Tag Archives: bitcoin

2017 Predictions

It’s fun to have opinions, and it’s easy to craft a narrative to fit your beliefs. But it’s especially dangerous to look back at events and place them retroactively into your model of the world. You can’t learn anything if you’re only ever looking for evidence that supports you.  However, if you try to use your model of the world to create testable predictions, those predictions can be proven right or wrong, and you can actually learn something. Incorrect predictions can help update our models.

This is, of course, the basis for the scientific method, and generally increasing our understanding of the world. Making predictions is also important for making us more humble; we don’t know everything and so putting our beliefs to the test requires us to reduce our certainty until we’ve researched a subject before making baseless claims.  Confidence levels are an important part of predictions, as they force us to think in the context of value and betting: a 90% confidence level means I would take a $100 bet that required me to put up anything less that $90. Moreover, it’s not just a good idea to make predictions to help increase your knowledge; people who have opinions but refuse to predict things with accompanying confidence levels, and therefore refuse to subject their theories to scrutiny and testability, must be classified as more fraudulent and intellectually dishonest.

First let’s take a look at how I did this past year, and see if my calibration levels were correct. Incorrect predictions are crossed out.

World Events

  1. Liberland will be recognized by <5 UN members: 99% (recognized by 0)
  2. Free State Project to reach goal of 20,000 people in 2016: 50% (occurred February 3rd)
  3. ISIS to still exist: 80%
  4. ISIS to kill < 100 Americans 2016: 80% (I think <100 were killed by any terrorists, fewer in combat)
  5. US will not get involved in any new major war with death toll of > 100 US soldiers: 80%
  6. No terrorist attack in the USA will kill > 100 people: 80% (50 did die in the Orlando shooting unfortunately)
  7. Donald Trump will not be Republican Nominee: 80% (whoops)
  8. Hillary Clinton to be Democratic nominee: 90%
  9. Republicans to hold Senate: 60%
  10. Republicans to hold House: 80%
  11. Republicans to win Presidential Election: 50% (I predicted in December, Nate Silver had Trump at 35% the day of, who’s a genius now??)
  12. I will vote for the Libertarian Presidential Candidate: 70% *
  13. S&P 500 level end of year < 2500: 70%
  14. Unemployment rate December 2016 < 6% : 70%
  15. WTI Crude Oil price < $50 : 80%
  16. Price of Bitcoin > $500:  60%
  17. Price of Bitcoin < $1000: 80%
  18. Sentient General AI will not be created this year: 99%
  19. Self-driving cars will not be available this year to purchase / legally operate for < $100k: 99%
  20. I will not be able to rent trips on self-driving cars from Uber/ Lyft: 90% **
  21. Humans will not land on moon by end of 2016: 95%
  22. Edward Snowden will not be pardoned by end of Obama Administration: 80% *

Personal

  1. Employed in current job:  90%
  2. I will have less than 300 Twitter followers: 60%
  3. I will have authored > 12 more blog posts by June 30, 2016:  50% *
  4. michaelelgart.com to have >4,000 page loads 2016: 50%
  5. These predictions are underconfident: 70%

Sports

  1. Miami Heat make playoffs 2016:  80%
  2. Miami Heat will not make Eastern Conference Finals:  90%
  3. Duke basketball wins 1 game or more against UNC: 60%
  4. Duke basketball makes it to Round of 32 in NCAA Tournament: 70%
  5. Duke basketball does not make Final Four: 90%
  6. USA wins Olympic gold medal in basketball: 70%
  7. Kevin Durant will not be highest paid NBA player during 2016-17 season: 70%

*I didn’t personally vote for the libertarian candidate, but I did trade my vote, resulting in Gary Johnson getting two votes more than he would have had I not voted at all. I’m counting this as at least a vote for Johnson.

**Technically, I am not particularly able to get a ride on a self-driving Uber because I don’t live in Pittsburgh, but I don’t think that’s what I meant. I also didn’t expect any self-driving Uber rides to be available anywhere, so I’m counting it against me.

*Obama still has a few weeks to pardon Snowden, but it’s not looking good

**Most of the blog posts were not on this blog.

So let’s take a look at how I did by category:

  • Of items I marked as 50% confident, 2 were right and 1 was wrong.
  • Of items I marked as 60% confident, 4 were right and 0 were wrong.
  • Of items I marked as 70% confident, 7 were right and 0 were wrong.
  • Of items I marked as 80% confident, 8 were right and 2 were wrong.
  • Of items I marked as 90% confident, 4 were right and 1 was wrong.
  • Of items I marked as 95% confident, 1 was right and 0 were wrong.
  • Of items I marked as 99% confident, 3 were right and 0 were wrong.

 

2016-predictions-personal

You’re supposed to be as close to the perfect calibration line as possible. The big problems are the 60% and 70% predictions all coming true. The chance of all 60% predictions coming true assuming they actually had a 60% chance of happening is 13%. The chance of all 70% predictions coming true was 8%. These seem unlikely, so I need to work on finding more uncertain things to predict or upping my confidence in some of my predictions.

Predictions for 2017:

World Events

  1. Trump Approval Rating end of June <50% (Reuters or Gallup): 60%
  2. Trump Approval Rating end of year <50% (Reuters or Gallup): 80%
  3. Trump Approval Rating end of year <45% (Reuters or Gallup): 60%
  4. Trump 2017 Average Approval Rating (Gallup) <50%: 70%
  5. ISIS to still exist as a fighting force in Palmyra, Mosul, or Al-Raqqah: 60%
  6. ISIS to kill < 100 Americans: 80%
  7. US will not get involved in any new major war with death toll of > 100 US soldiers: 60%
  8. No terrorist attack in the USA will kill > 100 people: 90%
  9. France will not vote to leave to the EU: 80%
  10. The UK will trigger Article 50 this year: 70%
  11. The UK will not fully leave the EU this year: 99%
  12. No country will leave the Euro (adopt another currency as their national currency): 80%
  13. S&P 500 2016 >10% growth: 60%
  14. S&P 500 will be between 2000 and 2850: 80% (80% confidence interval)
  15. Unemployment rate December 2017 < 6% : 70%
  16. WTI Crude Oil price > $60 : 70%
  17. Price of Bitcoin > $750: 60%
  18. Price of Bitcoin < $1000: 50%
  19. Price of Bitcoin < $2000: 80%
  20. There will not be another cryptocurrency with market cap above $1B: 80%
  21. There will not be another cryptocurrency with market cap above $500M: 50%
  22. Sentient General AI will not be created this year: 99%
  23. Self-driving cars will not be available this year for general purchase: 90%
  24. Self-driving cars will not be available this year to purchase / legally operate for < $100k: 99%
  25. I will not be able to buy trips on self-driving cars from Uber/Lyft in a location I am living: 80%
  26. I will not be able to buy a trip on a self-driving car from Uber/Lyft without a backup employee in the car anywhere in the US: 90%
  27. Humans will not land on moon by end of 2017: 95%
  28. SpaceX will bring humans to low earth orbit: 50%
  29. SpaceX successfully launches a reused rocket: 60%
  30. No SpaceX rockets explode without launching their payload to orbit: 60%
  31. Actual wall on Mexican border not built: 99%
  32. Some increased spending on immigration through expanding CBP, ICE, or the border fence: 80%
  33. Corporate Tax Rate will be cut to 20% or below: 50%
  34. Obamacare (at least mandate, community pricing, pre-existing conditions) not reversed: 80%
  35. Budget deficit will increase: 90%
  36. Increase in spending or action on Drug War (e.g. raiding marijuana dispensaries, increased spending on DEA, etc): 70%
  37. Some tariffs raised: 90%
  38. The US will not significantly change its relationship to NAFTA: 60%
  39. Federal government institutes some interference with state level legal marijuana: 60%
  40. At least one instance where the executive branch violates a citable civil liberties court case: 70%
  41. Trump administration does not file a lawsuit against any news organization for defamation: 60%
  42. Trump not impeached (also no Trump resignation): 95%

Sports

  1. Miami Heat do not make playoffs:  95%
  2. Miami Heat get top 6 draft pick: 60%
  3. Duke basketball wins 1 game or more against UNC: 80%
  4. Duke basketball makes it to Round of 32 in NCAA Tournament: 90%
  5. Duke basketball makes Final Four: 50%
  6. Duke basketball does not win NCAA tournament: 80%
  7. Warriors or Cavs will win the NBA title: 60%
  8. Lebron James will not be highest paid NBA player during 2017-18 season: 70%

Personal

  1. Employed in current job:  90%
  2. I will have less than 300 Twitter followers: 60%
  3. I will change my registered party from Republican to Libertarian: 70%
  4. I will have authored > 14 more blog posts (not just on this blog) by June 30, 2017: 90%
  5. I will have authored > 30 more blog posts (not just on this blog) by December 31, 2017: 80%
  6. michaelelgart.com to have >3,000 page loads 2017: 70%
  7. These predictions are under-confident: 70%

Disrupting the Currency Market

My column that originally appeared in the Duke Political Review.

The advancement of the digital age has transformed financial transactions, both in high powered trading and in everyday use. According to Nilson Reports, some $4 trillion in purchases occurred using credit, debit or prepaid credit cards in 2012. Online shopping is omnipresent, and smartphones have even rendered trips to your local bank unnecessary, as checks can be deposited directly into your account from wherever you are. The one area of payments that remained undisrupted by the digital age was the concept of currencies themselves. Continue reading

The Future of Virtual Currencies: Part 2, Brief History of Virtual Currencies

Below is Part 2 of my series on Virtual Currencies and Bitcoin.  You can find Part 1 here.

Brief History of Virtual Currencies Before Bitcoin

Virtual currencies have not only existed for quite some time before Bitcoin, but have been large commercial ventures for over a decade. An in-depth report from Eurogamer traces in-game currency trading back to one of the first multiplayer online games, Ultima Online, first launched in 1997[1].  Although Ultima waned, other MMOs grew over the course of the last decade. With larger player bases and more complicated games, more complex economies naturally arose.  Players spending dozens if not hundreds of hours in these games meant that in-game currency could be priced to many hours of labor, in essence creating a huge market where in-game currency had real-world value. Continue reading

Some great links

Haven’t written much this weekend, but I’ve got some nice links to check out. In the politics and econ areas, I highly recommend this article from Reason about the End of Power.  Also check out this Op-Ed from the NY Times from an actual Gitmo detainee.

In the cool techie things department, reddit has compiled a beautiful list of so-called internet tricks, that everyone should know.

If Bitcoin is your thing, after all the volatility last week, some people have gotten together to build an open source Bitcoin exchange to help alleviate some of the problems experienced by the community. Here is the reddit link, and here is the project on github.  I’m also writing a short paper on Bitcoin and virtual currencies for my CS seminar, so if you have cool articles, feel free to tweet @mjelgart.

Finally, in basketball news, the Heat have wrapped up home court advantage throughout the playoffs. Somehow, after winning a championship last year, they are even better then they’ve ever been before. Look at these numbers. The Heat are really good right now. As a Miami native, I cannot wait for the playoffs to start this weekend.

Bitcoins

Bitcoins are a relatively new form of currency incorporating aspects of cryptology, networking, and economics. For a more in depth understanding, check out this link off of Hacker News.

Bitcoins offer a mix of unique options. Their use is secured like other monetary transactions, but they’re also anonymous, as each bitcoin transaction is linked to unique public bitcoin key.  Furthermore, bitcoins are governed by an open source algorithm, not a government, meaning that they cannot be arbitrarily created or destroyed, affecting the economy due to policy initiatives.

It can be difficult for people to accept that something that has no intrinsic value can work as a currency. While there are lots of fiat currencies, those currencies are often enforced by a government (Federal Reserve Notes must be accepted by law in the United States).  But if enough places begin to accept bitcoins, and many websites are, their value will continue to grow.

The real question right now is whether the meteoric rise in bitcoin value is part of a bubble or not.  Of course, since the value of any currency is based on what people’s perception of the currency is, as well as what you can buy with it, calling it a bubble is pretty easy; bitcoins’ value is of course artificial, there’s no denying that.  The beginning of the rise in bitcoins’ value occurred when more websites started to accept bitcoins as payment. Whether the improved liquidity of bitcoins warrants their value at close to $70/coin is a more difficult question. I know I’m not buying any bitcoins right now, but knowing whether speculators will move out of the bitcoin space in the near future is almost impossible to tell.

Still, this is a very interesting topic, and if you want to learn more, I would check out the bitcoin subreddit as well as bitcoin.org.