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Author Topic: Here we go again, bitcoin exchange rates have been doing just fine  (Read 6800 times)
niko
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September 05, 2011, 01:03:08 AM
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Bitcoin exchange rates have been doing just fine, especially if we take into account series of attacks and scams.  Here is a year-long picture:


There is no "major drop". Now you can all relax and do something useful for Bitcoin. Spread the good word.

P.S. I know some folks will get confused with the log scale. If you are interested in the exchange value, you are concerned with the relative change in value, right?  For example, if you wish to invest $100 in Bitcoin, you do so - regardless of the price. You might end up buying 1000 or 0.003 coins, it doesn't matter. What matters is the relative change over time - has it doubled or tripled or halved? If the value, for example, has doubled over a year and now you decide to sell, you will have made exactly double the amount of dollars you invested - regardless of what the exchange rate was when you first invested. This is why log plot, and log plot only, is appropriate and accurate representation of the exchange rate.  In cases where exchange rates remain within a narrow range, linear scale will distort the picture only slightly, so it can still be used if for some strange reason you are inclined to.

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September 05, 2011, 01:23:29 AM
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Thanks! Where did you get the historical data?

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September 05, 2011, 01:27:09 AM
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Agreed. A good buying strategy is the same for what most people should do with gold and silver. Buy some bitcoins every month, regardless of the price. In the long run, you will probably be ahead. The idea here is that, like gold and silver, bitcoins are money, and it is better money to save in gold, silver and bitcoins than fiat currencies. Don't treat it like an investment where you try to maximize your gain. Just treat it as savings, and that's why you buy some every month, just like you should be saving your money every month.
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September 05, 2011, 01:31:19 AM
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Thanks for the intelligent post and proper information regarding the performance and rates...

It's absurd how many people claim the sky is falling and use (on purpose, I suspect) the wrong chart to support their claim. :/

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September 05, 2011, 01:35:44 AM
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Thanks! Where did you get the historical data?

I've been carrying a notebook and a pencil with me for the past year. But that has nothing to do with it. Just go to http://bitcoincharts.com/charts/ and choose the time period from the drop-down menu.

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September 05, 2011, 01:59:44 AM
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that's nothing new, unfortunatly too many people don't keep up with the facts; thanx for bringing more people up to speed Smiley

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September 05, 2011, 02:36:32 AM
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Log scale and long averages, pf....
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September 05, 2011, 02:47:28 AM
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Log scale? Jesus christ. The denial is strong in this thread.
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September 05, 2011, 03:21:36 AM
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Log scale? Jesus christ. The denial is strong in this thread.
Log scale makes a lot of sense for bitcoin. It is a currency that will eventually inevitably grow at an exponential rate. It is also - unlike fiat currencies - based in mathematics. Also, it makes the graphs easier to read and understand for those of us who might be otherwise bothered by trifling matters like excessive short-term volatility, allowing us instead to focus on the extraordinary long-term prospects of bitcoin. The very name "logarithmic" itself fits well with the elegant nature of bitcoin.

I challenge you to find a scale system better suited to plot bitcoin prices. Linear? Hah - that's as retarded as using the Euler method! Hypergolic? Violates the Kutta condition.
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September 05, 2011, 03:28:16 AM
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Log scale? Jesus christ. The denial is strong in this thread.
Log scale makes a lot of sense for bitcoin. It is a currency that will eventually inevitably grow at an exponential rate. It is also - unlike fiat currencies - based in mathematics. Also, it makes the graphs easier to read and understand for those of us who might be otherwise bothered by trifling matters like excessive short-term volatility, allowing us instead to focus on the extraordinary long-term prospects of bitcoin. The very name "logarithmic" itself fits well with the elegant nature of bitcoin.

I challenge you to find a scale system better suited to plot bitcoin prices. Linear? Hah - that's as retarded as using the Euler method! Hypergolic? Violates the Kutta condition.

Pretty funny, I have to admit.

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September 05, 2011, 04:02:43 AM
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Log scale? Jesus christ. The denial is strong in this thread.

I wish you actually made a logical argument instead of resorting to Jesus christ. It's quite simple, I'll try and explain it better. If you represent the data in linear scale, doubling the price from 1 to 2 is represented by say one inch on y axis, whereas doubling the price from 10 to 20 is represented by ten inches. Both cases are actually identical as far as your fiat investment is concerned (it has doubled), but linear scale misrepresents them as fundamentally different. That is, you would be in denial that someone could have doubled their investment going from 1 to 2 just as someone else got it going from 10 to 20. In logarithmic scale these two identical cases are also visually identical. Linear scale is distorted, log scale is not. This is nothing exclusive to Bitcoin. It is nothing exclusive to exponential trends either. Log scale is appropriate whenever you want to represent relative change without distortion.

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September 05, 2011, 04:07:12 AM
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That image is fuzzy?

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September 05, 2011, 04:31:33 AM
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That image is fuzzy?

Yes, it is. It's been through a lot. Just go to, for example, http://bitcoincharts.com/charts/, chose options as you please, and see it for yourself clearly.

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September 05, 2011, 04:54:38 AM
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I wish you actually made a logical argument instead of resorting to Jesus christ. It's quite simple, I'll try and explain it better. If you represent the data in linear scale, doubling the price from 1 to 2 is represented by say one inch on y axis, whereas doubling the price from 10 to 20 is represented by ten inches. Both cases are actually identical as far as your fiat investment is concerned (it has doubled), but linear scale misrepresents them as fundamentally different. That is, you would be in denial that someone could have doubled their investment going from 1 to 2 just as someone else got it going from 10 to 20. In logarithmic scale these two identical cases are also visually identical. Linear scale is distorted, log scale is not. This is nothing exclusive to Bitcoin. It is nothing exclusive to exponential trends either. Log scale is appropriate whenever you want to represent relative change without distortion.

That's all fine and dandy except that you made a one year graph to make it look like nothing has been going on recently when it actually has been on a downtrend for a while and still looking bearish. Something clearly is up and it would serve Bitcoin's interest better if we actually discussed what's wrong and how to correct it instead of pretending that the future looks as bright as the sun.

This is what the 3-month trend looks like:


niko
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September 05, 2011, 04:58:16 AM
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Wow it's down almost 50% in just 2 short months.... that's not good!

Thank you - this is another great example of distorted thinking, and is of educational value for Bitcoin users: making a statement based on two arbitrary data points that are chosen to fit the statement. Falling for this kind of circular logic requires ability to ignore all other combinations of data points that would prove exactly opposite.

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September 05, 2011, 05:09:04 AM
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That image is fuzzy?

Yes, it is. It's been through a lot. Just go to, for example, http://bitcoincharts.com/charts/, chose options as you please, and see it for yourself clearly.

Wow it's down almost 50% in just 2 short months.... that's not good!
Sure it is, it's shaken out the skittish "investors" who don't actually understand their investment.

Note that it's still up something like 1000% in just 5 short months.  This is why you have to use log scales, and longer time frames - so you don't lose the perspective that matters.
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September 05, 2011, 05:13:01 AM
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Thank you - this is another great example of distorted thinking, and is of educational value for Bitcoin users: making a statement based on two arbitrary data points that are chosen to fit the statement. Falling for this kind of circular logic requires ability to ignore all other combinations of data points that would prove exactly opposite.

June it was at 16 by Aug it was at 8 .... it is now less than 8, what circular logic? What distortion?  Arbitrary?  I used the last 3 month chart, how was that "to fit the statement"?

We are only choosing arbitrary data points to fit the statement when it doesn't fit his statement.
niko
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September 05, 2011, 05:13:09 AM
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That's all fine and dandy except that you made a one year graph to make it look like nothing has been going on recently when it actually has been on a downtrend for a while and still looking bearish. Something clearly is up and it would serve Bitcoin's interest better if we actually discussed what's wrong and how to correct it instead of pretending that the future looks as bright as the sun.

You misunderstood me. There is no trend, just the past data. I simply presented all relevant data in a way that does not distort it, and concluded that bitcoin has been doing just fine. Of course I agree that in the past three months the exchange rate has declined - this clearly shows in my original plot, and it shows in the context of the overall performance over the past year. I don't know if the future looks bright or dark, but I can see that serious blows did not do much damage, meaning the idea, the protocol, and the public opinion are relatively solid. So far, so good.

As for your focus on recent data, I think you'll agree that it's simply about lack of influx of new buyers. One could argue that the last rally was a speculative bubble that is now slowly deflating, and I think that's good for Bitcoin in the long term. Stability, merchants, and such.

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September 05, 2011, 05:29:09 AM
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Cool, Its a good news  Smiley

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September 05, 2011, 09:36:24 AM
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If you want to make bad news look good: A) use a log graph, B) include completely irrelevant data in your graph, such as last year's bitcoin price which 99% of bitcoiners have never experienced and can never experience.  Sure, if I bought bitcoins at $0.05 I would still be saying that bitcoins today are fantastic and the price is brilliant.  But the vast majority of bitcoin users do not.

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