Stephen Reed's Million Dollar Logistic Model

[deisik]

Siegfried explained it, we don't need more food, more roads,  more houses, we need a better and enjoyable food, we need better ways to get around,  we need better ways to accommodate our selves, and better in the context of the entire ecosystem not just the virtual meme we call an economy

So you (or rather Siegfried) come to decide for people what they need, right?

[LAMarcellus]

Siegfried explained it, we don't need more food, more roads,  more houses, we need a better and enjoyable food, we need better ways to get around,  we need better ways to accommodate our selves, and better in the context of the entire ecosystem not just the virtual meme we call an economy

So you (or rather Siegfried) come to decide for people what they need, right?

Easy there. Deisik and Siegfried aren't forcing you at gun point to buy "affordable" health insurance here and pay for your senators childrens college education.
They are simply claiming that they think quality is preferable to quantity in biological systems.
And that is their educated opinion based on observing the world around them.
How come you hate observation and the scientific method bro?

Their opinion is correct fact according to me.
It's also called Natural Selection. Or said another way,   "what can't be sustained won't be sustained."

You can decide for yourself how you live. I would suggest you go for quality over quantity though. But you decide, I'm not trying to decide for you. Just suggesting based on what I've seen of this world.

Fucking fedguv, now they are trying to decide what is right or wrong for you. The won't hesitate to kill you if you "disagree" to strongly. Me, I'm just a quiet voice from across the internet making a suggesting.

[Siegfried]

Siegfried explained it, we don't need more food, more roads,  more houses, we need a better and enjoyable food, we need better ways to get around,  we need better ways to accommodate our selves, and better in the context of the entire ecosystem not just the virtual meme we call an economy

So you (or rather Siegfried) come to decide for people what they need, right?

No, I think everyone should be able to decide for themselves what they need in a free market, assuming all externalities are priced in. Unfortunately externalities such as environmental impact are not priced in, so there does need to be some kind of science-based rules and regulations in order to ensure sustainability and the survival of life on the planet.

[lyth0s]

This just became my first and only "watch" thread. Great job on the analysis and google spreadsheet Slippery Slope, keep it up!

[deisik]

Siegfried explained it, we don't need more food, more roads,  more houses, we need a better and enjoyable food, we need better ways to get around,  we need better ways to accommodate our selves, and better in the context of the entire ecosystem not just the virtual meme we call an economy

So you (or rather Siegfried) come to decide for people what they need, right?

Easy there. Deisik and Siegfried aren't forcing you at gun point to buy "affordable" health insurance here and pay for your senators childrens college education.
They are simply claiming that they think quality is preferable to quantity in biological systems.
And that is their educated opinion based on observing the world around them.
How come you hate observation and the scientific method bro?

The crucial point here is "they think". Others may think otherwise and give strong reasons supporting their stance at that. Actually, it all depends. But it is not only that. The other part of the problem is that an educated opinion doesn't guarantee you from mistakes. And understanding this is also part of the scientific method man...

In complex systems (and before all in biological systems) such terms as quality and quantity lose their meaning in respect to "quality is preferable to quantity"!

This is a wrong frame of reference

[deisik]

Their opinion is correct fact according to me.
It's also called Natural Selection. Or said another way,   "what can't be sustained won't be sustained."

I would strongly disagree. As I said before, nothing is sustainable in the long run. The sun will die eventually, and the life on Earth will die too (even without our "help", as it were), so we shouldn't take an opportunity to use solar energy or just live?

And I know what you would say in response...

[shockload]

Siegfried explained it, we don't need more food, more roads,  more houses, we need a better and enjoyable food, we need better ways to get around,  we need better ways to accommodate our selves, and better in the context of the entire ecosystem not just the virtual meme we call an economy

So you (or rather Siegfried) come to decide for people what they need, right?

Easy there. Deisik and Siegfried aren't forcing you at gun point to buy "affordable" health insurance here and pay for your senators childrens college education.
They are simply claiming that they think quality is preferable to quantity in biological systems.
And that is their educated opinion based on observing the world around them.
How come you hate observation and the scientific method bro?

The crucial point here is "they think". Others may think otherwise and give strong reasons supporting their stance at that. Actually, it all depends. But it is not only that. The other part of the problem is that an educated opinion doesn't guarantee you from mistakes. And understanding this is also part of the scientific method man...

In complex systems (and before all in biological systems) such terms as quality and quantity lose their meaning in respect to "quality is preferable to quantity"!

This is a wrong frame of reference

Indeed. Now if those that have been clogging up the last page or so would take their opinions elsewhere it would be most appreciated.

Slippery Slope, I keep thinking of questions and situations to challenge / add to your model and I cannot for the life of me get one to hold up to a great deal of robust hole poking, obviously based on the idea that Bitcoin is a technology that the world wants / needs (this is not an invite to any libertarian nut bags to start banging on again). Keep up the good and very interesting work.

[SlipperySlope]

May 5, 2014 Update

The November 2013 bubble continues to collapse, as apparent from these updated price charts. Because of the close fit provided by the Metcalfe Law relationship between the number of transactions and the historical price series, I have also included the corresponding chart that shows a two month downtrend in the number of transactions.

The logistic model calculates the trend price today at $1,187. Accordingly, today's price of $428 is a relative bargain. April 10 at $340 is the lowest price reached after the November peak at $1163. The downtrend has not yet been broken.

Here is the updated logistic model presented in Log10 form . . .

[SlipperySlope]

Adjusted number of transactions, as reported by Blockchain.info . . .

[SlipperySlope]

Log10 delta from the trend . . .

[freshprince]

The slippery slope is a fallacy in that it assumes that any line drawn will be continually redrawn to the point of absurdity. For example, "if gays are allowed to marry its only a matter of time until people can marry their pets" is a fallacy because it assumes any change in the status quo would henceforth result in a dismissal of existing ideals for anything loosely concerning the original issue.

Attempting to discern where to draw the line is thus contrary to the slippery slope fallacy because it is concerned about realigning legality based on what is currently believed to be ethical or whatever and recognizes that subsequent changes to related laws would have to go through the same due process that this change (whatever THIS is) must go through.

[Adrian-x]

I believe Slippery Slope in the context of this thread is a proper noun. It represents the origin of this Million Dollar Logistic Model, not the concept of the slippery slope.

[SlipperySlope]

I believe Slippery Slope in the context of this thread is a proper noun. It represents the origin of this Million Dollar Logistic Model, not the concept of the slippery slope.

Indeed. SlipperySlope was my then-so-clever handle at the peak oil blog The Oil Drum, which I carried over here back in 2011. On Reddit I am frugal-guy. The SlipperySlope user name here has no semantic relationship to Bitcoin.

-Stephen Reed

[BitDreams]

Thanks for the updates on the model. Here's a chart using Bitstamp prices from TradingView Charting tool attempting to capture the median line and price action above and below it.

[aliro38]

May 5, 2014 Update

The November 2013 bubble continues to collapse, as apparent from these updated price charts. Because of the close fit provided by the Metcalfe Law relationship between the number of transactions and the historical price series, I have also included the corresponding chart that shows a two month downtrend in the number of transactions.

The logistic model calculates the trend price today at $1,187. Accordingly, today's price of $428 is a relative bargain. April 10 at $340 is the lowest price reached after the November peak at $1163. The downtrend has not yet been broken.
...

Since my last post here, I’ve managed to develop what seems to be a tremendously strong model. (In fact, it was more like inspiration literally came and hit me...)
There is still work I have to do on automating and slightly refining the calculus (currently I do a lot of hand-on work and I use some shortcuts/simplified/linear math) but I’m truly amazed. The model basically matches the last 12 months with great accuracy (I haven’t computed it yet but by far it looks better than anything I’ve ever seen in stochastic models. In fact, a correlation that good can’t be of stochastic nature and at least its core is deterministic, which made me go 'hmmm…').

The first “hot test” was already launched here, albeit modestly: https://bitcointalk.org/index.php?topic=600683.msg6618571#msg6618571
Maybe the launch was a little too early, too rough (I didn’t fine tune anything) and too far in time for an accurate prognosis (>20days) but I think it will hold.

Why I’m posting all of these?
Well, in the simplest linear extrapolation I’ve done 4 days ago, the price for today (May 11) in my model was predicted to be 377-442$. For yesterday it was predicted at 382-444$ (a bit under evaluated but again my first forecast was quite crude, linear and some figures were mercilessly rounded), for tomorrow prediction is at 373-439$ and finally for the day after tomorrow it will be at 368-437$. The model is dynamic, meaning that some time-dependant critical variables will have inflexion points that, when happening, will invalidate current prediction but mind it there were only two inflexion points in the last 365 days!
I’ll do a proper (2nd or 3rd order) extrapolation as soon as I’ll have some time in my hands but due to the amount of math involved it may not be happening until next weekend.

Finally, to the points:
1. I confirm the downtrend and I am to determine whether it is accelerating, constant or slowing down toward a possible reversal.
2. I don’t want to contradict the Logistic Model as I believe it to be really great and correct as macro model in long run (or at least until its hypotheses are questioned as no longer being valid) but rather to suggest considering that there are models out there (I have reasons to believe that chances are I might have re-discovered what others may already be knowing/applying for a long time). Such models (mine included) predict the current price is not a bargain but it is the correct one according to the bitcoins’ fundamentals.
3. I believe current price might actually be at its upper margin in the downtrend channel.
4. Of course, all of the above may be seen for now (and proved by future evolution) to be mere under-performing in the Logistic Model but if the discrepancies with Metcalfe’s Law (in terms of number of transactions etc) keeps growing it may be a sign for questioning the exponential growth.
5. Let’s see what happens by May 31, compare the 292-398$ prognosis with that of >1232$ (please update) and see if further comparisons may have some merits. Agree?

Best regards,

[Teppino]

Pardon me, but where's the model?

[SlipperySlope]

Pardon me, but where's the model?

The logistic model is here . . .

https://docs.google.com/spreadsheet/ccc?key=0ArD8rjI3DD1WdFIzNDFMeEhVSzhwcEVXZDVzdVpGU2c

http://en.wikipedia.org/wiki/Logistic_function

aliro38's model?

[aliro38]

You're welcome.The model is on my computer, so far scattered in several files but I'll clean it up.
It is not based on a particular modelling theory. I've started it from scratch, looking for correlations.

Have a nice week.

[Teppino]

You're welcome.The model is on my computer, so far scattered in several files but I'll clean it up.
It is not based on a particular modelling theory. I've started it from scratch, looking for correlations.

Have a nice week.

I'm genuinely interested, but without a model you just made a price forecast. There's no point comparing it to SlipperySlope's model as the timeframe and historic volatility, among others parameters, must be considered.
If you think the last 12 months followed a different pattern, best suited by your model, you should explain it somehow as it would be of great value for everyone.

Have a nice week too!

[BitchicksHusband]

You're welcome.The model is on my computer, so far scattered in several files but I'll clean it up.
It is not based on a particular modelling theory. I've started it from scratch, looking for correlations.

Have a nice week.

I'm genuinely interested, but without a model you just made a price forecast. There's no point comparing it to SlipperySlope's model as the timeframe and historic volatility, among others parameters, must be considered.
If you think the last 12 months followed a different pattern, best suited by your model, you should explain it somehow as it would be of great value for everyone.

Have a nice week too!

Well, for starters, he's predicting under $400 by May 31.  It remains to be seen, but that would be interesting if it happens.