Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[adamstgBit]

I just did an estimate of the "Bitcoin National Debt" (BND), which is the minimum amount that the bitcoin system "owes" to the people who are holding bitcoins.   It is between 483 million and 17.2 billion USD.

For example, someone who bought 10 BTC a year ago must have paid close to 600 $/Ƀ, the market price at that time.  Therefore, he must be expecting to get at least 6600 $ if he were to sell or spend those bitcoins -- the 6000 $ that he invested, plus 10%/year of return.   By doing that math for every bitcoin and adding the results we would get the BND.

Unfortunately, there is no way of knowing when any given lump of bitcoin was bought by its current owner.  The purchase may not even have been recorded in the blockchain (e.g. if it was bought in an exchange and left there).  We can only assume that the last purchase of a bitcoin that was mined on day X will (almost) surely have occurred on date X or after that.  Therefore, by looking at the minimum and maximum price in that interval, we can get uper and lower bounds to the expectations of its owner.  

For example, the 25 bitcoins that were mined on 2014-04-01 (when the price was ~450) may have been bought by their present owner(s)  on 2014-06-01 (when the price was at its highest, ~680) or on  2015-01-14 (when the price was at its lowest, ~150).  So, the current owners of those bitcoins, even if they are happy with a 10%/year return on investment, now expect to get from them between 25 × 150 $ and 25 × 680 $ plus the 10%/year.

I may post more details later if I get the time.

Too many variables to draw reliable conclusions concerning cause and effect, but could make for interesting data points in themselves.

"National debt" is wrong, even with tongue firmly in cheek, a debt is a promise to repay... which bitcoin doesn't promise. The exchange rate volatility risk is foisted upon current owners and traders (not rights to future labor and income), and rightly so.

Maybe "bagholder pain index" or BPI can be produced, at least partially, with this data.

What happens to "bagholder pain index" when price exceeds $1200 ? Do we reach negative pain? Just like negative interest rates?

same acronym different meaning BPI Bagholder Pleasure Index, this would be a really useful Technical Indicator

[JorgeStolfi]

"National debt" is wrong, even with tongue firmly in cheek, a debt is a promise to repay... which bitcoin doesn't promise.

Of course.  It is only a "moral" debt, that no one has any obligation to pay...  

Maybe "bagholder pain index" or BPI can be produced, at least partially, with this data.

That is a rather indelicate way of saying, but it is precisely what it is: how big is the bag that the bag-holders are holding...

[Cconvert2G36]

I just did an estimate of the "Bitcoin National Debt" (BND), which is the minimum amount that the bitcoin system "owes" to the people who are holding bitcoins.   It is between 483 million and 17.2 billion USD.

For example, someone who bought 10 BTC a year ago must have paid close to 600 $/Ƀ, the market price at that time.  Therefore, he must be expecting to get at least 6600 $ if he were to sell or spend those bitcoins -- the 6000 $ that he invested, plus 10%/year of return.   By doing that math for every bitcoin and adding the results we would get the BND.

Unfortunately, there is no way of knowing when any given lump of bitcoin was bought by its current owner.  The purchase may not even have been recorded in the blockchain (e.g. if it was bought in an exchange and left there).  We can only assume that the last purchase of a bitcoin that was mined on day X will (almost) surely have occurred on date X or after that.  Therefore, by looking at the minimum and maximum price in that interval, we can get uper and lower bounds to the expectations of its owner.  

For example, the 25 bitcoins that were mined on 2014-04-01 (when the price was ~450) may have been bought by their present owner(s)  on 2014-06-01 (when the price was at its highest, ~680) or on  2015-01-14 (when the price was at its lowest, ~150).  So, the current owners of those bitcoins, even if they are happy with a 10%/year return on investment, now expect to get from them between 25 × 150 $ and 25 × 680 $ plus the 10%/year.

I may post more details later if I get the time.

Too many variables to draw reliable conclusions concerning cause and effect, but could make for interesting data points in themselves.

"National debt" is wrong, even with tongue firmly in cheek, a debt is a promise to repay... which bitcoin doesn't promise. The exchange rate volatility risk is foisted upon current owners and traders (not rights to future labor and income), and rightly so.

Maybe "bagholder pain index" or BPI can be produced, at least partially, with this data.

What happens to "bagholder pain index" when price exceeds $1200 ? Do we reach negative pain? Just like negative interest rates?

It would go negative after a prolonged ATH, at least with currently held coins. It could also approach infinity with a mass exodus from the asset to better vehicles or in the chance of a protocol failure.

[BlackSpidy]

I just did an estimate of the "Bitcoin National Debt" (BND), which is the minimum amount that the bitcoin system "owes" to the people who are holding bitcoins.   It is between 483 million and 17.2 billion USD.

For example, someone who bought 10 BTC a year ago must have paid close to 600 $/Ƀ, the market price at that time.  Therefore, he must be expecting to get at least 6600 $ if he were to sell or spend those bitcoins -- the 6000 $ that he invested, plus 10%/year of return.   By doing that math for every bitcoin and adding the results we would get the BND.

Unfortunately, there is no way of knowing when any given lump of bitcoin was bought by its current owner.  The purchase may not even have been recorded in the blockchain (e.g. if it was bought in an exchange and left there).  We can only assume that the last purchase of a bitcoin that was mined on day X will (almost) surely have occurred on date X or after that.  Therefore, by looking at the minimum and maximum price in that interval, we can get uper and lower bounds to the expectations of its owner.  

For example, the 25 bitcoins that were mined on 2014-04-01 (when the price was ~450) may have been bought by their present owner(s)  on 2014-06-01 (when the price was at its highest, ~680) or on  2015-01-14 (when the price was at its lowest, ~150).  So, the current owners of those bitcoins, even if they are happy with a 10%/year return on investment, now expect to get from them between 25 × 150 $ and 25 × 680 $ plus the 10%/year.

I may post more details later if I get the time.

Too many variables to draw reliable conclusions concerning cause and effect, but could make for interesting data points in themselves.

"National debt" is wrong, even with tongue firmly in cheek, a debt is a promise to repay... which bitcoin doesn't promise. The exchange rate volatility risk is foisted upon current owners and traders (not rights to future labor and income), and rightly so.

Maybe "bagholder pain index" or BPI can be produced, at least partially, with this data.

What happens to "bagholder pain index" when price exceeds $1200 ? Do we reach negative pain? Just like negative interest rates?

It just looks like just a fancy way to compare what the miners/buyers would expect as return (in USD) for "investing" into bitcoin. Seems odd, is all I'm saying. Why not just declare a loss if one has been hodling between November 5th 2014 and now? I mean, if you bought/mined bitcoin between then and the first day of this year, your bitcoins are definitely worth less than what you bought/mined them at.

So, this "debt" looks like a way to exaggerate the now-dying downtrend.

[Cconvert2G36]

I agree that the built-in 10% ROI is superfluous. It's either -100% or (x)%+ in this game. Best to just stick with the actual values, as expectations will be scattered everywhere.

[JorgeStolfi]

What happens to "bagholder pain index" when price exceeds $1200 ? Do we reach negative pain? Just like negative interest rates?

It would go negative after a prolonged ATH, at least with currently held coins. It could also approach infinity with a mass exodus from the asset to better vehicles or in the chance of a protocol failure.

The BND numbers that I posted are the minimum and maximum that the bagholders's should expect to get back, without being greedy.  To satisfy their expectations, they would have to find new investors willing to invest between 483 million and 17.2 billion USD in bitcoin.

The BPI could be defined as what the current holders expect to get back, minus what they would get back if they all sold their coins today with no slippage. That is, the BPI would be the BND minus the market cap, which today is 3.65 billion USD; which gives between −3.16 billion (meaning that the bagholders as a whole could profit that much) and +13.5 billion (meaning that they could have that much loss), or anything in between.

[Cconvert2G36]

Meanwhile, the sovereign bond holders, are calculating their similarly devised BPI in the nominal trillions of $ equiv.

[JorgeStolfi]

Remember those valiant new core developers, who were defending bitcoin against the fork that the Evil Lords Gavin and Mike wanted?  Seems that they now have a little ittyy bitty forklet of their own happening now...

[ChartBuddy]

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[edgar]

droning waffle

>> (i have no morals)  <<

more droning waffle

Agreed!

If it wasnt for being lumped in with moral-less entities such as this wall of waffle-text posting clown, things would be much more comfortable.

it feels as though a bunch of lonely shut-ins have joined us and claimed us as their own - and there are millions more yet to arrive...

As much as we all want increased adoption, knowing the vast majority of them will be no morals having, life-story repeat-whining d-bags just makes me cringe.

[Chef Ramsay]

droning waffle

>> (i have no morals)  <<

more droning waffle

Agreed!

If it wasnt for being lumped in with moral-less entities such as this wall of waffle-text posting clown, things would be much more comfortable.

it feels as though a bunch of lonely shut-ins have joined us and claimed us as their own - and there are millions more yet to arrive...

As much as we all want increased adoption, knowing the vast majority of them will be no morals having, life-story repeat-whining d-bags just makes me cringe.

Considering we're on the cusp of another uptick of unheard proportions, I say your worry of them having no morals isn't such a thing to be concerned about. So much is going to change in such a large manner that'll you'll be super surprised.

[ChartBuddy]

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[ejinte]

 I like it.

[ChartBuddy]

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[gijoes]

Remember those valiant new core developers, who were defending bitcoin against the fork that the Evil Lords Gavin and Mike wanted?  Seems that they now have a little ittyy bitty forklet of their own happening now...

6-blocks deep invalid chain due to some stupid miners not checking blocks and only using headers? Meh. Could be almost anything,  just happened to be BIP-66 specific. Blaming it on core devs is disingenuous. The situation has zero similarity with the pandora's shitbox opened by a bunch of fervent Bitcoin-XT fork promoters.

[ChartBuddy]

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[Cconvert2G36]

Remember those valiant new core developers, who were defending bitcoin against the fork that the Evil Lords Gavin and Mike wanted?  Seems that they now have a little ittyy bitty forklet of their own happening now...

6-blocks deep invalid chain due to some stupid miners not checking blocks and only using headers? Meh. Could be almost anything,  just happened to be BIP-66 specific. Blaming it on core devs is disingenuous. The situation has zero similarity with the pandora's shitbox opened by a bunch of fervent Bitcoin-XT fork promoters.

Those scalists, trying to increase capacity to something on par with a regional renaissance festival. For shame.

[Cconvert2G36]

https://bitcointalk.org/index.php?topic=1108304.0;all

Not to ruin the plot... but it's over already. The panic was less than impressive.

[ChartBuddy]

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[ChartBuddy]

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