1.
A lot of the posts that have been made in response to my previous threads are very typical of "despair bubble phase" posts. Some of the posts include analysis or reasons, but there were also a few where people simply discounted other posters, writing "there's no way that bitcoins can go that high."
They may be right or wrong, but I remember that a bubble was imminent immediately after I started seeing these "there's no way" posts the last two cycles.
2.
In 2000, I was involved in a "virtual 3d worlds" online software package called Activeworlds (http://activeworlds.com). I was given the opportunity to lead one of their most popular "worlds." During that time, I, with the help of others, increased the userbase from 2 to about 60 simultaneous users online in the world at any given time. I programmed software and we had events and games using the company's platform. People "built" houses with 3D objects and made real-world friendships online.
On January 6, 2002, Activeworlds raised its pricing from $19.95/yr to $9.95/mon. The number of users dropped by half in the first month. Even though we had done everything right, we were dependent upon the company to continue allowing people to visit the work we had created. When they did not, the community eventually fell apart. 12 years later, I don't think anyone ever visits the AWTeen world anymore (even though it is still there).
This is a lesson why bitcoin will succeed over centralized networks. After that happened, I swore that I would never again develop software that relied upon a proprietary platform, such as facebook or twitter. The bitcoin network has all the great features of a proprietary platform, but nobody can suddenly change terms of use on you. Developers who have been burned recognize this and will gravitate towards bitcoins like wildfire.
3.
I don't see altcoins dying after the next bubble. Since altcoins are always popping up, there are always going to be some around. I would imagine that, after the bitcoin ETFs come along, we will also have funds that "diversify" into altcoins as well. These funds will trade bitcoins for altcoins and back in a risky attempt to make a buck. Investors just give money to "experts" and let them do the altcoin trades for them.
The altcoins will always be second to bitcoins, and may never find any commercial use, but traders will be able to play games with them in these big funds.
4.
There is a person who always disagrees with everything everyone says (no matter what it is), and who always has negative scores on his posts. While I don't place a lot of emphasis on karma, isn't there any way to automatically reject posts from people whose every post is far in the negative, even if it's just for a day?
5.
I've stated that I strongly disagree that bitcoins will have a prolonged period of sideways movement like in 2011 and 2012. I think it's time to examine why bubbles seem to happen at this time interval of 234 days.
I propose that the cycle originates from the time it takes for an average software development project to be released. Many books have been written on this subject, but they tend to come to one conclusion: you can't significantly affect the time it takes to release a software project by hiring lots of people to work on it. Hiring people can actually slow a project down by requiring other members to train the new members. For every project, there is an ideal number of developers - below that, the project fails because management gives up on the project, and above that, all the extra effort is wasted in communication and inefficiency. Therefore, the time required to release the first version of a product is largely fixed.
My experience seems to indicate that 8 months is about right, but I did some research to try to confirm what the average length of a software project's development cycle is. At http://www.isbsg.org/ISBSGnew.nsf/WebPa ... 580022835D, this site apparently has a database of 650 projects or so. They concluded that the average software development project duration of all the projects in their database is between 231 and 258 days, depending on the type of project. I don't know whether that company is reputable or not, and I will do more research on this in the coming days.
Here is the hypothesis for people to discuss: each development cycle begins at the beginning of the huge uptrend, when developers hear about bitcoins and start developing stuff. Many of those developers stick it out and continue development during the next crash period. 8 months later, they are ready to launch their software. This round of software makes it to the front page of /r/bitcoin and to news organizations, and investors drive the price up. As the price goes up, companies with a larger market cap have developers start on projects that are now feasible with the higher price. The cycle repeats, each time with more and more developers, from larger and larger companies.
This theory would explain many trends with bitcoin prices. It would explain why political news does not itself move the price, and why political news is only used as an excuse by speculators for price movements. The movements are being caused by the activity of developers and the software engineering lifecycle.
Other
- Vladimir Putin played hockey against a professional Russian team earlier this week. At 61, he scored six goals and, in an amazing display of agility and strength against players a third of his age and thousands of times more experience, blew out the Russian team 21-4.
- Days until July 24: 70