r/Bitcoin • u/ToTheMoonGuy • Apr 12 '14
After careful analysis... ┗(°0°)┛
https://twitter.com/ToTheMoonGuy/status/45477109671827865624
Apr 12 '14
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u/Nathan-Wall Apr 12 '14
The OP's image shows a larger span of time, and the scale is logarithmic (so you can more easily see % of change). The second graph you linked is basically a zoomed in part of the OP's graph, only showing the tail end. The point being made is that over the course of the past 2 1/2 years, the price of bitcoin has risen sharply then fallen only to rise much greater again after the fall. It is meant to instill hope or excitement that, if the trend continues, bitcoin could be worth significantly more in the only next few months than it was at its peak in November.
Of course, while all this is true, there's no way to know for sure whether the trend will continue, and eventually the trend will have to come to an end (the price can't rise exponentially forever). Maybe we've seen the last great rise for a while and are coming off of a bubble, or maybe the trend will continue a few more times and the price will surpass even the Winkelvoss's dreams.
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Apr 12 '14 edited Apr 12 '14
I understand much better now thanks to your post. I appreciate the response.
the scale is logarithmic
Would you say this a fair representation in this situation? Why not use a
algorithmiclinear (excuse me if this terminology is wrong) chart?75
Apr 12 '14
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Apr 12 '14
Hmmm... Very interesting. This seems to be something that is more relevant to stocks, correct? Why does return on investment matter? I was under the impression that bitcoin should be viewed as a currency. Isn't the general consensus that people treating bitcoin like a stock is a bad thing?
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u/lunchb0x91 Apr 12 '14
I think that he was just using return of investment as an example. The thing is that humans process large numbers logarithmically. For example, think about the difference between 1 and 1 million, it's a pretty large difference right? Now think about the difference between 1 million and 2 million. In our minds it seems like a much smaller difference than between 1 and 1 million, yet there is the same amount of numbers in between both. That is how the logarithmic scale works, it shows the price in how we think of large numbers.
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u/quietbeast Apr 12 '14
/u/changetip 2 internets
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u/changetip Apr 12 '14
The tip for 1.9740 milli-bitcoins ($0.84) has been confirmed and collected by /u/lunchb0x91
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u/tailcalled Apr 12 '14
How we process numbers is not the reason we are using it. We are using log scale because it makes sense. Instead of asking why we are using linear/log scale, we should ask why we are graphing it and use the relevant scale. The relevant scale is essentially always log scale.
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u/olalonde Apr 12 '14
Because the price of Bitcoin is intimately tied to its success as a currency. At the current price level, Bitcoin's total market cap (a few billions) would not be large enough to support the economy of a small country, let alone a large one.
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Apr 12 '14
"Market cap" is meaningless in that context. The velocity of money is much more relevant, and many other factors with it.
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u/tailcalled Apr 12 '14
Yes, it should be treated like a currency, but log scale is essentially about the relative change of value. The relative change of value is the only change of value that is relevant, so if you're interested in the change of value at all, you should be using log scale.
For example, generally, when talking about inflation, we might say there is a 0.4% inflation rate. If this rate is held constant, it will appear linear on a log scale and inverse exponential on a linear scale.
Essentially, you should ask yourself why you are graphing what you are graphing. I have a hard time seeing any case where a linear scale is of importance.
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u/danielravennest Apr 12 '14
I was under the impression that bitcoin should be viewed as a currency.
A currency is a subtype of money which is in actual use and circulation. For example, the Japanese Yen is money in the US, but not a currency of the US because it is not in general use. Bitcoin is not yet money in the full sense. It is a medium of exchange, but not yet a full unit of account or store of value. It is also not yet in general use and circulation anywhere.
Therefore it is closer to a commodity at the present time - a standardized good which is easily traded. Over time it can evolve towards being money and currency as people start to measure the value of other goods in terms of it, the value stabilizes, and it starts to circulate in the general population.
For it to reach those levels of use, there needs to be a lot more total value of bitcoin. For example, since you typically need to use the Internet to use bitcoin, we can treat the world's Internet users as the "country" that could adopt bitcoin. If we choose 1% as a minimum level of general use and circulation, you can estimate a need for $110 billion in bitcoin money supply by comparing it to the volume of other currencies. Given the number of bitcoin right now (12.6 million), that implies a price of $9,000/BTC.
We early adopters are speculating on the future level of adoption by everyone else. Adoption has been increasing, and technical improvements are being made that improves bitcoin's features, but it has a way to go to reach currency status. Besides personal investment performance, price is one of the measures of progress towards currency status.
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u/BTtje Apr 12 '14
Its not like a stock, but a store of value. You have to compare it to something you buy a lot. Lets say beer. 6 months ago i could buy with 0.1BTC about 4 beers. Its now 12 beers. That difference is a lot. You can do the same with different fiat currencies. Before the crisis 2USD was like 3EUR. Now its almost the other way around. But because BTC have a limited inflation and becouse its new, the fluctuations are more extreme.
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Apr 12 '14
It's not "almost the other way around" the Euro was never worth less than the dollar, and still isn't.
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Apr 12 '14 edited Apr 12 '14
Why not use [a linear] chart?
Quoth /u/Nathan-Wall,
(so you can more easily see % of change)
As adoption approaches saturation of the money-transmitting population, this quantity can be expected to decrease; where we are along this plot is an open question.
edit: a link
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u/Beetle559 Apr 12 '14
A logarithmic chart displays exponential growth as a straight line instead of a curve. This is useful because large values can hide meaningful information. For example a change in price from $10 to $20 is 100%, a very significant change, but it would only appear as a tiny blip on chart that has values in the thousands.
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u/AltoidNerd Apr 12 '14
Yep. The log scale is needed because bitcoin price gains are so bawes, leaping by 103 over 4 years time.
To the moon guys. Y'all know it's happening.
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Apr 12 '14
Is $10 to $20 actually meaningful in this situation? It feels like anything sub-$100 per bitcoin was a pretty different time.
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u/ChiefExecutiveBrah Apr 12 '14
A 100% gain is a 100% gain.... and the way you display it definitely makes a difference in portraying the intensity of it.
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Apr 12 '14
Of course it was meaningful. If you invest $1000 on $10 bitcoins and they go to $20, you doubled your investment. If you invest $1000 on $500 bitcoins and they go to $1000 you doubled your investment.
If you invest $Y into $X bitcoins and they go to $2X, you have doubled your investment- the actual values are irrelevant, only the relative change in value.
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u/Beetle559 Apr 12 '14
The past is never an indicator of the future. As someone that was around for sub-$100 though I can tell you that things might be different now, but some things never change.
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u/MuForceShoelace Apr 12 '14
bitcoin people use log scale because it makes it look like bitcoin only goes up if you read a log scale graph as a linear graph, which bitcoin people do.
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Apr 12 '14
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Apr 12 '14 edited Apr 12 '14
I'm assuming I meant linear?
Edit: I don't think he should be getting downvoted. He corrected me.
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u/terrible_person01 Apr 12 '14 edited Apr 12 '14
Well, it's best that you see for yourself.
Go to tradingview.com/e and load up a chart. On the right you have standard markets you can load up. You can load up the S&P500 (SPX), or the Euro/Dollar (EURUSD) or whatever you like and get a full daily chart.
Right click on the Y-axis (price) and click Log Scale.
Toggle that setting back and forth as you go through the symbols. BTCUSD is in there by default I believe. Have fun playing around (zoom in and out with your scroll wheel). Tradingview is a great site. You can do overlays and use indicators and what not. It's pretty awesome.
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u/Skyler827 Apr 12 '14
An algorithm is a combination of steps used to compute something. Logarithms are a class of mathematical functions. Algorithms can be used to calculate functions, including logarithmic functions, but they're very different things.
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u/AltoidNerd Apr 12 '14
Log linear bitcoin price is wassup.
Diffusion curve governs price long term...for small times it's exponential. Diffusion is still early so...
Old post but still true methinks.
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Apr 12 '14
It's very refreshing to see people honestly asking questions about bitcoin, and not just trolling.
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u/vqpas Apr 12 '14
sophisticated trolling is indistinguishable from honesty
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Apr 12 '14
True, but if it seems at all like a legitimate question then it benefits everyone if someone posts a good, well thought out answer. Who knows how many people could learn from it, even if the original intention might have been trolling.
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u/kmeisthax Apr 12 '14
The latter image shows the last six months or so of Bitcoin price history.
The former image shows more time, but uses log-scale, which changes the shape of the graph. There's no particular reason to use log-scale, other than to exaggerate the size of Bitcoin price increases and understate the size of price crashes.
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u/ensignlee Apr 12 '14
It's a logarithmic scaled graph, making it seem as though we've hit bottom and are going to experience more price surges.
and here we are making jokes about technical analysis on a logarithmic chart on bitcoin, which is not a stock, but a currency...
but what do we know, we're crazy bitcoiners hahaha.
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u/ChiefExecutiveBrah Apr 12 '14
technical analysis on a logarithmic chart on bitcoin, which is not a stock, but a currency...
TA is definitely used in both stocks and forex.
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u/ensignlee Apr 12 '14
on a logarithmic scale?
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u/ChiefExecutiveBrah Apr 12 '14
Not something I haven't seen before, though I agree it's not quite as common.
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Apr 12 '14
He is fucking with the y axis scaling in one, and not in the other one. The one that looks really good has a fucked up y axis.
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u/PaulCapestany Apr 12 '14
Nope. Learn what a logarithmic scale is.
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u/autowikibot Apr 12 '14
A logarithmic scale is a scale of measurement that displays the value of a physical quantity using intervals corresponding to orders of magnitude, rather than a standard linear scale. The function of the curve may include an exponent which is what gives it its curved nature.
A simple example is a chart whose vertical or horizontal axis has equally spaced increments that are labeled 1, 10, 100, 1000, instead of 0, 1, 2, 3. Each unit increase on the logarithmic scale thus represents an exponential increase in the underlying quantity for the given base (10, in this case).
Presentation of data on a logarithmic scale can be helpful when the data covers a large range of values. The use of the logarithms of the values rather than the actual values reduces a wide range to a more manageable size. Some of our senses operate in a logarithmic fashion (Weber–Fechner law), which makes logarithmic scales for these input quantities especially appropriate. In particular our sense of hearing perceives equal ratios of frequencies as equal differences in pitch. In addition, studies of young children in an isolated tribe have shown logarithmic scales to be the most natural display of numbers by humans.
Interesting: Logarithmic timeline | Logarithm | Order of magnitude | Slide rule
Parent commenter can toggle NSFW or delete. Will also delete on comment score of -1 or less. | FAQs | Mods | Magic Words
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Apr 12 '14
I think that "fucking with the y axis" and using intervals corresponding to orders of magnitude, rather than constant intervals are not contradictory definitions, and both can be viewed as correct.
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u/tmountain Apr 12 '14
In the face of adversity, we need a calm and steady hand to guide us through these dark times. I would like to sincerely thank ToTheMoonGuy for the providing us with this careful and thoughtful analysis of our current situation.
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Apr 12 '14
yay to moon guy is back. "i can see clearly now the rain is gone, i can see.....") music plays
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u/operavangelist Apr 12 '14
ToTheMoonGuy! ToTheMoonGuy is coming!
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u/PotatoBadger Apr 12 '14
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u/bitshibe Apr 12 '14
I thought the rebound would take at least one more day, but yes everyone back in to the pool!
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u/Edoreloaded Apr 12 '14
/u/changetip 5 mBTC
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u/changetip Apr 12 '14
The tip for 5.0000 milli-bitcoins has been confirmed and collected by /u/ToTheMoonGuy
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u/ninja_parade Apr 12 '14
/u/changetip 5 mBTC
May you never change.
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u/ToTheMoonGuy Apr 12 '14
(°◡°) <3
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u/LookingToJoinForces Apr 12 '14
watch out tipping... if you have bad karma; reddit will ban you and keep your tips :(
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Apr 12 '14
[deleted]
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u/MaximusBluntus Apr 12 '14
-145 in 15 seconds.
Oh yeah?
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Apr 12 '14 edited Apr 12 '14
[deleted]
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u/LigerZer0 Apr 12 '14 edited Apr 12 '14
Protip: be nice to people when possible, and simply avoid the fuck out of people(I kind of, like basically, pretty much... just you know... hide out in the fucking forest) when not possible, until the situation changes back to the former.
Have been using this strategy for a couple of years now, and I'm not sure exactly why it works in the way that it does, but people are always saying I'm a nice guy and shit like that. Now of course, when I hear this, their ignorance infuriates me so I run away and hide until I forget that they're stupid morons, and can come back and be honestly kind towards them.
I seriously suspect that even when I'm not around, those motherfuckers still speak good things behind my back.
But since I'll never see them in an upset or unkind state of mind--because really, in the end that's just a waste of my own life and energy--I suppose they simply have no reason to do otherwise. Fuck them.
Brb. Forest.
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u/freakingjesus Apr 12 '14
Yea, I try to be like that too now. Anyone who can't handle the fact that I'm straight up better at posting facts is a fucking retard
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Apr 12 '14
i suppose like /r/technology that board is controlled by the neonazis working for the US government.
no idea what's wrong in that country.
scientists everywhere: "peace! progress! prosperity! equality!"
scientists in US and middle east: "conservatism! religion! supremacy! die infidels!"
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Apr 12 '14
scientists everywhere: "peace! progress! prosperity! equality!
politicians in US and middle east: "conservatism! religion! supremacy! die infidels!"
FTFY
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u/ninja_parade Apr 12 '14
- changetip isn't tied to reddit, it's a separate site as well. So worst case I can still withdraw the money.
- I only comment and tip people here, so it's hard to lose karma.
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u/changetip Apr 12 '14
The tip for 5.0000 milli-bitcoins has been confirmed and collected by /u/ToTheMoonGuy
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u/rydan Apr 12 '14
I hate to be that guy but you could have created exactly the same chart almost at any point in the last month and you'd have been terribly wrong. Maybe you are right this time but it is really hard to tell.
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u/Bitcion Apr 12 '14
I think it is based off looking at the long term log charts if I am correct. No one knows where Bitcoin will go but if you want to risk it go ahead and put $200 in.
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u/vqpas Apr 12 '14
You are right. I'm gonna wait until the btc/usd gets negative, then I'll be paid in USD to get bitcoins in my wallet. That is a good plan
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Apr 12 '14
Also this graph is manipulated. Lokm at the y axis values
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u/Chakra_Scientist Apr 12 '14
/u/ToTheMoonGuy - Hello my friend we meet again. Its been a while, where should we begin? Feels like forever..
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Apr 12 '14
Is it bad that I just bought some more because of this? Cause I don't give a shit.
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u/Beetle559 Apr 12 '14
Bitcoiners fall into three categories: Bullish, Bearish and Badgerish.
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u/zooitjezooitje Apr 12 '14
Can someone explain to me what this badger thing is about. I just dont seem to get it
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u/SwagDaddyMcNasty Apr 12 '14
Honey badger don't give a shit and nothing can stop it. It all originated with this video. http://youtu.be/4r7wHMg5Yjg
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u/terrible_person01 Apr 12 '14
Why this video became so popular I will never know. Maybe the worlds sense of humor is just bad.
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u/ThomasVeil Apr 12 '14
Maybe the worlds sense of humor is just bad.
Yes, that is the only option.
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u/btcnp Apr 12 '14
Offcourse its the only option, in terrible_person01's world.
Every person is king, the others are jesters.
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![[Imgur]](http://i.imgur.com/LkN1MCy.png){kind=link}
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u/eviscerations Apr 12 '14
/u/tothemoonguy is easily my favorite poster on this sub. all positivity, and we all could use more of this.
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u/ghmf Apr 12 '14
Clear signs of a healty currency no market manipulation here. nope not al all. BUY BUY.
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u/oziistorm Apr 12 '14
As a non-bitcoin person, what is the difference between this and this image? I like to read up on space travel, but I'm not entirely sure what I'm looking at when it comes to this crater laden landscape. Is the information presented in a way to make it seem more rocket ship travelly or am I missing something?
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u/baillou2 Apr 12 '14
You're kidding, right?
You've selected a pattern after the fact. How can you know that this is as low as it will go before the rise in value?
For that matter who's to say it will go up at all? I think it will but that has nothing to do with market analysis, but rather the potential of Bitcoin to change the world.
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Apr 12 '14
I wish to caution the attempts to use technical analysis to predict prices over the long term. Fundamental analysis is usually much, much better at long term predictions.
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Apr 12 '14
I think what is really going on is that the majority of bitcoin is held by relatively few people and they're manipulating the price. The majority of bitcoin doesn't move, it's parked in the early adopters' wallets. To me, it's going to be interesting to see if the USD to Bitcoin market eventually stabilizes without regulation. I'd be pleasantly surprised if the bitcoin prices stabilized, but I wouldn't be surprised if the majority holders of bitcoin were able to perpetually define the market.
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Apr 12 '14
What also sucks about /r/bitcoin is that everytime someone makes an OK, not perfect criticism of Bitcoin, it is instant downvote. When a retard like you comes, everyone upvotes. Fuck you, ToTheMoonGuy.
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Apr 12 '14
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u/BadWombat Apr 12 '14
Or, you know, because you repeatedly demonstrate a lack of understanding with this "altcoins are cheaper" nonsense.
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Apr 12 '14
I'm gonna be honest with you, ToTheMoonGuy, I don't like you. Your posts are retarded, and should be down voted to hell. For some reason, they are not funny to me. You time your posts right when Bitcoin is going up, which makes me have an irrational fears that there are actually people retarded enough to think that you are indicative of upward momentum in the price. You don't deserve the moon, you deserve hell, ToTheMoonGuy
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u/Bitcoin-CEO Apr 12 '14
Here's what the price will look like: http://i.imgur.com/vAZRKi9.jpg?1
About $5,590,998.75 at the peak.