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I remember seeing a chart that correlated botcoins price with it's Google search volume.

by deevolution 9y ago

bdcravens 9y ago
correlation != causation
- it_learnses 9y ago
  we are not looking for causation here. simply correlation is sufficient to predict the trend.
- MichaelBurge 9y ago
  I think that searching for Bitcoin is causally related to market demand for Bitcoin(i.e. the price). Because if you want anything(like cheese or furnace filters), you'll then search for it on Google.
  - jiggunjer 9y ago
    It could be people were just curious, and after being served ads by Google they got an impulse to buy. Just playing devils advocate.
Kiro 9y ago
It's the other way around.
- Marazan 9y ago
  It's actually more complicated. With previous bubble spikes bitcoin price starts rising first then search term follows but search term then peaks before the price peaks.
  - bonestamp2 9y ago
    I know everyone is going to say it is, but what if it's not a bubble... What if the huge demand and very limited supply is the driving factor behind the current price? I mean, even if you don't like bitcoin, there are a thousand more coins and there might be something in there for everyone... but you typically need to buy bitcoin first before you can get most of those coins.
    - b1daly 9y ago
      Generally, huge demand and limited supply are necessary for any bubble to get going. I can see no way that the Bitcoin price is not a bubble. It's rise in price is none-the-less astonishing, and is somewhat a testament to the soundness of the security model. The whole system does require new money coming in all the time to maintain current price levels, as miners need to sell their bitcoin to get paid. It's less than a zero sum situation, as some of that money coming in goes directly to paying for the mining costs. Since the overall awareness of Bitcoin is relatively low, in terms of actually knowing what it is, and how to get some, this bubble could run a long time, as there is a lot of money in the world, in need of investing.
      - bonestamp2 9y ago
        > huge demand and limited supply are necessary for any bubble to get going Does that mean gold is in a bubble? I mean, who are we to say either way? Bitcoin is arguably more useful than gold and it's supply is known with great precision. You could say that Gold is more speculative in a way since somebody could be sitting on a stockpile that is equal to half of the known supply. > The whole system does require new money coming in all the time to maintain current price levels That's only true for the next few years, then no new coins are created. You can't see how it's not a bubble but frankly, I have trouble seeing how we can say it's in a bubble. Maybe it is, but I don't think anybody knows how to evaluate bitcoin... it's not like anything we've seen before. When IBM started selling computers, their roadmap didn't include home computers because they didn't think that anyone would ever want a computer in their home. We understand the implications of bitcoin now about as much as IBM understood the impact of computers back then.

I remember seeing a chart that correlated botcoins price with it's Google search volume.

bdcravens 9y ago

correlation != causation

it_learnses 9y ago
we are not looking for causation here. simply correlation is sufficient to predict the trend.
MichaelBurge 9y ago
I think that searching for Bitcoin is causally related to market demand for Bitcoin(i.e. the price). Because if you want anything(like cheese or furnace filters), you'll then search for it on Google.
- jiggunjer 9y ago
  It could be people were just curious, and after being served ads by Google they got an impulse to buy. Just playing devils advocate.

Kiro 9y ago

It's the other way around.

Marazan 9y ago
It's actually more complicated. With previous bubble spikes bitcoin price starts rising first then search term follows but search term then peaks before the price peaks.
- bonestamp2 9y ago
  I know everyone is going to say it is, but what if it's not a bubble... What if the huge demand and very limited supply is the driving factor behind the current price? I mean, even if you don't like bitcoin, there are a thousand more coins and there might be something in there for everyone... but you typically need to buy bitcoin first before you can get most of those coins.
  - b1daly 9y ago
    Generally, huge demand and limited supply are necessary for any bubble to get going. I can see no way that the Bitcoin price is not a bubble. It's rise in price is none-the-less astonishing, and is somewhat a testament to the soundness of the security model. The whole system does require new money coming in all the time to maintain current price levels, as miners need to sell their bitcoin to get paid. It's less than a zero sum situation, as some of that money coming in goes directly to paying for the mining costs. Since the overall awareness of Bitcoin is relatively low, in terms of actually knowing what it is, and how to get some, this bubble could run a long time, as there is a lot of money in the world, in need of investing.
    - bonestamp2 9y ago
      > huge demand and limited supply are necessary for any bubble to get going Does that mean gold is in a bubble? I mean, who are we to say either way? Bitcoin is arguably more useful than gold and it's supply is known with great precision. You could say that Gold is more speculative in a way since somebody could be sitting on a stockpile that is equal to half of the known supply. > The whole system does require new money coming in all the time to maintain current price levels That's only true for the next few years, then no new coins are created. You can't see how it's not a bubble but frankly, I have trouble seeing how we can say it's in a bubble. Maybe it is, but I don't think anybody knows how to evaluate bitcoin... it's not like anything we've seen before. When IBM started selling computers, their roadmap didn't include home computers because they didn't think that anyone would ever want a computer in their home. We understand the implications of bitcoin now about as much as IBM understood the impact of computers back then.