I'm not trying to make the math work against the math. I'm trying to make the math work for the people against instability and the formation of market bubbles.

This thread is getting cluttered with anger, pedantry and semantics. I'm simply not responding to it any more. You can go argue somewhere else if you have nothing constructive to add. Anything that looks sounds or smells like an ad hominem attack will be ignored and, if the attacks get bad enough, reported. I will update the first post as new developments occur on the site and I'll gladly respond to meaningful criticism but I'm tired of playing this game where we all just call each other names and get nothing accomplished. Be constructive, be productive or go home.

Which actually sounds a lot like what many of us do anyway during times when coins are undervalued.

Best thing I could find is the MtGox "recent trades" JSON feed, which seems to go back about a week. I'm fairly sure I could hack something together to pull that data into a temp database, calculate a moving average and then dump the temp table. I'll have to play with the data a bit but I think an exponential moving average might fit the data better with less lag. I feel like I'm heading dangerously close to speculator territory with the bot idea, but I suppose there's a difference between speculation with my own interests in mind and speculation with the interests of the market in mind.

Absolutely brilliant, I love it! Any idea where I could find an API feed with, say, daily average prices for the last 7 days as well as daily average mining power for the same period? Such a value would be likely to increase steadily during each difficulty period which would show much closer to the real trend of slowly increasing value rather than big spikes every time the difficulty goes up. Yes I understand that difficulty lags price (because it's calculated after the fact) but if you smooth the lines of that jagged stairstep they tend to match price quite nicely.

The 7 day average bit is precisely what I was talking about when I was asking for ideas to improve the formula... Now let's try to make it happen lol.

I can't agree more that we need to both buy and sell around the limit, it's just much harder to get people to agree to buy at any given point than to convince them to sell 

If enough people are selling coins at or around the average market-sustainable rate there wouldn't be anyone to buy them from you at MtGox for $24.

At the very least publishing the VALUE of 1 BTC versus the PRICE of 1 BTC should give an idea of the current status of the market. Try as I might there was no way I could justify $31 per BTC last week. Such a price was unsustainable and as we saw, it caused quite a little weekend crash. Things rebounded this time, but how many crashes can we really have like that without killing the project?

That actually sounds like it could be a real vulnerability if anyone really WERE to organize enough miners... Has anyone addressed this? Should the system change difficulty primarily in N blocks but have a secondary failsafe to change difficulty every N days if the block limit isn't reached? Now that I've got this thought in my head it legitimately worries me...

Oh, and the network is at 6.550 TH/s right now, to add 0.5% to the network with his "couple rigs" your theoretical miner would have to be pulling 32,750 MH/s. That's something on the order of 61 5970s. Assuming quad-card rigs that'd eat up about 20 kilowatts of electricity, which would be interesting to see outside of a data center since most houses and apartments are fused at 100A (115V * 100A = 11,500W maximum load). That's also not counting the 8 kilowatts he'd have to spend cooling off the 70,775 BTU of heat he's dumping into his house for that "measly" 0.5%. Get an idea of the scale we're working with before you act like you understand things.

Then the total processing power of the network magically grew out of thin air with no new interest drummed up in the project whatsoever? Again, people posting crap about how screwed up my methods are without bothering to post their magical fix to the solution. What is your better option?

The hashrate is a product of the number of miners, which is a product of the number of users. The difficulty lags the actual network growths by a bit but yes, since hashrate is (albeit indirectly) a measure of network size/interest, it should raise proportionately with price per BTC which is also largely a function of network size/interest.

in·flat·ed  (n-fltd)
adj.
1. Filled or expanded by or as if by gas or air.
2. Unduly enlarged or aggrandized; swollen: an inflated estimate; an inflated ego.
3. Full of empty or pretentious language; bombastic.
4. Raised or expanded to abnormal levels: an inflated economy; inflated wages.
5. Hollow and enlarged: an inflated calyx.

I'm going with definition 4 on that one. If we have a baseline measure of average value for a span of time, and the currency is currently trading well above that value, I'm pretty sure the Oxford English dictionary says we get to use the word "inflated." It does, in fact, mean what I think it does.

Any idea how many workers it can handle on what kind of hardware? The only server I've got access to right now (with access to outside web anyway, which is the feature I want it for) is shared hosting and I don't know what kind of performance I'm likely to get there...

All right, fine, just pretend I'm not trying to accomplish anything by putting the information out there then. All I am is a guy who threw out a web site that shows, based on prior trends, what the average exchange rate for BTC should be for a given period as delineated by difficulty changes. Do with that information what you will - I still say it will keep bubbles from growing as large just for people to know exactly how inflated the currency probably is at a given moment.

Oh and just to reaffirm that a big enough wall of coins can stabilize the price of bitcoins, anyone else remember the $20, $25 and $30 marks and how we hovered around them so much longer than, say, the $16 mark or the $23 mark? Go look at Mt. Gox's market depth data. See those big spikes at the even $5 increments? That would be the source of that stabilizing factor so yeah we have actually seen that stabilization occur before - it couldn't stop the bubble but it did stall it at $5 increments. Those familiar spikes, by the way, represent about 2,000 BTC each according to Mt. Gox's chart, which is less than 1/3rd the kind of power a united coalition of miners could wield.

Regardless of the problems with my implementation, merchants will not enter this marketplace if they have to change their prices daily - and in the current market, daily wouldn't even be often enough! There is no reason that anyone anywhere should pay 1 BTC for a shirt and then twenty minutes later see a price tag of 0.8 BTC and then 1.4 BTC twenty minutes after that. The issue still remains that this market is too volatile for real commerce and if the only people in the market are the speculators, who thrive on volatility, there will likely never be a sufficient decrease in that volatility to make this a worthwhile mechanism for most businesses to transact in.

I see a lot of people reaffirming that I've spotted a problem and telling me that my solution is stupid, wrong or communist but not a lot of people stepping up to do anything themselves. So until someone has a better idea and wants to implement it, stop complaining about my imperfect solution.

Why thank you good sir. I had actually registered bitcoinreference.com before I saw this post but thanks for the suggestion anyway. I figure I'm talking about setting a "reference price" so the name works

To contradict something my mother used to tell me: Just because you created something doesn't mean you have the right to destroy it. Murder is murder, even if you're killing your own child.

Speculation within certain bounds is a good thing, without active speculation we wouldn't have Forbes and SmartMoney writing articles about us, but too much speculation allowed to run rampant and create bubbles as massive as this past week has seen create collapses like we saw on Saturday and I for one don't want to see any more collapses that big. It is therefore in everyone's best interest to understand what 1 BTC *should* be trading at and refuse to participate in such speculations. There will always be those who will and small inflationary bubbles and their associated crashes can still occur - I welcome them even, because they mean more investors coming to our community - but we can't allow them to get out of hand like they recently have.

I'm not talking regulation or enforcement, I'm talking education. People are still welcome to make their own decisions, but I'd like them to be well-informed decisions.

URL changed, I managed to get http://bitcoinreference.com

Other than the titles and base URL, site content hasn't changed at all, all other paths are still the same relative to the new base URL so API can be found at http://bitcoinreference.com/api

btcunion.com now redirects to bitcoinreference.com

I'm promoting the idea that every user of BTC should be somehow protected by the ability of the speculators to destroy the market. I'm promoting the idea that education about where this currency comes from and the factors that truly drive its VALUE - not its PRICE - might just help stabilize the bitcoin economy. If we all know what a bitcoin SHOULD cost then we can compare that to what a bitcoin currently DOES cost and make better decisions, avoid bubbles and prevent tremendous crashes like we saw on Saturday.

OK I'm really tired of hearing peoples' opinions on the word "union" now when it was just poorly chosen in the first place. I'll be AFK a while to shop for a new URL 

Really the idea should be self-reinforcing. All I'd need to do in the first place is make an accurate assessment of the "value" of 1 BTC as opposed to its current market price. If enough people trust the assessment, they will refuse to sell when market price is beneath it, happy to sell when the price is nearby and recognize a bubble for what it is when the price is too far above it. I'm disseminating information in the hopes that people acting on that information will cause perhaps a bit more stability. I'm offering a decent guess of what exchange rates merchants should sell their goods at for a longer term than 5 minutes. I'm not charging dues, I'm not offering insurance, union is clearly the wrong word so let's see if I can find something more appropriate.