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

[JorgeStolfi]

that's why Bitcoin wins in the end, there are no system controllers making mistakes - not understanding systematic financial contagion, just millions individuals cooperating for the optimum outcome in pursuit of the Nash equilibrium.

That is the peisely point: "millions billions of individuals cooperating for the optimum outcome in pursuit of the Nash equilibrium" is just a longer name for the world's economy, including all the corporations, governments, regulations, criminals, etc., each one with its oun idea of what is the "optimum outcome"; and that is just too complicated a system to predict its future evolution with any confidence.  Including whether those billions will adopt bitcoin, or some other cryptocoin, or will stick to credit cards.

[Richy_T]

Physics does not want to understand all the universe.  It only wants to understands how its parts work, and generally limits itself to the smallest and simplest parts.

Phisicists may study the behavior of isolated atoms of generic bonds between atoms, but if you ask them to predict what a dozen atoms will do when they get together, they will tell you "sorry that's Chemistry, not Phisics".  Ditto if you want to predict tomorrow's weather, create a better strain of wheat, cook a good meal, pick up a girl at the bar...

And even the simplest "economic atoms" are already way more complicated than a tropical storm...

It seems like the first step in economics would be to define what can be known and what can't (much in the way you comp-sci chaps have done with the halting problem). Government economists not only don't seem to be able to admit this for critical parts of the economy but also seem to get it wrong a vast amount of the time. Worse still, they have the guns to make those errors manifest.

[adamstgBit]

shorts continue to hover near their all time high on bitfinex.

[JorgeStolfi]

All this market behavior seems like non-deterministic chaos AKA outcome is very sensitive to initial conditions and parameter variation. Similar to the weather. We know how it works to an extent, but the predictive power of the theory is lacking. Also, multiple atoms == statistical mechanics.

I'm a physicist; don't bring physics into this shit again

Agreed with all, except that statistical mechanics considers large numbers of SIMILAR atoms with VERY SIMPLE interactions (such as elastic collisions).  If you have several types of atoms mixed together, or they interact in slightly more complex ways (eg. by covalent bonds) then Statistical Mechanics has nothing to say.

[Adrian-x]

And even the simplest "economic atoms" are already way more complicated than a tropical storm...

Lol, that's the FUD the lie, the simplest "economic atoms" are supply and demand.

[findftp]

1. I don't watch television (anymore)
2. I never watched fox, I live in europe.
3. Fox is just as bad as almost any other network.

Sorry to oversimplify and to assume regarding your media viewing preferences (and to get it wrong), but to me it did sound as if you had been attempting to oversimplify the role of government into narrow sets of coercion and lack of voluntary participation - which are the same kinds of diversionary talking points that they engage in on Fox "news." 

If you have more subtle and nuanced views regarding the various aspects of the role of government, then you had NOT been showing such with your apparent exaggerated descriptors of government as a bunch of thugs.

Who are you to decide what I should or shouldn't be showing?

You may need to employ some reading skills

Probably because I'm not native english. You figured out why I'm also not very specific in my english writing.
Lets convert to Dutch, then I'm able to have an intellectual discussion with you because I don't master all the words in english.

[JorgeStolfi]

And even the simplest "economic atoms" are already way more complicated than a tropical storm...

Lol, that's the FUD the lie, the simplest "economic atoms" are supply and demand.

No, the simplest "economic atoms" are suppliers and consumers.  Try making a mathematical model for either of them...

[xyzzy099]

The science of physics is an attempt to understand All of Reality, which is generally considered to be an even larger set of phenomena than your description of economics  

Are you suggesting that since we can never really understand All of Reality, that no 'hard science' of physics can exist, and that such a purported 'hard science' of physics can't have any predictive power or utility?

Physics does not want to understand all the universe.  It only wants to understands how its parts work, and generally limits itself to the smallest and simplest parts.

Phisicists may study the behavior of isolated atoms of generic bonds between atoms, but if you ask them to predict what a dozen atoms will do when they get together, they will tell you "sorry that's Chemistry, not Phisics".  Ditto if you want to predict tomorrow's weather, create a better strain of wheat, cook a good meal, pick up a girl at the bar...

And even the simplest "economic atoms" are already way more complicated than a tropical storm...

You seem to think it is somehow not 'hard science' to study dynamic nonlinear systems, and that no good can come of such study.  I don't know why you think that, but I'm pretty sure a vast array of scientists, from meteorologists to mathematicians to quantum cosmologists would strongly disagree with you.

You answer does not address whether it is possible that there might exist a hard science of economics, as opposed to a mere philosophy, which was the original point.  Characterizing economics as a dynamic nonlinear system (which it certainly is), does not invalidate it as a subject of hard science.

[cmacwiz]

All this market behavior seems like non-deterministic chaos AKA outcome is very sensitive to initial conditions and parameter variation. Similar to the weather. We know how it works to an extent, but the predictive power of the theory is lacking. Also, multiple atoms == statistical mechanics.

I'm a physicist; don't bring physics into this shit again

Agreed with all, except that statistical mechanics considers large numbers of SIMILAR atoms with VERY SIMPLE interactions (such as elastic collisions).  If you have several types of atoms mixed together, or they interact in slightly more complex ways (eg. by covalent bonds) then Statistical Mechanics has nothing to say.

Well I don't agree, as something like a crystal structure (even a complex one) can be treated as a periodic potential for the behavior of electrons in said crystal lattice. Not even to mention the myriad of Van der Waals forces/effects (sometimes applicable). Just one example, and the behavior of these electrons vary in specific cases, which we still can't explain. If a theory cannot explain a physical phenomenon, then it isn't correct or complete. So to bring it back to economics, there is a difference in what each community expects from their theories. All the market analysis varies from solid statistical analysis to graphs riddled with confirmation bias and some wavelet bullshit. This is really why I would not compare the two, or put a economics as a subset of physics. The expectation of the theories differ.

But it is semantics arguing when stat-mech blends into p-chem blends into material science.

[Richy_T]

And even the simplest "economic atoms" are already way more complicated than a tropical storm...

Lol, that's the FUD the lie, the simplest "economic atoms" are supply and demand.

It does seem like they say "We'll spend a whole bunch of money on X to achieve Y" then when Y doesn't happen, they just stand around looking puzzled (And complain that spending on X wasn't big enough) instead of bringing their assumptions into question. Especially in the light of all the people standing around telling them it isn't going to work.

[grappa_barricata]

To attempt to understand complex systems and predict their evolution, one has to in a very real sense simulate the components and their interactions.
Understanding the mechanics of the human system, then, became a matter of considering the individual elements as 'politico/socio/economical' particles whose interactions are the manifestation of a single, simple rule: self-preservation.

[bigdave]

shorts continue to hover near their all time high on bitfinex.

And yet the price hasn't changed much...

[adamstgBit]

there appears to be a staring contest happening at bitfinex everywhere, who will blink first? exciting!

[justusranvier]

There cannot be rigorous arguments in that sort of subject.

Called it.

Maintaining your belief requires you to preemptively deny the possibility of being wrong, just like any other religion.

Quite the contrary.  Believing that your belief is certain and objective, rather than just probable and subjective, is the mark of religion.

There can't be rigorous arguments in economics or other "soft sciences".  It is pointless to debate if we start disagreeing right there...

(Haven't you never read priests, politicians, and assorted pundits "prove rigorously" all sort of weird and contradictory ideas, from creationism to communism to why gun control is good/bad and beyond?  Why do you think that those sciences are called "soft"?)

Agreeing with Sr. Stolfo here. Economics, politics, etc. are at least partially based on an individual's set of preferences. Arguing which of those sets is superior to another won't work unless you appeal to a set of higher axioms, which eventually always turn out to be ideologically motivated.

That said, there is one case in which a rigorous political/economical argument can be made: in showing that one's set of preferences is contradictory.

However, the problem is that even in those potentially rigorous arguments, one will need to make some assumptions that are not easily seen as "objective", so we're back to the first point - that economical/political objectivity doesn't practically exist.

Did a thousand years of alchemy prove that chemistry didn't exist?

[Adrian-x]

that's why Bitcoin wins in the end, there are no system controllers making mistakes - not understanding systematic financial contagion, just millions individuals cooperating for the optimum outcome in pursuit of the Nash equilibrium.

That is the peisely point: "millions billions of individuals cooperating for the optimum outcome in pursuit of the Nash equilibrium" is just a longer name for the world's economy, including all the corporations, governments, regulations, criminals, etc., each one with its oun idea of what is the "optimum outcome"; and that is just too complicated a system to predict its future evolution with any confidence.  Including whether those billions will adopt bitcoin, or some other cryptocoin, or will stick to credit cards.

Progress Jorge, nice, now you being 1 in a billion do you put your faith in the people who are making life changing calls based on a system just too complicated to predict its future evolution with any confidence, or do put your faith in your local community the people you know and trust to figure out a path through the unknown?

Most Bitcoiners it seems to me are global community thinkers, and oppressed psychopaths, the difference in the real world it is the psychopaths are our politicians. The beauty in moving to Bitcoin is the psychopaths lose there power as the heard learns.

[bigdave]

https://www.youtube.com/watch?v=GHcDX1C-J30

[adamstgBit]

operation stabilize bitcoin complete!

[Walsoraj]

http://www.marketwatch.com/investing/bond/10_year

Set period to 1yr. Rate liftoff? If so, zombie apocalypse just around the corner.

[adamstgBit]

in other news

http://www.reuters.com/article/2014/09/12/us-usa-bitcoin-cftc-idUSKBN0H71FU20140912?feedType=RSS&feedName=technologyNews

[JorgeStolfi]

thinkers like Ludwig von Mises and Hayek create a distinct divide between the social science and the actual science. the social science in economic = at what point do people start paying more for lobster than for cod, when calculating a supply and demand problem. the actual science is when there is a limited supply, the price will increase if the demand stays constant increases, or if there is monetary inflation and the demand stays constant the price will rise consistently if the new money is introduced equally.

there is Economics the Hard science (the Austrian leaning View)

the hard facts in any science are universal and can be leveraged but not manipulated, the same is true in economics

Take the current bitcoin economy, for example (to stay on topic).  It has a single fungible "product" that can be moved instantaneously and for free across the globe, without "shelf life", etc..  It should be simple to make an economic theory for it that could predict its price, in the short or long range.

But one runs into problems right at the definition of "supply" and "demand".  The number of existing bitcoins is known and objective, but that cannot be considered the "supply" for price fixing purposes because some large holders will not sell (they say) for less than 10 k$/BTC, so it is like if those coins did not exist.  To simulate the price in the short run, what matters is the amount of coins that could be sold or bought for prices in the 200$--2000$ range.  The order books at the exchanges do not tell us that, because many traders keep their working assets outside the exchanges, and because there may be substantial OTC trading going on. 

As for demand, there is some demand for several utilitarian purposes, but we have no data about its magnitude. There is much evidence that it is dwarfed by the speculative demand for investment at various time scales.  And we do not have complete data about that either, for the same reasons above.

More importantly, the demand and supply of bitcoin can change drastically and unpredictably in a matter of hours, because they depend on the beliefs that buyers and sellers have about its future -- and those beliefs mat be radically changed by news, regulation, competition, etc..

So, what is the use of a neat and "rigorous" equation that relates price, supply and demand, if one cannot even objectively define -- much less measure and predict -- the future supply and demand?