【Long-term currency price prediction】Talking about the fractal trend of Bitcoin

1. Big Data
Friends who follow me know that since the price of the currency reached 1,500 yuan, I have made many long-term currency price predictions based on big data. Friends who are interested can review my predictions: "Also Talking about 4,000 yuan is the beginning of the Bitcoin bull market."

The reason why I like big data so much is that I worked as a data warehouse/big data engineer in Shanghai Mobile for five years after graduation and before I quit my job to enter the cryptocurrency circle. This gave me the valuable experience of observing the 24 million people in Shanghai from a "God's perspective". In my opinion, looking at people with big data is like looking at ants .

For example, in October 2015, when the price of Bitcoin was 1500, I wrote in the Zhihu What is Bitcoin? – Jiang Zhuoer’s answer:

The price of Bitcoin is volatile and has experienced huge declines after three bubbles.

However, statistics such as independent active Bitcoin addresses show that the number of Bitcoin users has been growing rapidly, basically ignoring changes in exchange rates.

Why can Bitcoin continue to rise sharply over a long period of time? Even after experiencing multiple 90% crashes, it can still rise from the ashes? From the perspective of big data, the reason is very simple:

1. Because Bitcoin is useful, the number of Bitcoin users is constantly increasing, which is reflected in big data as the number of active addresses on the blockchain continues to increase monotonically .

2. Because the number of active addresses is increasing monotonically, the value and price of Bitcoin are constantly rising . After the price of the currency rises for a period of time and produces a wealth demonstration effect, external funds will flow in at an accelerated rate, and a positive feedback effect will be formed between the rise in the price of the currency and the influx of funds, causing the price of the currency to rise wildly.

3. However, the supply speed of external funds is limited. Once the funds required for the currency price to rise exceeds the replenishment speed of external funds, the currency price will stop rising and a huge bubble will burst.

Every time the price of Bitcoin crashes, the media likes to say that Bitcoin is going to die. However, from the perspective of big data, as long as the number of active addresses continues to rise, the value of Bitcoin is still rising. Bitcoin is still in a period of vigorous growth. How can there be any signs of death? As for the price crash? It is just that the price has gone too far and too fast, far beyond the value, and then returned to the value.

2. Geometric fractals
Before Bitcoin was accepted by the mainstream society, and before NetEase/Tencent published news about Bitcoin, and before a large number of people called Bitcoin a scam, the logic of each price rise and collapse was similar, which led to a very similar fractal pattern in the trend of Bitcoin .

Fractal is a geometric concept, which refers to the situation where there is self-similarity between the local and the whole, as shown in the following figure:

For the Bitcoin chart, the charts of the first bubble in June 2011, the second bubble in April 2013, and the third bubble in November 2013 are very similar, each time showing a rapid surge + slow resistance to decline.

Interestingly, a fractal very similar to that between the 2nd and 3rd bubbles appeared between the 3rd and 4th bubbles . But to use this fractal, the first question to be answered is: Is it the top now?

There are a lot of "analysts" in the cryptocurrency world who always brag about how accurate their predictions are, but never use their predictions to make money. Instead, they focus on earning the monthly fees of their apprentices. If you ask them how the price of a cryptocurrency will go in the future, they will tell you that it is possible to go up, but it is also possible to go down, and it is also possible to go sideways. That's it.

I never make short-term predictions, I like to say:

In the short term, ask God; in the long term, ask the number of users

I like to make some long-term, very certain, and low-risk predictions, and then add a huge position to this low risk - that is, "hedging." So I give a very clear answer: From a long-term perspective, it has not reached the top yet .
Why? There are many indicators showing that it has not reached the top yet, such as bubble index, Google and Baidu search index, market sentiment, 60-day consecutive increase, exchange website Alexa data, Zhihu Bitcoin topic followers, etc.

As for where the top will be, it is impossible to predict. The interesting thing about Bitcoin is that I know it will keep rising, but I don’t know where it will rise to. But if we only look at the fractal graph, we can make a fractal prediction: the third bubble peak is four times the second peak, so the fourth is also four times the third. Remind you again: this is only based on the assumption that the fractals are exactly the same.
3. The battle for expansion
Of course, the above prediction has a major premise: the expansion dispute has basically been settled and there will be no more trouble.

Many people don’t know why I have spent so much time and energy on the expansion dispute and written so many articles. Many people think that large block expansion is just miners fighting for their own transaction fees. No, no, no, I feel sad for these people.

In January 2016, I wrote "Bitcoin faces a critical choice: I implore all coin holders to support the 2MB expansion". When the expansion dispute began, I only had a Litecoin mining pool (LTC1BTC.com, LTC mining pool, accounting for 30% of the computing power of the entire LTC network), no Bitcoin mining farm, no Bitcoin mining machine, and no Bitcoin computing power .

At that time, based on the ever-increasing number of active addresses, I knew very clearly that Bitcoin would have a huge increase, so I converted all my assets into Bitcoin, and even bought Bitcoin with debt - there is nothing strange about this, there will always be someone who can see through the fog of the future - when I learned that some developers in Core refused to expand the capacity, and squeezed out Gavin, Mike and others who demanded to expand the block size from the team, and even attempted to permanently limit the block size to 1M, I was very angry. This is a murder of Bitcoin!

I entered the expansion battle not as a miner, but as a coin holder. I fought to protect my Bitcoin . I started to buy Bitcoin mining machines, build Bitcoin mining farms, set up Bitcoin mining pools, voted for Bitcoin expansion with computing power, and wrote a lot of articles. Today, BTC.TOP has 11% of the computing power of the entire network, ranking second in the entire network, second only to Ant Pool.

The essence of Chinese Confucianism is the hierarchy of "king-king, minister-minister, father-father, son-son", so many people have always had a sage-king complex, hoping that a "sage king" would lead the development and growth of Bitcoin. But I want to point out that the development direction of no software project is determined by front-line programmers. There is a special term in this regard, "programmer thinking limitations" . I am a programmer. In addition to a computer degree, I also have an economics degree. I have changed from a programmer to a CEO in my career, so I see this problem particularly clearly.

Core's programmers are excellent in software development, but they are terrible at the direction of Bitcoin development (if not intentional). Core hopes to keep the main chain very small, with the main chain as the settlement layer, and use the second-layer network to undertake transactions. This solution is technically beautiful - as beautiful as Motorola's Iridium network. The Iridium network eventually dragged down Motorola. Core's castrated main chain + second-layer network will eventually give birth to a centralized super settlement node and kill Bitcoin - there is nothing strange about this, there will always be someone who can penetrate the fog of the future.

No one opposes the second-layer network to supplement the Bitcoin main chain. The big block faction only opposes Core's castration of the main chain. Fortunately, the community has finally completed the last key step before Bitcoin matures - developing decentralization. Even without Core, most of the companies and computing power in the community have reached a consensus "Consensus 2017 Bitcoin Scaling Agreement: Segregated Witness and 2MB Scaling Will Be Deployed Simultaneously" , preparing to deploy SW+2M at the same time to resolve the 3-year expansion dispute.

This is the broadest consensus the community could reach, including:
56 companies in 21 countries;
83.28% of the Bitcoin hashrate on the entire network;
$5.1 billion in monthly on-chain transaction volume;
20.5 million Bitcoin wallets;

Of course, some diehards in the small block in Core will still try to undermine the implementation of consensus through various means, including but not limited to UASF, and even evil, dictatorial, and centralized means without a voting process. This consensus is hard-won, and I urge everyone to use your computing power, speech, and Bitcoin to support the implementation of the consensus, and not let this hard-won bull market die because of the sabotage of some people .

Make Bitcoin Great Again!

The expansion dispute is a very complex issue, involving a lot of technical content, which leads to the first reaction of everyone when seeing this issue: chaos, and no one knows what the two sides of the expansion dispute are arguing about. This lecture uses language that ordinary users can understand to make an objective and comprehensive explanation of the expansion dispute and the views of both sides.

If you have questions about the following:
1. Why did Satoshi Nakamoto set the block size at 33.5M at the beginning and later added a temporary 1M limit?

2. Satoshi Nakamoto gave the plan and code to remove the temporary 1M in the future. What is the reason why Core does not expand according to Satoshi Nakamoto’s plan?

3. What is Core's expansion plan? Why does Core think hard fork expansion is risky? How does the Lightning Network work?

4. Why do the expansionists oppose transforming Bitcoin into a settlement network of "1M+Lightning Network"?

5. What is the root of the disagreement between the expansionists and the Core group behind the apparent block size debate?

6. What kind of compromise process did the expansionists and Core members go through, and how did they eventually part ways?
What are the mutual accusations and conspiracy theories on both sides?

7. Why do the expansionists want a hard fork? What will happen if there is no hard fork?
Why does the hard fork not split into two coins as ordinary users speculate?

8. After the hard fork, what impact will it have on users, miners, exchanges, and wallets, and what measures should be taken?

9. What impact does the hard fork have on prices? What should investors do?

Welcome to listen to the lecture to get the most comprehensive understanding of the expansion dispute :)

"[Recording + Text Outline] Huobi Everyone Says "Jiang Zhuoer: Bitcoin Expansion and Its Impact on Prices""
《MR JIANG ZHUO ER's talk on Huobi forum about bitcoin scaling problem》

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Expansion & Bull Market Series: January 22, 2016: [Bitcoin faces a critical choice] We implore all holders to support the 2MB expansion
March 11, 2016: [Basic Science] Can Bitcoin support all human transactions?
June 26, 2016: "4,000 yuan is the beginning of the Bitcoin bull market"
October 15, 2016:
[Completely end the debate between soft and hard forks] A safe hard fork is a soft fork expansion
"Ending the Soft/Hard Fork Debate】 A Safe Hard Fork is the same as a Soft Fork"
October 20, 2016: "On the Correct Approach to Bitcoin Upgrading (and Refuting ahr999's "Consensus Rules")"
October 29, 2016: "Pouring cold water on Zcash - With Deep Black, does the market really need Pure Black?"
November 4, 2016: "Beware of Exchange Risks Under Tightened Foreign Exchange Regulation"
22 November 2016:
"Why do we firmly oppose Core's soft fork segregated witness? Jiang Zhuoer, who has invested tens of millions of real money in the mining industry, will tell you the answer!"
"Why We Must Oppose Core's Segwit Soft Fork, Bitcoin Miner Jiang Zhuo'er Tells You Why!"
January 13, 2017: [Basic Science] How to use a mobile wallet to safely store Bitcoin (and talk about the recent situation)
January 13, 2017: "Happy to hear that BTCC and Huobi have stopped margin trading, OK has reduced leverage to 1x, and all fake coins in the market have been wiped out"
February 5, 2017: [Bitcoin Economics] Discussing the long-term impact of financing, currency lending and handling fees on currency prices
February 10, 2017: "On the central bank's dilemma regarding Bitcoin"
February 15, 2017: "Focus Interview Interpretation: Bitcoin's important regulatory shoe has landed, and exchanges are no longer at risk of being closed or suspended from deposits"
March 7, 2017: [The Truth] Coin holders vote: 90% of coins support large block size expansion and oppose the Core roadmap]
March 9, 2017: " Why Satoshi Nakamoto is not worried about "big blocks blowing up the computers of losers" " March 14, 2017: "Dr. Chang Yong: Why do people support BU expansion and oppose Core and its SW ?"

March 29, 2017:
"[Recording + Text Outline] Huobi Everyone Says "Jiang Zhuoer: Bitcoin Expansion and Its Impact on Prices""
《MR JIANG ZHUO ER's talk on Huobi forum about bitcoin scaling problem》
April 15, 2017: "【Basic Science】A Simple Comparison between Extended Blockchain Expansion (EXTBLK) and SW" April 20, 2017: " 【Jiang Zhuoer's Open Letter】Why haven't I voted for LTC's SW yet?"
April 22, 2017: " LitePool and AntPool have started voting for SW, celebrating the LTC roundtable and community consensus! "
April 24, 2017: [ Rational Logic vs Emotional Attack] Demonstrate how to slap the Core fans in the face
April 27, 2017: "If Bitmain opposed SW because of asicboost, why did it agree with the Hong Kong consensus of SW first and 2M later? "