rpietila Wall Observer - the Quality TA Thread ;)

[elg]

Bitchick, maybe just point Hill of Hope to this thread?

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[Cassius]

My big goals are to fund a mission trip I am taking to India in the fall and pay for some humanitarian type things while I am there (water wells, medical camps, Aids outreach, funds for an orphanage).  If the price spikes this Summer I should be a in a great position to do so much more.  

Plus, when I was younger, I was joking that my "dream job" someday would be to become a philanthropist!  Maybe this will be a way to fulfill that dream!    (I also said that the only way I would ever get a doctorate degree is if I could get an "honorary" one.  Perhaps it goes along with philanthropy? LOL  We will see. . . )

Nice
I work for a Christian charity. Tried to bring up bitcoin with my boss a couple of times as something that is going to be a really big deal and we need to engage with. He wasn't interested, just didn't seem to get it. So I put one aside and in a year or two years I'll donate it to the charity with a big "I told you so."
It's kind of passive aggressive, but what's he going to do...?

I am sure he won't complain if you say "I told you so" with a nice donation.  It is really difficult getting non-profits on board, surprisingly!  I am going to India with a group of women and we are using a non-profit organization called Hill of Hope that will be serving as the site where all of the funds are collected before we then go to work with the group Harvest India.  I contacted Hill of Hope about taking Bitcoin directly and they did not seem interested.  I guess I can always just cash out coins myself and pay them directly but it would have been great to get them involved, not just for this one trip but for some of the other great charitable works they are helping finance.

Give it a couple of years.
This is getting a little off topic, but there is some great work going on with microfinance charities and bitcoin because it's the only way people can donate small sums directly without bank fees killing them.

[Biodom]

. . . Not many are in real life prepared for $100k per bitcoin this year, even though it is possible. It may ruin many people's life more than bitcoin going to zero.

Ha. Our log trend models predict an average price of $100k per bitcoin in about 18 months. What difference does 12 months make when it comes to ruining people's lives?

I don't think that it is much of a problem for most . After all, there are only 10K people with 100 coins or more.
So, they will have >=$10 mil. $ 1 mil is quite modest and widespread in US if you count all assets (house, retirement, etc.).
Having 10 times more would not be a life changer in any way, but fully securing retirement.
There are roughly 29 mil millionaires in the world, so adding another 10 or even 100K people would not make a dent numbers-wide.

What I am seriously interested in is the recent side-chain proposal. Essentially, anyone with a large stash of bitcoins can become a corporation (aimed at new business ventures) while securing the entire new sidechain with their bitcoin.

[chessnut]

[smoothie]

Revisiting the trendline that I last posted, we see that the recent news about Chinese exchanges has conveniently stopped the rally short term at about the 550 resistance point. Because I believe that we are now between the bottom of the November 2013 bubble and the beginning of the next bubble, I am biased to expect that prices will move sideways through the resistance before resuming the rally. 

This is definitely a healthy thing. Growth over time is best. Imagine if you went from 4 feet talk to 6 feet over night....you would probably be dead. lol

[pinksheep]

What's this about only being able to withdraw $10K a month from an exchange? I didn't buy through an exchange directly, but presumably the company I bought them from did.

[smoothie]

What's this about only being able to withdraw $10K a month from an exchange? I didn't buy through an exchange directly, but presumably the company I bought them from did.

What exchange?

[SlipperySlope]

Would you agree that Elliott Wave counts as you recognize them indicate a completion of the November 2013 bubble collapse?

[chessnut]

Would you agree that Elliott Wave counts as you recognize them indicate a completion of the November 2013 bubble collapse?

Alongside fundamentals, yes. fundamentals can change. EW can be ambiguous, but it offers clear junctures. this could be an impulsive correction in a bear market, but I do not believe that..... we are not in a bear market. we are in a massive bull market.

[MatTheCat]

What's this about only being able to withdraw $10K a month from an exchange? I didn't buy through an exchange directly, but presumably the company I bought them from did.

U are surely talking about MtGox?

[ArticMine]

For me how much BTC I choose to sell, if any, in such a bubble may actually come down to how I choose to treat the BTC/USD exchange data from New Liberty Standard in 2009 http://newlibertystandard.wikifoundry.com/page/2009+Exchange+Rate, as it can impact my model trend lines. This is the nature of exponential models. Whether the price of 1 BTC was 0.000613 USD or 0.005 USD in December 2009 is actually an important factor here.  

Do you think an argument can be made that recent price data has greater predictive power than old price data and should therefore be given greater weight when calculating the trendline?  Two arguments:
1. More recent price data, in theory, has more market information to draw upon. ie, any interval changes in market fundamentals are reflected in recent price data but not older price data.
2. The volatility as measured on a log scale is expected to decrease with time. IOW, recent price data should be modeled as having a better signal to noise ratio than older price data.

There is a case here but not including earlier data or giving it a lower weight does run the risk also of skewing the results. One thing we must keep in mind here is that there are some long exponential trend lines going back to April 2011 that have held, so getting a good grip on what happened before the 2011 peak is very important.

[BitchicksHusband]

Agree with all of what rpietila said. But for me, especially this:

- The countries have issued capital gains tax edicts, which makes you pay $100-$500 million tax per every billion you sell, and you don't have time to scale up your organization and tax planning

If you are in the US, just make sure you make less than $73,800 joint or whatever the equivalent is for single ($36,900).  If you are over, max out your 401k, IRA, charitable giving, buy an electric car, etc.  If you need to quit your job so your income is less than that, then do it.

[BitchicksHusband]

. . . Not many are in real life prepared for $100k per bitcoin this year, even though it is possible. It may ruin many people's life more than bitcoin going to zero.

Ha. Our log trend models predict an average price of $100k per bitcoin in about 18 months. What difference does 12 months make when it comes to ruining people's lives?

100K ruining people's lives?  (now or in 18 months which really is not that much longer)  Is the thinking that it will be like those that win the lottery and are not in the position to handle such wealth so quickly?

http://www.complex.com/pop-culture/2009/07/curse-of-the-lotto-how-the-millions-can-ruin-lives

The gravest danger from sudden wealth, e.g. 1000x your current net worth, is how unprepared one could be with regard to the safety of the household and loved ones. We take for granted the enormous amount of security provided by simple anonymity when living in a developed country with an average amount of cash.

Here in Austin however, we have a world famous billionaire Michael Dell. From a distance I have seen a couple of his estates which are patrolled by private, armed guards. There is no way that Mr. Dell or his family could enjoy the sights and street life like I can. So much of what I enjoy about life would be interrupted if everyone stared at me in public, or my bodyguards, or my armored car.

What of all the beggars and solicitors that would seek my attention?

I need great wealth to fund greater goals and am old enough that the majority of my happy ordinary life is behind me. If I must move away from my less-than-secure but lovely and loving neighborhood to a compound, so be it, and live with guards, so be it. But I know that my dear wife will never be as happy and will blame me for the rest of my life when she fully realizes what I have done by simply holding on to bitcoin.

One of the top NHL players used to live near me.  He would go to events with my neighbor 2 doors down, who lives in a 1500 sq ft house.  I saw this player at a nearby mall leaving with his wife and kids.  I said, "Hi" and asked him if anyone recognized him.  He said I was the first one all day.

It is well-known that he made $8 million that year and had no particular security and wanders around in public anonymously.  I think you may be overestimating the problem.

[BitchicksHusband]

My big goals are to fund a mission trip I am taking to India in the fall and pay for some humanitarian type things while I am there (water wells, medical camps, Aids outreach, funds for an orphanage).  If the price spikes this Summer I should be a in a great position to do so much more.  

Plus, when I was younger, I was joking that my "dream job" someday would be to become a philanthropist!  Maybe this will be a way to fulfill that dream!    (I also said that the only way I would ever get a doctorate degree is if I could get an "honorary" one.  Perhaps it goes along with philanthropy? LOL  We will see. . . )

Nice
I work for a Christian charity. Tried to bring up bitcoin with my boss a couple of times as something that is going to be a really big deal and we need to engage with. He wasn't interested, just didn't seem to get it. So I put one aside and in a year or two years I'll donate it to the charity with a big "I told you so."
It's kind of passive aggressive, but what's he going to do...?

Tell him you'll donate $100,000 (1 bitcoin), but ONLY IF he takes it in bitcoin.

[SlipperySlope]

One of the top NHL players used to live near me.  He would go to events with my neighbor 2 doors down, who lives in a 1500 sq ft house.  I saw this player at a nearby mall leaving with his wife and kids.  I said, "Hi" and asked him if anyone recognized him.  He said I was the first one all day.

It is well-known that he made $8 million that year and had no particular security and wanders around in public anonymously.  I think you may be overestimating the problem.

That is a comfort. Thanks.

[SlipperySlope]

Supposing that support holds at 480 through the lower volume weekend, the declining resistance trend line from the November 2013 peak becomes close enough to the support that there could be a breakout next week - resuming the rally I am biased to expect, because many share the belief that the bottom of the previous bubble collapse is behind us.

Here is the 12 hour chart extended in to the next couple of weeks.

[sidhujag]

. . . Not many are in real life prepared for $100k per bitcoin this year, even though it is possible. It may ruin many people's life more than bitcoin going to zero.

Ha. Our log trend models predict an average price of $100k per bitcoin in about 18 months. What difference does 12 months make when it comes to ruining people's lives?

100K ruining people's lives?  (now or in 18 months which really is not that much longer)  Is the thinking that it will be like those that win the lottery and are not in the position to handle such wealth so quickly?

http://www.complex.com/pop-culture/2009/07/curse-of-the-lotto-how-the-millions-can-ruin-lives

The gravest danger from sudden wealth, e.g. 1000x your current net worth, is how unprepared one could be with regard to the safety of the household and loved ones. We take for granted the enormous amount of security provided by simple anonymity when living in a developed country with an average amount of cash.

Here in Austin however, we have a world famous billionaire Michael Dell. From a distance I have seen a couple of his estates which are patrolled by private, armed guards. There is no way that Mr. Dell or his family could enjoy the sights and street life like I can. So much of what I enjoy about life would be interrupted if everyone stared at me in public, or my bodyguards, or my armored car.

What of all the beggars and solicitors that would seek my attention?

I need great wealth to fund greater goals and am old enough that the majority of my happy ordinary life is behind me. If I must move away from my less-than-secure but lovely and loving neighborhood to a compound, so be it, and live with guards, so be it. But I know that my dear wife will never be as happy and will blame me for the rest of my life when she fully realizes what I have done by simply holding on to bitcoin.

One of the top NHL players used to live near me.  He would go to events with my neighbor 2 doors down, who lives in a 1500 sq ft house.  I saw this player at a nearby mall leaving with his wife and kids.  I said, "Hi" and asked him if anyone recognized him.  He said I was the first one all day.

It is well-known that he made $8 million that year and had no particular security and wanders around in public anonymously.  I think you may be overestimating the problem.

Wow well nhl players dont really get the attention they deserve.. in the states ncaa will get played over stanley cup finals.. a shame because there is no sport that can compare to the challenge of winning the stanley cup.. Here in Canada im sure he wouldnt walk around like that.

[rpietila]

Now let's start the Accountable Prediction(TM) competition. (I may move this to another thread if it catches on).

The first task is to predict, what is the price in 2014-5-17 (daily average Bitstamp).

Give your answer as a probability distribution where each USD value between 0-100,000 is assigned a % probability and these values add to 100%. All answers given in 24 hours from the timestamp of this post take part in the competition.

And example and my official prediction is the following:

I am willing to predict where the price is 2014-5-17 (30 days from now) volume weighted average Bitstamp price:

Price in USD range; probability

4466-100000; 0.1%
2818-4465; 0.4%
1778-2817; 2.0%
1413-1777; 2.0%
1122-1412; 3.0%
1000-1121; 2.5%
891-999; 3.5%
794-890; 5.5%
708-793; 8.0%
631-707; 14.0%
562-630; 18.0%
501-561; 17.0%
447-500; 9.0%
398-446; 6.0%
355-397; 4.0%
316-354; 2.0%
251-315; 2.0%
0-250; 1.0%

Let's suppose that price ends up being $600. I assigned 18.0% to this band which consists of 69 dollars. Therefore my probability density is 18.0% / 69$ = 0.2609 %/$.

If the price were $400 instead, 6.0% / 49$ = 0.1224 %/$.

An outlier like a doubling the price to $1,000 would have a quite small probability density: 2.5% / 122$ = 0.0205 %/$.

Once the price is determined (daily volume weighted average rounded to the nearest full dollar) and the probability density of each prediction at that price is calculated, a geometric mean of the predictions is calculated. In this example, if the figures above were the contestants' probability densities at the "winning number", their geometric mean is: (0.2609*0.1224*0.0205)^(1/3) % = 0.0868 %.

Then we award plus points to the ones who did better than the mean, and minus points to the ones who did worse:

0.2609 / 0.0868 - 1 = 2.004
0.1224 / 0.0868 - 1 = 0.410
1 - 0.0868 / 0.0205 = -3.237

The point system compares the relative accuracy of different people's forecasts, and the average of the points over several prediction rounds gives a better idea whether this person has the hunch over future prices or not. To predict effectively you should know the system which penalizes severely if you have grossly underestimated the probability of something, yet it happens. It ruins your whole score. Also you should know the distribution of historical results, which for 30 days period is listed here.

[wachtwoord]

Very interesting approach. I do however have the feeling this system is gameable with a very concentrated strategy.

[rpietila]

Very interesting approach. I do however have the feeling this system is gameable with a very concentrated strategy.

How would you do it? What if your only competitor was me, and my published numbers? How would you game the system to the maximum vs. me?  

EDIT: After a few trial rounds this will become a serious competition with cash prizes, so better get used to it