(SSS) - A Sane and Simple bitcoin Savings plan

[genco]

Why doesn't somebody already prepare a spreadsheet to test this theory (based on various start dates would be nice)??

 I believe this theory is stupid, but I would like data to show what the results would be.

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[wachtwoord]

Why doesn't somebody already prepare a spreadsheet to test this theory (based on various start dates would be nice)??

 I believe this theory is stupid, but I would like data to show what the results would be.

You mean SSS? Go ahead: http://bitcoinsavingsplan.com/

[Peter R]

I believe this theory is stupid, but I would like data to show what the results would be.

What in your opinion would be a non-stupid theory?

[dnaleor]

I know I posted that I will start selling @1000 USD, but took another look at my spreadsheet today and considering to wait until 2000 USD.
Breaking the current all time high is, in my opinion, a sure thing. So it does not really makes sense for me to start selling @1000 USD.

Selling in "uncharted territory" makes more sense, because the volatility and uncertainty is higher.
still tweaking my personal SSS plan. I want to be prepared when the next bubble starts.

The difficult part for me will be not postponing my sell orders. I am such a bitcoin bull that I become a little greedy when everything is shouting "2 d@ M00N !!!"
Therefore, I will place my sell orders in advance.

[ErisDiscordia]

I have been watching the adjusted transaction quantities reported by Blockchain.info for a reversal. I believe price is leading transaction quantity, to the extent that price and transaction quantity are weakly independent. There is a hint now of a reversal to confirm what we have seen in price action for a few days.

https://blockchain.info/charts/n-transactions-excluding-popular?showDataPoints=true&timespan=30days&daysAverageString=1&scale=1&address=

Chart display options include a 7 day average, and also a longer duration of data.

I find it interesting to note that the number of transactions (ex. popular addresses) moves in 7 day cycles and hitting its low point without fail on Sundays.

[BitChick]

I know I posted that I will start selling @1000 USD, but took another look at my spreadsheet today and considering to wait until 2000 USD.
Breaking the current all time high is, in my opinion, a sure thing. So it does not really makes sense for me to start selling @1000 USD.

Selling in "uncharted territory" makes more sense, because the volatility and uncertainty is higher.
still tweaking my personal SSS plan. I want to be prepared when the next bubble starts.

The difficult part for me will be not postponing my sell orders. I am such a bitcoin bull that I become a little greedy when everything is shouting "2 d@ M00N !!!"
Therefore, I will place my sell orders in advance.

It is actually hard not to do that when the price is skyrocketing.  This is why having a plan is so important.  We can make more logical decisions this way that are not based entirely on emotions.  It seems when our emotions are involved we have a much greater chance of getting burned somehow. 

[kmicic77]

I'd like to mention that if you tweak this system by selling bitcoins gradually the cash you'll get will be lower than if you sell only when the price doubles. When you divide your 10% of BTC to 10 equal parts and sell 1st part  at 1100, 2nd at 1200 and the last part at 2000 it means that you sell your 10% of BTC for average price of 1550 instead of 2000 which is 77.5% of the price you could get if you didn't split.
Splitting to 2 parts means that you sell half of your 10% holdings at 1500 and another half at 2000. Average price you get is 1750 which is 87.5% of the price if you don't split.
The last extreme example is when you divide your 10% to 100 parts and sell them at 1010, 1020, 1030.. 2000. Average price you get is 1505 which is around 75% of the price if you don't split.
I think splitting makes sense only if you don't believe that the price will actually double at all, or when you already have plenty of bitcoins and every cashout you make gives you some real money and peace of mind.
If the cashouts are small and you don't risk much money holding bitcoins it's better to wait for the price to double or even miss a few cashouts to build your BTC value quicker.

[Ibian]

I'd like to mention that if you tweak this system by selling bitcoins gradually the cash you'll get will be lower than if you sell only when the price doubles. When you divide your 10% of BTC to 10 equal parts and sell 1st part  at 1100, 2nd at 1200 and the last part at 2000 it means that you sell your 10% of BTC for average price of 1550 instead of 2000 which is 77.5% of the price you could get if you didn't split.
Splitting to 2 parts means that you sell half of your 10% holdings at 1500 and another half at 2000. Average price you get is 1750 which is 87.5% of the price if you don't split.
The last extreme example is when you divide your 10% to 100 parts and sell them at 1010, 1020, 1030.. 2000. Average price you get is 1505 which is around 75% of the price if you don't split.
I think splitting makes sense only if you don't believe that the price will actually double at all, or when you already have plenty of bitcoins and every cashout you make gives you some real money and peace of mind.
If the cashouts are small and you don't risk much money holding bitcoins it's better to wait for the price to double or even miss a few cashouts to build your BTC value quicker.

Another option is to sell in small increments with the intention of buying back in whenever the price drops. Depending on volatility, this could actually give more total bitcoin and fiat than simply selling on doubles. Worst case scenario with that strategy is that the price goes up and never comes back down, so timing would still be somewhat important. Undecided if I will go for this.

[jmw74]

I'd like to mention that if you tweak this system by selling bitcoins gradually the cash you'll get will be lower than if you sell only when the price doubles. When you divide your 10% of BTC to 10 equal parts and sell 1st part  at 1100, 2nd at 1200 and the last part at 2000 it means that you sell your 10% of BTC for average price of 1550 instead of 2000 which is 77.5% of the price you could get if you didn't split.
Splitting to 2 parts means that you sell half of your 10% holdings at 1500 and another half at 2000. Average price you get is 1750 which is 87.5% of the price if you don't split.
The last extreme example is when you divide your 10% to 100 parts and sell them at 1010, 1020, 1030.. 2000. Average price you get is 1505 which is around 75% of the price if you don't split.
I think splitting makes sense only if you don't believe that the price will actually double at all, or when you already have plenty of bitcoins and every cashout you make gives you some real money and peace of mind.
If the cashouts are small and you don't risk much money holding bitcoins it's better to wait for the price to double or even miss a few cashouts to build your BTC value quicker.

This is not really true, you can reduce the rake to compensate.

I realize this ruins the "simple" part of the plan, but I'm thinking about adding a component that considers how far above or below the trend the price is at the time of the sale.  So sell more than the usual rake when it's above the trend, and less when it's below.  That would allow you to then buy back (if you choose) when the price goes down well below the trend.

[rpietila]

I'm thinking about adding a component that considers how far above or below the trend the price is at the time of the sale.  So sell more than the usual rake when it's above the trend, and less when it's below.  That would allow you to then buy back (if you choose) when the price goes down well below the trend.

Practically always when it makes new ATH's, it is also above the trend. So this correction would not be very practical, because you never sell unless it goes to uncharted territory, and when it does, it is typically overbought already.

A separate matter which is not really part of the SSS ideology at all (but which I subscribe to myself) is to use the exponential trendline sell signals with the intention to buy back cheaper later. This speculation should imo be conceptually different from SSS, so that SSS winnings are not used for buyback, only the proceeds from the speculative selling at the bubble top.

Just don't drown in all the money you suddenly make at the bubble top with these various plans 

[dnaleor]

I just want to thank you again, rpietilla

I did some small investments in an altcoin and price exploded today. I had my sell orders in place based on your SSS plan
with one djustment: to avoid panic sells, I would only start the plan when I had my invested BTC back

[Trolololo]

I quote these two Risto's posts because they deserve to be remembered it in this thread:

For most people, holding 100% of the initial amount is not a wise choice. It is good to diversify by selling into strength to account for the possibility of a black swan event in Bitcoin technology. This way you steadily accumulate also non-BTC assets, and can learn how to handle wealth. You sleep better and don't see dips in price as an opportunity to panic, but rather an opportunity to buy back if you really feel like so. The selling plan must be based on percentages, which means that no matter how high bitcoin goes, you still have more value in your remaining BTC.

If you have BTC1,000 and you absolutely want to have the same number when it hits $million, then it is best to just bury the paper wallet into ground and wake up when you are a billionaire. Trading only makes you lose the most of it over time with no gain. But it is not healthy for anyone to suddenly become a billionaire.

If instead, you flex your Excel muscle and devise a plan to sell BTC900 in decreasing increments at exponentially rising price points, you will already be rich and well-established when bitcoin hits $1 million, and totally content with the idea that your remaining stash is still worth a cool $100M.

I was quoting prices is dollars for convenience, because this is a large forum where most readers do not use bitcoin as their accounting unit.

Wealth is the same, regardless whether it is measured in bitcoins or dollars, because (in any point of time), bitcoin is a fixed multiple of dollar.

I do advocate using dollar as your accounting unit, since its value (purchasing power) is relatively constant, whereas Bitcoin's purchasing power increases tenfold every year. It is just handy.

But I also encourage to carefully consider that every one of your bitcoins is increasingly likely to reach $1 million in value quite soon. It should be treated as an inheritance, not to be wasted away. Every bitcoin you give away must give you more value than an extra $ one million would have given you in a few years of time. This is accomplished by selling only so little that the remaining amount is worth more (more dollars, houses, or gold) than the whole stash was in the previous stage.

How you allocate the non-bitcoin part of your portfolio is up to you. I do not advocate holding dollars as any % of it, unless you do arbitrage or something. The value converted from bitcoin should be used to buy silver, gold, castles with apple gardens, businesses, etc.

If you are a world dominator, then it makes sense to acquire as many bitcoins as possible and not care about the above. But who wants in that kind of game anyway...

[farl4web]

I love you SSS plan http://bitcoinsavingsplan.com.  I am using it for Nxt now. Too bad there is not an option to add other crypto's like Nxt.

[SlipperySlope]

[I find it interesting to note that the number of transactions (ex. popular addresses) moves in 7 day cycles and hitting its low point without fail on Sundays.

Because payments to miners from pools occur every day, I suppose the day-of-week variation is due to consumer and investor behavior. Likewise bitcoin exchange volume drops on weekends.

[d9000]

I love you SSS plan http://bitcoinsavingsplan.com.  I am using it for Nxt now. Too bad there is not an option to add other crypto's like Nxt.

Thanks, I think it should still work fine as long as you ignore the BTC units 

I just updated it today based on some requests to be able to modify the "doubling" to other values.  You can now modify the cycle multiplier to trigger a sell on 2x, 1.5x, 1.1x, etc.

Also, if you want to set up a fixed withdrawal rate in fiat, there is an option under the cycle multiplier to calculate that for you based on a given rake %.

[Cranky4u]

Hi rpietila,

congrats on a great savings plan. Really nice one.  


I have another one if you would like to comment. It is intended for people who already save some money every month.
They could save a small part of that (say $100 per month) into bitcoin.
The difference would be that they wouldn't have to suffer inflation but rather deflation for the bitcoin part of their savings.

If for example over a 30 year period we have 5% yearly inflation, while bitcoin has 3% monthly deflation (being ultra conservative here),
the difference after 30 years would be astonishing!!!

Please feel free to comment. Or whoever else wishes to.

Can someone do up an example of this scenario with US$1K over 10 years?

[wachtwoord]

Hi rpietila,

congrats on a great savings plan. Really nice one.  


I have another one if you would like to comment. It is intended for people who already save some money every month.
They could save a small part of that (say $100 per month) into bitcoin.
The difference would be that they wouldn't have to suffer inflation but rather deflation for the bitcoin part of their savings.

If for example over a 30 year period we have 5% yearly inflation, while bitcoin has 3% monthly deflation (being ultra conservative here),
the difference after 30 years would be astonishing!!!

Please feel free to comment. Or whoever else wishes to.

Can someone do up an example of this scenario with US$1K over 10 years?

Just go here: http://bitcoinsavingsplan.com/ and play with the numbers. Best easiest and fastest way to learn and get a feel for this.

[JayJuanGee]

I love you SSS plan http://bitcoinsavingsplan.com.  I am using it for Nxt now. Too bad there is not an option to add other crypto's like Nxt.

Thanks, I think it should still work fine as long as you ignore the BTC units 

I just updated it today based on some requests to be able to modify the "doubling" to other values.  You can now modify the cycle multiplier to trigger a sell on 2x, 1.5x, 1.1x, etc.

Also, if you want to set up a fixed withdrawal rate in fiat, there is an option under the cycle multiplier to calculate that for you based on a given rake %.

I really like this tool, also. 

I do have one suggestion that may make the tool even more amazing, and that would be able to individually modify the multiplier for each cycle.  In that regard, each line would have its own multiplier and I would NOT want to rake very much in earlier cycles; however, in later cycles my rake multiplier would be higher.  So, if I could set the multiplier on each line, then I would really be able to customize the plan to my individualized preference(s)

[Cranky4u]

Hi rpietila,

congrats on a great savings plan. Really nice one.  


I have another one if you would like to comment. It is intended for people who already save some money every month.
They could save a small part of that (say $100 per month) into bitcoin.
The difference would be that they wouldn't have to suffer inflation but rather deflation for the bitcoin part of their savings.

If for example over a 30 year period we have 5% yearly inflation, while bitcoin has 3% monthly deflation (being ultra conservative here),
the difference after 30 years would be astonishing!!!

Please feel free to comment. Or whoever else wishes to.

Can someone do up an example of this scenario with US$1K over 10 years?

Just go here: http://bitcoinsavingsplan.com/ and play with the numbers. Best easiest and fastest way to learn and get a feel for this.

thnx...nice lead

[raindex]

I love you SSS plan http://bitcoinsavingsplan.com.  I am using it for Nxt now. Too bad there is not an option to add other crypto's like Nxt.

Thanks, I think it should still work fine as long as you ignore the BTC units 

I just updated it today based on some requests to be able to modify the "doubling" to other values.  You can now modify the cycle multiplier to trigger a sell on 2x, 1.5x, 1.1x, etc.

Also, if you want to set up a fixed withdrawal rate in fiat, there is an option under the cycle multiplier to calculate that for you based on a given rake %.

I really like this tool, also. 

I do have one suggestion that may make the tool even more amazing, and that would be able to individually modify the multiplier for each cycle.  In that regard, each line would have its own multiplier and I would NOT want to rake very much in earlier cycles; however, in later cycles my rake multiplier would be higher.  So, if I could set the multiplier on each line, then I would really be able to customize the plan to my individualized preference(s)

Next you will want your customizations to be saved for you, because you will feel it's too annoying to redo all the tweaking tomorrow, when you have a new idea. I think the tool is good as it is. If you want something more personalized, you can create your own spreadsheet. Takes just a few minutes. If you want it to be accessible from anywhere, use Google Docs or some other similar service.