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Cryptodepression by karov

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· @karov · (edited)
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Cryptodepression
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<p><img src="https://thedisorderofthings.files.wordpress.com/2015/07/man-drowning.jpg" width="1366" height="768"/></p>
<p><a href="https://en.wikipedia.org/wiki/Cryptodepression"><strong>Cryptodepression</strong></a> is a term from the physical geography and <a href="https://en.wikipedia.org/wiki/Geomorphology"><strong>geomorphology</strong></a> , but it is also such a nice fit to the current situation in the <a href="https://en.wikipedia.org/wiki/Decentralization"><strong>cryptocurrency sector</strong></a>.&nbsp;</p>
<p>So rich in economic, psychological and all other subtle <a href="https://en.wikipedia.org/wiki/Connotation"><strong>connotations</strong></a> of <a href="https://en.wikipedia.org/wiki/Depression"><strong>depression</strong></a>.&nbsp;</p>
<p>Without any shadow of fundamentalism or <a href="https://www.investopedia.com/terms/b/bitcoin-maximalism.asp"><strong>maximalism </strong></a>after all this entire decade of observation unfortunately for me bitcoin and crypto are yet synonymous. NOTHING after <a href="http://www.bookofsatoshi.com/"><strong>Satoshi </strong></a>, nothing fundamentally new - only <a href="https://www.investopedia.com/terms/a/altcoin.asp"><strong>alts</strong></a>, <a href="https://www.investopedia.com/terms/s/shitcoin.asp"><strong>shits</strong></a> and, thanks God, some <a href="https://en.bitcoinwiki.org/wiki/Mastercoin"><strong>Layer</strong></a>. Okay, quite a few projects with promises of post-satoshiness around, but yet none of them yielded anything working. Mere variations of the already ancient tune is all the crypto musical scene we have.&nbsp;</p>
<p>You know already <a href="https://steemit.com/@karov"><strong>my ''obsession''</strong></a> that <a href="https://en.wikipedia.org/wiki/Growth"><strong>growth</strong></a> is the only mode of <a href="https://en.wikipedia.org/wiki/Sustainability"><strong>sustainability</strong></a> that we knew, know and probably will ever know. This ''fixation'' predates <a href="https://bitcoin.org/bitcoin.pdf"><strong>bitcoin</strong></a> and makes my focus on crypto to be kinda predisposed. For the blockchain being the most powerful <a href="https://steemit.com/bitcoin/@karov/geodesica"><strong>transactor</strong></a> we have ever known and had. The strongest monetary algorithm. Doing the most with the least, so far.&nbsp;</p>
<p>Economy could be viewed as a network which yields <a href="https://en.wikipedia.org/wiki/Wealth"><strong>wealth</strong></a>, like the brain - a network that outputs <a href="https://en.wikipedia.org/wiki/Thought"><strong>thought</strong></a>. ''Individual'' computer's circuitry is also ... network. It is all about <a href="https://en.wikipedia.org/wiki/Moore%27s_law"><strong>quantity</strong></a> and <a href="http://unenumerated.blogspot.com/2014/10/transportation-divergence-and.html"><strong>quality</strong></a> of connections. Structure is <a href="https://en.wikipedia.org/wiki/Gradient"><strong>gradient</strong></a>, per se, but on this some other time... All objects are relations connectomes.&nbsp;</p>
<p>The better the transaction, the tighter the <a href="https://en.wikipedia.org/wiki/Connectivity"><strong>connectivity</strong></a>, the bigger the output.&nbsp;Check <a href="https://www.quantamagazine.org/how-complex-networks-explode-with-growth-20150714/?fbclid=IwAR1nqir0ppus4LdmF12guMbxmN2pwWULUUMsZxgj2RmpV1oBPqtgajrZBYY"><strong>this</strong></a> out, per instance!&nbsp;</p>
<p>In <a href="https://steemit.com/bitcoin/@karov/bitcoin-retrodictions"><strong>this</strong></a> and <a href="https://steemit.com/bitcoin/@karov/bitcoin-retrojections"><strong>this</strong></a> essays of mine - almost an year across the time - I outlined some of my findings and thoughts on the great grower's growth.&nbsp;</p>
<p>If bitcoin is such a good of a transactor, and if better transaction = greater growth, then why the hell bitcoin's growth itself is so hesitant and wobbly?&nbsp;</p>
<p><img src="https://i.redd.it/cu52fxb6jzh11.jpg" width="1062" height="757"/></p>
<p>or</p>
<p><img src="https://files.mastodon.social/media_attachments/files/005/299/020/original/528e096e88541ba0.png" width="907" height="657"/></p>
<p>Well, the answer seems to gravitate around how the human attention, motivation, memory and public attentioning works.&nbsp;</p>
<p>FIRST, watch <a href="https://www.youtube.com/watch?feature=youtu.be&amp;v=aL52ywnhfT8&amp;app=desktop"><strong>this vid</strong></a>.&nbsp;</p>
<p>It is from 6th of January 2017!!&nbsp;</p>
<p>The fact that it is so up to date even now - up all the crypto-booming 2017 and down all the crypto-busting 2018 reveals the quite a strong level of understanding by the author. Well done, <a href="https://www.youtube.com/channel/UCdC3h2m88FC02Yw-A_VESRQ"><strong>Chris Dunn</strong></a> !&nbsp;</p>
<p>In a nutshell the idea is.: Bitcoin price grows all the time. So far nothing different from my <a href="https://steemit.com/bitcoin/@karov/bitcoin-retrodictions"><strong>Blue Line</strong></a>. It goes up gently and steadily when not observed. Once the growth noticed it attracts attention in a runaway fashion. Out of the sudden the <a href="https://99bitcoins.com/bitcoin-obituaries/"><strong>Dead is Risen</strong></a> again and fully back in the news, all headlines flashing as <a href="https://en.wikipedia.org/wiki/Cyberpunk"><strong>cyberpunk</strong></a> neon lights. The attention brings fiat in, lots of it - dollar the ticket for the roller-coaster ride is. Nobody want's to miss the train. More dollars in = higher price, to a level of bullish anxiety maximum, <a href="https://www.babypips.com/forexpedia/ath"><strong>ATH</strong></a>, bitcoin fever ... overshoot and BUST!&nbsp;</p>
<p>The bigger the forced deviation away from the <a href="https://steemit.com/bitcoin/@karov/bitcoin-retrodictions"><strong>Blue Line</strong></a>, the bigger and longer lasting is the yo-yo effect. The higher it's pushed the deeper it will go and the longer it will stay under the Line. And vice versa.&nbsp;</p>
<p>This is also an explanation about why the overally smooth <a href="https://www.investinblockchain.com/cryptocurrency-adoption-rising-in-2018/"><strong>bitcoin adoption increase</strong></a> does not correspond to the price dynamics. <a href="https://www.investopedia.com/investing/surprising-benefits-when-brokers-grade-their-customers/"><strong>Dumb money</strong></a> buys and sells are not adoption.&nbsp;</p>
<p>It is like <a href="https://www.physicsclassroom.com/class/momentum/Lesson-2/Momentum-Conservation-Principle"><strong>momentum conservation</strong></a>. Bitcoin is not only <a href="https://en.wikipedia.org/wiki/Parabolic_trajectory"><strong>parabolic</strong></a>, it is also <a href="https://en.wikipedia.org/wiki/Elasticity_(physics)"><strong>ELASTIC</strong></a>.&nbsp;</p>
<p>Two take-aways from up to here ::&nbsp;</p>
<blockquote>- Mass media rather distort the market, than to mitigate the <a href="https://en.wikipedia.org/wiki/Economic_calculation_problem"><strong>economic calculation</strong></a>,</blockquote>
<p>&amp;</p>
<blockquote>- Bitcoin has kinda <a href="https://en.wikipedia.org/wiki/Schr%C3%B6dinger%27s_cat"><strong>Schroedinger</strong></a> growth mode - if you look at it - it stays between the life and death, when unobserved - it simply grows.&nbsp;</blockquote>
<p>SECOND, do we know other such exemplary mechanisms in play? &nbsp;</p>
<p>Well, it seems, yes. Perhaps it is everywhere, but here you are one: The <a href="https://en.wikipedia.org/wiki/Kondratiev_wave"><strong>K-waves</strong></a>.&nbsp;</p>
<p><img src="https://c2.staticflickr.com/4/3082/2925528770_eaf26f6be4_b.jpg" width="1024" height="768"/></p>
<p>The wonderful graph of <a href="https://www.poisonpapers.org/about-us/peter-von-stackelberg/"><strong>Peter von Stackelberg</strong></a>'s from <a href="https://www.flickr.com/photos/andreasmb/2925528770/sizes/o/"><strong>here</strong></a>.&nbsp;</p>
<p><a href="https://en.wikipedia.org/wiki/Nikolai_Kondratiev"><strong>Kondratiev</strong></a> was a honest <a href="https://en.wikipedia.org/wiki/Econometrics"><strong>econometrician</strong></a>. A fact proven by the reward he got for his great work - endless years in a Gulag camp and a shooting squad for parole. He couldn't make it with rigorous theoretical explanation for the drive behind these cycles. He would if he had his own lifetime, I'm sure.&nbsp;</p>
<p>I paid a lot of attention of the bubbliness and wobbliness of economic growth in the Dark immediatelly after the <a href="https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932008"><strong>subprime crash of 2007-2008</strong></a>. Few years of really serious literature archaeology.&nbsp;</p>
<p>And the best explanation for the K-cyclicity I found was the most natural one - the human generations and social memory.&nbsp;</p>
<p>Somebody noticed that K-wave specific frequency of about 50-60 years is almost exactly 2 human<a href="https://en.wikipedia.org/wiki/Generation_time"><strong> generations</strong></a> of average 28 years each.&nbsp;(Best definition of ''generation'' was something like average age of parents divided on average age of their progeny.)</p>
<p>The K-wave is defined by the pulse of the human reproduction.&nbsp;</p>
<p>Once a human generation is 1 <a href="https://en.wiktionary.org/wiki/nanohertz"><strong>nanohertz</strong></a>. Once per two generations (Kondratiev) is half a nanohertz. Two billions of times less frequent that once in a second.&nbsp;</p>
<p>Like with ICE, or with a bicycle, walking, birds flight ... the overall curve of growth is smooth on greater scale, but because effort excercise is never uniform in time this makes it to look like a staircase upon zoom-in.&nbsp;</p>
<p><img src="https://i2.wp.com/www.planetexperts.com/wp-content/uploads/2016/05/knowledgecurve.jpg" width="965" height="740"/></p>
<p>Bitcoin's wave specific frequency of 4 years?&nbsp;</p>
<p>Pulsed by the built-in <a href="https://blockonomi.com/bitcoin-halving/"><strong>reward halving rate</strong></a>.&nbsp;</p>
<p>And human <a href="https://en.wikipedia.org/wiki/Herd_behavior"><strong>attentional herding</strong></a> amplified by the mass media ... as the wave peak-lifter and though-deepener...&nbsp;</p>
<p><img src="https://imgs.edhelper.com/clipart/stories/rstoriesg4925prev.jpg" width="226" height="170"/></p>
<p>The big picture? .:&nbsp;</p>
<p><strong>Wavelength</strong> - about 4 years.&nbsp;</p>
<p><strong>Crest </strong>- as high as the herding buying pushes it up.&nbsp;</p>
<p><strong>Through</strong> - as deep as the panic sale dig is (but not deeper than the Bottom).&nbsp;</p>
<p><strong>Bottom</strong> - the average mining cost.&nbsp;</p>
<p><img src="https://www.investopedia.com/thmb/p_-ozVEGI8Y5o3byZuIv0BtPeto=/1200x1865/filters:no_upscale()/bitcoin_mining_costs_around_world_chart-5bfd7c89c9e77c0051bce8f0" width="1200" height="1865"/></p>
<p>Can it death-spiral bottomlessly?&nbsp;</p>
<p>Rather not, ... <a href="https://gameofthrones.fandom.com/wiki/What_Is_Dead_May_Never_Die"><strong>''what is dead may never die''</strong></a>. ;)</p>
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<p><strong>18qSKUUTAGw1uL53simrSiZ6pJpfxKACvj for research support. Thanks.&nbsp;</strong></p>
<p><strong>Copyright © 2019 Georgi Karov. All&nbsp;rights reserved.</strong></p>
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@zuerich ·
Great post! Thanks!
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@karov ·
another few hundred are coming. Thanks for following my writings.
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