rpietila Wall Observer - the Quality TA Thread ;)

[rpietila]

Thank You Peter R! I will add this model to the toolkit when I try to explain to people why sometimes (2013) it rises 100x and sometimes (2012) hardly at all. Randomness.

Randomness is not the only possible explanation. Log-logistic adoption is another possibility for a declining rate of appreciation.

So it is not sufficient to say, "the model must be my fit, and randomness explains why the fit is off this year".

The burden of proof is on the "fit" that fits the data less (despite being more complicated), i.e. yours.


(I seriously think you are wasting your precious time, trying to argue with me about statistics. Tell me when I do likewise re: your strong point.)

[1714504907]

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[1714504907]

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[AnonyMint]

Thank You Peter R! I will add this model to the toolkit when I try to explain to people why sometimes (2013) it rises 100x and sometimes (2012) hardly at all. Randomness.

Randomness is not the only possible explanation. Log-logistic adoption is another possibility for a declining rate of appreciation.

So it is not sufficient to say, "the model must be my fit, and randomness explains why the fit is off this year".

The burden of proof is on the "fit" that fits the data less (despite being more complicated), i.e. yours.


(I seriously think you are wasting your precious time, trying to argue with me about statistics. Tell me when I do likewise re: your strong point.)

Define 'more complicated' mathematically? Would it be what you are more familiar with?

Overfit is a problem if the curve fit or regression model is not correct.

I am trying to help both of us avoid confirmation bias error.

Even the concept of fit has a plurality of models.

How are you so certain that Bitcoin adoption has not slowed?? You can say it is just a lull due to randomness, but how can you be so confident of that? I am trying to be objective. I see evidence it is slowing. It might be randomness, but it also might not be. I also see much confirmation that Bitcoin is not being adopted by most of those who hear about it, because there are enormous barriers to adoption.

P.S. I nearly aced my Theory of Probability and Statistics course 30 years ago. But correct I don't use it in practice. But that distinction seems to be irrelevant in this case, because we have to choose the correct model before we can apply statistical discipline. Or we need some very higher order statistical methods to try to determine which model is correct.

[MahaRamana]

Thank You Peter R! I will add this model to the toolkit when I try to explain to people why sometimes (2013) it rises 100x and sometimes (2012) hardly at all. Randomness.

Randomness is not the only possible explanation. Log-logistic adoption is another possibility for a declining rate of appreciation.

So it is not sufficient to say, "the model must be my fit, and randomness explains why the fit is off this year".

The burden of proof is on the "fit" that fits the data less (despite being more complicated), i.e. yours.


(I seriously think you are wasting your precious time, trying to argue with me about statistics. Tell me when I do likewise re: your strong point.)

Define 'more complicated' mathematically? Would it be what you are more familiar with?

Overfit is a problem if the curve fit or regression model is not correct.

I am trying to help both of us avoid confirmation bias error.

Even the concept of fit has a plurality of models.

How are you so certain that Bitcoin adoption has not slowed?? You can say it is just a lull due to randomness, but how can you be so confident of that? I am trying to be objective. I see evidence it is slowing. It might be randomness, but it also might not be. I also see much confirmation that Bitcoin is not being adopted by most of those who hear about it, because there are enormous barriers to adoption.

P.S. I nearly aced my Theory of Probability and Statistics course 30 years ago. But correct I don't use it in practice. But that distinction seems to be irrelevant in this case, because we have to choose the correct model before we can apply statistical discipline. Or we need some very higher order statistical methods to try to determine which model is correct.

It is simply impossible to "choose the right model" with certainty. It is impossible to say today if bitcoin adoption has slowed or not.
- Statistically, the past is the best prediction of the future : it would mean adoption has not slowed and will catch up through sudden big moves of mass adoption and we will follow an exponential trendline which is the best model for the past so far.
- Empirically, adoption in 2014 has been disappointing which could mean we are invalidating the current model, yet there are preparations being made that would allow a greater wave of adoption.

[AnonyMint]

I also see much confirmation that Bitcoin is not being adopted by most of those who hear about it

I am much more experienced than you in analyzing market demographics. I knew the following intuitively before I even Googled to verify it.

Bitcoin is nearing 6 years old. The World Wide Web was launched to the public-at-large in 1993. By the 6-7th year, the dot.com bubble had a capitalization that was 183% of the USA GDP!!!

Bitcoin is 1000x smaller phenomenon and yet the WWW is 10x bigger by now, so relatively speaking Bitcoin is 10,000x smaller.

http://www.forbes.com/sites/robertlenzner/2014/02/22/the-stock-markets-valuation-is-at-a-dangerous-115-2-of-the-gdp/

The ratio today is 115.1% of the $16 trillion GDP. In the year 2000, just before the market cracked in the dot-com bubble, the market capitalization was 183% times the GDP, according to a chart published recently.

And in 2007, just as the housing credit bubble was bursting, the ratio was 135% times the GDP. These are all times when the stock market looks overvalued.

This is basic research on relative size that anyone of your position with a thread like this should have done already.

I suppose we should also include all the money invested in Bitcoin-related public companies. But I doubt it exceeds Bitcoin's market cap, so my point remains in spades.

http://www.coindesk.com/americans-think-bitcoin-is-xbox-game/

42% of Americans Know What Bitcoin is

According to a new Bloomberg poll, 42% of Americans know that bitcoin is a digital currency.

However, the majority of the US residents quizzed still don’t know what bitcoin actually is.

Those who were familiar with the cryptocurrency said they were still unsure what to make of it. In fact, many who were asked had questions for the pollsters too.

Those that do know, don’t know much

Of the people who had heard of bitcoin, some were hesitant to use it themselves, either in a business or personal capacity.

Olga Ruff, a 62-year-old businesswoman, said she was unlikely to start accepting bitcoin in her small jewellery shop. “What use would it be for me?” she said, adding: “I’m not sure what the value of it is, and what I’d be able to exchange it for.”

Jeremy Labadie, an internet security specialist, said he would have to consider his options further before making a purchase: “I don’t necessarily know if it’s something I would think about using.”

However Labadie also admitted that he had considered buying some bitcoins as a long-term investment.

Other respondents said they heard about bitcoin through mainstream news coverage. In turn, this had given them an idea of the currency’s drawbacks as well as bitcoin-related scams and crimes.

...

Bitcoin: Xbox game or iPhone app?

More than 1,000 people took part in the poll and some answers were rather amusing.

A total of 46% said they do not know what bitcoin is. Suprisingly, 6% of participants thought bitcoin was an Xbox game, while another 6% were convinced it was an iOS app on the iPhone.

Unsurprisingly, the poll found that people under the age of 35 were more likely to know a thing or two about bitcoin.

How much more clear can it be that most people have no use for Bitcoin? See below...

http://cointelegraph.com/news/112135/the-ethnic-group-that-knows-the-most-about-bitcoin-is-not-who-you-think-it-is

The average Bitcoin user used to be a non-religious male with libertarian/anarcho-capitalist leanings, 31.2 years of age, with a job and a full-time relationship, according to a self-selecting community survey done last year by tech/economics blog Simulacrum.

...

Hispanic-Americans were by far the ethnic group most likely to say they would consider using Bitcoin themselves: 23% answered they were “very likely,” compared to 9% from African-Americans and “others” and just 5% from whites.

Though it may be presumptuous to draw definitive conclusions from the survey, a clear inference about the results may be that Hispanic-Americans have begun to pick up on Bitcoin’s exciting implication for the remittance market: a low-cost method for diaspora members to send money back home.

Bitcoin-based remittance companies have been exploding especially in Africa, where it’s been estimated that people are losing US$1.8 billion annually to remittance fees.

http://www.cnbc.com/id/101523567

More we know bitcoin, the less we trust it: Poll

Nearly half of all Americans know what bitcoin is but most don't trust the virtual currency, according to a new survey.

Just 13 percent of all respondents to a Harris Interactive poll said they prefer bitcoin over gold. Bitcoin has been embroiled in a series of controversies over the past few months, including inappropriate use and the shuttering of its highest-profile exchange.

Those negative headlines have taken their toll: The survey, conducted on behalf of financial innovation platform Yodlee, found that the more people know about bitcoin the less they trust it. People in the more tech-savvy regions in the West were better acquainted with bitcoin than those in other regions, but only 7 percent said they would invest in it over gold.

The cryptocurrency's biggest fan base: Men in the 18-to-34 age group, 22 percent of whom said they would choose bitcoin over gold.

[rpietila]

Define 'more complicated' mathematically? Would it be what you are more familiar with?

Not a very general definition, but if model B has all the terms/functions that model A has + extra, then B is strictly more complicated than A.

How are you so certain that Bitcoin adoption has not slowed??

I am not saying that. What I am saying, is that:

- logistic model has (much) better R^2 than log-logistic model
- logistic model is simpler than log-logistic model
- behaviour now is well within the bounds of expected volatility (based on historical volatility ex. 2012/2013)

It is just that under these conditions there is no ground to assess a higher probability to log-logistic than logistic.

As a reply I accept your post containing a graph how terrible fit the log-logistic model actually is and how mistaken trading signals it would have given in the past.

[AnonyMint]

My dissension is that I think that curve fit is basically useless as a trading tool and is dubious as a long-term predictor.

You don't need that crutch to convince yourself to continue to hold Bitcoin, as even a log-logistic model would point to 10 bagger from here within a few years at most. But your curve fit could make you overconfident and cause you to miss out on searching for other more undervalued assets.

I've read you say you have a hard time finding anything with as much astronomical upside potential as Bitcoin.

As a reply I accept your post containing a graph how terrible fit the log-logistic model actually is and how mistaken trading signals it would have given in the past.

I am not trading (not a trader). I am trying to access rate of adoption and total end game adoption of Bitcoin and potential competitors.

The possibility of randomness means your fit is useless as a short-term trading, timing tool.

For long-term valuation prediction, we need to access the adoption.

You made one major correct decision which was to buy BTC below $10. That didn't require any curve fit, it was just obvious to anyone who was paying attention.

I even told you < $10 that you were probably correct, but that I couldn't do any speculation at that time, so it was fairly obvious to me too even I wasn't even studying Bitcoin at that time in 2012 (when you first mentioned it) and early 2013 (when you pounded the table). One of the reasons is I didn't even know how to buy it or hold it and I wasn't in a position to make mores silly process mistakes in my weakened condition (e.g. buying another 1000oz bar from Tulving that arrives with the serial # chiseled off and he refuses to do the right thing). Even you had to lose a ton of $ when you laptop was left unattended, so I was wise not to try to rush in too late and commit the usual learning mistakes.

I think you are placing too much confirmation bias on that curve fit when it appears it is not even responsible for your success. You sold at too low a price if I remember correctly in 2013 and more than one of your trading calls on price have been wrong in 2013 and 2014. So just like anyone trying to trade price, you are correct about 50% of the time.

As far as I know, the successful trades you make are arbitrages often with ladder structure so that you win with high probability. I don't think timing the price has ever been something you excel at. You do excel at buying highly underpriced assets, e.g. silver below $10 along with me.

I seriously don't see Bitcoin as extremely highly undervalued. Looks like about a 10 - 100 bagger from here. Yeah that is a good investment but it depends how long you have to wait. Whereas buying below $10 in 2012/2013 was an exceptionally undervalued purchase.

I have since learned that I don't have any particularly expert skill at trading. My skills are in identifying market trends, demographics, and size, and also in developing products to meet the market needs. I would never (again!) try to do arbitrage trades, or shorting BBR the way animorex recently described. I don't have the correct personality nor sufficient interest in it. I view it as drudgery and it impinges on my creative time which means I end up not being thorough.

Since Bitcoin is not going to take over the world, now I am searching for that incredibly undervalued one that will take over the world. Make sure you buy it cheaper than I do or invest more than I have (which won't be difficult), else I will have bragging rights

[Jungian]

Since Bitcoin is not going to take over the world, now I am searching for that incredibly undervalued one that will take over the world. Make sure you buy it cheaper than I do or invest more than I have (which won't be difficult), else I will have bragging rights Smiley

Make sure you tell us when you found it ok?

[Majormax]

I also see much confirmation that Bitcoin is not being adopted by most of those who hear about it

Nearly half of all Americans know what bitcoin is but most don't trust the virtual currency, according to a new survey.

Just 13 percent of all respondents to a Harris Interactive poll said they prefer bitcoin over gold. Bitcoin has been embroiled in a series of controversies over the past few months, including inappropriate use and the shuttering of its highest-profile exchange.

Those negative headlines have taken their toll: The survey, conducted on behalf of financial innovation platform Yodlee, found that the more people know about bitcoin the less they trust it. People in the more tech-savvy regions in the West were better acquainted with bitcoin than those in other regions, but only 7 percent said they would invest in it over gold.

The cryptocurrency's biggest fan base: Men in the 18-to-34 age group, 22 percent of whom said they would choose bitcoin over gold.

I started proselytizing and talking about BTC around 2 years ago, and the same issues have regularly arisen.

(Like many people, I didn't 'invest' any meaningful amount because I was more enthused by the principle and technology, than by any prospect of monetary gain).

The vast majority will either:

a. Have no use for BTC (yet)

b. Not trust it enough to use it as a money replacement.

c. Not understand the true nature/implications of the revolutionary technology.


It splits roughly along demographic lines and I would conjecture that the strongest supporters need to grow and age into more influential positions before the real step change in adoption can happen.

Fiat will be dominant for some time, and the real game changer might even, ironically, be fiat administered by blockchain.

[aminorex]

Since Bitcoin is not going to take over the world, now I am searching for that incredibly undervalued one that will take over the world. Make sure you buy it cheaper than I do or invest more than I have (which won't be difficult), else I will have bragging rights Smiley

Make sure you tell us when you found it ok?

He would be a fool to tell you until he has accumulated substantially, and a fool not to tell you afterwards.

Not that there is anything wrong with that:  In Orthodoxy there is a tradition of the "holy fool", whose spiritual insight is advanced, such that his actions appear folly to those of lower, merely fleshly, awareness.

[rpietila]

Since Bitcoin is not going to take over the world, now I am searching for that incredibly undervalued one that will take over the world. Make sure you buy it cheaper than I do or invest more than I have (which won't be difficult), else I will have bragging rights Smiley

Make sure you tell us when you found it ok?

He would be a fool to tell you until he has accumulated substantially, and a fool not to tell you afterwards.

I am a fool in the first count

[aminorex]

I am a fool in the first count

St. Risto of Malla?

I know you cultivate your public image, but please don't aspire until you expire.

[AnonyMint]

This is my farewell post, because I don't like the animosity that speaking my mind causes. I don't like crashing the party in my friend's house. I thought I was trying to help, but I realize I protesth too much and this costs me valuable time.

Majormax, the WWW did not have those problems. There were skeptics, but the majority were adopting it on the first time they tried it and couldn't unhook themselves from spending hours upon hours playing with the new tool (toy).

Bitcoin is a useless enigma to the majority. Sorry I am sure I am correct.

And for those who think the powers-that-be could not have planted Bitcoin, or who think that Martin Armstrong is some whacko:

http://armstrongeconomics.com/2014/09/05/are-markets-manipulated-all-the-time/

...

I had more than half the equivalent of the US National Debt under contract for advisory. I think I saw things no analysts has ever dreamed of no less understood.

...

I have written that written publicly that first PhiBro silver manipulation took place in 1993. They client was Warren Buffet. The CFTC went to PhiBro demanding to know who they were buying silver for. They refused to give up Buffet’s name. The CFTC would have thrown anyone else in jail and out of business. They are owned by the big players and corrupt as hell right to the core. The CFTC simply said ok, no name, then exist the trade.



They desperately tried to get me to join the second silver manipulation with Buffet. I have written stating publicly that PhiBro’s brokers walked across the COMEX pit and showed my floor brokers Buffet’s orders and told me to join. They knew I would never trust these people for how would I know I was not the patsy to buy and they would use a another seller. I would never join them. Hence, PhiBro showed me the orders to convince me to join.



I then reported to our clients “they are back” knowing it was Buffet and PhiBro for a second time. They all got pissed-off at me even though I never mentioned names. The buying of silver was done in London. Therefore, they moved silver out of COMEX warehouses in USA and shipped to London to pretend there was a shortage to justify the manipulation. The Wall Street Journal assisted in the rally.

The manipulators with steering the buffet buying in London to avoid the 1993 problem with the CFTC. This is why AIG trading arm also set up in London. Buying silver in London justified moving it from the NY COMEX and this allowed them to get the manipulation going. COMEX supplies were reported in isolation. Moving the silver to London created the false image of a shortage to justify thye higher prices. The Wall Street Journal was used to plant the story. On September 30th 1997 the stories played headlines – “Silver Prices Hit Six-Month High On Steadily Declining Reserves, By  PALLAVI GOGOI AP-Dow Jones News Service Updated Sept. 30, 1997 12:01 a.m. ET NEW YORK — Silver futures surged to a six-month high at the Comex division of the New York Mercantile Exchange, a move analysts said was triggered by steadily declining warehouse stocks. The rally was boosted by preplaced purchase orders around the $5-per-ounce level…” This was the news created for the manipulation that was constantly played out in the newspapers. The Wall Street Journal again reported on November 17, 1997, “Silver Futures Prices Leap On Hints of Tight Supplies”, and again on December 4, 1997 the Wall Street Journal from London reported “Silver Surges on Strength In Supply-Demand Status By NEIL BEHRMANN Special to The Wall Street Journal Updated Dec. 5, 1997 12:01 a.m. ET LONDON — Gold may be in the doghouse, but silver is soaring like a bird”. The reporting of shortages continued to fuel the rally. The Wall Street Journal reported again December 24, 1997 for the manipulators “Silver Futures Advance As Inventories Plunge”

The interesting point is the manipulators know that if the rally the metals, the retail goldbugs rush in and buy. They then routinely turn around and sell to them at the top and the markets crash. This standard procedure and the goldbugs buy the high every single time.

The “cluib” was pissed-off that I would not join and warned they were back manipulating silver. The got a journalist from the Wall Street Journal to try to discredit me. They told him I was short silver and trying to talk it down. The journalist accused me of this nonsense and we argued on the phone. It got quite heated and frankly I was not retail so could care less what they printed. My clients were the real deal who all knew the truth about journalism. In fact, they did not ever want me to give interviews about market forecasting to the press for their view was hey – we pay for that info.

Nevertheless, the journalist kept arrogantly taunting me and said if silver was being manipulated, then give him the name so I said fine, go ahead, let me see you print it, knowing he never would. The name I gave him was Warren Buffett. He laughed. Told me everyone knew Buffett did not trade commodities I told him that was how much he knew.

The Wall Street Journal published the article. The London newspapers were fed stories by the “Club” that I was now the largest silver trader in the world. This became all a joke to me. It demonstrated how bad the press really was. They were the pawns of the manipulators and probably didn’t even know it.

The mistake made by the “Club” by turning out the press against me, was they actually created such a worldwide story that silver was being manipulated the CFTC was forced to call me – it was public now and they had no choice. They knew I was not the source of the manipulation. Even the CFTC could look at positions and knew I was not the biggest player in silver. The CFTC then asked me, where was the manipulation taking place? I told them it was in London, out of their jurisdiction. The CFTC told me that they could pick up the phone and investigate London. I told them that they had to make that clear decision. I hung up. Never did I expect that they would really do anything. Yet, they never asked me who because the question was jurisdiction.

A few hours later, my phone rang. It was a good source in London who also was helping to monitor the “Club” actions. He told me that the Bank of England had called an immediate meeting of all silver brokers in London in the morning. I was shocked. The CFTC had made the call. But then again, I had given them no names so perhaps in their mind, this was fair game.

Within the hour, Warren Buffett made a press announcement. He admitted he had purchased $1 billion worth of silver, in London . He denied he was “manipulating” the market. Claimed the silver was a long – term investment. Everyone was shocked that Buffett was suddenly exposed as a commodity trader after all. The very next day the Wall Street Journal called me. The writer asked – “How did you know?” I told him it was my job to know! Silver thereafter declined and made new lows going into 1999. So much for Buffet’s long-term investment since he sold out.

When one trader from New York joined our firm, he called Goldman Sachs to ask about us. He has publicly stated on the record that their response was they had butted head with me many times but I usually won.

Exposing the silver manipulation trying to turn the press against me was a huge mistake. The CFTC would have never called the Bank of England just because I reported the manipulation to our clients. That was private. Exposing the issue in the press forced them to respond. My brokers on the floor were Emerald Trading. I routinely traded AGAINST the manipulators and defeated them many times. Just as the goldbugs do not like me, neither do the manipulators and it far too often seemed to coincide when they were trying to goose the markets UP – not down. Contrary to the bullshit, they need people to BUY the metals to create a pool of longs to bury. They are NOT interested in forcing a metal down to compel people to sell. That is not very profitable for they want the emotional traders who buy highs. Of course the goldbugs will say I am wrong but have never been in the same circles and some of them I question if they are not the people paid on the side by the manipulators.

There have been major manipulations of markets such as rhodium and then there was the manipulation of Platinum. I had recorded tapes and tons of documents on every manipulation. This was all seized by the court and I stood up instructing the court that these tapes Alan Cohen was demanding involved criminal activity on the part of the banks. I had it all for years. Alan Cohen then was made a board member of Goldman Sachs yet still remained as the court appointed person to run Princeton Economics. That is totally illegal and a conflict of interest. Law does not matter in New York City. (see Transcripts below).

To say I will not admit markets are manipulated is absurd. To claim they are always manipulated is impossible. Yet the real paradox is when they rally, they never seem to be manipulated. That is always real. They become manipulated only when they decline.

Not even the central banks can manipulate everything. Sure people try. But not everything. They target one market and go after that. The central banks have been trying to manage the economy to eliminate recessions. They have never succeeded even once. The central bankers know this is a confidence game just as the market manipulators. You NEED the public to move a trend. They cannot do it alone. If they were all-powerful, then Bretton Woods would never have collapsed.

There is a huge difference from a short-term manipulation within the trend like the Buffet silver move, but the market still fell to new lows with all the movement of silver and buying $1 billion in a tiny market. Where is the PROOF of systemic manipulation. It is nonsense.

The above conclusion is why I think the powers-that-be can't win against the free market. The Knowledge Age is rising and the crypto-currency that wins will be the one that engages more people in adopting the Knowledge Age. I have specific ideas of what this entails, but as the Bible says in Matthew 7 when talking about people who constantly judge others, "don't throw your pearls at swine".


For those who doubt Martin Armstrong's computer model which predicted the wise of the War Cycle years ago and targeted 2014 and recently targeted September 2014 for a turning point and November for actual escalation. Read the following and weep.

http://armstrongeconomics.com/2014/09/05/russia-demands-ukrainian-troops-withdraw-us-sends-in-troops/

Now it is time for people who are capable to roll up their sleeves and stop talking in forums with people who not capable.

[rdnkjdi]

You will be missed.  Thank you for summarizing the information you have here.  More people follow you than you know - I have no doubt you'll be back some day even if with a different handle.

Godspeed.

[troisky]

Of course Bitcoin is still underground, thats why we are still early adopters and you have to be mentally nuts not to buy on disruptive technology.

[NewLiberty]

I agree re waiting, but by December it should be clear (at least short term), don't you agree?

Not at all.  There is a great deal of psychological research that shows how our human minds try to find patterns that aren't really there.  A fantastic book on this topic is "Thinking Fast and Slow" by Daniel Kahneman.

IMO, the growth rate for bitcoin would need to decline strongly (or retreat over a long period) to truly invalidate the exponential growth model.  Here's a model that fixes bitcoin's market cap at inception at $500,000.  The "rationale" is that Satoshi spent approximately 2 years building it, and the market-value for Satoshi-level talent is $250,000 / year.  



I'm not arguing for this model, just pointing out that if growth slows to a more modest (but still exponential level), arguments could still be made that we are on trend.  IMO it would take a failure to reach a new ATH by 2017, or a sustained (1 year+) fall below $250, for me to say that "bitcoin growth has halted."  

...

It's so easy to be fooled by randomness.  Here's several simulations of the same underlying exponential growth model.  But instead of solving a regular differential equation to get a smooth exponential curve, I'm solving a stochastic differential equation that adds process noise.  The people in Alternate Universe #1 who get to ride the upper purple curve will think bitcoin is the most fantastic thing!  The people riding the bottom blue curve are going to make up story after story about how it's failing.  But in all cases, the only difference was randomness.  

Significantly more than 2 years, but also 2 years of doing almost nothing else.

[btc2nxt]

Bitcoin is nearing 6 years old. The World Wide Web was launched to the public-at-large in 1993. By the 6-7th year, the dot.com bubble had a capitalization that was 183% of the USA GDP!!!

Bitcoin is 1000x smaller phenomenon and yet the WWW is 10x bigger by now, so relatively speaking Bitcoin is 10,000x smaller.

Governments get tax by WWW,  but will lose money by Bitcoin. That is why governments did not like bitcoin, but push WWW .
That is the difference.

[Wexlike]

Puh, i made a chart, that shows the bitcoin creation price under best circumstances.

- Modern and efficient hardware (Antminer S3 - 440 GH/340W)
- very low electricity costs (0.05 cent/kwh)
- no other maintenance costs other than electricity
- I assume the miner is fully paid and the only costs are electricity
- difficulty correct till the current rise
- for the future i assumed a 10% difficulty rise per adjustment

Please don't criticize me too much, i made the chart with paint lol. The data is in the chart under the picture.



The data starts from the release of the miner.

Code:

diff	        btc/d	btc per cycle	creation cost for 1 bitcoin
13462580114,53	0,02	0,18		30,95
				
16818461371	0,01	0,18		31,91
				
17336316979	0,01	0,17		34,48
				
18736441558	0,01	0,16		36,31
				
19727645941	0,01	0,13		43,91
				
23844670039	0,01	0,11		50,51
				
27428630902	0,01	0,11		50,51
				
30171493992,2	0,01	0,1		55,57
				
33188643391,42	0,01	0,08		67,92
				
36507507730,56	0,01	0,08		74,71
				
40158258503,62	0,01	0,07		82,17
				
44174084353,98	0,01	0,06		90,4
				
48591492789,38	0	0,06		99,44
				
53450642068,32	0	0,05		109,37
				
58795706275,15	0	0,05		120,31
				
64675276902,66	0	0,04		132,36
				
71142804592,93	0	0,04		145,58
				
78257085052,22	0	0,04		160,13
				
86082793557,44	0	0,03		176,19
				
94691072913,19	0	0,03		193,82
				
104160180204,51	0	0,03		213,23
				
114576198224,96	0	0,02		234,52
				
126033818047,45	0	0,02		258,02
				
138637199852,2	0	0,02		283,87
				
152500919837,42	0	0,02		312,21
				
167751011821,16	0	0,02		343,43
				
184526113003,28	0	0,02		377,78
				
202978724303,6	0	0,01		415,52

Atleast i understand now, why the big mining operations are investing like crazy in new miners.  

[Odalv]

Puh, i made a chart, that shows the bitcoin creation price under best circumstances.

Just change your 10% into 40-50% (based on this chart http://bitcoin.sipa.be/speed-lin-ever.png)
And add cost of miner. (if you ever mines initial investment)

[Wexlike]

https://bitcoinwisdom.com/bitcoin/difficulty

I think it will slow down to ~15% and later to 10% if the price doesn't change in the immediate future.

[Odalv]

https://bitcoinwisdom.com/bitcoin/difficulty

I think it will slow down to ~15% and later to 10% if the price doesn't change in the immediate future.

http://bitcoincharts.com/ 
Network total 284141.699 Thash/s  now. Your 2 month chart, starts at 120000 Thash/s