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Without claiming to be an accurate result, I want to share an evaluation method borrowed from astrophysics.

Suppose you want to know what the atmospheric pressure is on planet Plyuk. There are measurements of this quantity, but they are all obtained indirectly by methods, depend on fuzzy assumptions, are monstrously noisy and do not agree with each other hundreds of times. What to do? The approach in this case may be as follows:

1. We make a list of measurements obtained in

2. Write down their values. Suppose it is 0.01, 0.18, 7, and 10 atmospheres.

3. We calculate their geometric mean M = (0.01 x 0.18 x 7 x 10)

In the first approximation, this will be more or less a decent assessment of the true pressure on the planet Plyuk, with the lack of information available.

People familiar with the statistics can indicate both the possibility of improving the method (for example, the introduction of confidence weights when calculating the geometric mean) and the limitations of its applicability (for example, if the estimates are correlated or their distribution is not lognormal). And they will be right. On this topic, you can write a separate dissertation. However, even in such a primitive form, this method is useful, so in this article I will confine myself to it.

As you may have guessed, it is proposed to do the same with bitcoin. If possible, collect independent estimates of its prospective market value and then take their geometric mean.

Why does this mathematical shamanism still work?

One can imagine that, ideally, in the mind of some clever and all-knowing economist-mathematician, there can be some True Function of predicting the price of Bitcoin at infinity. In practice, no one knows her; it may not even be computable. But we assume that our imperfect assessments somehow somehow capture some aspects of this function. The values they give can be thought of as True Function values, distorted errors (such as simplifications or ignorance of important input parameters). These errors by their strength are such that they make us erroneous not at percentages, but at times. But these errors (the second assumption) are also random in nature, for each method simplifies and misses something of its own. Therefore, if you multiply a large pile of such estimates, then errors, on average, mutually compensate each other and the result will be closer to the truth. Again, statistics can tell at what speed and with what limitations such an answer will converge to the correct one, but I will not go into that.

And just go to the estimates.

A simple geometric average of eight given estimates gives the expected prospective Bitcoin cost of $ 10,506 (ten and a half thousand) per piece. The expected average spread is in the range of $ 2392 to $ 46139. Ps. After the exclusion of a clearly erroneous estimate of №7, the geometric mean is obtained at the level of $ 12.6K.

Of course, I am aware of the imperfection and incompleteness of these assessments. They can and should be improved, you can add your own, you can modify the method of combining the results together. In particular, it can be stated that bitcoin is not “gold

In conclusion, I repeat once again that everything written here is solely my personal opinion. For the consequences of taking (or not taking) him seriously, I am not responsible.

Congratulations to all readers of Hicktimes Happy New Year,

Yevgeny Bobukh.

[one]. geektimes.ru/post/296623

[2]. bitcoinist.com/bitcoin-market-cap-is-now-bigger-than-visas

[3]. www.vox.com/energy-and-environment/2017/12/2/16724786/bitcoin-mining-energy-electricity

[four]. digiconomist.net/bitcoin-energy-consumption

[five]. digiconomist.net/bitcoin-electricity-consumption

[eight]. www.marketwatch.com/story/bitcoin-needs-to-be-worth-1000000-to-be-a-legitimate-currency-2017-09-15

[9]. www.investopedia.com/articles/investing/091814/what-bitcoins-intrinsic-value.asp

[ten]. www.unodc.org/toc/en/crimes/organized-crime.html

[eleven]. en.wikipedia.org/wiki/Circulation_ (currency) #Total_currency_in_circulation

[12]. arstechnica.com/tech-policy/2017/12/bitcoin-fees-are-skyrocketing

[13]. www.wsj.com/amp/articles/the-bitcoin-valuation-bubble-1503868225

[2]. bitcoinist.com/bitcoin-market-cap-is-now-bigger-than-visas

[3]. www.vox.com/energy-and-environment/2017/12/2/16724786/bitcoin-mining-energy-electricity

[four]. digiconomist.net/bitcoin-energy-consumption

[five]. digiconomist.net/bitcoin-electricity-consumption

[eight]. www.marketwatch.com/story/bitcoin-needs-to-be-worth-1000000-to-be-a-legitimate-currency-2017-09-15

[9]. www.investopedia.com/articles/investing/091814/what-bitcoins-intrinsic-value.asp

[ten]. www.unodc.org/toc/en/crimes/organized-crime.html

[eleven]. en.wikipedia.org/wiki/Circulation_ (currency) #Total_currency_in_circulation

[12]. arstechnica.com/tech-policy/2017/12/bitcoin-fees-are-skyrocketing

[13]. www.wsj.com/amp/articles/the-bitcoin-valuation-bubble-1503868225

Source: https://habr.com/ru/post/409355/