It might be possible to predict a future crash

[grondilu]

Today I've edited a Rosetta Code task about forest fire, and by doing so I've learnt about the Forest fire model.

How is this related with bitcoin?   Well, later in the day I was browsing the press coverage section on the bitcoin forum, and I thought how silly journalists were, to copy one an other in such a ridiculous way.  It seems clear to me that they are, consciously or not, in major part responsible for the current bull market in bitcoin.

As I was trying to find an analogy, the forest fire naturally came to my mind.

Here are the rules of a forest fire model:

* A burning cell turns into an empty cell
* A tree will burn if at least one neighbor is burning
* A tree ignites with probability f even if no neighbor is burning
* An empty space fills with a tree with probability p

It's easy to relate to journalism, isn't it?

A newspaper will certainly not make its headline about the same subject several times in a row.  That's rule 1.
When Bloomberg makes its headling about bitcoin, the Financial Times somehow thinks it just has to do the same.  That's rule 2.
Rule 3 and 4 are similar, but introduce parameters which are largely unknown for journalism, but we might infer them with historical data, I guess.

If we add to this model other parameters, such as a to-be-determined relation between the price and media coverage, I suspect it must be possible to predict the end of the current rally.

Anyone would like to give it a try?

[Charm Quark]

Trying to predict the future will tend to bring you to the same conclusion:
We need more information

[ElectricMucus]

Any kind of fuckup that will be the crash. We are at the point where even a bee sting can pop this bubble.

[wtfvanity]

36

[ECore]

Any kind of fuckup that will be the crash. We are at the point where even a bee sting can pop this bubble.

I would argue against that.  Bitcoin hasn't even touched the tip of the iceberg when it comes to its potential.  Yes, it's going to pop...it's going to EXPLODE!...in a good way.  UP UP and AWAY!

[crazy_rabbit]

And a new bitcoin business model was born.

[ElectricMucus]

Any kind of fuckup that will be the crash. We are at the point where even a bee sting can pop this bubble.

I would argue against that.  Bitcoin hasn't even touched the tip of the iceberg when it comes to its potential.  Yes, it's going to pop...it's going to EXPLODE!...in a good way.  UP UP and AWAY!

Just parrot that a couple of times till you have convinced yourself.

And a new bitcoin business model was born.

lol

[PrymeTyme]

Today I've edited a Rosetta Code task about forest fire, and by doing so I've learnt about the Forest fire model.

How is this related with bitcoin?   Well, later in the day I was browsing the press coverage section on the bitcoin forum, and I thought how silly journalists were, to copy one an other in such a ridiculous way.  It seems clear to me that they are, consciously or not, in major part responsible for the current bull market in bitcoin.

As I was trying to find an analogy, the forest fire naturally came to my mind.

Here are the rules of a forest fire model:

* A burning cell turns into an empty cell
* A tree will burn if at least one neighbor is burning
* A tree ignites with probability f even if no neighbor is burning
* An empty space fills with a tree with probability p

It's easy to relate to journalism, isn't it?

A newspaper will certainly not make its headline about the same subject several times in a row.  That's rule 1.
When Bloomberg makes its headling about bitcoin, the Financial Times somehow thinks it just has to do the same.  That's rule 2.
Rule 3 and 4 are similar, but introduce parameters which are largely unknown for journalism, but we might infer them with historical data, I guess.

If we add to this model other parameters, such as a to-be-determined relation between the price and media coverage, I suspect it must be possible to predict the end of the current rally.

Anyone would like to give it a try?

nah ,,


its not the news istelf who push or pull price .. its more often how the markets act to news & data release .. especially if pros are in those markets,,#
and more often then not  news lag price...

example:
the news goes like this .. All time high of BTC a massive bull run.. etc.. all bullish news ..
this news lag  actually!..

one of two things might happen.. A.) Big Money dumps into good news .. as average joe jumps on the train
or B.) the bull run continues and gets even more fired up .. by fresh money coming in...

so news are somewaht a catalyst .. and its a mather of how the market reacts to news.. wheter bad or good

but , yes it is actually possible to *predict* future crash..  just by oberserving price ! and judging the market by its own action

[||bit]

Today I've edited a Rosetta Code task about forest fire, and by doing so I've learnt about the Forest fire model.

How is this related with bitcoin?   Well, later in the day I was browsing the press coverage section on the bitcoin forum, and I thought how silly journalists were, to copy one an other in such a ridiculous way.  It seems clear to me that they are, consciously or not, in major part responsible for the current bull market in bitcoin.

As I was trying to find an analogy, the forest fire naturally came to my mind.

Here are the rules of a forest fire model:

* A burning cell turns into an empty cell
* A tree will burn if at least one neighbor is burning
* A tree ignites with probability f even if no neighbor is burning
* An empty space fills with a tree with probability p

It's easy to relate to journalism, isn't it?

A newspaper will certainly not make its headline about the same subject several times in a row.  That's rule 1.
When Bloomberg makes its headling about bitcoin, the Financial Times somehow thinks it just has to do the same.  That's rule 2.
Rule 3 and 4 are similar, but introduce parameters which are largely unknown for journalism, but we might infer them with historical data, I guess.

If we add to this model other parameters, such as a to-be-determined relation between the price and media coverage, I suspect it must be possible to predict the end of the current rally.

Anyone would like to give it a try?

Is the idea that the media "burns out" and either report negatively on bitcoin or that they just reporting less to none on it?
Sounds useful as a part, but I suspect it will be incomplete.

Meanwhile, let's see how we can counter the media fire analogy to float a spark on over to start another fire by analogy. 

Suppose the media is the kindling. And now, the bitcoin users fire is now burning. The users of bitcoin are the new fire - spreading by word of mouth. So, even if the media burns out, you have a bigger new [or at least accelerated] fire going. One that, perhaps, replaces the smoldering media.

Sorry, just throwing in some thoughts on how it can get complicatified. 

[SgtSpike]

Under normal circumstances, I might agree with you.

These are not normal circumstances.

The MtGox verification queue keeps growing.  Anyone who has been in Bitcoin a while now likely either already has an account there, or will refuse to ever have an account there.  So that's 13,000 people who are waiting to buy Bitcoins.

Long after the news coverage stops (I'd say, at least a month), the rally will continue just from these people continuing to be verified.

And, you speak of the forest fire through the media... what of the forest fire through people?  Word of mouth?  That is the much bigger fire just starting to burn...

[Le Happy Merchant]

Trying to predict the future will tend to bring you to the same conclusion:
We need more information

The rules of the mentat.

[zby]

A better model would be the beer game: http://en.wikipedia.org/wiki/Beer_distribution_game