Stephen Reed's Million Dollar Logistic Model

[BitDreams]

A little deflation because of progress is a good thing but sadly the average consumer often doesn't benefit from deflated prices due to corruption of one sort or another. Bitcoin lowers costs for consumers and merchants and resists corruption.

Edit: regarding price climbing until resources are exhausted, well the target is 'all the money in the world and then some' (due to progress) 

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[Voodah]

A little deflation because of progress is a good thing but sadly the average consumer often doesn't benefit from deflated prices due to corruption of one sort or another. Bitcoin lowers costs for consumers and merchants and resists corruption.

Edit: regarding price climbing until resources are exhausted, well the target is 'all the money in the world and then some' (due to progress) 

I assure you, nothing resists corruption.

There is already ample evidence of corruption in Bitcoin, both in the early days and now.

[Peter R]

A little deflation because of progress is a good thing but sadly the average consumer often doesn't benefit from deflated prices due to corruption of one sort or another. Bitcoin lowers costs for consumers and merchants and resists corruption.

Edit: regarding price climbing until resources are exhausted, well the target is 'all the money in the world and then some' (due to progress) 

I assure you, nothing resists corruption.

There is already ample evidence of corruption in Bitcoin, both in the early days and now.

Not that I couldn't see it happening Voodah, but can you give some examples of corruption in Bitcoin?  Do you mean things like the pirate scandal or the recent inputs.io hack, or something more sinister?

[Voodah]

A little deflation because of progress is a good thing but sadly the average consumer often doesn't benefit from deflated prices due to corruption of one sort or another. Bitcoin lowers costs for consumers and merchants and resists corruption.

Edit: regarding price climbing until resources are exhausted, well the target is 'all the money in the world and then some' (due to progress)  

I assure you, nothing resists corruption.

There is already ample evidence of corruption in Bitcoin, both in the early days and now.

Not that I couldn't see it happening Voodah, but can you give some examples of corruption in Bitcoin?  Do you mean things like the pirate scandal or the recent inputs.io hack, or something more sinister?

Yeah, you just mentioned a couple but I'll throw in some more...

Early on, the operator (and also one of the bitcoin devs) of one of the biggest pools secretly diverted the pool's power (a lot) to at least one other sha-256 alt-coin to kill it (successfully).

A couple months back the now biggest pool (part of big mining scam to consumers if you ask me) was proven to have used it's majority power of the network to construct and successfully execute double-spendings. They only needed their 29% majority share of the network (and a less-than-secure victim). They now have 33%, no one is doing anything, the news doesn't get out and people keep buying GH at insane prices from them and giving them control over the network.

Just this last week, China and it's exchanges have given yet another example of on-going corruption which we cannot easily spot or control: volume and tape manipulation. Who can police an exchange?

As with all past human history, corruption is deeply engrained in the human behavior whenever a lot power falls in the hands of a few. As you can see, most of these cases appear on centralization points, making for yet another great argument on why we so badly need to protect descentralization at all costs.

[wachtwoord]

Early on, the operator (and also one of the bitcoin devs) of one of the biggest pools secretly diverted the pool's power (a lot) to at least one other sha-256 alt-coin to kill it.

Lukejr

A couple months back the now biggest pool (part of big mining scam to consumers if you ask me) was proven to have used it's majority power of the network to construct and successfully execute double-spendings. They only needed their 29% majority share of the network (and a less-than-secure victim). They now have 33%, no one is doing anything, the news doesn't get out and people keep buying GH at insane prices from them and giving them control over the network.

GHasj.IO

[Voodah]

Early on, the operator (and also one of the bitcoin devs) of one of the biggest pools secretly diverted the pool's power (a lot) to at least one other sha-256 alt-coin to kill it.

Lukejr

A couple months back the now biggest pool (part of big mining scam to consumers if you ask me) was proven to have used it's majority power of the network to construct and successfully execute double-spendings. They only needed their 29% majority share of the network (and a less-than-secure victim). They now have 33%, no one is doing anything, the news doesn't get out and people keep buying GH at insane prices from them and giving them control over the network.

GHasj.IO

Yes, I chose not to specify so as not to derail this thread (and turn it into a flame war, please don't), and also so that the people interested do their own research and come to their own conclusions. It's all here on the forum, a search away.

[Mikcik]

Coinbase reports that 80% of wallets are buy and hold, the remaining 20% are used for transactions. That supports the idea that when fully adopted, the majority of bitcoin will be held as a deflating store of value, and the smaller portion held as working capital by transacting entities. I do not distinguish intrinsic value aside from the contextual market price. Please enlighten me with regard to the two main uses of bitcoin as partitioned above.

OMG how can you even say something so stupid... even this little sentence totally discredits your analysis. The 80% are not "stores of value" but speculators... When the price reaches their desired level, they will sell or buy something with bitcoin, or yes, try to think of it as a store or value, but i think majority will sell for fiat, but you cannot for god sake tell at this moment that they use bitcoin as a store of value, because its not true, and if you fail to realize this, what else you do you fail to realize or what else do you got wrong :-(?

[wachtwoord]

Yes, I chose not to specify so as not to derail this thread (and turn it into a flame war, please don't), and also so that the people interested do their own research and come to their own conclusions. It's all here on the forum, a search away.

That's why I only gave the names, to make it searchable.

I see I mistyped GHash.io.

[BitDreams]

Coinbase reports that 80% of wallets are buy and hold, the remaining 20% are used for transactions. That supports the idea that when fully adopted, the majority of bitcoin will be held as a deflating store of value, and the smaller portion held as working capital by transacting entities. I do not distinguish intrinsic value aside from the contextual market price. Please enlighten me with regard to the two main uses of bitcoin as partitioned above.

OMG how can you even say something so stupid... even this little sentence totally discredits your analysis. The 80% are not "stores of value" but speculators... When the price reaches their desired level, they will sell or buy something with bitcoin, or yes, try to think of it as a store or value, but i think majority will sell for fiat, but you cannot for god sake tell at this moment that they use bitcoin as a store of value, because its not true, and if you fail to realize this, what else you do you fail to realize or what else do you got wrong :-(?

Personally, if I want to speculate with my Bitcoins I would move them to an EXCHANGE where I can then speculate with my Bitcoins or I would no longer be holding Bitcoins, I would have SOLD them, being a speculator and whatnot.

How long do I have to hold them for you to consider that I'm storing value? Do you place a value on Bitcoins and if so, what is it? I'd like to know when I can sell some according to your definition

[marcus_of_augustus]

Coinbase reports that 80% of wallets are buy and hold, the remaining 20% are used for transactions. That supports the idea that when fully adopted, the majority of bitcoin will be held as a deflating store of value, and the smaller portion held as working capital by transacting entities. I do not distinguish intrinsic value aside from the contextual market price. Please enlighten me with regard to the two main uses of bitcoin as partitioned above.

OMG how can you even say something so stupid... even this little sentence totally discredits your analysis. The 80% are not "stores of value" but speculators... When the price reaches their desired level, they will sell or buy something with bitcoin, or yes, try to think of it as a store or value, but i think majority will sell for fiat, but you cannot for god sake tell at this moment that they use bitcoin as a store of value, because its not true, and if you fail to realize this, what else you do you fail to realize or what else do you got wrong :-(?

You sound like a spouting idiot .... and it is not the first time I've run across your offensive broadsides either.

The hundreds of billions 'stored' wealth in US Treasury bonds are also from speculators then? (I'd be inclined to agree). You probably don't understand money or how people use it very well going by your rantings.

Hint: Differentiating between speculators and investors becomes nonsensical when the CB's are printing hundreds of billions in fresh money monthly ....

[Hideyoshi]

OMG how can you even say something so stupid... even this little sentence totally discredits your analysis. The 80% are not "stores of value" but speculators... When the price reaches their desired level, they will sell or buy something with bitcoin, or yes, try to think of it as a store or value, but i think majority will sell for fiat, but you cannot for god sake tell at this moment that they use bitcoin as a store of value, because its not true, and if you fail to realize this, what else you do you fail to realize or what else do you got wrong :-(?

I have lots of bitcoins. Your claim that when price reaches desired level, those who have lots of bitcoins will sell for fiat, is wrong. If you have maybe few thousand dollars, and are just speculating, then yes, you can sell for fiat. But if you have hundreds of thousands, or millions of dollars of bitcoins, selling means paying taxes, and telling other people that you have so much money. It also means having your money stuck in a bank some where. At some point, it just becomes impossible to sell it all, because you can not live buying expensive cars and houses every week without being noticed. So you have to keep bitcoins in bitcoins, and only sell whatever needed to live, and maybe use some to invest in various projects.

[BitChick]

OMG how can you even say something so stupid... even this little sentence totally discredits your analysis. The 80% are not "stores of value" but speculators... When the price reaches their desired level, they will sell or buy something with bitcoin, or yes, try to think of it as a store or value, but i think majority will sell for fiat, but you cannot for god sake tell at this moment that they use bitcoin as a store of value, because its not true, and if you fail to realize this, what else you do you fail to realize or what else do you got wrong :-(?

I have lots of bitcoins. Your claim that when price reaches desired level, those who have lots of bitcoins will sell for fiat, is wrong. If you have maybe few thousand dollars, and are just speculating, then yes, you can sell for fiat. But if you have hundreds of thousands, or millions of dollars of bitcoins, selling means paying taxes, and telling other people that you have so much money. It also means having your money stuck in a bank some where. At some point, it just becomes impossible to sell it all, because you can not live buying expensive cars and houses every week without being noticed. So you have to keep bitcoins in bitcoins, and only sell whatever needed to live, and maybe use some to invest in various projects.

Sounds like a good problem to have.  Can't say I have it yet.

I have pondered this though.  There may come a point in the future where it does become a problem managing fiat.  Of course we have already thought of the tax implications of selling, but then there is the problem of what to do with the money when it is cashed out as well.  It will be wise to keep some in coins for sure.

[Spendulus]

OMG how can you even say something so stupid... even this little sentence totally discredits your analysis. The 80% are not "stores of value" but speculators... When the price reaches their desired level, they will sell or buy something with bitcoin, or yes, try to think of it as a store or value, but i think majority will sell for fiat, but you cannot for god sake tell at this moment that they use bitcoin as a store of value, because its not true, and if you fail to realize this, what else you do you fail to realize or what else do you got wrong :-(?

I have lots of bitcoins. Your claim that when price reaches desired level, those who have lots of bitcoins will sell for fiat, is wrong. If you have maybe few thousand dollars, and are just speculating, then yes, you can sell for fiat. But if you have hundreds of thousands, or millions of dollars of bitcoins, selling means paying taxes, and telling other people that you have so much money. It also means having your money stuck in a bank some where. At some point, it just becomes impossible to sell it all, because you can not live buying expensive cars and houses every week without being noticed. So you have to keep bitcoins in bitcoins, and only sell whatever needed to live, and maybe use some to invest in various projects.

Sounds like a good problem to have.  Can't say I have it yet.

I have pondered this though.  There may come a point in the future where it does become a problem managing fiat.  Of course we have already thought of the tax implications of selling, but then there is the problem of what to do with the money when it is cashed out as well.  It will be wise to keep some in coins for sure.

I caution you, that this is not the road to go.  But this wealth is not uncommon, for example people buy shopping centers and malls, 30-40 acres of that stuff is quite valuable.  Even beyond that, are people that do things like buy casinos in Vegas.  They make the guys that own malls look like beggars.
 
I say this is not the way to go because of several factors, but just note the likely effects of on line gambling, and of on line shopping, on the fixed real estate models over the medium term...say 10-20 years.

Nonetheless, diversification is a good thing, as an example look up theory of why and how a 'diversified stock portfolio' is widely understood to be a good thing.

[deisik]

OMG how can you even say something so stupid... even this little sentence totally discredits your analysis. The 80% are not "stores of value" but speculators... When the price reaches their desired level, they will sell or buy something with bitcoin, or yes, try to think of it as a store or value, but i think majority will sell for fiat, but you cannot for god sake tell at this moment that they use bitcoin as a store of value, because its not true, and if you fail to realize this, what else you do you fail to realize or what else do you got wrong :-(?

I have lots of bitcoins. Your claim that when price reaches desired level, those who have lots of bitcoins will sell for fiat, is wrong. If you have maybe few thousand dollars, and are just speculating, then yes, you can sell for fiat. But if you have hundreds of thousands, or millions of dollars of bitcoins, selling means paying taxes, and telling other people that you have so much money. It also means having your money stuck in a bank some where. At some point, it just becomes impossible to sell it all, because you can not live buying expensive cars and houses every week without being noticed. So you have to keep bitcoins in bitcoins, and only sell whatever needed to live, and maybe use some to invest in various projects.

Satoshi, is that you?

[Cablez]

OMG how can you even say something so stupid... even this little sentence totally discredits your analysis. The 80% are not "stores of value" but speculators... When the price reaches their desired level, they will sell or buy something with bitcoin, or yes, try to think of it as a store or value, but i think majority will sell for fiat, but you cannot for god sake tell at this moment that they use bitcoin as a store of value, because its not true, and if you fail to realize this, what else you do you fail to realize or what else do you got wrong :-(?

I have lots of bitcoins. Your claim that when price reaches desired level, those who have lots of bitcoins will sell for fiat, is wrong. If you have maybe few thousand dollars, and are just speculating, then yes, you can sell for fiat. But if you have hundreds of thousands, or millions of dollars of bitcoins, selling means paying taxes, and telling other people that you have so much money. It also means having your money stuck in a bank some where. At some point, it just becomes impossible to sell it all, because you can not live buying expensive cars and houses every week without being noticed. So you have to keep bitcoins in bitcoins, and only sell whatever needed to live, and maybe use some to invest in various projects.

At some point you're going to use it and be noticed. I guess it's best to prepare to be able to deal with being noticed. If you don't, watch the use of having all those Bitcoins? (Even if you don't have a job and live of your Bitcoin's you'll be noticed. At least where I live.)

Agreed,  If you have that many BTC the first purchase is a damn good tax attorney, after that go live life you have won the bitcoin game.

[Voodah]

Just move over here to 3rd world country.

Live like a king. No questions asked.

[Hideyoshi]

At some point you're going to use it and be noticed. I guess it's best to prepare to be able to deal with being noticed. If you don't, watch the use of having all those Bitcoins? (Even if you don't have a job and live of your Bitcoin's you'll be noticed. At least where I live.)

That is something to be aware of. But for use, I can spend it on projects I am interested in, instead of on wealthy lifestyle. Many things out there much more important than fancy living.

[marcus_of_augustus]

SlipperySlope .... there's some new work that you might like to try to fit into your Logistic model ... a super-exponential growth phase

https://bitcointalk.org/index.php?topic=322058.msg4227238#msg4227238

[SlipperySlope]

SlipperySlope .... there's some new work that you might like to try to fit into your Logistic model ... a super-exponential growth phase

https://bitcointalk.org/index.php?topic=322058.msg4227238#msg4227238

Agreed that the Log(Log) graph fits recent data better, however there is no principle behind the equation as there is with a logistic model of population growth with resource constraints.  The Log(Log) model suggests that prices during 2014 will reach 100000 USD by summer 2014. To me, this is not a plausible growth rate for bitcoin prices.

I believe that 2012 simply under performed and that 2013 over performed with regard to the log trend line.

[bitwager]

Agreed that the Log(Log) graph fits recent data better, however there is no principle behind the equation as there is with a logistic model of population growth with resource constraints.  The Log(Log) model suggests that prices during 2014 will reach 100000 USD by summer 2014. To me, this is not a plausible growth rate for bitcoin prices.

I believe that 2012 simply under performed and that 2013 over performed with regard to the log trend line.

justusranvier brought up a great point in that USD purchasing power has been following an exponential decay model.  Doesn't that suggest the growth should be super exponential, at least for some phase?

https://bitcointalk.org/index.php?topic=178336.msg4210004#msg4210004