Updated historical Bitcoin bubble charts and predictions.

Bitcoin historical bubble charts, updated.

2010 bubble (5x):

2010/2011 bubble (30x):

2013 bubble (8x):

2013/2014 bubble (10x):

What next?

Predictions:

• There will be another bubble. The all time high will be between 5x and 30x of the current stable price (that is, between $2000 USD and $12000 USD).
• There is currently a concentration of hashing power - centralisation of miners - in China. The government of that country will act out of fear of capital flight to take control of those miners. The result will be a significant proportion of the Bitcoin network's hashing power in the hands of that government with the obvious power over the Bitcoin protocol that brings.

Will Bitcoin will survive this?

Nobody knows the future.

An illustrated history of bitcoin bubbles

There has been some angst and amazement in the mainstream media about the current Bitcoin bubble.

How does it compare to previous Bitcoin bubbles?

November 2010

Approximately 1000% gains.

June 2011

Approximately 6000% gains.

April 2013

Approximately 1600% gains.

December 2013

Approximately 1200% gains so far.


During any given bubble a newcomer only sees the colossal tidal wave of value that must soon obviously crash.

Notably in every instance the previous bubbles, however massive at the time, are generally invisible or insignificant on the charts when compared to the height of latest bubble. They are blips in the rear view mirror even though they were tsunamis.

Post-bubble values generally seem to steady off at 50-60% of peak value.

This time is different?

I don't know.

How to make a "canary wallet"

A "canary wallet" gives you a way to find out if your wallet's private keys have been compromised. Here is how to make one:

1. Generate a public/private key pair to use as a wallet in the normal way.
2. Put a very small amount of bitcoin into this wallet and store it as you normally would - on paper, brainwallet, encrypted folder, as a MultiBit/Bitcoin client wallet, whatever.
3. Now use the private key of this first wallet (the "canary wallet") as a seed to deterministically generate a new public/private key pair for a new, second wallet. Don't store the second wallet's private key anywhere - always generate it from the first when you need to access it.
4. This second wallet is where you actually store your bitcoins.

In this way, if your storage is ever compromised you will know because the attacker will transfer the small number of bitcoins out of the first wallet - the "canary wallet". You could monitor the first wallet's balance with a script and if it is ever spent that is your flag that the storage has been compromised and that you should move your money to a new wallet.