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BITCOIN prediction Mark Perelman ISI 490.

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Presentation on theme: "BITCOIN prediction Mark Perelman ISI 490."— Presentation transcript:

1 BITCOIN prediction Mark Perelman ISI 490

2 Systems Request

3 Proposal - Develop a system that can predict the price of Bitcoin for company traders; - Traditional methods of predictions can be integrated with machine learning; - Higher accuracy predictions will bring higher returns; - Sale of license produces extra revenue;

4 Project Sponsor: Crypt Crypto – investor;

5 Business Need: - Portfolio Expansion; - Revenue from emerging market; - Gain reputation and market share;

6 Business Requirements:
- Working internet connection; - Data Science Maintenance; - Workstations;

7 Business Value : - Data prescribed decision-making; - Unique models; - Ability to share platform and enhance partnerships;

8 Constraints : - Data sources must be functional; - Model needs to periodically updated; - Data scientist on demand;

9 FEASABILITY ANALISYS

10 DEVELOPMENT COSTS Cash Flow Description Year 0 Year 1 Year 2
Planning & Design $3,000 Coding $40,000 Testing $5,000 Server $2,000 Closeout $10,000 Total $60,000

11 Operation/Maintenance Costs
Cash Flow Description Year 0 Year 1 Year 2 Model Maintenance $5,000.00 Server Maintenance $1,500.00 User training $3,000.00 Total $9,500.00 $8,000.00

12 Time adjusted cost (adjusted pv) Cumul. cost over lifetime
Costs Adjusted Cash Flow Description Year 0 Year 1 Year 2 Discount factors for 12% 1.000 0.893 0.797 Time adjusted cost (adjusted pv) $69,500 Cumul. cost over lifetime $69,500.00 $76,642.86 $83,020.41

13 Software License Sales
Tangible Benefits Cash Flow Description Year 0 Year 1 Year 2 Service Revenue $150,000.00 $200,000.00 $350,000.00 Hedge Fund Revenue $500,000.00 $600,000.00 Software License Sales $100,000.00 Total $350,000 $800,000 $1,100,000

14 Customer Satisfaction
Intangible Benefits Cash Flow Description Year 0 Year 1 Year 2 Customer Satisfaction $50,000.00 $75,000.00 Total $0 $50,000 $75,000

15 Time adjusted benefits Cumulative lifetime adjusted cost and benefits
Benefits Adjusted Cash Flow Description Year 0 Year 1 Year 2 Discount factors for 12% 1.000 0.893 0.797 Time adjusted benefits $350,000 $758,929 $936,703 Cumulative benefits $1,108,929 $2,045,631 Cumulative lifetime adjusted cost and benefits $280,500.00 $1,032,285.71 $1,962,610.97

16 Operation/Maint. Costs
Development Costs Operation/Maint. Costs Planning & Design Coding Testing Server Closeout Model Maintenance Server Maintenance User Training Tangible Benefits Intangible Benefits Service Revenue Hedge Fund Revenue Increase in Clients Reputation Software Licenses

17 Annual ROI = ROI/period
summary Summary Net PV $ 1,879,590.56 ROI = netPV/cum cost 2364% Annual ROI = ROI/period 1182%

18 Tasks Task Name Duration Start Finish Predecessors Documentation
48 days Thu 2/1/18 Mon 4/9/18 Planning 16 days Thu 2/22/18 System Request Feasibility Analysis Analysis 5 days Wed 2/28/18 2 Requirements Methodology Use Cases Diagram User Cases DFD ERD Design 28 days Thu 3/1/18 5 Infrastructure 10 days Wed 3/14/18 Model 20 days Tue 3/13/18 Testing 19 days Tue 4/10/18 Fri 5/4/18 1 Performance Test User Acceptance Test Implementation 6 days Fri 5/11/18 14 Deploy Web App Deploy Model App Closing 3 days Sat 5/12/18 Tue 5/15/18 17 2 days Mon 5/14/18

19 GANTT

20 pERT

21 Requirements & use cases

22 Methodolody & Reasoning
A third-party vendor CryptoCurrency Analytics/Prediction software can be costly and unreliable; With the uncertainty of strategy and metrics, we have decided to develop such a tool ourselves, crafted to our methodology and requirements; - A JAD session was held and have come up with the needed features that are required for this platform;

23 Jad PARTICIPANTS - Investment Managers: Active Speaking participants; - Client Support VP: Active Speaking participant; - Crypt Crypto (sponsor): Limited Participation, concerned with aesthetics; - Data Scientist: Active speaking participant regarding the technicalities of the models; - IT Maintenance VP: Curates technical infrastructure; - Scribe: Collects minutes and creates documentation;

24 JAD Questions - Would a tool like this be helpful in the daily operations? - Would everybody be comfortable with adapting to a new system? - What can be done to make the transition as easy as possible? - What features that exist in the current system would you like to see in the one? - What are the issues that occur on a daily basis with the current system?

25 Functional Requirements
- Real Time price indexes; - Predictions based on 15 minute/hourly intervals; - Predictions for Bitcoin; - News search;

26 Nonfunctional Requirements
- Mobile support; - RBAC system for users (User accounts for Firm vs License Purchasers); - 24/7 Uptime (Maintenance not included); - Backup measures for data source downtime; - Output is a graph;

27 User requirements: House Investor Data Scientist
Access predictive model to tune parameters House Investor View 15-minute interval predictions View hourly predictions View News  Partner View hourly predictions View news

28 USE CASES DIAGRAM & USE CASES

29 Use Case Diagram

30 Use case (View Predictions)

31 User cases (Update model)

32 DFd/erd

33 Context Diagram

34 Level 0

35 erd

36 Relational tables

37 Hardware/software

38 Client/Server Architecture

39 HW/SW Specification Standard Web Server Standard Application Server
Standard Database Server Operating System Linux Special Software Apache Rshiny/R MySQL Hardware 20 GB SSD 2.0 GHz Intel Xeon (Skylake)  Network 135 Mbp/s Ethernet

40 SYSTEM ARCHITECTURE DESIGN

41 ACQUISITION ANALYSIS Ratings Feature Weights Outsourcing In-House Dev
Feature Weights Outsourcing In-House Dev Buy Time 20% 1 2 5 Initial Price 3 Development 35% 4 Overtime Costs 15% User Support 10% Totals 2.1 3.75 3.3 Key 1 = The Worst 3 = Medium 5 = The Best

42 Ui: Prototype (Output)

43 Prototype (auth)

44 Program design

45 Fin BITCOIN PREDICTION


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