This started as a reply to a comment.

Then it got long. Then it got much longer. Then I typed so much good stuff that it became worth sharing more broadly. So now it's a post.

Her comment is long, feel free to read it if you like; but for the purpose of this post I have copied and pasted the important bits that I will address. As I am answering her comment it is typed to her. Anyone else is a stalker observing from the outside. 😄

Reply to TG's comment on my post of yesterday

Ah TG, you're going to give old Bit Brain grey hair! 👴(Or no hair at all.)

Let me address your comments individually:

I thought that was going to be a lot more brutal ! very disappointed

I'm not a monster you know! Only mildly evil. 👹

I think you're curve fitting. You are seeing the patterns that you want to see that don't exist. You are invested in it, so you are desperately looking for signs that you've made the right choices.

Put the horse before the cart? 😨 Me? Never!

I'm in crypto because of the curves I saw, not the other way round!

As for "fitting" the curves - well, yes. That's what I'm trying to do! Curves are a graphic representation of an mathematical equation. It's a lot easier to fit a curve to data then to calculate a formula. Curves are like scientific theories. Good theories should be able to explain all observed phenomena, they should make testable predictions about the future, they shouldn't contradict any basic proven facts and other people should be able to replicate the results using them. If new data is found that doesn't match the theory (or in this case, curve), then the theory should either be scrapped and start afresh, or more commonly, modified to account for the new data. (These are not my own words, I'm paraphrasing Stephen Hawking, but there is no way I'm going to be able to find that quote in one of his books within a reasonable amount of time!)

So I make my curves to fit the data. And my curves are good "theories" - they encompass all the old data and they make reliable predictions. They can also be tested by anyone. Crypto is still young and has therefore got a limited data set. I constantly fine tune my curves to make them fit just a little better. It doesn't make them wrong, indeed, it makes them more accurate. The basic curves that I show (the long-term trendlines) are the same ones I have been showing for months and are the same ones that got me into crypto in the first place.

They do exist. Make your own, you'll see. The data is all available. Crypto grows logarithmically. FACT. You can deny that, but you're denial will look a little silly when all the evidence is pointing to the contrary.

Where are all these bull runs that are heading to the moon that get predicted almost hourly ? (not by you personally I know)

I avoid the "Moon shot" predictions because they are so hard to call accurately. My prediction accuracy would be very low. I will predict this though: Moon shots will continue to happen. I just can't tell you when or where. I am invested in several low market cap coins which I consider to have a high "Mooning" potential, but I can't guarantee if or when it will happen to them.

The log thing makes me chuckle, I've never seen anyone else ever use it in trading. I wonder if you'd use it if it went the wrong way and didn't back up your claim ? Or is it just another curve fit that fits the narrative ?

A few questions in here. The log thing makes sense when you are dealing with logarithmic growth. It would never makes sense in a traditional market, the growth is not logarithmic. Crypto growth is logarithmic because it is a technology that is being adopted (as discussed in detail here). My post yesterday showed a log curve next to a normal one. The normal one is useless prior to mid 2017, that much is self-evident. But HUGE price actions did take place, as I showed in the individual examples. The only way to display that is on a log curve. You can see that right?

I'm not sure what you mean by "if it went the wrong way". If by that you mean the growth was not logarithmic, then it would make little difference: a log curve would show stunted peaks and exaggerated troughs, but the playing field would otherwise be level, so basic analysis would still be possible as long as you were not trying to, for example, equate a climb from the bottom to the centre of the chart, with a climb from the centre to the top. Without logarithmic growth there would be no need for a log curve, it would only make life harder, so I wouldn't use it. I never look at my normal stocks using log curves - they sure as hell don't grow logarithmically! (They're pretty good at losing me money!) The curve fits the narrative, but why would I use one that didn't? I'm not making up the data. It makes the curves, not me.

If you mean "would I use a log curve if the market is contracting" then the answer is also "no". As above, the log curve works because the growth is logarithmic. The growth is logarithmic because of tech adoption. If the growth were to (for whatever reason) recede; logarithms would no longer factor into the equation and they would be useless. For instance: I did not measure the recent crash with logarithms, but I did continue to look at the overall logarithmic growth trendline of crypto.

Are you suggesting that Bitcoin, 8 years ago when it's price was I dunno, fractions of a dollar and maybe 10 people in the world actually knew what it was, has any relationship whatsoever to the price now ?

Yes. It does. That's the beauty of technology adoption. It's predictable over the long term. Okay, maybe not quite from 10 people (I do ignore the outliers in the very early days), but definitely from a few thousand. This pattern is consistent and predictable. It's also logarithmic: From https://fs.bitcoinmagazine.com/

theres some correlation between the ATR from then to now, because it's all logarithmic ? Are you saying the price is going to keep increasing at a logarithmic rate, and some point in the future the daily ATR is going to be tens of thousands of dollars ?

I just had to teach myself ATR quickly (thanks for the education tip). Yes, ATR should also increase logarithmically as the peaks and troughs are also following logarithmic trajectories. We can expect even greater variation between future highs and lows. But at a daily level? No. The crypto cycles are fast, but not that fast! Logarithmic growth does not happen visibly over that sort of timespan. I use normal charts for short-term work. If I were day trading crypto and looking at charts of 1, 3, 5 or 7 days then I would not be using logs at all.

If not, then the log chart means literally nothing. There hasn't been a single asset in the history of the earth that's increased at a log rate forever,

Forever? No - that's impossible. But they can increase logarithmically as long as they are linked to a tech that is still growing within the first half of the S-curve! i.e. it has not yet achieved 50% adoption. As long as that holds true then growth rate will increase! (Not "growth", "growth rate" - important distinction.) Here is a log view of Amazon. It's not a crypto stock, but it IS linked to S-curve following tech (e-commerce and internet adoption). The blue line is logarithmic growth.

It looks ridiculous on a non-log curve - you can hardly even make out the Y2K "bubble"! Surely there was price movement there worth looking at?

In summary: crypto will grow logarithmically, not forever, but until it reaches 50% adoption.

It just can't happen, who's printing all the free money so they can buy infinite crypto to push the price up ?
That's a good point actually, where is the money coming from ? For Bitcoin to get to 100k by the end of the week/month/year as a lots of retards constantly predict, do you think they realise how much money would need to be pumped into the system to raise the market cap that high ?

Good question. You remind me of the Moore's Law skeptics. They've been saying for the last 20 years that the number of transistors on a PC processor is going to hit a physics brick wall and it's impossible for the law to hold. So far the law has kept on increasing logarithmically without a care as to what they think... 😄

But that's irrelevant. To answer your question: TG you offend me! Do you even read my lovingly hand-crafted posts about where money comes from? 😉 These two explain it best: https://steemit.com/cryptocurrency/@bitbrain/money-understanding-it-and-cryptocurrencies-part-2-recap-of-the-basics and https://steemit.com/cryptocurrency/@bitbrain/money-understanding-it-and-cryptocurrencies-part-3-cryptocurrencies

Fiat money has no upper limit. It's inflationary, but it can be printed indefinitely (under the guise of "stimulating the economy through liquidity" - also known as "getting you further into debt with the fatcats" and "devaluing what's in you bank account" - but I've already discussed this in the posts linked above). Remember that there was a time that every single dollar (and Euro/Pound/Peso/Yen/Rupee) etc never existed. Yet HERE THEY ARE! Legitimate currency. Backed by nothing more than a government promise (because we trust government promises! 😂). Where did it all come from? Thin air. The great thing about thin air is that it is so plentiful. THERE IS NOTHING STOPPING THE FIAT SUPPLY FROM INCREASING TO BUY ALL THE CRYPTO THAT IT NEEDS TO!

But it doesn't need to. You don't have to buy crypto at all. Remember: crypto is disrupting the fiat market. One of the very best things about crypto is that it is putting wealth generation into the hands of the common man! I don't need to buy what I can create myself. Crypto is not issued by central authorities. Most of it is mined by people like you and me. WE CAN CREATE IT. Bitcoin blocks are going to keep on generating 12.5 new BTC each (for the next two years or so before it gets halved again) whether someone buys them with fiat or not. As a deflationary currency (fixed maximum supply and guaranteed scarcity) it will continue to increase in value. Only by major holders dumping the currency can it drop in value. Crypto does not need fiat. It will end up independent of it! TG 20 years from now will be buying all her clothing online with DashCoin or LiteCoin or Nano, not with fiat! She'll buy her groceries with her TenX card or UTrust phone app, her ISP will be Substratum and her 2 SBD and 3.5 STEEM that she earned on a blogging experiment many years in the past will be worth a small fortune... Fiat is not required to make crypto run. It's not required to grow crypto. It can help the growth, but crypto will be generated and gain value with or without it. Demand will see to that.

There is nothing magical and secret squirrel about crypto that only a few select gurus can possibly understand, everyone else can understand it perfectly well like every other asset. In fact, they all look just like penny stocks which is basically what they are.

No secret. No magic. Anyone can do it. But I tell you again - see crypto as a normal stock (like a penny stock) and you'll never see its potential, the purpose of log curves or the importance of early adoption. This will lead to you greatly underestimate the speculative value of crypto - which is exactly what I maintain traditional investors are doing. Looking at crypto through the wrong set of filters: you're Michaelangelo trying to understand a Picasso.

Are you trying to say that I can trade all of those and make money (and believe me I do) but I somehow can't trade crypto for some strange and mystical reason known only to a select few ?

No. But I still think you need to get some skin in the game to learn the differences and peculiarities of crypto.

Crypto is a childs market and it trades like a childs market. Every single clique signal on crypto is a self fulfilling prophecy because everyone believes the same self taught amateur garbage. The other traders that I know that trade crypto claim it's the easiest thing in the world to trade, like taking candy from a very dumb baby and I have no reason to doubt them.

Most crypto traders are rank amateurs - especially the day traders. I'm sure you can decimate them. Remember that day trading crypto is not logarithmic, you can do that with no modifications to your existing skill set. It's only the longer-term stuff that differs.

I'm sure as shit not going to deposit my life savings, literally my future pension fund in a pissy little tinpot company that's only been around for 2 minutes, and could fold tomorrow and run off with the money. If I lose my money where it is now, then that would mean my country has financially collapsed and there's no standing Government.

I wouldn't either, though I question the future value of traditional pension funds (which are increasingly looking like unsustainable pyramid schemes themselves). You are obviously fortunate enough to live in a relatively stable country, not everybody has that luxury. In fact, most don't. Zimbabweans have gladly traded their fiat for greatly overpriced crypto. It's safer than some fiat currencies. Also remember that stable countries don't always stay stable. The world has been at peace (relatively speaking) for far too long now... Ask Germany about that hyperinflation you spoke about in your comment. My answer is a) not to invest more than I can afford to lose in crypto, and b) to diversify. I KNOW that some of my "pissy little tinpot companies" aren't going to exist a few years from now. I'm working that into the equation and spreading the risk accordingly. I also know that a few are going to give me great ROI...

Am I a bit of a fraud? I have a traditional pension fund. I use fiat for just about everything. If I really believed in crypto 100% then surely I would put everything into crypto?

Sadly the volatility of crypto doesn't permit that. My life circumstances are currently in flux and unfortunately I require a decent fiat buffer and income. Perhaps if I were not supporting others then I would be more risky with my money. I trust crypto to succeed, but the volatility is a very real risk (I may not have money when I need it) and I'm not counting on it as a source of income - I've essentially already written off my crypto investment.

don't take any of this personally, I'm just ranting in general :-) I look forward to lots more discussions on it

It takes something upwards of tactical nukes to p... me off - no risk there! I'm sure there will be many more discussions and I'm looking forward to them too. 😊

Yours in crypto,
Bit Brain

DISCLAIMER:
I am neither a financial advisor nor a professional trader/investor. This is not financial advice, investment advice or trading advice. Unless otherwise stated, all my posts are my opinion and nothing more. Crypto is highly volatile and you can easily lose everything in crypto. You invest at your own risk! Information I post may be erroneous or construed as being misleading. I will not be held responsible for anything which is incorrect, missing, out-of-date or fabricated. Any information you use is done so at your own risk. Always Do Your Own Research (DYOR) and realise that you and you alone are responsible for your crypto portfolio and whatever happens to it.