McAfee’s Dick Math: illuminating Bitcoin’s ACCELERATING price

in bitcoin •  23 days ago 

Dr. Albert Bartlett stated, “The greatest shortcoming of the human race is our inability to understand the exponential function.”

Imagine a caretaker that comes to check on his lily pond once a month. It requires 36 visits (i.e. months) for the pond to be completely covered with lily pads. But on the 35th visit the pond is only half covered. If not thinking in terms of exponential math, the typical human caretaker’s linear extrapolating, visual mind will be fooled into thinking there’s 35 more visits after the 35th visit before the pond will be fully covered.

Visual inspection of the following long-term Bitcoin price charts fools most humans to conclude that Bitcoin is “decelerating” more than it is.


(click here to zoom above images)

The myopia is driven by:

  1. A logarithmically scaled vertical, price axis which renders as visual “deceleration” any actual price acceleration which less than the chosen log scaling factor.

  2. Comparing all the ATH price peaks to each other, presuming that they’re all topologically equivalent, when in fact they’re not.

There’s a repeating topological feature or fractal pattern 1-2-3-4-5 which repeats as 3-5-6-7-8 and 6-8-9-10-11. Note 11 has not occurred yet.

McAfee tweeted May 2019:

“Bitcoin over $400,000 in two years??? Anyone who can add and subtract, and who has even the slightest comprehension of point-set topology, knows, absolutely, that it can't be less than one mil within two years. Does no-one study math anymore?? WTF people?”

And tweeted:

“When I predicted Bitcoin at $500,000 by the end of 2020, it used a model that predicted $5,000 at the end of 2017. BTC has accelerated much faster than my model assumptions. I now predict Bitcoin at $1 million by the end of 2020. I will still eat my dick if wrong.”

McAfee’s original July 2017 “eat my dick” tweet presumably correlated the future 10 peak to extant 4 and 7 peaks.

Thus McAfee presumably performed a model calculation (presumably much more sophisticated than this but perhaps approximated by) roughly comparing the regression fit of 1-2-4, 3-5-7 and 6-8-10. Noting that 10 had not yet occurred when McAfee published the said July 2017 tweet. McAfee assumed a model acceleration that would be roughly equivalent to the acceleration of 3-5-7 and this projected a model price of roughly $5000 at the end of 2017. My topological study isn’t sophisticated enough (yet) to know how or if he was able to pinpoint a peak for the end of 2017. I am just focused on mathematically explaining roughly how he presumably arrived at the acceleration of the model.

The following Bitcoin price data is lifted from my prior comment post on this topic 6 months ago in May 2019. I suggest also reading that linked post after reading this blog.

The x axis is days since Bitcoin’s launch (or since first data point) and y axis is price. First, the 1-2-4:

Next, the 3-5-7:

Finally, the 6-8-10 prediction model before 10 occurred:

The relative acceleration is the computed C data point. Remember from differential calculus that the second derivative 2C of A + Bx + Cx² is the acceleration and the first derivative B + 2Cx is the velocity.

Note the acceleration C for 3-5-7 and 6-8-10 were presumed to be more or less equivalent (with insignificant differences in my computation being possibly attributed to using slightly different price data points and/or probably a lower level of holistic, mathematical sophistication in my topological model).

Yet as McAfee noted May 2019 when he increased his prediction to $1 million, that Bitcoin had accelerated (and I compute by an order-of-magnitude!) during the actual 6-8-10 outcome:

My simplistic, non-holistic “topological” methodology for modeling the predicted price of 11 is to compare 1-4-5, 3-7-8 and 6-10-11. First, the 1-4-5:

Next, the 3-7-8:

Finally, the 6-10-11 at same acceleration of 3-7-8 and 11 arbitrarily at the end of 2020:

Without an increase in acceleration, that predicts only a maximum of $42,000 before the end of 2020.

Yet the increase in acceleration has been on the order-of-a-magnitude, so the 6-10-11 at order-of-magnitude increase in the acceleration of 3-7-8 and 11 arbitrarily at the end of 2020:

That presumption raises the maximum predicted price to $154,000 before the end of 2020.

Yet my simplistic method lacks a model for the change in the acceleration over time, which would require a cubic regression fit for A + Bx + Cx² + Dx³. Given that 6-10-11 will be of much greater duration compared to 3-7-8 than 6-8-10 compared to 3-5-7, there will be more than an order-of-magnitude acceleration.

Additionally my model doesn’t account for the sudden change in velocity and acceleration for the final moonshot price rises to 5, 8, and 11, because my model is not a complete point-set topological space model. All the data points need to be factored into a holistic model. For example, the above three data point model has the maximum price above $100,000 at the May 14, 2020 halving (i.e. 4144 days); whereas, other clues I’ve found are indicating $26 – $78k before the halving event.

McAfee is now claiming $2 million before the end of 2020, which would require the following acceleration in an overly simplistic, quadratic regression model:

The slope of the moonshot to 5 from $0.56 on April 4 (816 days) to $19 on June 8 (881 days) was $0.28 daily. The slope of the moonshot to 8 from $99 on September 28 (1723 days) to $1241 on November 30 (1787 days) was $18 daily. The time duration from 8 to 11 at end of 2020 divided by the duration from 5 to 8 will be factor of 2.85. If at the May 2020 halving event, then 2.6. The slope could thus conceivably easily rise into the $30,000 per day range ((18 ÷ 0.28) ^ 2.85 = $143k or (18 ÷ 0.28) ^ 2.6 = $51k daily), which for a 65 day duration would be $1.95 million.

I’m reasonably convinced that McAfee is probably correct, because if I measure an equivalent length moonshot into 11 from current price levels on a live version of the complete Bitcoin price history chart, then I get some price ranging from $1.2 million to $3 million.

The mistake nearly everyone is making is looking at the gradual price rise to 10 instead of the moonshot 65 day price rises into 5 and 8. They make this mistake because they’re not grouping the point-sets into a topological space.

Bitcoin is about to shock the hell out of everyone.

And in more ways than one, because Core Bitcoin will likely also be destroyed at the halving event. Most everyone is going to be bewildered and lose everything. Especially likely many arrogant Bitcoin maximalists who ignored my detailed explanations and warnings.

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I believe McAfee is still lowballing.

The acceleration is not a continuous acceleration, it is like several booster rockets that have yet to fire.

The adoption curve has two components, the really early geeks, and the early adopters. Between these two, you have the pit of despair, or the chasm, where either normies start adopting or it becomes yesterday's geek play thing.
Crossing that chasm is at least a x10 boost in acceleration.

And, if that was all, we might not make McAfee's 1 mill mark (by a couple of months)

BUT! we have several other accelerators.

  • Flight from The US dollar
  • Flight from cash (as banks have ATM problems, then staying open problems...)
  • Gold price spiking
  • First major retailer accepts bitcoin/cryptos
  • Trade deals moving to bitcoin
  • and more

My only concern with this much acceleration is how soon does bitcoin break all the ETFs, and then soon after, when bitcoin goes no bid.

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  ·  23 days ago (edited)

glad to see that you still active. So far I have learned a lot from your old writings.

Since your are both well educated in consensus and in probability theory I have two concerns:

First concern is the build-in a priori assumption that Bitcoin is a store-of-value at all. Free from hindsight: 1634-1637 a tulip bulb also was a solid store for value, but on the ontological level it lags the thermo-dynamically hard-properties of a piece of gold.

Every extrapolation-based model implies, that the scaleability-trilemma is solved ON-chain... which is a strong assumption. The "coin" other than most people think, is an emergent property of the replicated state machine. The coin is not "zeros and ones" and it is not just the sum of all locally stored "copies". In fact there are no copies of the blockchain or the coin, because redundancy is bottom up and never top down. A part of the system (the single process/node) cant hold the emergent property of the replicated state machine. So coins only sit in the grid. Mutualy shared information does not make a copy. A copy is something with the same properties. I mean this is trivial for you but most people still don´t get it.

Their existence is directly dependent on the miners profitability and the miners profitability as far as I understood is dependent on >>ON<<-chain scaling.

Bitcoins correctness is only guarantied by constant validation of the distributed state. It is not quiescent. Even when there are no/not enough transactions, miners still need to validate. Ergo Bitcoins grid-storage is RAM and not ROM. Coins should not be considered as permanent or as Szabo calls it "secure property titles".

Second point is the mathematical rigor: Markets are fat tail distributed right? Hence convergence to the real mean is not observable in real time. Why you bother with those "predictions" at all? Even Nicks co-integration to PlanB´s prediction is based on a violation of the law of large numbers... I mean your reconstruction is rigorous because its not a prediction and has no strong assumptions but the object of your study, the prediction of MCAfee is just bogus?

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Cryptotourist wrote at the BCTalk forum:

@roachtheunsavory (aka realr0ach) wrote:

Cryptotourist wrote:

I still don't know exactly what to make of Anonymint's claims

Anonymint knows what he's posting is complete bullshit because you can't have a sky high Bitcoin price without mining cost of production expanding by orders of magnitude to match it. If we go by the same metrics as the last pump and dump scam hitting around $20k with $3k cost of production, for Anonymint's "$1 million Bitcoin" claim after just a single halving, you would need the equivalent of $150,000 cost of production to facilitate the same pump and dump scam to $1 million.

Thanks for your insight.
Now lets sing Kumbaya together, and pray that McAfee's future sacrifice will not be in vain. ::rolleyes::

r0ach, then you need to explain how the Bitcoin price attained a multiple in excess of 30 of the stock-to-flows price in the past? So with a S/Fs model price of $100k in 2020, and a potential multiple as high as 30 due to the acceleration and potential increase in front running the halving under way, that implies a $3 million price in 2020 is plausible.

Shown on the above chart is a multiple of 21 for the $16.85 closing price, but intraday price peaked above $30.

The cost of production rises as systemic hashrate does. If we accept your claim that cost of production must be some minimum fraction of the block reward (and by what theory can you assert there must be such a relationship?), your argument distills down to an inability to manufacture or repurpose enough mining equipment fast enough. So perhaps even GPUs will become profitable for mining Bitcoin again for a while.

Also keep in the mind that of the ~10 million BTC for which the private keys have not been lost, about ~7 million of them (last time I checked) are stored in SegWit addresses which will be donated to the legacy miners in 2020 if the SegWit attack occurs (which I think will be the event that drives the price of the legacy Bitcoin skyhigh). Thus the block reward can be perhaps orders-of-magnitude higher than normally, which as I say may facilitate mining with GPUs again until all of the SegWit donations have been taken (only so many can fit in each block).

Which btw, means that while the SegWit attack is ongoing, the transaction fee attached to your legacy Bitcoin transaction must be greater than the value of the SegWit donations that can be taken instead of including your transaction in a block. Which is why mostly none of us will be able to sell Bitcoin at the $1+ million price in 2020. By the time we are able to get our transaction included in the blockchain (2022?), the likelihood is much greater for us being walled off from doing so by the governments’ automatic nosebleed high income tax on obligatory airdropped Core tokens, capital controls, blockchain blacklists to be enforced by miners, proof-of-source-of-funds, KYC, AML, etc...

Dismiss the math of deterministic chaos (c.f. also) at your own peril.

Great post even though i cant say im very familiar with the methodologies used to make the calculations.

If im honest i mainly consider these predictions absolute nonsense simply due to the presuppositions used, generally those that are seen as being accepted by the target audience.

But regardless, its interesting seeing a post like this, if only to experience what it looks like being deep in "the discussion" like you apparently are.

Thanks for the candid feedback.

If I had a PhD in topological math, I would probably be able to make a more convincing mathematical argument as to why the topology I chose fulfills the requirements for a topological space. In topology they are looking for invariance of fixed points, and properties such as connectiveness, etc.. Refer to the Wikipedia and Quora links I provided in the blog.

Yet as I reason about the numbered key points I chose and my conceptualization of the repeating pattern I see, I find no other pattern which is rational and congruent to some consistent logic or axioms. So I think I have identified the rough sketch of the topological space.

If we trust that McAfee is in fact the math genius that many have vouched he is, and we can see there’s some basis, then I must presume he has worked out the more complete point-set topology using the full suite of numerical methods and algorithms he would be familiar with in his PhD education.

Unfortunately I do not have enough free time right now to go learn a whole new field of higher mathematics and all the expert methodologies employed in the field. So I have to take some reasonable short-cut that is readily available to me.

If we are correct about the topology indicating a move 10-11 analogous to 4-5 and 7-8, then any comparable moonshot (just use your ruler on the chart) takes us easily to $1 million.

Frankly I am hoping the price moves up gradually first into the halving maybe to $30k or so, because if the price rises from $10k to $1+ million within 65 days, the exchanges are likely going to break. Transaction fees might skyrocket. Mempool backlog for transactions could become egregious. Many potential problems.

I am reminded that String Theory is elegant, mathematically beautiful. However, that mathematical elegance can be used to describe almost any conceivable universe, and is not very useful to describe the one we're in exactly because of that.

@lauch3d well points out that tulips were not simply digits, but real world items and their value crashed not because of mathematical miscalculations, but real world issues. Maths work great in hindsight, but not so well in the real world to predict value. So many different events could utterly void this calculation I am boggled that effort is undertaken to make it.

War, pandemic, the ongoing solar minimum, gamma radiation burst, solar flare, censorship, corruption, a better DLT, on and on. There is no conceivable limit to the actual events that can not be calculated but that can be counted on to affect politics, finance, and people.

Your calculations could turn out to be right, but I'm not holding my breath. McAfee's dick is safe, because even he is not loony enough to cut it off no matter if he has to eat his words. Sure things never are, and people that tell you they are are either fools or scammers in my experience.

BTC is not calculations, even if most people think that's all it is (PoW). It's a poltical force, and war is politics by other means. Do note that living things, which people are, never actually increase in population exponentially. At least, not without plummeting in population with equal vigor. BTC only has value because people give it value, and people are frangible.

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"The greatest shortcoming of the human race is our inability to understand the exponential function.

I disagree. Imho, human's greatest shortcoming is to see causalities and patters where none exist. Imo, the market (and especially BTC market) is random and unpredictable.

“The greatest shortcoming of the human race is our inability to understand the exponential function.”

I disagree. Imho, human's greatest shortcoming is to see causalities and patter[n]s where none exist.

Agreed. For example the hysteria about man-made climate change which is a hoax foisted by politicians who want people to think they need a government to do something.

Imo, the market (and especially BTC market) is random and unpredictable.

The evidence against your opinion is in my reply to @valued-customer.

Btw as one of many examples of myself correctly predicting the short-term crypto markets more than 50% of the time (not 100% but slightly better than 50%), I predicted the the recent decline from above the 50 DMA to the lows today.

I guess some people still remember when I screamed to buy Litcoin at $6 right before it blasted off and ended up at $350. I got banned from BCTalk for multi-posting my emphatic expectation. Imagine that, got banned for helping some people become $millionaires.

Note McAfee’s claimed topological model is a long-term analysis and thus is much more likely to be accurate because there’s a lot more data exposing the hidden order of chaos in long-term data series.

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