In my view, the big problem with the power law model is the valuation of the Bitcoin price in dollars. Fiat money isn’t a good yardstick for measuring anything. Accordingly, I believe the Power Law model will eventually break down. Maybe even very soon, if BTC takes another dive😅 but we’ll see. It’s certainly fascinating and shows that the BTC price isn’t rising linearly or exponentially—but has so far been behaving a bit like a living organism.
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@stefan_21 You can measure it in Big Macs. 😅
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•@TotallyLost They're a better benchmark, but they're not perfect either, because they keep getting smaller over time🥲
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@stefan_21 But wasn't the power law broken just recently? 🧐
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@Da_Fischi Depending on which chart you look at, we were either just below the support line or right on it. We don’t know if it’s been broken yet, because the lines change as the price moves :D
It’s quite possible that we were just below it now and will find out in a year that we were actually within it after all 🤷♂️, but that’s exactly why I’m saying: the dollar isn’t a good benchmark. It can’t really work that way 😅
It’s quite possible that we were just below it now and will find out in a year that we were actually within it after all 🤷♂️, but that’s exactly why I’m saying: the dollar isn’t a good benchmark. It can’t really work that way 😅
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@stefan_21 You’re really hitting on a core issue there! “Elastic fiat money” naturally skews any long-term mathematical projection.
But the comparison to a living organism is spot on. Just like an organism, Bitcoin adapts to its environment—no matter how chaotic the surrounding fiat landscape is. Even though it’s not perfect, I think the power law model comes closest to predicting its future development. How else would you measure it?
But the comparison to a living organism is spot on. Just like an organism, Bitcoin adapts to its environment—no matter how chaotic the surrounding fiat landscape is. Even though it’s not perfect, I think the power law model comes closest to predicting its future development. How else would you measure it?
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@Philipwdr I think it would make more sense to measure absolute numbers, like the number of addresses with a balance or something like that. It’s hard to project the price in dollars into the future when you have no idea how the dollar’s purchasing power will change. On the other hand, the power law—with its upper and lower bounds—also has a relatively wide margin of error. We’ll see how it plays out :)
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