Monthly average USD/bitcoin price & trend

[NewLiberty]

Energy costs money, thus adding value to the coins.
If it costs to make it is more valuable than if it is free.

That's untrue. Bitcoin would work even if no energy was consumed by mining. Look up Proof of Stake, for example.

Costing more does not make anything more valuable, it just makes it more costly.  Energy saving measures can reduce the cost, but these do not make it less valuable.

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[Arriemoller]

Semantics, if it's costly it's valuable.

[NewLiberty]

Semantics, if it's costly it's valuable.

Wrong.
Definitions.
Higher cost, makes for less value.

Which would you pay more for: a 1TH rig that costs 1000/year to run, or one that costs 2000/year to run?

Running more expensive mining isn't what makes bitcoin valuable either.  The incentive runs in the opposite direction.  A valuable bitcoin gives reason to run expensive mining, but less costly is still always better. 

The earlier point is that the electricity costs are a part of the bitcoin cost, but that cost does not make bitcoin more valuable, it does the opposite, it makes it more costly.

[marcus_of_augustus]

Energy costs money, thus adding value to the coins.
If it costs to make it is more valuable than if it is free.

That's untrue. Bitcoin would work even if no energy was consumed by mining. Look up Proof of Stake, for example.

Costing more does not make anything more valuable, it just makes it more costly.  Energy saving measures can reduce the cost, but these do not make it less valuable.

This is correct, it does not make it more valuable but it places a floor on the market price at which point production scales back when price drops below cost .... stickiness in difficulty complicates the calculations further than this though.

Edit: are we going to get a December update?

[molecular]

FYI: http://bitcoin.org/bitcoin.pdf

The basics are all on the original whitepaper.

What is the date of this whitepaper?

late 2008 I think.

[rpietila]

The official December update is coming at the end of December. My current trendline which is calculated from daily prices until 15.12.2013, shows that we are at $469 now. We have not yet had any daily breaches of the trendline since the latest bubblepop.

Many have wondered, whether the trendline approach was able to cope with the extreme price movements of the 2011 bubble. It is true that during the move up, it was not possible to deduce anything from the trendline, which had just started to form. But during the move down, it called the bottom with almost deadly precision: the trendline was crossed down in 7.10.2011 (note: 4 months after the top) when the price was $4.29. The buy-level, which is -0.2 log units below the trend, was reached 17.10.2011 at $2.85. On a daily level, the bottom was reached 2 days after, at $2.28. At that point we were -0.341 units below the trend.

In 2013 April bubble, the final capitulation played out as follows: trendline was crossed in 3.6.2013 at $119, buy-level of -0.2 was reached in 1.7.2013 at $90, bottom was in 6.7.2013 at $69 at -0.341.

I am sure that -0.341 as the daily average of the most opportune day to buy, months after the bubble, is pure coincidence Nevertheless, it gives confidence to those who do not decide to invest all after a runup, fearing to be left behind. If we expect the final capitulation to come on the red candles' day (14.2.2014), it is still possible to buy back in between $308-$427 if the previous bubbles are any guide.

[NewLiberty]

FYI: http://bitcoin.org/bitcoin.pdf

The basics are all on the original whitepaper.

What is the date of this whitepaper?

late 2008 I think.

Oct 31 2008
Reformation day.

[Voodah]

Would the event of skipping this final capitulation imply the trendline has to be adjusted upwards or do you consider possible a scenario where we could go through two consecutive "bubbles" and only then come back to the trendline?

[marcus_of_augustus]

So if this trend line is based on assumption of exponential growth phase of adoption curve has there been any consideration to modelling when we begin to approach the saturation level?

I'm just wondering what a sigmoid curve will look like on this log plot (actually I know) but want to see it plotted ... and if there is any sign that the exponential growth may be starting to level off will we be able to see/anticipate that?

[rpietila]

Would the event of skipping this final capitulation imply the trendline has to be adjusted upwards or do you consider possible a scenario where we could go through two consecutive "bubbles" and only then come back to the trendline?

The trendline is recalculated every time a datapoint is added. This changes its starting point and slope (kx+b).

As the recalculation happens so frequently, and adds only less than 2% of new data, the changes are very small.

The predictive power of the trendline is under constant evaluation. If the price fails to go below the trendline before enough time has passed (perhaps because of a new bubble), it is already more expensive to buy in absolute terms, even if the price later tumbles well below the trend. We are talking at most a few months of waiting that could still be profitable.

On the other hand, even after such a black swan event as the rise from 0.005 to 32 in less than a year in 2010-2011, the trendline was duly visited before uptrend resumed, and the low predicted with considerable accuracy. This gave me an entry point of about $3, which of course is much worse than in the beginning of that year, but very good compared to May-Oct

This is guesswork, but I give greater odds (perhaps 65-35) that we continue the correction now (as an alternative to reinflating the bubble). Even if the bubble reinflates, it will pop so quickly that buying at <1000 is a very reasonable chance.

[bitrider]

So if this trend line is based on assumption of exponential growth phase of adoption curve has there been any consideration to modelling when we begin to approach the saturation level?

I'm just wondering what a sigmoid curve will look like on this log plot (actually I know) but want to see it plotted ... and if there is any sign that the exponential growth may be starting to level off will we be able to see/anticipate that?

See

https://bitcointalk.org/index.php?topic=366214.0

[oper128]

New interesting concept here: https://bitcointalk.org/index.php?topic=392117.0

[Ducky1]

My alternative approach - log vs log(log) from 01.11.2011 to present. Conclusion: The log-log model seems to better fit the data than the linear-log model, and according to this model we are actually slightly under the trend line. Comments?

[wachtwoord]

My alternative approach - log vs log(log) from 01.11.2011 to present. Conclusion: The log-log model seems to better fit the data than the linear-log model, and according to this model we are actually slightly under the trend line. Comments?

Let me get this straight: we've been going super exponential all this time? 

Could you draw this out on a log(log) chart as well?

[marcus_of_augustus]

My alternative approach - log vs log(log) from 01.11.2011 to present. Conclusion: The log-log model seems to better fit the data than the linear-log model, and according to this model we are actually slightly under the trend line. Comments?

Wow ... that's some wild-ass result you got!! ... but hard to argue with the math, the fit looks good (just eyeballing but some best-fit stats would be nice) if we are indeed in the super-exponential phase (vertical) right now.

[wachtwoord]

My alternative approach - log vs log(log) from 01.11.2011 to present. Conclusion: The log-log model seems to better fit the data than the linear-log model, and according to this model we are actually slightly under the trend line. Comments?

Wow ... that's some wild-ass result you got!! ... but hard to argue with the math, the fit looks good (just eyeballing but some best-fit stats would be nice) if we are indeed in the super-exponential phase (vertical) right now.

If he's right we've been going super exponential from the start. That's the point.

[Voodah]

My alternative approach - log vs log(log) from 01.11.2011 to present. Conclusion: The log-log model seems to better fit the data than the linear-log model, and according to this model we are actually slightly under the trend line. Comments?

Wow ... that's some wild-ass result you got!! ... but hard to argue with the math, the fit looks good (just eyeballing but some best-fit stats would be nice) if we are indeed in the super-exponential phase (vertical) right now.

If he's right we've been going super exponential from the start. That's the point.

That's uber-bullish, but can exchanges currently handle that rate of growth?

[Ducky1]

My alternative approach - log vs log(log) from 01.11.2011 to present. Conclusion: The log-log model seems to better fit the data than the linear-log model, and according to this model we are actually slightly under the trend line. Comments?

Let me get this straight: we've been going super exponential all this time?  

Could you draw this out on a log(log) chart as well?

It may be just a fluke, but super exp. at least fits best for this time period. Here is a log log chart. The blue lines above and below is drawn by hand. The actual price in log-log space have been added manually to the left right of the vertical axis. The chart was not really meant for publication so a bit rough.

[Ducky1]

My alternative approach - log vs log(log) from 01.11.2011 to present. Conclusion: The log-log model seems to better fit the data than the linear-log model, and according to this model we are actually slightly under the trend line. Comments?

Wow ... that's some wild-ass result you got!! ... but hard to argue with the math, the fit looks good (just eyeballing but some best-fit stats would be nice) if we are indeed in the super-exponential phase (vertical) right now.

Yes.. take them with a grain of salt though. The fit factors are on the chart (0.9451 for log-log and 0.9098 for log)

[wachtwoord]

My alternative approach - log vs log(log) from 01.11.2011 to present. Conclusion: The log-log model seems to better fit the data than the linear-log model, and according to this model we are actually slightly under the trend line. Comments?

Let me get this straight: we've been going super exponential all this time? 

Could you draw this out on a log(log) chart as well?

It may be just a fluke, but super exp. at least fits best for this time period. Here is a log log chart. The blue lines above and below is drawn by hand. The actual price in log-log space have been added manually to the left of the vertical axis. The chart was not really meant for publication so a bit rough.

Thanks a lot for sharing this. Very interesting