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Baseline, Chronic, Progressive
Let’s start with a dorky reference graph that models a sentient being’s physical state of health:
Now let’s transition to a chronic, recurrent state of health:
In this state, you’re Ok for awhile, and then you suffer for awhile, and then the cycle repeats. The graph example above shows a worst case scenario where, as time goes on, the patient spends more and more time in a painful, “Flare Up” sub-state than she does in its peer “OK” sub-state.
And finally, we arrive at the progressive, fatal state of health:
In this bad ass state, our heroine not only spends progressively more and more time in the “Flare Up” sub-state, each “Flare Up” feels worse and worse upon each transition into it. Eventually, the last “OK” sub-state is entered, and then, upon exit…… the reaper awaits.
So now, let’s integrate up the previous babblings and concoct a homemade state transition diagram of health as follows:
Read read the model as follows.
We are initialized at birth into a healthy, baseline state. The luckiest of us will go through life relatively unscathed from physical and mental dysfunction. The lucky ones will dwell in the glorious baseline state over time, right until RIP comes a callin’. Others will take the progressive-RIP path or the dastardly chronic-progressive-RIP path on their way through life.
In my case, I was idling away in the warm, baseline state of health for 57 years. And then, boom, upon hearing of my terminal diagnosis, I transitioned instantaneously into the progressive state. I hope all who read this are dwelling happily away in their baseline states!
Scarcity Drives Price?
I’m gonna temporarily veer away from blabbing on about cancer and sickness and death. For this post, since I know I have a handful of Bitcoin (BTC) readers, I’m going to write about an exciting development in the Bitcoin space. I hope my fellow “sat stackers” will correct me if I’m factually wrong in what I say below.
The Rise Of PlanB
Ever since the $20K peak in BTC price in 2017, the Bitcoin space has been pretty much boring and uneventful. However, in March of last year, an unknown, soft-spoken, humble, dutch financial quant, whose handle on Twitter is PlanB@100trillionUSD, released an innovative paper titled “Modeling Bitcoin Value with Scarcity“.
Ever since its release, the paper has been gaining more and more traction in the BTC community and PlanB is being slowly elevated to celebrity status. His genius is that he pursued a novel approach to modelling Bitcoin’s price action over the last decade. His open, rigorously scrutable model is based on quantifying Bitcoin’s price in terms of its scarcity. Monthly price data from the first 11 years of Bitcoin’s existence fits PlanB’s simple, but elegant, model nicely.
The reason for all the increasing buzz in the Bitcoin community is that the first version of PlanB’s model (S2F) predicts a price of around $55K within the next four years. The second version of the model (S2FX) updates that prediction to $288K!
Lots of smart people have been trying to tear down the model but no one can (as far as I can tell) mathematically disprove his theory and analysis. Mind you, PlanB has said many times himself, it’s just a model, and as George Box once said: “All models are wrong. Some, however, are useful”. PlanB cautions that even though the real price data from 2009->2019 fits his model closely, the model could breakdown and fail at future predictions.
The Data And The Model
The figure below shows the real bitcoin monthly price data as a time series (colored dots) superimposed on what PlanB’s S2FX model (disjoint white line) predicts. Note that the Y axis is logarithmic in order to cover the large range in price appreciation over the years.
Of huge importance to PlanB’s scarcity model are the Bitcoin “halving” events that occur by design approximately every 4 years. During each abrupt discontinuity, the “flow” of BTC rewards to the miners that keep the BTC network secure is cut in half, thereby increasing Bitcoin’s Stock(pile)-To-Flow (S2F) ratio by a factor of 2. The hypothesis underlying the model is that the higher the S2F ratio of any commodity, the higher its price.
Stocks, Flows, And Producers
In my next post, health willing, I will try to understand and explain stock(piles), flows, commodity pricing (gold, silver, copper, oil, pork bellies, etc), and the quantification of perhaps Bitcoin’s greatest price-driving attribute: scarcity.
Living In The Head
I’ve found that the best way for me to maintain a modicum of a healthy state of mind is to dwell as much as I can in the present moment, not withstanding the stage 4 cancer diagnosis and the coronavirus siege. A.k.a. “living in the now” as opposed to “living in the head“.
If I’m not diligent at monitoring and detecting which time frame my thoughts are dwelling within, I’ll find myself spending too much time speculating about a fearful future or spending too much time regretting bad decisions that I’ve made in the past. When I’m living in the present moment, life feels “lighter”. I’m more able to appreciate the sights, sounds, smells, touches, and tastes that are right in front of me… right now. Everything is much more vivid and alive. There is pure joy in indulging the sensations that permeate my being!
My Katy Kahuna massage chair, cannabis edibles, and meditation practices (Balance and Headspace apps) are great tools. I employ them to nudge me me back into the present moment from my wild and scary mental transgressions into the (scary) future and (regretful) past.
The Double Whammy
Geeze, a lot has changed since my last blog post on March 20th. I’ve gotta tip my hat to the insidious new coronavirus scourge that has emerged out of nowhere and jumped into the ring to compete with the EOAM for ownership over my body and soul. This emperor+virus double whammy indicates that the fit has really hit the shan for me and millions of others with pre-existing conditions. Yikes!
I know I’ve probably been an asshole more than I’ve been a nice person during my lifetime, but I didn’t think “god” would be so enraged at me that she would summon the vile coronavirus to compete with the sinister emperor for the annihilation of my physical and (especially) mental well being.
Ok then, enough doom and gloom (for now). On the bright side, I had a CT scan and a brain MRI since my prior post. They both indicate that the emperor is still firmly shackled in place. There is no doubt he’s still an integral part of me, hoping that the newcomer virus doesn’t beat him to the punch. He’s patiently waiting for the time when my Opdivo immunotherapy infusions stop working so that he can shed his shackles and resume pursuing his goal of slowly ravaging my body into dust.











