Quote from: Zangelbert Bingledack on April 04, 2013, 05:18:49 PM

Quote from: Timbert33 on April 04, 2013, 05:45:51 AM

Quote from: ffernandex on April 03, 2013, 01:53:48 PM

If you switch your charts to a logarithmic scale, things look much less dramatic,

So? Of course it makes things look much less dramatic. That's the whole point of the logarithmic system and a log scale... Don't understand people's obsession with the log scale graph in this forum. It changes nothing...

If you don't understand you probably haven't considered the difference between relative and absolute growth. Relative growth is what matters from an investment perspective. Regular charts distort the changes by magnifying the recent relative changes and shrinking older relative changes. They therefore systematically distort investment decisions.

Moreover, Bitcoin is experiencing exponential growth in almost every measurable indicator, including of course price. Log charts are simply far more suited to analysis of exponential growth phenomena; otherwse you have to try to eyeball a exponential curve as if it were superimposed the price movements to check whether it is moving in line with the exponent, which is rather difficult and error-prone. It's way easier to look at a log chart and see whether the price is moving in a straight line or not (the BTC price was, but in the past three weeks it has started lilting upward).

Here's the thing, though. While there is value to using log charts in some cases to analyze growth, it's obviously not what is happening on this forum in general. What IS happening on this forum is that people are using log charts to reassure themselves that the current growth trend is not out of control and is completely fine and normal.

I bet in June 2011 people were on here posting this log chart:

http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=60&i=&c=1&s=2009-02-04&e=2011-06-06&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=0&ps=0&l=1&p=0&

Instead of this chart:

http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=60&i=&c=1&s=2009-02-04&e=2011-06-06&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=0&ps=0&l=0&p=0&

to reassure themselves that it wasn't a bubble as well, which it quite apparently was. So, I just don't want people to use it to make themselves feel safe for no reason.

I've even heard people on here say that it wasn't a bubble in June 2011 because bitcoin has EVENTUALLY come back to those prices. That's clearly a ridiculous statement, ESPECIALLY since it might just be back above those prices because we're in ANOTHER BUBBLE. Maybe it is, maybe it isn't, but either way June 2011 was a bubble, and I don't want people to just blindly put a lot of money into btc at this point when it's a reasonably high risk investment.

I'm still invested myself, but people on this forum definitely need reality checks. Bitcoin is very unlikely to turn hundreds of thousands of people into millionaires in 6 months, which everyone seems to think will happen.

Timbert33

Posts

Merits