Blockchain.info has now removed the "holes" from their charts, allowing me to update my Metcalfe Value plot. Although we don't have price data prior to the opening of MtGox mid 2010, I was able to use the Metcalfe model to extrapolate backwards to the genesis block. The extrapolated value of all bitcoins in circulation was approximately $10,000 in 2009, before beginning the now famous trajectory to the moon in 2010.
The constant of proportionality in Metcalfe's law (V ~ N2) was also quantified for each of the two proxies for N. For example, using the number of transactions per day excluding popular addresses for N, the model best fit the market cap data with a constant of proportionality equal to $1.50. In other words, the model predicts that the bitcoin market capitalization is approximately equal to $1.50 multiplied by the square of the number of TXs per day (excluding popular addresses).
I am still stunned that the Metcalfe model so accurately corresponds to the actual market cap over 4 years and over 1,000,000% growth in market cap. The plot confirms for me that the value of bitcoin comes from the network of people who use it. If we keep finding new ways to use bitcoin, the rest will take care of itself.
The constant of proportionality in Metcalfe's law (V ~ N2) was also quantified for each of the two proxies for N. For example, using the number of transactions per day excluding popular addresses for N, the model best fit the market cap data with a constant of proportionality equal to $1.50. In other words, the model predicts that the bitcoin market capitalization is approximately equal to $1.50 multiplied by the square of the number of TXs per day (excluding popular addresses).
I am still stunned that the Metcalfe model so accurately corresponds to the actual market cap over 4 years and over 1,000,000% growth in market cap. The plot confirms for me that the value of bitcoin comes from the network of people who use it. If we keep finding new ways to use bitcoin, the rest will take care of itself.
Thanks. Very important work, as it enabled me to make the log-logistic theory, since money is apparently ALWAYS adopted by power law distribution not Gaussian (bell curve).
Noted it is mcap and not price, yet the are close proxy to each other now, since coin debasement is only 11% per annum now.
My TA. I put a ruler along the bottom of the green line since 2012 and looks it needs to come down to 3/5 current value to meet the trendline again. Which corresponds very roughly to $300.
P.S. Indeed any activity even promoting Bitpay transactions and driving our idealism into the toilet will satisfy our greed (for a while and that is a poetic note).
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The costs of a credit card transaction can vary widely, from under 1% to even over 50%.
You failed to grasp my point that the credit card holder pays 0% (or even gets cash back). What the merchant pays is irrelevant, unless the merchant is giving that 3-5% discount to the Bitcoin purchaser. Even with a discount, it is bad tradeoff because we are pushing our ecosystem to hell.
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What fool would lose 3-5% spread (at least) on two times exchanges instead of paying 0% to spend the fiat with a credit card?
The costs of a credit card transaction can vary widely, from under 1% to even over 50%.
You failed to grasp my point that the credit card holder pays 0% (or even gets cash back). What the merchant pays is irrelevant, unless the merchant is giving that 3-5% discount to the Bitcoin purchaser. Even with a discount, it is bad tradeoff because we are pushing our ecosystem to hell.
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My point is that in some cases the cost the the "credit card holder" can be upwards of 50% or even not be able to make the transaction in the first place. The case of an individual having to purchase a prepaid "credit card" in order to make an online purchase and spending more on "fees" then the amount of the purchase is a real case situation. I have said this over two years ago and will say it again. The low hanging fruit for Bitcoin has a FICO score of 350 or thereabouts or lives in a country that is blocked, or is under age 18, or wishes to purchase goods or services from an "high risk" merchant across an international boundary etc etc.
The cost to the merchant can be very relevant particularly if the transaction fall into the "high risk category". Ever wonder why so many retailers refuse international credit card transactions for example? Not every transaction involves a consumer with an 800+ FICO score purchasing goods or services in person from a large retailer.
So you are arguing that most can't get a credit card or can't use, so they are selling Bitcoin to purchase and then replacing their Bitcoin. I find this so far off the relevance scale. Majority of Bitcoin holders weren't unable to purchase anything online before Bitcoin came along. That is an extreme assumption. We know Bitcoin appeals to tech people who surely had mapped out how to buy online many years ago.
I am arguing that a huge market for using Bitcoin in retail transactions is those who cannot get or use a credit card. This is in many cases an entirely different group of people from those who choose to invest or speculate in Bitcoin.
And that is off topic to the point I was making. But I don't disagree with you on your point, it just doesn't refute the point I was making.
I am arguing that a huge market for using Bitcoin in retail transactions is those who cannot get or use a credit card. This is in many cases an entirely different group of people from those who choose to invest or speculate in Bitcoin.
yes, I agree, this is one of the key purposes for this technology, but sadly such a small portion of what it is used for today.
Peter Thiel's Paypal doesn't allow filipinos to receive payments (or at least didn't until a year or two ago), because the USA wanted the Philippines to first enact laws to end bank secrecy, support anti-terrorism, have an AML and KYC law, give the IRS access to any private data requested, etc.. Philippines has complied, so now they got upgraded by Moody's, Standard & Poors, etc.. So now they get fattened with debt. Lovely world and now we bow like good slaves to Peter and give him control of our Bitcoin.
P.S. the law of unintended consequences a.k.a. chaos when politicians make laws is why you are reading this thread in reverse.
Also I want to add that I understand it is very difficult to get merchants to hold BTC. But I am not in a rush to have merchants and fiat slavery. I am willing to invest in my future freedom for the long-term and be patient. I am not a greedy bastard. I live simply.