to invest whatever more you think is prudent NOW. There is a plausible case to be made for bitcoin maxing out above $1M. A thousand fold increase from here is possible, but according to logistic models, next year the remaining increase will be only one hundred fold, .. and so forth. Furthermore, my own research on bitcoin holdings over time, suggests that when holders realize 100-1000x return on their mining/investment, they cash out. |
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so the end of 2014 looks to be around $6k and end of 2015 looks to be about $100k. Not a bad little chart. Im guessing 2014 will be higher than the chart has it, and 2015 will be a little lower
The rate of increase is about 10x annually. My model assumes that about 10x more speculators are buying bitcoin each year. In three years that is about 1000x more speculators buying bitcoin than now. Perhaps in three years we will see participation by large companies, commercial banks, or central banks as speculators. |
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A logistic graph of European smartphone adoption, as an analogy for bitcoin adoptionMay be interesting to compare to smartphone adoption s-curve and the total population. Slope is likely to be similar from a technology adoption perspective. If you assume all fiat replaced then not sure 1M is enough.
 When I began fitting a logistic model to bitcoin prices, I understood that adoption by speculators can occur much faster, i.e. steeper slope, than is the case for adoption of bitcoin as replacement of, and enhancement of, currency for transactions.
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The Logistic S-Curve The logistic function F(x) = 1 / (1 + e -x) was developed to model the growth of a population that multiplies until constrained by exhausted resources. It has the property of exponential growth to the midpoint, followed by exponentially slowing growth. In my application of the model, the population consists of all speculators who will ever buy bitcoins. That population grows as bitcoin knowledge spreads to new speculators, and that population is eventually limited by the finite number of available speculators. The price series of bitcoin is subject to bubbles and crashes that are ignored by the model, rather the model addresses the price trend. The S Curve is plotted on my chart using a logarithmic price axis, and thus does not directly resemble the Sigmoid graph above.
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A logistic model of bitcoin adoption by speculators predicts that exponential growth will eventually end. Here is the widely used general model . , ,  In this multi-year thread I will update and monitor a particular model that assumes a million dollar maximum bitcoin price. I chose a high price because plausible arguments can be made that bitcoin will eventually replace fiat currency worldwide. I use the MtGox price series through 2011 and Bitstamp prices thereafter as the input data. The logistic trendline passes through the earliest recorded bitcoin price, and is subsequently hand-fit to the remainder of the price series in November, 2013. I simply guessed at the maximum bitcoin price. Periodic review will determine when the rapid exponential growth of bitcoin stops. Note that this model ignores the fact that when bitcoin is fully adopted by the underlying economy, it will continue to grow in price at least in proportion to economic growth. The below chart is plotted with a log price axis . . .  Here is the same logistic model using a linear price axis . . .  Log10 delta from the trend . . .  The entire spreadsheet of data and analysis is published here and is updated daily.
Whatever price one selects for the maximum, the slope of the exponential portion of the log-S-Curve is the same - as I discovered when I performed sensitivity analysis on the model. Accordingly, the rate of growth that we have so far witnessed will continue at the same breathtaking acceleration until it inevitably begins to rapidly taper off. Your modeler - Stephen Reed  I dedicate this thread to long term bitcoin holders, and to the author of this classic forum post from June 2011, at a time when bitcoin was priced at $13 - having risen 260x from $0.05 only a year before. ... I am pretty confident we are the new wealthy elite, gentlemenhttp://astrohacker.com/ahc/bitcoin-is-the-economic-singularity/After reading this, the scale of black market and digital economies and the effect Bitcoin will have on them I am pretty certain we are going to be very wealthy men -- even with a sum as small as 10 Bitcoins. It's just so hard to believe. We are only in the beginning storms with these significant rallies from 10 to 20 dollars. I will not be surprised to see prices from hundreds to thousands in the coming months. The world just isn't going to be the same and we have been blessed as the pioneers. What are you going to do with your Bitcoin wealth once your coins hit upwards of $10,000 a pop? Here are the thread music video themes . . . Zhou Tonged - Holding (Billy Joel - The Longest Time)"The sky's the limit, and I'm in it to win it". Laura Saggers - 10,000 Bitcoins"Its having someone to share the dream, I'm so glad you share yours with me" Here is the thread destination image . . .  To The Moon !!! Stephen Reed's Relevant posts . . . Notable conversations started by others . . . Memorable quotes by others . . . No financial planner would have my goals. If they did, they would be institutionalized. Also, I can't afford to hire anyone smarter than me, and I won't hire anyone dumber than me.
(editor: Hal Finney's prescient reply to Satoshi Nakamoto's announcement back in 2009 - the very beginning . . .) http://www.mail-archive.com/cryptography@metzdowd.com/msg10152.htmlAs an amusing thought experiment, imagine that Bitcoin is successful and
becomes the dominant payment system in use throughout the world. Then the
total value of the currency should be equal to the total value of all
the wealth in the world. Current estimates of total worldwide household
wealth that I have found range from $100 trillion to $300 trillion. With
20 million coins, that gives each coin a value of about $10 million.
So the possibility of generating coins today with a few cents of compute
time may be quite a good bet, with a payoff of something like 100 million
to 1! Even if the odds of Bitcoin succeeding to this degree are slim,
are they really 100 million to one against? Something to think about...
If the projection is correct my miniature Bitcoin holding will no longer be so miniature. LOL.
I assure you, nothing resists corruption.
There is already ample evidence of corruption in Bitcoin, both in the early days and now.
(editor: SWIFT is the 2000+ employee firm managing existing bank transfers in 212 countries)
Re: 'SWIFT' -- could adopt Bitcoin and campaign with 'All the money in the world handled by all the nodes in the world'.
In 1982 there were only 12 billionaires. In 2000 there were about 300. And now 1,500. So in 2025 maybe 10,000+ billionaires.  Leadership from Bitcoin, innovation from the Altcoins. I wonder what consolidation among coins will look like? I hope enthusiasts discover methods of gracefully merging those deserving more than abandonment. Nothing sadder than pulling up a QT wallet and finding no peers.
I still think you're kinda nuts, but it's fun to keep dreaming with you during this fun ride, up, down, up, down...  You can manipulate charts/lines almost anyway you want to make a point. I'm not saying you specifically are doing this, but you are certainly "reaching" a bit. TA practitioners and sages eventually all suffer from Apophenia. They can't even help themselves at some point, they will chart a cockroach running up a wall to look for patterns.
Technical analysis is always trumped by fundamentals over the long run.
Start with an anti-fragile base and build on top of it. Just like Microsoft has chosen to stop supporting WindowsXP on April 8th, Bitcoin developers can dump the old code and build from the ground up with the goal of lasting more than 27 years.
Bitcoin works at the core so enforcers can concentrate on the edges.
I believe the more the law understands bitcoin the more they will work to support it. Bitcoin benefits everyone but the sharks.
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I bought at 710 yesterday and am anticipating the dead cat bounce to around 1000 atm. But this only on a side note, the most important question right now: Where is the bottom?
Going with your earlier estimation of a 70% retraction it would put the bottom somewhere around 360$. After some time has passed, if you reassess your prediction, where would you put the target at present?
I am hesitant to predict a bottom, rather I observe that the low of 576 on MtGox is not as severe a drop as the low from the April 10 peak. The price action so far is more typical of a correction than a bubble collapse. |
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3. Dec 2013
| #People | #Bitcoins | #TotalBitcoins | | 47 | BTC10k+ | 3.5M | | 880 | BTC1k-10k | 2.6M | | 10k | BTC100-1k | 3.0M | | 63k | BTC10-100 | 1.8M | | 210k | BTC1-10 | 0.6M | | 350k | BTC0.1-1 | 0.1M | | 350k | BTC0.01-0.1 | 0.0M | | 210k | BTC0.001-0.01 | 0.0M |
Total: 11.6M bitcoins (0.5M bitcoins assumed lost) 1,200,000 people own bitcoins that are valued at more than $1 ( BTC0.001 or more) 280,000 people own bitcoins that are valued at more than $1,000 ( BTC1 or more), up from 120,000 last month 930 people own bitcoin that are valued at more than $1 million ( BTC1,000 or more) 1 person owns bitcoins that are valued at more than $1 billion (Satoshi, estimated to be BTC980,000) Changes from previous month: - Bitcoin total number adjusted to account for increase in money supply - Thoroughly re-engineered the number of bitcoin users from original data of the userbases of several services + blockchain usage. This shows that the last month estimate was probably too small, and perhaps 50% of the growth in number of users can be attributed to correction of a previous underestimate. - Corrected the highest bracket a little bit ( BTC0.6M ) upwards because it was over-corrected downwards last time. Number of holders in this category went down a little but we have better estimate of the holdings. As this is a base case model, we do not assume large, completely anonymous entities without at least circumstantial evidence of their holdings. - Number of people in each bracket behaves according to binomial distribution as found in another data with the parameters: total=1.2 million users, highest bracket=fixed, #of_coins=fixed. As a result: - Bracket 1,000-10,000 saw the greatest loss -20%, bracket 100-1,000 lost 10%. Sub- BTC10 holdings gained a lot. I have been tracking my bitcoin holding total on http://btc.ondn.net/search for a couple of weeks and I observe that my rank has been moving lower, meaning that there are likely fewer holders with more than BTC me than there were two weeks ago. I think that my rank has improved because I am holding beyond the 100-1000x price increase that tempted other early adopters to sell. Notably my rank improved the most during the crash/correction of December 4-6. I expect this trend to continue, and will look for it in your updates. |
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Any updates?
Are we getting a rounded (double)top instead of the anticipated (at least on my part) sharp parabolic increase kind of needle tipped top?
I agree with your interpretation of the top. My timing of bubble peaks depends upon an unsustainable ever-increasing rate of price growth. After the November 18 peak and correction, it looked to most of us that another greater peak would form to fully collapse this bubble. However, the recent China bank/bitcoin regulation news removed the speculative fever from the market. I continue to assume that the collapse of this November bubble will be similar in technical shape to the April 2013 bubble, with the peak price followed within a few days with the low price, then a damped oscillation of prices centered about halfway between the high and low price. Following a buy-some-more and hold strategy, I bought at 753 earlier today. |
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Actually, I can see bitcoin failing, but subtly.
There is no reason that Bitcoin can't be used to prove the concept and get the legislation worked out, and then it gets upgraded to a Government controlled version.
This could easily happen in the same way that the people who bought all those great domain names found themselves being called domain squatters and eventually had to hand everything over for free.
Rather than calculate where bitcoin will be in 7 years, why not work out where it may be in 25 years - that is the sort of time frame the finance industry works to.
Interesting approach. I distinguish bitcoin adoption by speculators apart from bitcoin adoption by the underlying economy. In 25 years I expect bitcoin to completely replace the legacy financial infrastructure and extend its utility through a disruptive combination of lower cost and software-defined features. I expect network effects to strongly favor keeping bitcoin, and to favor amending the consensus protocol to forestall otherwise competitive cryptocurrencies. Bitcoin is the TCP/IP of money in that regard. Furthermore, consider that bitcoin is not minted by central banks in response to credit demand, rather individuals and commercial entities requiring an amount of bitcoin for working capital, e.g. for ordinary bitcoin-denominated expenses, will have to purchase that bitcoin from some holder. I am beginning to believe, and will look for evidence, that speculative holders are selling bitcoins to transacting users very dearly. Thus using a metric such as world M2 monetary base to figure the extreme high end of bitcoin adoption may be too low a target. |
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Been watching this pop up from time to time over the last year and a half... Im beginning to think this OP was a god damn genius. Ha Ha...
TC
The funny thing is that the OP is one of the biggest idiots to have frequented these forums. And that's saying something I think the OP is a prophet. How can one have an opinion on the other posts of the OP? It appears to be an unreachable guest account. OP is/was Atlas, among many other pseudonyms he took after being repeatedly banned for turning everything into an argument about why governments across the world will fall to libertarian ideals (you could be talking about which soda you prefer, and Atlas will surely come in and start ranting about the soda Nazis, and why libertarians must drink unlicensed soda to rebel against government oppression). When not derailing threads, his range of topics (which varied greatly, along with personality, depending on which sock account he used) included "everyone should use blue light bulbs" and "I can't make the 'u' thing on my keyboard." His MO consisted mostly of quoting dead people and complaining about the heavy-handed moderation policies. As you probably know, you basically can't post anything on this forum without having your thread being deleted by Thermos the Tyrant. Ahh. Thanks for the background on Atlas. How ironic then that this post has become iconic. |
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Been watching this pop up from time to time over the last year and a half... Im beginning to think this OP was a god damn genius. Ha Ha...
TC
The funny thing is that the OP is one of the biggest idiots to have frequented these forums. And that's saying something I think the OP is a prophet. How can one have an opinion on the other posts of the OP? It appears to be an unreachable guest account. |
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I think one of the toughest parts about the plan is the temptation to buy back in after a rake. Example:
- BTC briefly touches a new ATH at $1,000
- sell 10% for fiat
- BTC plunges to $500 a week later
- buy back in and hold for BTC to reach $1000
Assuming a strong belief that the new ATH is a realistic value for BTC, I for one would be very tempted to buy back in with the 10% I had just sold and wait again for BTC to double again.
In that case the SSS could be enhanced by a speculative component: 10% non-reversible rake and 5% reversible rake. The reversible rake would trigger a buy-back at a price point which e.g. is at half the price point at which it was used. E.g. assume a (USD/mBTC) scenario by starting with 10 BTC ($10k USD) : 1->2->4->2->4 15% conventional rake strategy at each doubling: (USD/mBTC, BTC, USD) 1, 10, 0 2, 8.5, 3000 4, 7.225, 8100 2, 7.225, 8100 4, 7.225, 8100 10%nonrev/5%rev rake strategy at each doubling: (USD/mBTC, BTC, USD) 1, 10, 0 2, 8.5, 3000 4, 7.225, 8100 2, 7.650, 7250 4, 7.225, 8950 The 10% acts as a hedge, the 5% acts as a time-based arbitrage from which you gain additionally. I would allocate very little of the rake amount to buy-backs because otherwise a major benefit of SSS is forfeited - if bitcoin subsequently crashes to zero, buy-backs simply compound the loss. |
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Let the champagne bottle pop! We've earned it gentlemen.
Um excuse me? I only have 10btc... This ain't jack When will I be the wealthy elite??  I think 2018. You have ten whole bitcoins! |
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