BTC Fractals.

[chessnut]

As an EW analyst I went to the effort of making this illustration of fractals, if not only because some might find it interesting to see. I do not mean for it to be predictive, because by large it is retrospective.

[1714927774]

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[1714927774]

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[1714927774]

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[zoinky]

 

[JustAnotherSheep]

Indeed, it is fascinating. And it is all the more fascinating when you consider the fact that price can essentially be seen as a visualized output of thought and sentiment on a mass scale.

Tells you a lot about the workings of our minds, especially when put in groups.

[tspacepilot]

As an EW analyst I went to the effort of making this illustration of fractals, if not only because some might find it interesting to see. I do not mean for it to be predictive, because by large it is retrospective.

I noticed a self-similar pattern when looking at the all-time chart on bitcoinaverage.com  the other day.  Truly fascinating.  I think that fractals are a hallmark of naturalistic data---including socilogical/behavorial data in mass-systems.

[Elwar]

to da moon!!!

[spazzdla]

I have a lot of Fiat sitting around... dear lord it's tempting to throw a bunch at BTC.. humz..

[Alonzo Ewing]

Are you saying that the part inside the box looks like what follows?

Or are you saying that the part inside the box looks like the whole?

[chessnut]

Are you saying that the part inside the box looks like what follows?

Or are you saying that the part inside the box looks like the whole?

the part in the box looks like the whole and vice versa. There are two other fractals within the whole that look like the whole, the I wave and the V wave (although 'I' is messy). Same for every fractal, down to (i) scale.

I am using the III wave as an example because III waves are always the best defined of all waves.

[pinksheep]

Can someone explain what a fractal is?

[cbeast]

Can someone explain what a fractal is?

Its a mathematical term for self similar functions. They hold similar patterns at different resolutions.

[bananaControl]

Can someone explain what a fractal is?

You might have heard about the Mandelbrot set, it gives you a clear visual idea about what fractals are.

[pinksheep]

I haven't but googling it right now

[chessnut]

http://fractalfoundation.org/resources/what-are-fractals/

the moving illustrations show it best 

[pinksheep]

Thanks chessnut, I'll have a look at that now

[Alonzo Ewing]

This is fairly mind-blowing.  I started to see this in DanV's video.  Actually, I saw the "mother" and child" before I saw his video but his video crystallized the idea.  I just went to bitcoinwisdom and pulled up Huobi's charts (since it has the most liquidity) and even on 15 min, 5 min, and 1 min timescales I see the same pattern as in the top post repeat numerous times as I scroll to the left.

[chessnut]

but it gets even bigger than that.

[Krabby]

Why would this happen?

[chessnut]

Why would this happen?

It is an EW discussion not a FA, but the fundamentals are always merky none he less. plenty of factors that could drive bitcoin higher, and lower.

[Alonzo Ewing]

To me it looks like the current action does not match the previously repeating fractal pattern.  If I had to guess, the underlying action of the market is changing into a new one.

[chessnut]

To me it looks like the current action does not match the previously repeating fractal pattern.  If I had to guess, the underlying action of the market is changing into a new one.

yep in EW every fractal begins and ends a possible juncture. it's an opportunity for a previous or smaller fractal/s to express themselves in alternation creating only self similar properties.

[gogxmagog]

Could you use this for prediction? My caveman brain sees it always going down (smaller price)
The most I know about fractals is stuff stoned hippies have told me at raves.
It's like the golden mean in art design isn't it? Of course, that would mean everything is constantly being reduced?
Trippy none the less.

[chessnut]

Could you use this for prediction? My caveman brain sees it always going down (smaller price)
The most I know about fractals is stuff stoned hippies have told me at raves.
It's like the golden mean in art design isn't it? Of course, that would mean everything is constantly being reduced?
Trippy none the less.

I posted a second chart. did you see that one? very significant.

basically fractals are self similar, not identical. Of coarse we cannot see the future 100% using patterns on charts, this is just the way that natural forces resolve in a liquid market, in fractals. the most important thing about EW analysis/fractals are the junctures they offer. if you can identify an exact point of price/time where your expectations will be met/broken, then your trades will have a very high risk reward ratio, and you will be able to handle the stress of trading more mechanically. when the junctures are obviously related to fundamental events and panic sell offs etc, these junctures have fundamental significance, and should indicate reversals where they are seen. 339 is a prime example of an large impulsive wave terminating after panic selling. I bought at 355 when I saw this, not knowing what the future would bring, but simply knowing that the panic was over.

[gogxmagog]

Ok, I vaguely get it, I think...
The charts would make more sense with a detailed legend.
I'm no math.
 
Intriguing enough for me to do some independant research though.

Thanks for this  

Edit- oddly enough, just before I saw your thread, I was just remarking that the (general) mood (sentiment)across bitcointalk has noticeably taken a turn towards more positive compared to the gloom of the last couple weeks. Bullish?

[chessnut]

Edit- oddly enough, just before I saw your thread, I was just remarking that the (general) mood (sentiment)across bitcointalk has noticeably taken a turn towards more positive compared to the gloom of the last couple weeks. Bullish?

sentiment works like this - imagine everyone who is subject to craze buys the item subject to craze. At the point where the maximum amount of those people have bought, the price will be pushed up very high because of the demand they cause. However, having just bought that thing you are likely convinced for some reason or another that it will increase further in value. so when a price of something is at an extreme, an ATH, and a LOT of people are very bullish, that means that most demand is already expressed, and the slightest of supply to that market will cripple it (it will crash).
we are at a bottom extreme, and imo most people still think they are in for some 'cheap coins'. that is bullish. today, the sentiment is turning slightly more bullish, but this is not a sufficient contrary indicator because we are not near a bullish extreme. in this case, it is a good thing - people are realising that this is not the apocalypse.

[gogxmagog]

I would also like to see same type of charting applied to internet adoption. I'm fascinated but I'll silent now and let the people who know what they're talking about speak.

Good work bro

[RyNinDaCleM]

For every wave marked 1, 3,or 5, there are 5 smaller waves making it up. For each of those 1, 3, and 5, there are 5 smaller waves making it up. etc...etc...etc

[chessnut]

I would also like to see same type of charting applied to internet adoption. I'm fascinated but I'll silent now and let the people who know what they're talking about speak.

Good work bro

cheers, no problem.
I'd like to see a complete chart of the internet but I dont think there is one chart that represents the internet as charts may represent bitcoin. There's RyNinDaClem, authority on EW around here. that graph is a better illustration of fractals than bitcoin has to provide, but nice to compare the two.

[RyNinDaCleM]

It's not exact, but it is very close. It's a bit smaller in scale, so it may not challenge the $339 low, but this could play out.




Oh, and the counting is not for EW purposes. It's just to show the similarities.

Edit:
For the sake of argument, 13 waves is impulsive. 11 is not

[Alonzo Ewing]

Looks like fractal pattern might be holding after all, but with a variation.  If so, a near-term might be happening in the next day or two.

[JustAnotherSheep]

that is bullish. today, the sentiment is turning slightly more bullish, but this is not a sufficient contrary indicator because we are not near a bullish extreme. in this case, it is a good thing - people are realising that this is not the apocalypse.

I would argue for the contrary, that this is not bullish but possibly even bearish, as the general herd of people need to feel that this is, in fact, the apocalypse before a true bottom can be reached.

In other words we need far more hodlers to pull a Veronica

[bitcoinsrus]

that is bullish. today, the sentiment is turning slightly more bullish, but this is not a sufficient contrary indicator because we are not near a bullish extreme. in this case, it is a good thing - people are realising that this is not the apocalypse.

I would argue for the contrary, that this is not bullish but possibly even bearish, as the general herd of people need to feel that this is, in fact, the apocalypse before a true bottom can be reached.

In other words we need far more hodlers to pull a Veronica

[cbeast]

[gogxmagog]

fractals work with an element of randomness as well, do they not? Chaos theory and all that? I'm waaaaay out of my depth here, but the loose understanding I have of fractal science suggests that they are not useful as indicators of future movements, i.e. they may go up, down or sideways, depending on a myriad of external factors. (?)

jeez, this EROWID science stuff...I'm just digging myself deeper (derper)

[chessnut]

fractals work with an element of randomness as well, do they not? Chaos theory and all that? I'm waaaaay out of my depth here, but the loose understanding I have of fractal science suggests that they are not useful as indicators of future movements, i.e. they may go up, down or sideways, depending on a myriad of external factors. (?)

jeez, this EROWID science stuff...I'm just digging myself deeper (derper)

it's all about the market conditions. on a quiet day when nothing is fundamentally changing the free market can be effectively random, yet also retrospectively move in fractals. But, for example after an important news release a lot of people may panic sell. this will cause a wave that has natural limits. when the wave is complete, it will have formed a complete fractal system. using fractals we can pinpoint a high confidence entry. The best real example of this is the 339 low, It gave a very impressive entry using EW analysis. I got on at 355 as soon as I realised.

I do tend to disagree that the market is random. Global Liquid markets inevitably cause wave action. just like global weather systems. the waves that roll up onto the beach are always regular wavelength and consistent amplitude, yet they are the harmonic result of uncountable random events at sea.

[tspacepilot]

Everything in nature is fractal, from leaves on a tree to the clouds in the sky. The Bitcoin market is part of nature, it is controlled by a mass of human beings and is organic in nature. It is no surprise it has fractal qualities. However these fractals probably aren't very good for accurate predictions.

However, there have been 3 big pump and dumps for Bitcoin, these are also likely fractal in nature, and are a good prediction there will be more large pump and dumps in the future http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/the-past-and-future-of-bitcoins-price/

Can you say a bit more about these pump-n-dumps?  I'm into the fractal thing (the main topic of this thread), but as a side note, who's been doing the pumping?

[chessnut]

Everything in nature is fractal, from leaves on a tree to the clouds in the sky. The Bitcoin market is part of nature, it is controlled by a mass of human beings and is organic in nature. It is no surprise it has fractal qualities. However these fractals probably aren't very good for accurate predictions.

However, there have been 3 big pump and dumps for Bitcoin, these are also likely fractal in nature, and are a good prediction there will be more large pump and dumps in the future http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/the-past-and-future-of-bitcoins-price/

That cant be easily generalised. In general free market conditions, a zero sum game is always tough to make money in, fractals or no. But when fractals systems are caused by greater fundamental events, the chart begins to tell a story. If we dont know future events, the second best thing we can know is when the events that have come and gone had their net effect on the market. an unexpected fundamental event will always cause a wave, the wave will unfold in fractals, and sometimes we can see when the fractal system has terminated. 339 low was a prime example.

[hellscabane]

Everything in nature is fractal, from leaves on a tree to the clouds in the sky. The Bitcoin market is part of nature, it is controlled by a mass of human beings and is organic in nature. It is no surprise it has fractal qualities. However these fractals probably aren't very good for accurate predictions.

However, there have been 3 big pump and dumps for Bitcoin, these are also likely fractal in nature, and are a good prediction there will be more large pump and dumps in the future http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/the-past-and-future-of-bitcoins-price/

That cant be easily generalised. In general free market conditions, a zero sum game is always tough to make money in, fractals or no. But when fractals systems are caused by greater fundamental events, the chart begins to tell a story. If we dont know future events, the second best thing we can know is when the events that have come and gone had their net effect on the market. an unexpected fundamental event will always cause a wave, the wave will unfold in fractals, and sometimes we can see when the fractal system has terminated. 339 low was a prime example.

That's an excellent explanation, I concur.

Knowing when events come along is the trick. They can happen at any time.

Of course, though, in a way, fractals should give a sort of generalization to the next time there would be a "major event." This is assuming that the we have actually made a pattern that can be part of a fractal. Who says that we've even completed one cycle?

[tspacepilot]

Everything in nature is fractal, from leaves on a tree to the clouds in the sky. The Bitcoin market is part of nature, it is controlled by a mass of human beings and is organic in nature. It is no surprise it has fractal qualities. However these fractals probably aren't very good for accurate predictions.

However, there have been 3 big pump and dumps for Bitcoin, these are also likely fractal in nature, and are a good prediction there will be more large pump and dumps in the future http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/the-past-and-future-of-bitcoins-price/

That cant be easily generalised. In general free market conditions, a zero sum game is always tough to make money in, fractals or no. But when fractals systems are caused by greater fundamental events, the chart begins to tell a story. If we dont know future events, the second best thing we can know is when the events that have come and gone had their net effect on the market. an unexpected fundamental event will always cause a wave, the wave will unfold in fractals, and sometimes we can see when the fractal system has terminated. 339 low was a prime example.

But I thought that market values were exactly *not* a zero-sum game.  Or maybe I'm misunderstanding you somewhere.  Can you elaborate?

[chessnut]

Everything in nature is fractal, from leaves on a tree to the clouds in the sky. The Bitcoin market is part of nature, it is controlled by a mass of human beings and is organic in nature. It is no surprise it has fractal qualities. However these fractals probably aren't very good for accurate predictions.

However, there have been 3 big pump and dumps for Bitcoin, these are also likely fractal in nature, and are a good prediction there will be more large pump and dumps in the future http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/the-past-and-future-of-bitcoins-price/

That cant be easily generalised. In general free market conditions, a zero sum game is always tough to make money in, fractals or no. But when fractals systems are caused by greater fundamental events, the chart begins to tell a story. If we dont know future events, the second best thing we can know is when the events that have come and gone had their net effect on the market. an unexpected fundamental event will always cause a wave, the wave will unfold in fractals, and sometimes we can see when the fractal system has terminated. 339 low was a prime example.

But I thought that market values were exactly *not* a zero-sum game.  Or maybe I'm misunderstanding you somewhere.  Can you elaborate?

there is a finite sum of USD and BTC at any given point, and although that amount may change over time, wealth is not created by printing USD or mining bitcoin. every time someone loses money on the market, somebody makes an equal amount of money on the market, and total USD and BTC in circulation remain the same.

[tspacepilot]

Everything in nature is fractal, from leaves on a tree to the clouds in the sky. The Bitcoin market is part of nature, it is controlled by a mass of human beings and is organic in nature. It is no surprise it has fractal qualities. However these fractals probably aren't very good for accurate predictions.

However, there have been 3 big pump and dumps for Bitcoin, these are also likely fractal in nature, and are a good prediction there will be more large pump and dumps in the future http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/the-past-and-future-of-bitcoins-price/

That cant be easily generalised. In general free market conditions, a zero sum game is always tough to make money in, fractals or no. But when fractals systems are caused by greater fundamental events, the chart begins to tell a story. If we dont know future events, the second best thing we can know is when the events that have come and gone had their net effect on the market. an unexpected fundamental event will always cause a wave, the wave will unfold in fractals, and sometimes we can see when the fractal system has terminated. 339 low was a prime example.

But I thought that market values were exactly *not* a zero-sum game.  Or maybe I'm misunderstanding you somewhere.  Can you elaborate?

there is a finite sum of USD and BTC at any given point, and although that amount may change over time, wealth is not created by printing USD or mining bitcoin. every time someone loses money on the market, somebody makes an equal amount of money on the market, and total USD and BTC in circulation remain the same.

I understand, the amount of bitcoins under discussion is a zero-sum game. Ie, i give a bitcoin away means I just lost one, there's no creating bitcoins after the21millionth one is mined.  However, the value of a bitcoin isn't directly tied to it's unit.  The value is set by whatever someone is willing to trade for it.  That seems to me to be the opposite of a zero sum game.   Example:

1) I have 0btc, you have 1btc.  for illustration, assume you can buy a pizza at our favorite pizzaria for 1btc
2) You send me 0.5btc.
3) I have 0.5btc, you have 0.5btc   (ok, zero-sum with respect to the number of bitcoins, neither of us can afford 1 pizza)
4) ...time passes..."value" of a bitcoin doubles. (1 pizza now costs 0.5btc)
5) We now each have enough money to buy a pizza.

Am I making sense or am I missing the point somewhere?

[bitcoinsrus]

Everything in nature is fractal, from leaves on a tree to the clouds in the sky. The Bitcoin market is part of nature, it is controlled by a mass of human beings and is organic in nature. It is no surprise it has fractal qualities. However these fractals probably aren't very good for accurate predictions.

However, there have been 3 big pump and dumps for Bitcoin, these are also likely fractal in nature, and are a good prediction there will be more large pump and dumps in the future http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/the-past-and-future-of-bitcoins-price/

That cant be easily generalised. In general free market conditions, a zero sum game is always tough to make money in, fractals or no. But when fractals systems are caused by greater fundamental events, the chart begins to tell a story. If we dont know future events, the second best thing we can know is when the events that have come and gone had their net effect on the market. an unexpected fundamental event will always cause a wave, the wave will unfold in fractals, and sometimes we can see when the fractal system has terminated. 339 low was a prime example.

But I thought that market values were exactly *not* a zero-sum game.  Or maybe I'm misunderstanding you somewhere.  Can you elaborate?

there is a finite sum of USD and BTC at any given point, and although that amount may change over time, wealth is not created by printing USD or mining bitcoin. every time someone loses money on the market, somebody makes an equal amount of money on the market, and total USD and BTC in circulation remain the same.

I understand, the amount of bitcoins under discussion is a zero-sum game. Ie, i give a bitcoin away means I just lost one, there's no creating bitcoins after the21millionth one is mined.  However, the value of a bitcoin isn't directly tied to it's unit.  The value is set by whatever someone is willing to trade for it.  That seems to me to be the opposite of a zero sum game.   Example:

1) I have 0btc, you have 1btc.  for illustration, assume you can buy a pizza at our favorite pizzaria for 1btc
2) You send me 0.5btc.
3) I have 0.5btc, you have 0.5btc   (ok, zero-sum with respect to the number of bitcoins, neither of us can afford 1 pizza)
4) ...time passes..."value" of a bitcoin doubles. (1 pizza now costs 0.5btc)
5) We now each have enough money to buy a pizza.

Am I making sense or am I missing the point somewhere?

I still don't understand how that dude spent BTC10,000 for a pizza.  It was probably the extra cheese or something.

[chessnut]

Everything in nature is fractal, from leaves on a tree to the clouds in the sky. The Bitcoin market is part of nature, it is controlled by a mass of human beings and is organic in nature. It is no surprise it has fractal qualities. However these fractals probably aren't very good for accurate predictions.

However, there have been 3 big pump and dumps for Bitcoin, these are also likely fractal in nature, and are a good prediction there will be more large pump and dumps in the future http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/the-past-and-future-of-bitcoins-price/

That cant be easily generalised. In general free market conditions, a zero sum game is always tough to make money in, fractals or no. But when fractals systems are caused by greater fundamental events, the chart begins to tell a story. If we dont know future events, the second best thing we can know is when the events that have come and gone had their net effect on the market. an unexpected fundamental event will always cause a wave, the wave will unfold in fractals, and sometimes we can see when the fractal system has terminated. 339 low was a prime example.

But I thought that market values were exactly *not* a zero-sum game.  Or maybe I'm misunderstanding you somewhere.  Can you elaborate?

there is a finite sum of USD and BTC at any given point, and although that amount may change over time, wealth is not created by printing USD or mining bitcoin. every time someone loses money on the market, somebody makes an equal amount of money on the market, and total USD and BTC in circulation remain the same.

I understand, the amount of bitcoins under discussion is a zero-sum game. Ie, i give a bitcoin away means I just lost one, there's no creating bitcoins after the21millionth one is mined.  However, the value of a bitcoin isn't directly tied to it's unit.  The value is set by whatever someone is willing to trade for it.  That seems to me to be the opposite of a zero sum game.   Example:

1) I have 0btc, you have 1btc.  for illustration, assume you can buy a pizza at our favorite pizzaria for 1btc
2) You send me 0.5btc.
3) I have 0.5btc, you have 0.5btc   (ok, zero-sum with respect to the number of bitcoins, neither of us can afford 1 pizza)
4) ...time passes..."value" of a bitcoin doubles. (1 pizza now costs 0.5btc)
5) We now each have enough money to buy a pizza.

Am I making sense or am I missing the point somewhere?

no wealth is created by bitcoins rising in value. the appreciation of bitcoin would equally depreciate the value of USD. now a pizza would cost $10 + 0.001c in USD. the general poplulation of America would be paying for your pizza, although you would not notice the effect of 10bln dollars less to the economy.

[tspacepilot]

Everything in nature is fractal, from leaves on a tree to the clouds in the sky. The Bitcoin market is part of nature, it is controlled by a mass of human beings and is organic in nature. It is no surprise it has fractal qualities. However these fractals probably aren't very good for accurate predictions.

However, there have been 3 big pump and dumps for Bitcoin, these are also likely fractal in nature, and are a good prediction there will be more large pump and dumps in the future http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/the-past-and-future-of-bitcoins-price/

That cant be easily generalised. In general free market conditions, a zero sum game is always tough to make money in, fractals or no. But when fractals systems are caused by greater fundamental events, the chart begins to tell a story. If we dont know future events, the second best thing we can know is when the events that have come and gone had their net effect on the market. an unexpected fundamental event will always cause a wave, the wave will unfold in fractals, and sometimes we can see when the fractal system has terminated. 339 low was a prime example.

But I thought that market values were exactly *not* a zero-sum game.  Or maybe I'm misunderstanding you somewhere.  Can you elaborate?

there is a finite sum of USD and BTC at any given point, and although that amount may change over time, wealth is not created by printing USD or mining bitcoin. every time someone loses money on the market, somebody makes an equal amount of money on the market, and total USD and BTC in circulation remain the same.

I understand, the amount of bitcoins under discussion is a zero-sum game. Ie, i give a bitcoin away means I just lost one, there's no creating bitcoins after the21millionth one is mined.  However, the value of a bitcoin isn't directly tied to it's unit.  The value is set by whatever someone is willing to trade for it.  That seems to me to be the opposite of a zero sum game.   Example:

1) I have 0btc, you have 1btc.  for illustration, assume you can buy a pizza at our favorite pizzaria for 1btc
2) You send me 0.5btc.
3) I have 0.5btc, you have 0.5btc   (ok, zero-sum with respect to the number of bitcoins, neither of us can afford 1 pizza)
4) ...time passes..."value" of a bitcoin doubles. (1 pizza now costs 0.5btc)
5) We now each have enough money to buy a pizza.

Am I making sense or am I missing the point somewhere?

no wealth is created by bitcoins rising in value. the appreciation of bitcoin would equally depreciate the value of USD. now a pizza would cost $10 + 0.001c in USD. the general poplulation of America would be paying for your pizza, although you would not notice the effect of 10bln dollars less to the economy.

Your reply is timely but not very explanatory.  Can you elaborate?  Your reply is more like an assertion than an explanation.

[chessnut]

Everything in nature is fractal, from leaves on a tree to the clouds in the sky. The Bitcoin market is part of nature, it is controlled by a mass of human beings and is organic in nature. It is no surprise it has fractal qualities. However these fractals probably aren't very good for accurate predictions.

However, there have been 3 big pump and dumps for Bitcoin, these are also likely fractal in nature, and are a good prediction there will be more large pump and dumps in the future http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/the-past-and-future-of-bitcoins-price/

That cant be easily generalised. In general free market conditions, a zero sum game is always tough to make money in, fractals or no. But when fractals systems are caused by greater fundamental events, the chart begins to tell a story. If we dont know future events, the second best thing we can know is when the events that have come and gone had their net effect on the market. an unexpected fundamental event will always cause a wave, the wave will unfold in fractals, and sometimes we can see when the fractal system has terminated. 339 low was a prime example.

But I thought that market values were exactly *not* a zero-sum game.  Or maybe I'm misunderstanding you somewhere.  Can you elaborate?

there is a finite sum of USD and BTC at any given point, and although that amount may change over time, wealth is not created by printing USD or mining bitcoin. every time someone loses money on the market, somebody makes an equal amount of money on the market, and total USD and BTC in circulation remain the same.

I understand, the amount of bitcoins under discussion is a zero-sum game. Ie, i give a bitcoin away means I just lost one, there's no creating bitcoins after the21millionth one is mined.  However, the value of a bitcoin isn't directly tied to it's unit.  The value is set by whatever someone is willing to trade for it.  That seems to me to be the opposite of a zero sum game.   Example:

1) I have 0btc, you have 1btc.  for illustration, assume you can buy a pizza at our favorite pizzaria for 1btc
2) You send me 0.5btc.
3) I have 0.5btc, you have 0.5btc   (ok, zero-sum with respect to the number of bitcoins, neither of us can afford 1 pizza)
4) ...time passes..."value" of a bitcoin doubles. (1 pizza now costs 0.5btc)
5) We now each have enough money to buy a pizza.

Am I making sense or am I missing the point somewhere?

no wealth is created by bitcoins rising in value. the appreciation of bitcoin would equally depreciate the value of USD. now a pizza would cost $10 + 0.001c in USD. the general poplulation of America would be paying for your pizza, although you would not notice the effect of 10bln dollars less to the economy.

Your reply is timely but not very explanatory.  Can you elaborate?  Your reply is more like an assertion than an explanation.

sorry, ill try harder.
if the value of bitcoins rise all the bitcoiners will win. but because no wealth is created at any stage in the process, that means that the USD loses an equal amount of value as bitcoin has gained. however because the market cap of bitcoin is so small and the market cap of the USD is so big, it's like pissing in the ocean. there will be no effective devaluation in the USD until bicoin reaches a significant value.

do you undersand that by paying for something with USD that I have saved, I am indecting USD into the economy that was not apparently there before. this is creating a surplus. when I offer labour for USD I am creating a shortage of USD. when I buy a BTC with USD I am creating a permanent surplus (as long as I do not sell it again). the more USD in circulation, the less the value of each USD.

every time the bitcoiners win (bitcoin is in shortage, USD in surplus), the americans holding USD lose an equal amount of value. understand? zero sum.

[tspacepilot]

sorry, ill try harder.
if the value of bitcoins rise all the bitcoiners will win. but because no wealth is created at any stage in the process, that means that the USD loses an equal amount of value as bitcoin has gained. however because the market cap of bitcoin is so small and the market cap of the USD is so big, it's like pissing in the ocean. there will be no effective devaluation in the USD until bicoin reaches a significant value.

do you undersand that by paying for something with USD that I have saved, I am indecting USD into the economy that was not apparently there before. this is creating a surplus. when I offer labour for USD I am creating a shortage of USD. when I buy a BTC with USD I am creating a permanent surplus (as long as I do not sell it again). the more USD in circulation, the less the value of each USD.

every time the bitcoiners win (bitcoin is in shortage, USD in surplus), the americans holding USD lose an equal amount of value. understand? zero sum.

If I understand your argument correctly, a crucial point is that for every btc someone holds, they released usd in order to get it (putting usd into surplus for a relative amount of btc shortage).  Is that correct?

If so, I think there's a flaw in the argument which is that not all bitcoins held were obtained by the release of usd.  Miners mine, someone purchases btc for euros (not usd), someone trades labor (puts labor into surplus, not usd).

Again, am I missing something?  Thank you for the discussion.

[rogerwilco]

sorry, ill try harder.
if the value of bitcoins rise all the bitcoiners will win. but because no wealth is created at any stage in the process, that means that the USD loses an equal amount of value as bitcoin has gained. however because the market cap of bitcoin is so small and the market cap of the USD is so big, it's like pissing in the ocean. there will be no effective devaluation in the USD until bicoin reaches a significant value.

do you undersand that by paying for something with USD that I have saved, I am indecting USD into the economy that was not apparently there before. this is creating a surplus. when I offer labour for USD I am creating a shortage of USD. when I buy a BTC with USD I am creating a permanent surplus (as long as I do not sell it again). the more USD in circulation, the less the value of each USD.

every time the bitcoiners win (bitcoin is in shortage, USD in surplus), the americans holding USD lose an equal amount of value. understand? zero sum.

If I understand your argument correctly, a crucial point is that for every btc someone holds, they released usd in order to get it (putting usd into surplus for a relative amount of btc shortage).  Is that correct?

If so, I think there's a flaw in the argument which is that not all bitcoins held were obtained by the release of usd.  Miners mine, someone purchases btc for euros (not usd), someone trades labor (puts labor into surplus, not usd).

Again, am I missing something?  Thank you for the discussion.

I'm going to chime in on this, if I may.

Ultimately, I agree with chessnut. Currency wars are a zero-sum game, as wealth is created through production, not currency creation. But I think to understand this, it's important to view the broad picture of supply and demand for all forms of currency put together. The whole point of currency is to facilitate trade, not create wealth. Within this pool of various currencies, each one has its own levels of both supply and demand. The value of each is then determined from these levels.

For simplicity, suppose BTC and USD were the only currencies in existence, and 99% of the world economy currently used USD for trade. This percentage reflects the demand of each currency, and the supply only affects the value of each unit within that percentage. So the overall supply of bitcoins, say 12 million in total, would divide over the 1% used in its part of the economy to determine the value for each coin. If the supply increases due to mining, or decreases due to hoarding, the price would adjust accordingly while staying in that 1%.

But if there is a sudden spike in the demand for BTC, say 2% of the world economy, then each coin would double in value. Of course, if more are mined or sold or whatever at the same time, the price may still rise but not as much, as it would reflect the net effect of said changes in supply and demand.

So in terms of these aforementioned direct exchanges between USD and BTC, the supply would be affected by how each user would spend or save each currency afterward. But someone who permanently dumps USD in favor of BTC has affected the demand side as well.

But regardless of how well BTC does, it can only siphon away percentage points from the overall demand for currency, which will remain relatively constant. The reason many of us here find it superior to USD though is that no one can cheat the system and print their own BTC like they can USD. In other words, BTC is superior not because it creates prosperity, but because it prevents prosperity from being systematically stolen.

[bitleif]

I understand, the amount of bitcoins under discussion is a zero-sum game. Ie, i give a bitcoin away means I just lost one, there's no creating bitcoins after the21millionth one is mined.  However, the value of a bitcoin isn't directly tied to it's unit.  The value is set by whatever someone is willing to trade for it.  That seems to me to be the opposite of a zero sum game.   Example:

1) I have 0btc, you have 1btc.  for illustration, assume you can buy a pizza at our favorite pizzaria for 1btc
2) You send me 0.5btc.
3) I have 0.5btc, you have 0.5btc   (ok, zero-sum with respect to the number of bitcoins, neither of us can afford 1 pizza)
4) ...time passes..."value" of a bitcoin doubles. (1 pizza now costs 0.5btc)
5) We now each have enough money to buy a pizza.

Am I making sense or am I missing the point somewhere?

It's no longer a closed system because you've included other people in it (the people who are willing to pay for your btc.) It's only zero sum if you include every person involved from the start. If you add more money into the system along the way (such as new buyers) then of course its not a zero sum game.

YOU haven't gained anything by the price doubling, until you spend it. If you just sit on it, that's called paper profits. If you DO spend it, that's the same as selling it to someone else, and then someone ELSE takes the loss to counter your gain. They lost money by buying that bitcoin from you at the current price, instead of buying earlier at half price.

[tspacepilot]

sorry, ill try harder.
if the value of bitcoins rise all the bitcoiners will win. but because no wealth is created at any stage in the process, that means that the USD loses an equal amount of value as bitcoin has gained. however because the market cap of bitcoin is so small and the market cap of the USD is so big, it's like pissing in the ocean. there will be no effective devaluation in the USD until bicoin reaches a significant value.

do you undersand that by paying for something with USD that I have saved, I am indecting USD into the economy that was not apparently there before. this is creating a surplus. when I offer labour for USD I am creating a shortage of USD. when I buy a BTC with USD I am creating a permanent surplus (as long as I do not sell it again). the more USD in circulation, the less the value of each USD.

every time the bitcoiners win (bitcoin is in shortage, USD in surplus), the americans holding USD lose an equal amount of value. understand? zero sum.

If I understand your argument correctly, a crucial point is that for every btc someone holds, they released usd in order to get it (putting usd into surplus for a relative amount of btc shortage).  Is that correct?

If so, I think there's a flaw in the argument which is that not all bitcoins held were obtained by the release of usd.  Miners mine, someone purchases btc for euros (not usd), someone trades labor (puts labor into surplus, not usd).

Again, am I missing something?  Thank you for the discussion.

I'm going to chime in on this, if I may.

Ultimately, I agree with chessnut. Currency wars are a zero-sum game, as wealth is created through production, not currency creation. But I think to understand this, it's important to view the broad picture of supply and demand for all forms of currency put together. The whole point of currency is to facilitate trade, not create wealth. Within this pool of various currencies, each one has its own levels of both supply and demand. The value of each is then determined from these levels.

For simplicity, suppose BTC and USD were the only currencies in existence, and 99% of the world economy currently used USD for trade. This percentage reflects the demand of each currency, and the supply only affects the value of each unit within that percentage. So the overall supply of bitcoins, say 12 million in total, would divide over the 1% used in its part of the economy to determine the value for each coin. If the supply increases due to mining, or decreases due to hoarding, the price would adjust accordingly while staying in that 1%.

But if there is a sudden spike in the demand for BTC, say 2% of the world economy, then each coin would double in value. Of course, if more are mined or sold or whatever at the same time, the price may still rise but not as much, as it would reflect the net effect of said changes in supply and demand.

So in terms of these aforementioned direct exchanges between USD and BTC, the supply would be affected by how each user would spend or save each currency afterward. But someone who permanently dumps USD in favor of BTC has affected the demand side as well.

But regardless of how well BTC does, it can only siphon away percentage points from the overall demand for currency, which will remain relatively constant. The reason many of us here find it superior to USD though is that no one can cheat the system and print their own BTC like they can USD. In other words, BTC is superior not because it creates prosperity, but because it prevents prosperity from being systematically stolen.

Thank you for this reply, I think understand more deeply now.

You guys are arguing that because bitcoin is a currency, the value of a bitcoin is zero-sum with respect to demand for currencies.  Is that right?

I think I understand well the point that if demand for bitcoin goes up and we assume that the demand for currencies overall hasn't changed, then the rise in value of a bitcoin is countered by an equivalent loss in value for the collective rest-of-the-currencies.

Doesn't this reasoning assume that the demand for currencies (which are created to facilitate trade) is constant over time?  Is such an assumption tenable given a changing world population and many other dynamic factors?

That is, the more I think about you guys' argument, the more it seems to me that the creation of a more useful currency *can* create wealth, insofar as it does its job (fair faciliation of trade) better than older currencies.  I'm probably wrong though.

[chessnut]

That is, the more I think about you guys' argument, the more it seems to me that the creation of a more useful currency *can* create wealth, insofar as it does its job (fair faciliation of trade) better than older currencies.  I'm probably wrong though.

No, you are right. this I totally agree with, but for the moment Bitcoin is still a speculative tool and so far not very helpful to the greater economy.

[ranlo]

As an EW analyst I went to the effort of making this illustration of fractals, if not only because some might find it interesting to see. I do not mean for it to be predictive, because by large it is retrospective.

Can you please clarify what fractals are? Like repeating events or something?

[chessnut]

As an EW analyst I went to the effort of making this illustration of fractals, if not only because some might find it interesting to see. I do not mean for it to be predictive, because by large it is retrospective.

Can you please clarify what fractals are? Like repeating events or something?

Best to read about it here  http://fractalfoundation.org/resources/what-are-fractals/

Fractals are shapes that reoccur within a self similar or identical shape many times on all scales of space. Fractals often make up the overall design of a living thing in nature.

[ranlo]

As an EW analyst I went to the effort of making this illustration of fractals, if not only because some might find it interesting to see. I do not mean for it to be predictive, because by large it is retrospective.

Can you please clarify what fractals are? Like repeating events or something?

Best to read about it here  http://fractalfoundation.org/resources/what-are-fractals/

Fractals are shapes that reoccur within a self similar or identical shape many times on all scales of space. Fractals often make up the overall design of a living thing in nature.

Thanks! So the theory is that this shape (in this case with prices going up and down) may keep repeating itself. My issue with this is that there are just too many variables. I've always felt that the shifts (on the chart) are random and that people find ways to match them up together to make them something they aren't.

[chessnut]

Thanks! So the theory is that this shape (in this case with prices going up and down) may keep repeating itself. My issue with this is that there are just too many variables. I've always felt that the shifts (on the chart) are random and that people find ways to match them up together to make them something they aren't.

well as you can see, the chart has left some accuracy to be desired... although I do believe the market is expressed in fractals, self similar fractals. they are easy to see after they happen, but like I say, usually they are not predictive enough to use. The idea is that the chart reflects the fundamentals (often not predicable), and that unexpected net forces on the market tend to unfold in similar ways every time. just like a story, the event will have a beginning, middle and end. With fractals and fundamentals we can often pin point the top or bottom of a move that has been clearly caused by something that we know about.

[RyNinDaCleM]

Thanks! So the theory is that this shape (in this case with prices going up and down) may keep repeating itself. My issue with this is that there are just too many variables. I've always felt that the shifts (on the chart) are random and that people find ways to match them up together to make them something they aren't.

They aren't random, though! When I buy/sell, I've made a choice. I choose to make the candle move. This choice is made a thousand times a day by traders. The waves are made by the weight of whoever is trading. Some people have more weight behind them, so it moves in bigger ranges. But it's still not random.

[ranlo]

Thanks! So the theory is that this shape (in this case with prices going up and down) may keep repeating itself. My issue with this is that there are just too many variables. I've always felt that the shifts (on the chart) are random and that people find ways to match them up together to make them something they aren't.

They aren't random, though! When I buy/sell, I've made a choice. I choose to make the candle move. This choice is made a thousand times a day by traders. The waves are made by the weight of whoever is trading. Some people have more weight behind them, so it moves in bigger ranges. But it's still not random.

Does this mean, then, that theoretically one can ride these up and down in set patterns? I mean the market itself is what is random (unless people are working to manipulate it).

Thanks! So the theory is that this shape (in this case with prices going up and down) may keep repeating itself. My issue with this is that there are just too many variables. I've always felt that the shifts (on the chart) are random and that people find ways to match them up together to make them something they aren't.

well as you can see, the chart has left some accuracy to be desired... although I do believe the market is expressed in fractals, self similar fractals. they are easy to see after they happen, but like I say, usually they are not predictive enough to use. The idea is that the chart reflects the fundamentals (often not predicable), and that unexpected net forces on the market tend to unfold in similar ways every time. just like a story, the event will have a beginning, middle and end. With fractals and fundamentals we can often pin point the top or bottom of a move that has been clearly caused by something that we know about.

Okay, so more or less what you're saying is that you can't use the patterns to determine what is happening or about to happen, but instead use it to help write the story of the past?