{"id":16834,"date":"2024-09-10T12:45:44","date_gmt":"2024-09-10T09:45:44","guid":{"rendered":"https:\/\/forklog.com\/en\/bitcoins-power-law-and-where-kaspa-fits-in-viabtc-explains\/"},"modified":"2024-09-10T12:45:44","modified_gmt":"2024-09-10T09:45:44","slug":"bitcoins-power-law-and-where-kaspa-fits-in-viabtc-explains","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/bitcoins-power-law-and-where-kaspa-fits-in-viabtc-explains\/","title":{"rendered":"Bitcoin\u2019s power law and where Kaspa fits in \u2014 ViaBTC explains"},"content":{"rendered":"

In 2024, ViaBTC entered<\/a> the top five pools mining Kaspa (KAS). By September its hashrate on the network reached 70 PH\/s.<\/p>\n

At the same time, a Power Law Theory (PLT) emerged in the community, projecting bitcoin\u2019s price in line with the power law<\/a>. It quickly gained traction as an alternative to the much-criticised stock-to-flow model.<\/p>\n

Together with the ViaBTC<\/a> team, we outline PLT for bitcoin and explain why the power law may also apply to Kaspa.<\/p>\n

Power law in bitcoin<\/h2>\n

PLT was devised by Giovanni Santostasi, a PhD in astrophysics. In March 2024 he published<\/a> The Bitcoin Power Law Theory, setting out the model\u2019s foundations.<\/p>\n

\n\u201cI started studying bitcoin 12 years ago. Instead of journals, I chose Reddit as the place to publish my research. I wanted to reach the broader bitcoin community rather than publish a paper that only professional scientists would read,\u201d the article said.<\/cite><\/p><\/blockquote>\n

Santostasi saw a link between bitcoin and the power law when he noticed the cryptocurrency\u2019s price traced a straight line on a logarithmic chart. In January 2024 he posted on r\/Bitcoin.<\/p>\n

\n\u201cFive years ago I made a post<\/a> in this subreddit showing that BTC is a power law: price = A * days ^ n, (days since the genesis block), n = 5.8. Many did not believe me and said that the past does not predict the future. Well, five years later it turns out that BTC continues to behave according to a Power Law with a similar exponent. The power law is not yet another formula or model, but the same mathematical behaviour that underlies the formation of rivers, the growth of mountains, the development of cities, the relationship between GDP and population, the speed of metabolism. Like bitcoin, all the most important things follow a power law,\u201d he said.<\/cite><\/p><\/blockquote>\n

\"image2-370\"
PLT in bitcoin. Data: Reddit<\/a>.<\/figcaption><\/figure>\n

As an illustrative example of the power law, Santostasi cited the harmonic law<\/a>:<\/p>\n

\n\u201cKepler spent many years searching for a mathematical law that could describe the orbits of planets. He tried everything known at the time, for example fitting Platonic solids to each orbit and using many other esoteric mathematical tricks, which led nowhere. But he was convinced there was great harmony in the motion of the planets. Newly invented logarithms were very fashionable at the time, so in desperation he decided to plot the dependence of a planet\u2019s orbital radius on the time it takes the planet to go around the Sun. He was astonished to find that on this strange chart everything looked like a straight line<\/a>.<\/p>\n

The same chart is shown above. Of course, it is much cleaner and more precise for planets, given that the Solar System is a deterministic system, not a stochastic one like bitcoin. But the overall trend of BTC also seems deterministic and predictable.\u201d
\n<\/cite><\/p><\/blockquote>\n

Giovanni\u2019s son, Saverio Santostasi, posted a video<\/a> on YouTube demonstrating bitcoin\u2019s adherence to the power law. According to the model, bitcoin will reach $1m no later than 2036.<\/p>\n

\n

There’s a line that bitcoin’s price shall not pass. A lower bound on price, a power law. <\/p>\n

Time contours tell us how long it will be before the support forces current prices upwards. <\/p>\n

For 12 years, every bear market has returned to this support line.<\/p>\n

The support passes one\u2026 pic.twitter.com\/Jfz98ef1eQ<\/a><\/p>\n

\u2014 apsk32 (@apsk32) June 23, 2024<\/a><\/p><\/blockquote>\n