ABCDEFGHIJKLMNOPQRSTUVWXYZAAABACAD
1
2
3
A light web version of the Excel spreadsheet at: http://www.truthcoin.info/papers/LogMSR_Demo.xlsx
4
5
Total Capital Supplied (BTC)20
6
Liquidity Parameter14.42695041
7
8
StatesGoal Metric (USD/BTC)
9
Min (0$)Max ($50,000)
10
Blocksize 1 MB#1#3
11
Blocksize >1 MB#2#4
Red: higher blocksize, Blue: 1 MB blocksize, (Orange: today's expected future value)
12
13
EDITABLE (Numbers only, please)exp_sum
14
SharesShare PricesLMSR (Market Account)Update Cost (User Pays)Exchange RateP(Increase)
15
Time#1#2#3#4#1#2#3#40--1 MB>1 MBexpected
16
15.05.06.05.024.56%24.56%26.32%24.56%25.2565729825.25657298$25,866$25,00049.12%$25,4415.76
17
211.012.011.012.024.13%25.87%24.13%25.87%31.508662616.252089628$25,000$25,00051.73%$25,0008.88
18
319.019.017.016.027.15%27.15%23.64%22.06%37.808042116.299379505$23,270$22,41049.21%$22,84713.74
19
425.023.022.021.029.06%25.30%23.61%22.03%42.826858565.018816446$22,410$23,27047.33%$22,81719.46
20
532.028.026.029.030.96%23.46%20.43%25.15%48.914737026.087878465$19,875$25,86648.61%$22,78729.68
21
638.035.031.033.031.90%25.91%19.64%22.56%54.484338665.569601642$19,051$23,27048.47%$21,09643.67
22
746.041.037.039.034.98%24.74%18.75%21.53%61.152914596.668575922$17,446$23,27046.27%$20,14169.32
23
852.047.044.043.035.49%25.10%20.39%19.02%66.943350585.790435993$18,241$21,55644.12%$19,704103.56
24
956.051.051.047.033.90%23.97%23.97%18.17%71.607640024.664289443$20,711$21,55642.13%$21,067143.09
25
1062.055.059.052.034.16%21.02%27.74%17.08%77.498291295.890651266$22,410$22,41038.10%$22,410215.24
26
1166.060.067.057.030.61%20.19%32.80%16.40%83.08149335.583202011$25,866$22,41036.59%$24,601316.96
27
1267.060.068.058.930.68%18.89%32.89%17.54%84.044448510.9629552078$25,866$24,07636.43%$25,214338.84
28
1373.766.074.864.831.19%18.29%33.66%16.86%90.508850276.464401759$25,953$23,98435.15%$25,261530.38
29
1476.769.077.867.831.19%18.29%33.66%16.86%93.508850273$25,953$23,98435.15%$25,261652.98
30
1579.745.980.870.836.82%3.54%39.74%19.91%94.114213380.6053631097$25,953$42,45623.44%$29,821680.96
31
1679.745.980.870.836.82%3.54%39.74%19.91%94.114213380$25,953$42,45623.44%$29,821680.96
32
1779.745.980.870.836.82%3.54%39.74%19.91%94.114213380$25,953$42,45623.44%$29,821680.96
33
1879.745.980.870.836.82%3.54%39.74%19.91%94.114213380$25,953$42,45623.44%$29,821680.96
34
1979.745.980.870.836.82%3.54%39.74%19.91%94.114213380$25,953$42,45623.44%$29,821680.96
35
79.745.980.870.836.82%3.54%39.74%19.91%94.114213380$25,953$42,45623.44%$29,821680.96
36
37
38
39
40
At t = 12 someone purchases the "pro-increase portfolio".
("pro-increase portfolio" shares in box form)
41
At the given level of Initial Capital Supplied (cell C5)...
1.001.00
42
...it consisted of these shares...
1.000.001.001.93<-->0.001.93
43
...and it cost...0.9630
44
...but if we had infinitely liquid markets it would have cost 1 (try increasing "total capital supplied" at the top).
45
...the b-independent price, by naive multiplication...
0.9511
..(while currently ~8% overexpensive, this is sometimes underexpensive, depends on price-distribution).
46
47
Now, assume that the future Bitcoin price is...
$4,800...or...9.60%
...of the way between 0 and 50,000
48
...and recall that it was...
$24,601
...when the "pro-increase portfolio" was purchased (t=11)...
49
...implying a Bitcoin Return of...
-80.489%.
50
51
StatesGoal Metric (USD/BTC)
52
Min (0$)Max ($50,000)
53
Blocksize 1 MB???
54
Blocksize >1 MB???
55
So, we can fill in this half ---------------------------------->
90.40%9.60%
56
57
58
If the blocksize does increase...
59
StatesGoal Metric (USD/BTC)
60
Min (0$)Max ($50,000)
61
Blocksize 1 MB0%0%0.00%
<----------- Now, this half.
62
Blocksize >1 MB90%10%100.00%
63
90.40%9.60%
64
Revenue0.1856
65
b-indep Cost0.9511
(if bought at avaliable prices)
66
Infinite Liquidity Cost1.0000
(if bought at avaliable prices under infinite liquidity)
67
b-indep Return-80.489%
(equal to E49...fully replicated)
68
IL Return-81.443%
(approaches E49 as liquidity increases or ERs equalize)
69
70
If the blocksize does not increase...
71
StatesGoal Metric (USD/BTC)
72
Min (0$)Max ($50,000)
73
Blocksize 1 MB90%10%100.00%
<----------- Reversed.
74
Blocksize >1 MB0%0%0.00%
75
90.40%9.60%
76
Revenue1.0000
77
b-indep Cost0.9511
(if bought at avaliable prices)
78
Infinite Liquidity Cost1.0000
(if bought at avaliable prices under infinite liquidity)
79
b-indep Return5.141%
(approaches zero as liquidity increases or ERs equalize)
80
IL Return0.000%
(equal to zero, full refund)
81
82
83
84
It is best to have the b-indep and IL returns equal each other...
85
...this happens when b is high (ie large "Total Capital Supplied")....
86
...which costs money, so take out your wallets, please!
87
88
89
90
91
92
93
Changing the Units from BTC to USD
94
95
Setup
96
Sum#1#2#3#4#5#6#7#8
97
Random Numbers5.4780.6900.6250.4960.8690.6700.3710.9480.809
98
Initial Prices12.60%11.41%9.06%15.87%12.22%6.77%17.30%14.76%
99
100
Random Numbers1.1290.0540.6140.2380.223