I just came up with a revision of the Bitcoin power law, using total wealth as the unit of account, not dollars. The model goes like this: Bitcoin is increasing at a certain percentage relative to the total wealth in the world, and this increase will halve every doubling of time since the Genesis block. It will keep doing that forever, even though total wealth cannot go up with it at the same rate (total wealth will continue to increase, but never as fast as Bitcoin increases, with Bitcoin value growth trending asymptotically toward the growth in total wealth). Lost coins allow for this possibility, as people will adjust their valuations of Bitcoin to accommodate this. The rate of growth in Bitcoin valuation will decline as it reaches a greater proportion of the market, and will continue to grow nearly at the rate of total wealth, but only asymptotically. It is following a power law with total wealth right now, but people are measuring wealth with the wrong unit of account, and so the constants employed in power law models are skewed by the systematic fiat corruption of the pricing system inherent in their bias to measure the wrong kind of wealth.
46% yield on the dollar won't magically go down to 23% yield on the dollar in 15 years, contrary to Giovanni Santostasi's model. Instead, something like 34% yield in excess of the growth in total global wealth will go down to 17% yield in excess of the growth in total global wealth. This means that depending on worldwide growth and depending on the issuance of the dollar, Bitcoin could still be returning something like 25% to 40% on the dollar by that time if you plug in various world scenarios and fiat monetary policies. The dollar is not a necessary factor in the power law dynamics of Bitcoin in my model, but global wealth is, with the rate of return asymptotically approaching global growth.
tl, dr:
1 BTC = ct^k
and this expression is in units of Earth's productive capacity, which goes up significantly in terms of output and tremendously in terms of dollars over time. The relevant unit in this power law, and the accumulation of wealth on a Bitcoin standard, was never in dollars to begin with.
I might be wrong and this might actually be a logistic relationship to total wealth plus a correction factor for lost coins, but whatevs, I feel pretty confident about its predictive utility.
#Bitcoin #PowerLaw #PricePrediction #GiovanniSantostasi