What's up with Bitcoin, anyway?

A lil' Bitcoin background 

Bitcoin, more like BIGcoin ... am I right?! 
Oh, I'm not right? 
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Since Bitcoin launched it has become a phenomenon, sparking thousands of startups, including Gemini. Gemini is a Bitcoin exchange founded by the Winklevoss twins (of Facebook / The Social Network fame). 

The Winklevii presented about Gemini at Techcruch Disrupt in 2015.
Bitcoin has come a long way since it launched as an open source software in 2009 (source: Wikipedia.) Mainstream interest and attention to this largely mysterious digital currency has waxed and waned over time, due to various factors and forces; to mention a few: media coverage (arguably a mixture of truths and inaccuracies), domestic (USA) and international public policy, the global economic cycle, technological advancements, and decisions of individuals and groups of people within the community that has developed around the cryptocurrency. 

Bitcoin = Data
Despite all arguments about its legitimacy and/or longevity, one thing is inarguable: Bitcoin is mined and traded all over the world. Along with that comes lots and lots and lots of data! YAY DATA!

We <3 Data Exploration
Recognizing this reality a few years ago and armed with an affinity for big, open data sets, we (Keen) started an open source project* to help facilitate and encourage the exploration of interesting datasets like that which is emerging from the proliferation of Bitcoin throughout the economy. Since it was such a hot topic in August 2014, we chose Bitcoin as the starting point for this project.

[*BTW, if you’re an active member of the open source community and you’d like to explore data in other realms of the universe, we’d love to welcome you as a contributor!]

Let's Go Exploring! 

In collaboration with the wonderful people at Windrush, we created this fun, interactive report for your enjoyment and to perhaps inspire further data exploration. 

With all that data around Bitcoin prices in hand, we decided to explore it using Windrush+Keen to see what we could discover...

Below, you'll find several graphs that we generated by querying the Bitcoin dataset that lives within Keen IO. The queries were created right here in the Windrush editor, where their team has embedded Keen's open source data explorer.  The combination of tools makes uncovering fascinating insights and displaying them for others to see a super simple and  fun experience. Best of all: anyone can do this, without ever writing a line of code! 
"[Bitcoin] has all the signs [of a] paradigm shift"

-Paul Graham
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About the Dataset

  • collection start date: Aug 18, 2014
  • collection end date: current day
  • gap in data collection: Aug 19 2015 - Nov 18 2015
         • sadly, the Heroku instance on which this was running was turned off for a ~3 months  before  we noticed, so  we'll just have to use our imagination to complete the picture in our graphs 💭
  • full details in the Open Data Collectors repo on Github
  • uses the BitcoinAverage API to capture Bitcoin price trends over time
  • job runs every minute

From Analysis to Visualization

Median Price and Transaction Volume

Median Bitcoin Prices, Weekly (USD)
Monthly Bitcoin Transaction Volume (BTCE)
Above you can see graphs of the median Bitcoin price in US Dollars, and the monthly transaction volume in total Bitcoins exchanged. 

An interesting observation: in January 2015, when Bitcoin prices steeply fell, we see a huge spike in the volume of bitcoin trading activity. During this micro-crash we saw nearly 800 million Bitcoins, representing nearly 228 billion US dollars changing hands. Also interesting is that we do not see an identical spike in trading activity when the price suddenly climbed in January of this year (2016.) 

The two months surrounding the blank space in the data show an artificially low transaction volume. This is due to our starting and stopping collection part way through the month. 

Minimum and Maximum

Minimum Bitcoin Price, Monthly (USD)
Maximum Bitcoin Price, Monthly (USD)
As you can see, when your script stops running and data collection pauses, you get an "interesting" little gap in all your pretty graphs.

Note: this is NOT what they were referring to during the lesson in gap analysis  in that  business class you took 😜

More importantly, as you can see (even with slightly incomplete data) we can ask fairly simple questions and immediately garner a visual depiction of relevant trends within the Bitcoin landscape. Exploration leads to discovery! 
“Equipped with his five senses, man explores the universe around him and calls the adventure Science.” 
― Edwin Hubble
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So, what does the future hold for Bitcoin?

Who knows?! 🤔

After perusing this document, you may have jumped to the conclusion that we -- the authors -- are veritable experts in the complex world of Bitcoin, cryptocurrencies, and/or the global financial markets. 

While we'd love to claim that distinction, we'd rather hang on to our reputations as honest, humble, curious explorers and leave the future-telling to those more knowledgable and experienced financiers, investors, and fin-technicians.  

Warning: as you can see in the quotes below, the "experts" have highly varied opinions...  and experienced financiers, investors, and fin-technicians.  
"It has failed because the community has failed."
- Mike Hearn , OG Bitcoin developer
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"Bad Day For Bitcoin But Community Saves The Day" 
- headline of article by  Tim Frost
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Data-inform yourself!

Truth be told, we were armed, quite simply, with the following toolset: 
-  a free and open data set
- a set of tools to collect and explore that data through analysis (Keen IO)
- a platform to visualize and communicate our findings in a meaningful, interesting way (Windrush)

We encourage you to read what the real experts say, and we've included some articles here that we think will help you close in on your own conclusions. 

And, of course, if you'd like to take your own explorative adventure: 
1) go find an open data set (here are some!) 
2) check out Windrush and Keen IO or any of the other awesome products out there that enable data storage, analysis, and visualization 
3) be curious, ask questions, find answers, and tell your story! 

 If you have any questions and/or want to learn more about our respective products, don't hesitate to contact the helpful humans at Windrush and Keen IO - consider us the sherpas of your journey. 

We're excited to see where your data adventures take you and to hear about all your discoveries... 🗺

Photo Credits