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41  Economy / Speculation / Re: The key is to have as many bitcoins as possible on: April 10, 2014, 08:23:22 PM
5 Years from now 1 bitcoin will be worth approximately 2 mansions and a lamborghini.

But seriously what do you guys think bitcoin would be worth 5 years from today?

If you assume 21 million bitcoins exist (although I know it will still be much less than that in 5 years) and they were to replace all world currency, then the value of each bitcoin comes to something around $640,000 per coin. However I guess it would be a bit more since there will be less than 21 million in existence... maybe even close to $1 million per coin.

Just to clarify though, I don't think this will ever happen, or certainly not in 5 years anyway. I could see bitcoin becoming very commonly used and being valued very highly, but I think there will always be other currencies. If it ever reached the hundreds of thousands of dollars range, I think it would take at least another 10-15 years.

Oh I did forget about inflation though, so if you account for inflation then bitcoin definitely could be worth millions (theoretically), but millions at that time will be worth much less than today.
42  Economy / Speculation / Re: Prediction: Breaking $500 within 24 hours on: April 10, 2014, 07:53:54 PM
$500 within 24 hours from now is still possible.
BTC tends to bounce fast once the rally/recovery begins.  Smiley

lol well I hope it goes up, but also I posted this a week ago haha
43  Economy / Speculation / Re: [Cosmopolis] Prepare for Bitcoin $266 Retest on: April 10, 2014, 04:49:48 PM
You said we had a 50-50 ('rounded off') chance of going below $400.
And that if we did the price would end up between $166 and $366.
This isn't a prediction. It means 'The price might go below $400 and if it does it will end up below $400.'
^^^
This is for the benefit of newbies who might be tempted to take cosmo seriously. The other threads people have dug up on you tell people everything they need to know about you.

For me, I think it's time you joined igorr on my ignorr list. I believe you'll get on well together.

EDIT: for the record, bearish short term and think that $400 holding is optimistic, but it doesn't make a difference to me either way. I earn my btc and will continue to do so over the long term regardless of price. Long term I think bitcoin has a bright future. Sentiments here are based on troll moronity, not fear that the wiggly lines on the charts might wiggle more than usual.

Exactly this... his prediction was a truism. He's saying that there's a chance it will go below $400, and if it does, then it will be below $400. It's not a prediction. Plus he gave a two week period of time for this to happen. If you're going to make a prediction, give a 2 day period MAX and give a more specific price for it to drop to.

An equivalent prediction to cosmofly's would be like if I said that there is a 50% chance that the price will go above $450 in the next 2 weeks and if it does, there is a 50% chance it will reach $500 and a 50% chance that it will stay in the mid $400s.
44  Economy / Economics / Re: Please help educate a n00b... on: April 10, 2014, 02:37:50 PM
I'm no expert either but I would guess it that the fact that their population is just under 1.4 billion, which is almost 20% of the entire world population, is a pretty significant factor.
45  Economy / Economics / Re: The Fallacy of "Intrinsic Value" on: April 09, 2014, 08:40:44 PM
I believe we are simply interpreting the definition of intrinsic differently (and it is open for interpretation).  This type of definition (or phrasing) is what causes so much confusion.  Just because something fills an intrinsic need now, does not mean it will always fill that need (or at least, always fill that need well).  The object that fills the need is always temporary compared to the need itself.

Stone tablets used to be an object that helped fill the intrinsic need to communicate.  Then we invented paper.  The value of stone tablets was entirely dependent on it's instrumental value.  It's utility.  It is the same way for all objects.

A long time ago, a cave would have been valuable as it has attributes that make it useful for security and shelter.  It is the idea of security that is intrinsically valuable, not the cave.  The cave is only as valuable so long as it can fulfill that need better than something else.

At the end of the day, all these objects values are relative.  The needs remain, which is why I call the underlying concepts apparent in human nature intrinsically valuable.  The objects that fulfill these needs are only as valuable as they are useful.

So I am arguing on a fundamental level that NO PHYSICAL OBJECTS are intrinsically valuable.  Only concepts can claim to be intrinsically valuable.  Everything else has instrumental or utility value, the degree of which depends on how well they fulfill those concepts which are intrinsic to human nature.

You are right that we are interpreting the definition differently. I agree with what you are saying, but I don't think intrinsic value is the correct term to describe what you are referring to. That's just semantics though.
46  Economy / Economics / Re: The Fallacy of "Intrinsic Value" on: April 09, 2014, 07:37:45 PM
No, you're not addressing the core definition of the term "intrinsic value"  You are conflating it with totally different concepts.  Intrinsic value DOES NOT refer to its utility, utility value does. That is the whole point of the word utility!  They are wholly different concepts that you are confusing as one.
So first, let's be clear about the definition of intrinsic value:

"Intrinsic value is an ethical and philosophic property. It is the ethical or philosophic value that an object has "in itself" or "for its own sake", as an intrinsic property. An object with intrinsic value may be regarded as an end or (in Kantian terminology) end-in-itself.
It is contrasted with instrumental value (or extrinsic value), the value of which depends on how much it generates intrinsic value."

You're right, being a medium of exchange does not give something intrinsic value, and I never said it did.  I said the concept of a medium of exchange itself is what is intrinsically valuable.  Only the concept.  How well something fulfills that concept gives it utility.  And believe it or not, certain attributes are useful when seeking to use as a medium of exchange (it has to be fungible, divisible, non-corrosive, scarce, etc).  That's why cows make a shitty medium of exchange, because they don't have the attributes that fulfill that need.  Cows have value for other reasons.  Because they have utility of fulfilling other intrinsic needs.
This is true. I agree that certain properties make a currency better or worse as a medium of exchange, and that gives it some degree of intrinsic value.

All those aspects of gold you just described do give it value.  But not intrinsic value.  There is nothing intrinsically valuable about jewelry.  Just as there is nothing intrinsically valuable about a facebook like.  What these things do is fulfill an intrinsic need(s).

According to the definition of intrinsic value, this is false. I believe you are confusing intrinsic value with instrumental value (as defined above). If something fulfills an "intrinsic need" then it has intrinsic value.

The concept of "status" is intrinsically valuable to humans because we are "pack" animals.  As is something like "love".  These are concepts that are inherent in human nature.

This is why jewelry is valuable, because it fulfills intrinsic needs in human nature.  It fills that intrinsic void.  Jewelry is a way in which we show off our status in society.  That is the utility of jewelry.  Gold then, is valuable because it has many of the properties that we value in jewelry (shiny, malleable, scarce, etc).  There is nothing intrinsically valuable about gold itself, just those traits.  If something comes along and fills the attributes of jewelry better than gold, gold loses its value.  Or worse, if something comes along and fulfills the need of showing off our status better than jewelry does, suddenly jewelry itself loses some of its value, which in turn also hurts gold.

The point being, none of these objects are intrinsically valuable, they are only useful at filling intrinsic needs.  Their value comes from their utility, which is 100000% not the same as those items being intrinsically valuable themselves.  Items, by nature, can never be intrinsically valuable, only the underlying concepts.

Consider meat.  Meat is valuable because it has utility.  Meat itself is not intrinsically valuable.  What is intrinsically valuable is the concept of energy.  We require energy to survive.  Food is how we get that energy, and meat is a useful source of food.  If however, we found a new source of food that was better than meat, we'd consume more of that and meat would lose some of its value.  The further away you go from the original concept, the easier it is to see...

Take meat and break it down further.  Beef, pork, chicken, etc.  We value each of these differently based on how well they fill the void.  What do we value, protein content, taste, scarcity (which effects price and availability), etc.  So each of these types of meat has a different utility to each of us.  If Beef suddenly became incredibly scarce, it's value would go up.  If we discovered a meat that tasted like Pork, only much better, the value of pork would go down.  etc.

Now, back it up.  Food is only valuable because it fills certain intrinsic needs (the need for energy, the need for pleasure, etc.  These are intrinsic to human nature).  If something came along and filled one or all of those intrinsic needs better (say for instance, we figured out a way to convert sun directly into human energy), food would suddenly lose some of its value.  It would have less utility.

Or what if we figured out a way to simulate taste in our brain without having to actually eat.  Oh how food would lose some of its value (especially junk food that is bad for you but tastes good).

In the end, objects are only as valuable as they are useful.  Gold is useful for lots of things because it has qualities that fill the needs of lots of different intrinsic concepts.  That doesn't mean gold itself is intrinsically valuable.  When something comes along and does it better than gold, gold loses a little value.  Same with anything.

What you are saying about us having certain "intrinsic needs" is true, but it is also true that objects that fulfill these needs do have intrinsic value. The term intrinsic value does not refer to the need itself - it refers to the value of something in fulfilling that need. Your definition of utility seems to be the same as intrinsic value.
47  Economy / Economics / Re: The Fallacy of "Intrinsic Value" on: April 09, 2014, 02:55:12 PM
I've argued it before and I'll say it again.  No items have intrinsic value.  Concepts have intrinsic value.

The concept of a liquid medium of exchange, aka money/currency, has intrinsic value to humans.  It is a necessary part of the human experience.  These intrinsic concepts (there are many others) create voids that need to be filled.  They create a set of attributes which have utility value (money needs to be fungible, divisible, non-corrosive, scarce, etc).

How an item fulfills these qualities gives said item it's utility, aka value.  Gold, paper money, bitcoin, all have value because they combine certain attributes that make them useful as a medium of exchange.  That is their utility.  There is nothing intrinsically valuable about it.  What is intrinsically valuable is that concept of a medium of exchange.

That intrinsic concept creates a void.  And how items fill that void gives them their utility value.  They are only as valuable as they are useful.  When something comes along and fills the intrinsic void better they lose value.

But you're not addressing the core definition of the term "intrinsic value", which refers to its utility in itself as something OTHER than a medium of exchange. Gold use very useful for making jewelry, coating wires, and dozens of other applications in various industries. THESE are the things that give it its intrinsic value, and they are the only things. Being an effective medium of exchange does not give something intrinsic value.
48  Economy / Economics / Re: The Fallacy of "Intrinsic Value" on: April 09, 2014, 01:34:20 PM
This is demonstrably incorrect: It is the intrinsic qualities of bitcoin which give it value.  Those qualities make it better for exchange purposes than any other commodity.  That is intrinsic value, value deriving directly from the intrinsic qualities of the thing.  In this case it happens to coincide with the properties which make it useful for exchange.  Other commodities have relatively poor intrinsic qualities for exchange.  Their intrinsic qualities relate to other forms of utility.  But exchange is very much a real form of utility.

Yes, it has properties that make it useful as a currency, but that's not what intrinsic value is. For something to have intrinsic value, it has to be useful even if other people don't want it. Bitcoin's usefulness relies 100% on other people wanting bitcoin. Furthermore, it's not used for anything besides exchanging. By definition, something with intrinsic value must be regarded as an "end in itself". Bitcoin is definitely not an end in itself - it is used to obtain other things that are ends in themselves.

To say that bitcoin has intrinsic value because of its properties as a currency would be like to say that the US dollar has intrinsic value because it is small, light, universally recognized, and difficult to replicate.
49  Economy / Economics / Re: The Fallacy of "Intrinsic Value" on: April 09, 2014, 03:35:51 AM
Quote
If people value something, it has value; if people do not value some­thing, it does not have value; and there is no intrinsic about it.

I think this is an oversimplification... he even mentions in the article himself - gold has value because of its physical properties. It's not valuable only because we give it value. Gold is valuable because it is useful and we need the material for many real-life applications.

If something can be used for a purpose other than exchanging it for something else, then it has intrinsic value. In the case of bitcoin, it doesn't have intrinsic value. I do agree that this doesn't make it less valuable, but it means that its value could potentially fall to zero if people lost trust, whereas this would be impossible with gold or silver because they are needed in various industries. I guess you could still say that gold and silver are valuable only because we give them value, but the reason we give them value is because of their uses as substances, whereas with bitcoin we give value because of trust. Trust can disappear, but intrinsic usefulness can't. I think that this is the most important difference.
50  Economy / Speculation / Re: Prediction: Breaking $500 within 24 hours on: April 09, 2014, 03:12:43 AM
I hope you make a lot of money.   Im not here to criticize your system.   Im just skeptical as an options trader. Im a firm believer in random walk in short term (minutes) ,  technicals in semi  short (hours,  days)  term and fundamentals long term (days,  months) .   Most of my trades are delta neutral.  I sell premium 45 days out on IV spikes.   I do have spec long positions that are 6 mos to year out

2 problems I foresee trading BTC

1.  The slippage on BTC  is huge.   Probably  cause theres no liquidity.  I looked on bitstamp and coinbase and the bid/ask can be $5 wide.  Lack of liquidity also makes difficult for intraday trading if you cant get in and out of position

2.  Theres no easy way to short BTC so you can only trade bullish direction.   In options you can trade up,  down,  or sideways

Yeah, I mean as I've said, I don't know a lot about trading. I'm doing this from a computer science perspective, so I don't know how profitable this will be. As I've said before though, I believe predictions should be taken with a grain of salt, and you should consider recent news as well when making decisions, and use your own judgement. I would never blindly trade according to these predictions only (which is what the simulator will be doing). However I believe it can be a good tool to consult when making decisions to buy/sell. It may be able to help you optimize when you decide to execute trades, allowing you to earn some extra money.
51  Economy / Speculation / Re: Prediction: Breaking $500 within 24 hours on: April 08, 2014, 10:57:37 PM
Even if you improve the preditions and add more functions into your website, there are always people arguing about it, instead of looking for solutions to improved it themself.
Most people who have seen your work are positive. Smiley

Thank you, that's nice to hear Smiley

Quote from: twiifm
Just curious how do you trade these predictions?  You just buy and sell if your target is hit?

If your target doesn't hit what do you do?  Double down? Swallow loss?

Are you talking about the trade simulator idea that I've been testing? The method I'm testing at the moment, which I think is the most promising, is that it looks at the 24 hour chart and sets a buy and sell price based on the predictions. If it doesn't predict for the price to significantly change, it just sets the buy price to 1.5% below the current price, and the sell price to 1.5% above. If the price is supposed to change soon, then it sets the buy or sell price to the price that the chart says it should reach (buy if it's low, sell if it's high obviously).

If it doesn't reach the target then it will just wait. I have it so that it only buys and sells 1 btc at a time, never more or less. I feel like this is the simplest way to show potential profitability. Then people can see how much money per bitcoin it makes by trading based on predictions.

Also remember that if the target says, for example, that the price will be $480 at 6:00 pm, that doesn't actually mean it will be the price at that time. It means that will be the average price over the course of the hour leading up to that time, meaning that it is likely that the price will go a bit higher and a bit lower. If I set the sell to $480, that might not be the highest price it gets to but it will most likely reach that price. Even if the average price over the course of that hour ends up being $475 or $470, there is still a solid chance it will hit $480 at some point.

Unfortunately, the price has been super stable the past day or so, so the simulator isn't buying or selling. Hopefully we'll get a bit of volatility soon and we can see how it actually does.
52  Economy / Speculation / Re: Prediction: Breaking $500 within 24 hours on: April 08, 2014, 04:56:34 PM
Confidence intervals don't work like that. If the data exists then you don't state a confidence interval. You never know the data when you state confidence intervals.

Here's why your error is a poor stat. One, your error makes a time series itself. Condensing it like that and keeping all the historic results in the current error is not useful. Your error tells the user very little about recent applicability. Secondly, you don't make any effort to tell the user how your mean varies. The minimum is zero and the mean is 1.3% okay, but how about the variance? What's the tail look like? That's a very important piece of information that anyone who is more than slightly curious will miss from your site. Listing a mean with no variance or other info is meaningless when the underlying distribution is largely unknown.

I know very little about the method used to generate your model. I know nothing about AI. I'm a mathematician I spend all my time modelling. You shouldn't condense 24 time series (error) into one number with equal weighting like that it isn't a relevant statistic to anyone but you. That means your predictions for the price 2 years ago are as relevant as your ability to predict yesterdays price as far as your error goes.

The vast majority don't understand the error at all. They just don't look at it long enough to understand it or simply don't care or know enough to see why its flawed.

PS there are confidence interval methods for neural network models. Your method for calculation is an innaproriate statistic, no matter how many people 'understand it'.

As someone who knows nothing about neural networks, I don't think you are in any place to say that my method of calculation is an inappropriate statistic (also that statement doesn't make sense in English).

As someone who knows much less about who does and doesn't understand what aspects of my website than I do, I don't think you are in any place to say that the vast majority of people don't understand the error at all (which is false).

As someone who knows very little, if anything, about pattern recognition and function approximation, I don't think you are in any place to say that the error calculated on data from 2 years ago is any less relevant than the error calculated on data from 2 days ago. They are equally relevant and the fact that you disagree with this just continues to confirm your lack of understanding of my method.

The only reasonable point you've made is that I could show the variance distribution. However, I address this on the about page in a very non-mathematical way. I tell people that the prices are less accurate when real-life events are affecting the price, and they are more accurate when prices are stable. Statistics are not needed to back this statement, as it is pretty intuitively obvious and it gives people enough information to make their own intelligent judgement without having to clutter the site with a bunch of statistics that are meaningless to almost everyone (except you and the 3 other mathematicians who are looking at my site).
 
There are people out there who are skeptical of my predictions and even skeptical of my error figures, and that is perfectly reasonable. However, it is ridiculous when people who have no understanding of what I do criticize my methods. I understand that you have some background in math, but you clearly don't understand how non-mathematicians (i.e. almost every person on Earth) look at things and understand data. You are the only person of 13,000 who has expressed any issue with my method of calculating this number. I could clutter the site with tons of detailed statistics and you might be able to have a thorough understanding of the error, but nobody else would.

My current average error is one number - simple. It describes all of the data at once, and it is not misleading because everyone knows the 1hr prediction is likely to be more accurate than the 24hr prediction.

You can continue to hate on my project for no reason if you want, but you have no point here, I'm sorry...
53  Economy / Speculation / Re: Prediction: Breaking $500 within 24 hours on: April 08, 2014, 02:03:48 PM
In your example, your confidence interval would be a measure of how sure you are the function really looks like that over the next 60mins, based on historic info.

I'm fed up of arguing about your definition of error and your inappropriate simplification and presenting only a mean. It's a bad measure of error for the data you are presenting, and an inappropriate statistic on it's own. As it stands, the data you present is meaningless to everyone but you. It doesn't matter how many people visit the page, if they don't have any mathematical background then they won't understand the flaw in your 'average error' statement.

Lastly, thanks for the caps, but I'm not a child. I never mentioned humans being able to 'see' patterns in datasets. But humans can 'understand' patterns, in many cases. Bitcoin prices make a timeseries, and there are many, many, many ways to find patterns in time series (& judge how likely they are to 'really' exist) and understand exactly what they mean.

The confidence interval would not be a measure of how sure I am the function looks like that because this data does not exist.

I just don't understand how you can argue that this way of measuring error is meaningless and then have absolutely no better way of doing it yourself. You seem to know nothing about neural networks and how they calculate predictions like this and your suggestions have been either impossible or just much worse and more confusing than what I have now. My point was just that the vast majority of people understand the error easily. It's not an oversimplification and it makes a lot of sense to almost everyone. It's far from meaningless, and you have yet to give any reason at all to back your claim other than the fact that there will be slight differences in accuracy between the shorter and longer term data points on the same chart (which is a very weak argument).

If you are going to come here and tell me the data produced by my project (which I've spent months and months and a huge amount of effort working on) is "meaningless" then you should have a better than tenuous argument as to why, and you should have some kind of better way that you would have done it. You seem to have neither of these things, and I would be much more inclined to take your advice if you did.

And I mentioned this before but trying to understand the functions that a neural network finds in data would be kind of like, in this case, trying to understand a function with 60 * 200 * 24 = 288,000 different variables. This is far from simple stuff. This is how computers recognize voices and words, it is how they identify images, it is how Google brain can differentiate between humans and cats, it is how stock market prices can be predicted, and there are dozens of other very complicated tasks that they perform. This is much more complicated than just finding some pattern in a timeseries. This is artificial intelligence and machine learning.
54  Economy / Speculation / Re: Prediction: Breaking $500 within 24 hours on: April 08, 2014, 06:25:05 AM
Xell - A confidence interval just wouldn't make sense with this model of prediction. It would be like if you said that you are 90% confident that the value of the function f(x) = x + 5 is 7 given 2 for x, and 10% sure that it is 8 or 6. So that's not an option. Also error calculation HAS to be historic. There is no other way it could ever possibly be done - you can't measure the error of a prediction that has yet to play itself out.

The 24 hour prediction is probably a small amount higher than average, and the 1 hour prediction is probably a small amount lower - yes, that is true. I could possibly somehow inform viewers of the error of each hour individually, but I am 100% positive that this would be much more confusing to the vast majority of people. It would provide a lot of information, cluttering the charts and very few people would understand it without having to ask for an explanation. The way it is now, the vast majority of the 13,000 unique people who have viewed it so far have not needed an explanation, and the few who I have explained it to understood it pretty quickly. I would really like for everyone to be able to understand it pretty easily, but from what you guys are saying here it seems like, unfortunately, that may not be possible.

Also I don't think anybody is assuming that the average error quoted above the 24 hour chart refers ONLY to the last prediction. I'm pretty positive of this lol...

I would be curious to see what study you are referring to that showed that bitcoin prices correlate more with media patterns than historic patterns, but regardless this is irrelevant. As I've explained before, the cause of a recurring pattern in price does not matter. As long as some pattern exists, it can be recognized and used to successfully predict future prices. It can be the media causing the pattern, group psychology, or flying spaghetti monsters. Neural networks don't need to know this information.

And remember, this is finding patterns that are WAAYYYY too complicated for any human to see or understand. Just because something looks like it is the case doesn't mean that it is. It may look like price movements are arbitrary and they don't repeat themselves, but that just means that you cannot see the underlying patterns because our brains are just incapable of this.
55  Economy / Speculation / Re: Prediction: Breaking $500 within 24 hours on: April 07, 2014, 10:51:11 PM
Xell - Of course the error is historic. I can't compare my predictions to future prices...

In your example of a prediction being $495 or $505 and the actual price being $500, those two options would be two different average errors. If you predict $505 and the price is 500, that is closer than if you predict $495 and it ends up being $500 because the difference ($5) is a smaller percent of $505 than it is of $495.

You were asking about whether the error was based on the 24 hour prediction or the 1 hr prediction or something in between - it is based on all of them. I still think you're making it more complicated than it is. I look at every predicted price, calculate how far off it is from the actual price at that time, and then take the average of those errors. So in reality if you were to average all of the predictions made 24 hours out, the error would probably be a bit higher. However, if you were to average the predictions that are 1 hour out, it would be lower. Really the best way to look at it though is just that the predicted prices (individually) are each off by an average of 1.3%.

morphtrust - It uses bitstamp. Are you saying that the patterns in price fluctuation are different now because people have seen the older patterns before? Because if so, I would definitely have to disagree. I'm still not exactly sure if that's what you are saying though.

Costanza1 - Yes, it averages all of the predictions' errors for each chart. The 24 hour chart averages the 1 hr, 2 hr, etc up to 24 hour errors. I have not calculated the error at individual hours in advance, but I imagine it would show lower errors for the shorter predictions and larger errors for the longer ones. I don't think the difference between the shorter and longer ones would be particularly large though.

----------

Maybe to some people the error is confusing, and I don't want that. It is definitely not misleading though. To say it is misleading implies that the error makes it seem like it's more accurate than it is, which is false. The error effectively describes the neural network's accuracy.

For those of you who find the average error confusing, I would be very open to your ideas on how to make it more intuitive. Given a set of predicted prices, how would you describe their accuracy? To me the most intuitive thing was just to calculate the error of each prediction and take the average of those errors, so that's what I've done. I just don't see a simpler, more obvious way to do it than that. But if you guys have ideas I would love to hear them.
56  Economy / Speculation / Re: Prediction: Breaking $500 within 24 hours on: April 07, 2014, 03:21:18 PM
Then you need to make that clear. Because right now it appears that you mean 1.3% over 24 hours. But in effect it is this between datapoints. Over the 24 datapoints, it can be off by 30% or so...

No lol... it will never be off by 30% unless something ridiculous happens. This is the average error of all of the predictions in that time frame, it's not aggregate or anything. If you look at all of those points, on average each one is off by around 1.3%. Like I said, I just calculate how far off each one is and take the average of all of them.
57  Economy / Speculation / Re: Prediction: Breaking $500 within 24 hours on: April 07, 2014, 03:11:26 PM
Just reread your post. That method of expressing error is hopeless when your predictions update hourly. It just doesn't make sense to take an average of errors like that. You need to explain better exactly how you calculate the error when (in the 24 hour case) you are really making 24 predictions per hour. You look at the error from all 24 predictions, square them (or take absolute value) and add them up? So you're adding 24 positive values up?

Your errors are also meaningless in terms of current prediction, because the errors you list are purely historic and are independent of the current prediction.

I think you are making it a lot more complicated than it is. I really calculate the error in the most basic way possible. Also I don't know what you are talking about as far as squaring anything or taking absolute values.

If I predict the price to be $500, and it turns out to be $505, that's a 1% error. It was off by $5, which is 1% of the predicted price. So I just take all of the predictions and calculate those errors, and take the average. And by taking the average, I mean taking the average, as in the average of 2, 2, 3, and 5 is 2 + 2 + 3 + 5 = 12 / 4 = 3. I just add them all together and divide by the number of predictions that were made to figure out what the average error is.

Average error really just means exactly what it says - on average, predictions are off by that percent.
58  Economy / Speculation / Re: Prediction: Breaking $500 within 24 hours on: April 07, 2014, 01:48:03 PM
morphtrust - the possibility of people trading based on this information, and therefore causing higher errors is, of course, inevitable. However, at this point in the site's life I tend to doubt that enough people are actually making decisions based on this data to significantly affect the market though. This is very hard to measure though - especially given that I'm far from an expert in economics or markets and I don't really know how many people are needed to affect the market to what degree.

Xell - I mean, I thought the average error was pretty self explanatory. If it has an average error of 1.3%, that means that on average, it is off by 1.3%. That's about it. If you take all of its predictions and compare them against the actual prices, you'll find that the average of all the errors is 1.3%. A few people have asked about this though, so I'll give a little bit more detail.

The neural network, once it is done training, does some "test runs" where it attempts to make predictions at a few tens of thousands of points on the historic data. It compares its predictions to the actual prices that occurred and calculates the errors. The average errors that show up on the charts on the home page are the averages of all of these errors from the test runs.

With neural networks, there is no data that you would get which corresponds with something like a confidence level. It tries to approximate a function, but there is no probability involved in this.
59  Local / Mercado y Economía / Re: Sitio Para Predecir el Precio de BTC on: April 07, 2014, 05:05:18 AM
Ahora los predicciones dicen que el precio va a subir 4/8 a $500. Sera interesante ver lo que pasara.
60  Bitcoin / Bitcoin Discussion / Re: Overstock.com TV commercial advertises bitcoin! on: April 07, 2014, 04:56:13 AM
lol I thought you meant it would be an advertisement where they like, explicitly mention and advertise the fact that they accept bitcoin rather than just having the little note on the bottom with the logo. Still pretty cool though!
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