Post
Topic
Board Economics
Re: Monthly average USD/bitcoin price & trend
by
Roger_Murdock
on 31/12/2013, 05:20:27 UTC
So here's an "explanation" for why super-exponential growth might not be completely crazy.

Lots of people have speculated that Bitcoin's adoption might follow the familiar "S-curve" that's been seen with many other new technologies.  And, of course, the initial part of the S-curve looks like exponential growth. And so that's been used to justify the underlying exponential (or so we thought) growth trend for Bitcoin's price that we've witnessed over the past four years.  But why should we assume that the relationship between the rate of adoption and the price is linear?  And, in fact, if the rate of adoption is a measure of the number of users, isn't there at least some reason to expect a non-linear relationship with price? After all, if there are n users in the Bitcoin network, there are n(n-1) / 2 total possible connections.  

kdrop objected that the super-exponential trendline would put us at a million dollars per coin by the end of 2014 which, I have to admit, does seem a tad too optimistic.  But isn't the simple response that the super-exponential trend will only hold true for the initial phase of our now-modified S-curve?  On the other hand, hitting the slowdown / saturation phases in 2014 doesn't feel right to me.

Thoughts?