Great graphs, rpietila, molecular, and SlipperySlope. I don't know how I missed this thread.

SlipperySlope's graph adds an interesting angle: that we will see mainstream adoption get into full-swing in around 2-4 years. Almost as fun as considering the price growth is considering where Bitcoin will be qualitatively at each order of magnitude.

Mainstream adoption of Bitcoin suggests a radically changed world...in 2-4 years. (Holy shit!)

Also, I have a question for everyone to consider. Suppose Bitcoin never became popular in China. Suppose all investment and adoption stayed limited to the US, Europe, and wherever else it had significant uptake through 2012. We'd still be using this same exponential chart, correct?

If so, wouldn't that mean the addition of China (and later other countries) will have to add an extra doubling or so? It wouldn't be much in the grand scheme of things since it only takes a few months to double anyway, but it might fast-forward the graph by a couple of months, and more or less abruptly starting recently, given the dramatic upsurge in action from China. I know this distracts greatly from the purity of the math here, but then again those additions aren't nothing.

Totally. Did you see this post today? http://www.reddit.com/r/Bitcoin/comments/1qetkx/why_are_so_many_people_here_confident_that/

I've always said Tokyo is the best city to be rich in.

He's probably still asleep. It's 5am in Tokyo. You'd think maybe he'd have some kind of alarm just in case, but...

Thanks, and...ouch, gox is hemorrhaging market share:

Nice start to the week. /s

At least Gox is minority now.

People have been voting with their feet. I wonder how low their market share will have to get before they get it in gear.

It would seem that everyone who has bitcoins would care: even a few satoshis double spent are a deviation from the core idea of Bitcoin as an unimpeachable public ledger.

Looks like getting goxed is officially still a thing.

But of course the jobs report is meaningless. The Fed will not taper.

Given the rampant "success" of Cryptolocker, I'm sure we'll see many copycats. Hackers now have serious financial incentive to break into people's systems.

Someone was asking on reddit today whether Bitcoin would force people to take security seriously. Maybe, but Cryptolocker and others like it will really force people to (or pay up). It will probably force a great many people to learn how to buy bitcoins as well, however tragic a method it may be (in truth it is likely to be doing them a favor in a perverse way, as they are more likely to keep some for themselves...it could be what gives them that final push off the fence).

Revolution happens in the strangest ways.

Two things about this diagram.

1) The gray dotted line can be at different angles. In Bitcoin's case the line should be tilted upward quite a bit more, changing the whole shape of the curve. In the early 2013 bubble, for example, "return to mean" happened about 10x higher than "takeoff."

Here's a terrible MSPaint scribble of what I mean:



2) This actually plays out fractally in the markets on various timescales. You can see the familiar shape on the monthly chart, or on the weekly chart.

GREAT vid. Thanks.

I completely agree that the West has more than enough to fuel a massive run-up, especially via the BIT, but I think it would have been more like Jan-March 2013 all over again, rather than this jerky wild sprinting and retraction, which feels like a battle between summer 2011 and spring 2013.

Looks pretty accurate to me. It all comes back to the binary bet: either Bitcoin more or less follows this chart, or it goes to zero.

The investment proposition is simple. Determine what you think the odds of those two outcomes are, decide how confident you are in those odds, and place your bets accordingly (based on your own life situation in the context of those two outcomes and their probabilities, as well as your risk tolerance).

Technically, past performance is the ONLY indication of future results, for anything ever. You only know that trying to move your finger will actually move your finger because it has worked in the past. You only really know that letting go of your pencil will result in it falling down instead of falling up because of past performance.

Also, "the trend is your friend" is a trading adage for good reason.

Past performance is not a guarantee of future results, but it sure as hell is an indicator. If it weren't, humans would have no way to make sense of the world at all, because nothing would be even remotely predictable; all would be pure chaos. The consistency and regularity of phenomena is the very basis by which one navigates the world and manipulates it to one's benefit.

The interesting question is what happens when "2011 meets 2013." China is having its 2011 insane fever run, while the rest of us are looking for a nice, controlled bull run, hawkishly perched to sell a bit and cool the rally whenever things go double-exponential.

The result may be wildly unpredictable, but I'll take a first shot at laying some groundwork for analysis.

1) A lot will depend on how tight the arbitrage is between the exchanges. The tightness of the arbitrage is like the length of the "leash" the rest of the world uses to keep China's maniacal streak in check, but keep in mind that China is big enough to pull everyone else around quite a bit as well, like a rottweiler on a leash held by a 12-year-old kid. I'm guessing it will get pretty tight over the coming weeks since there is a lot of money up for grabs, but on the other hand the speed of the growth and the difficulties with Chinese capital controls could place a hard limit on how tight the arbitrage can be.

2) When China overheats severely, MtGox and Bitstamps will tend to sell off, and even if the arbitrage relationship isn't that tight, the strength of the difference will be powerful. That is, the kid holding the leash gains a lot of extra strength, even if the leash stays pretty long. Which is more powerful, Chinese exuberance or Western fears of repeating the April overheat and crash?

3) Perhaps there is something to be said for a cold mathematical approach, something like an average between the 2011 bubble growth rate and the early 2013 bubble growth rate. It took 10-12 days for the price to double during the 2011 bubble, and about 30-35 during the early 2013 bubble (until the final frenzy where it went much faster), so we can say the 2011 bubble was about three times as steep as as the early 2013 one. Maybe we will simply end up compromising at a three-week doubling time. This is actually more or less what we've seen in the past month:



Note how, instead of the very steady growth in Jan-March 2013, we're getting more "rottweiler on a leash" yo-yo growth with China zooming ahead but then getting pulled back, then zooming ahead and getting pulled back, as we rise.

Argument by pure assertion. Do people still do that? I thought the Internet had eradicated that practice.

This is the kind of article that makes me feel like we're moving into the mainstream. It has that Clifford Stoll feeling of ludditism in the face of inevitability to it.

So you're saying China is mostly a bunch of weak hands? That's not good news.

Yes, we (especially China) were going double-exponential, so it's a decent time to take a few % profits if you're overweighted in BTC, but not to sell the whole stash ARE U INSANE?

We could very easily see a scary correction any day now, but the trend should continue much higher before the big bubble peak (in the thousands I'm thinking).

NOTE: Never use a linear chart when considering things like this. Log chart. Logarithmic fucking chart. Always!