Bitcoin & Gold

[eyal]

[Tomatocage]

Awesome, only 12 more years to go!

[ercolinux]

Nice parallel. Only hope that took a little less time to begin to grow again: 24 years from gold to BTC scale is 2-3 years and today is more 1982-1986 range than in the 94-98 in which you put it.

[phelix]

of course bitcoin time runs faster. one bitcoin block ~ one gold week 

[eyal]

There are some key point that can be defined in the timeline of Gold and Bitcoin:
1. First Rally Start: When was a Free (no pre-set price) Exchange Market established. For this purpose, I assume that Exchange Markets are "established" when there is a general awareness to the existence of the Exchange, and there is a method for the public to exchange the currency for USD with no preset price. ('71 for gold, ending the gold standard thus making gold an independent decentralized currency, and 16-Apr-11 for Bitcoin ,using the first mainstream coverage in TIME magazine as the date from which awareness to bitcoin existed, needless to say that it did not make Bitcoin nearly as famous as Gold in '71, but the word spreads fast these days)
2. First Peak: The high-point which initialized the government intervention, which is followed by a long decline (Jan'80 for gold, and Jun'11 for bitcoin)
3. Second Rally Start :Balance of powers between Market Forces and Government intervention shifts (Apr 2001 for Gold, TBD for Bitcoin)
4. New Record Price: Market Price Exceed last peak and continue to skyrocket with no real resistance (Jan 2009 for Gold, TBD for Bitcoin)

I've attempted to calculate the Bitcoin future based on Gold's past using simple rationing. These are the results:

The Ratio between the progress rate of the events is ~1:60, meaning that market events occur 60x faster today compared to '71.

The model predicts that Bitcoin price would starts its rally around 15-Oct-2011 (As the World's Economic Collapse would likely gain even more momentum), from a price of around $8 (Assuming a similar 70% drop - which is what happened to Gold prices ''80-'01). At that point, the balance of power will shift from the Government intervention to Bitcoin Exchange Market forces at that point, and the price would begin an exponential upward trend.

The model predicts that around 2-Dec-2011 - Bitcoin will return to it's peak price of ~30$ and would continue it's exponential upward trend with no real resistance.

Calculation: https://docs.google.com/spreadsheet/ccc?key=0AnHPNP-GDn7adDBxM2FuRlVZTmhQTlVSaUZtM05MSnc&hl=en_US

[rebuilder]

And your assumption of government intervention is based on what?

[ElectricMucus]

Graphs do not work that way.

The timespans, scales and ratios, they are all different. The only thing common is that there is a peak and a slope.

You cannot possible compare bitcoin to gold.
The usual bitcoin buyer gets to bitcoin like this: Have you heard of bitcoin? It's this new internet currency, it's highly volatile and you can already buy stuff with it.
On the other hand you don't have: Have you heard of gold? It's this ancient store of value, it's shiny and you can put it under your mattress.

[eyal]

And your assumption of government intervention is based on what?

Gold: http://goldprice.org/news/2005/05/government-intervention-against-gold.html

Bitcoin: http://www.libertariannews.org/2011/08/30/bitcoin-fbi-admits-to-engaging-in-infiltration-disruption-and-dismantling-of-competing-currencies/

[cbeast]

[sunnankar]

You cannot possible compare bitcoin to gold.

Sure you can. What is illogical is to compare it the way eyal did by relying on class probability instead of case probability.

[rebuilder]

I'm not seeing the smoking gun here, eyal.