In a q-continued fraction related to the octahedral group I defined a new q-continued fraction for the square of ramanujan's octic continued fraction which I discovered using certain three term relations and algebraic manipulations.
Given $$\big(u(2\tau)\big)^2=\cfrac{2\,q^{1/2}}{1-q+\cfrac{q(1+q)^2}{1-q^3+\cfrac{q^2(1+q^2)^2}{1-q^5+\cfrac{q^3(1+q^3)^2}{1-q^7+\ddots}}}}$$
then by using the well known special value $$\big(u(i)\big)^2= \sqrt{2}-1$$ which was first found by Srinivasa Ramanujan in his first letter to GH Hardy ,leads immediately to the following new continued fraction of square root 2
$$\sqrt{2}=1+\cfrac{2\,e^{-\pi/2}}{1-e^{-\pi}+\cfrac{e^{-\pi}(1+e^{-\pi})^2}{1-e^{-3\pi}+\cfrac{e^{-2\pi}(1+e^{-2\pi})^2}{1-e^{-5\pi}+\cfrac{e^{-3\pi}(1+e^{-3\pi})^2}{1-e^{-7\pi}+\ddots}}}}$$
Can anyone verify the identity, either by algebraic or numerical methods?

If $|q|<1$ and we set $$ (a;q)_{\infty}=\prod^{\infty}_{n=0}\left(1-aq^n\right), $$ then (see [1]): $$ P(a,q):=\left(\frac{(-a;q)_{\infty}}{(a;q)_{\infty}}\right)^2= $$ $$ =-1+\frac{2}{1-}\frac{2a}{1-q+}\frac{a^2(1+q)^2}{1-q^3+}\frac{a^2q(1+q^2)^2}{1-q^5+}\frac{a^2q^2(1+q^3)^2}{1-q^7+}\ldots,\tag 1 $$ where $a$ is a complex number.
Take the logarithms in (1) and expand the two products in Taylor series (of $\log(1-x)$). Then the double sums are easily rearranged and we get $$ 4\sum^{\infty}_{n=0}\frac{a^{2n+1}}{(2n+1)(1-q^{2n+1})}=\log P(a,q). \tag 2 $$ Set also $$ u_0(a,q):=\frac{P(a,q)-1}{P(a,q)+1}. \tag 3 $$ Then we have $$ u_0(a,q):=\frac{2a}{1-q+}\frac{a^2(1+q)^2}{1-q^3+}\frac{a^2q(1+q^2)^2}{1-q^5+}\frac{a^2q^2(1+q^3)^2}{1-q^7+}\ldots,\tag 4 $$ Set now the value $a=q^{\nu+1/2}$, $\nu\in\{0,1,2,\ldots\}$ in (2) to get $$ P\left(q^{\nu+1/2},q\right)=\exp\left(-4\sum^{\infty}_{n=0}\frac{q^{(2n+1)(\nu+1/2)}}{(2n+1)(1-q^{2n+1})}\right)= $$ $$ =\exp\left(-4\sum^{\nu-1}_{j=0}\textrm{arctanh}(q^{j+1/2})+\textrm{arctanh}(k_r)\right) \tag 5 $$
( For many applications and very interested notes see:
http://www-elsa.physik.uni-bonn.de/~dieckman/InfProd/InfProd.html )
Here the function $k_r$ is the elliptic singular modulus and $k'_r=\sqrt{1-k_r^2}$.
For $\nu=0$ in (5) we get $$ P\left(q^{1/2},q\right)=\frac{k'_r}{1-k_r}. $$ Hence your continued fraction $u_0(q^{1/2},q)$ is $$ u_0(q^{1/2},q)=\frac{k'_r+k_r-1}{k'_r-(k_r-1)}=\frac{2q^{1/2}}{1-q+}\frac{q(1+q)^2}{1-q^3+}\frac{q^2(1+q^2)^2}{1-q^5+}\frac{q^3(1+q^3)^2}{1-q^7+}\ldots,\tag 6 $$ where $q=e^{-\pi\sqrt{r}}$, $r>0$.
Relation (6) with $r=1$, $k_1=k'_1=\frac{1}{\sqrt{2}}$ gives: $$ u_0\left(e^{-\pi/2},e^{-\pi}\right)=\sqrt{2}-1. $$
References
[1]: N.D. Bagis and M.L. Glasser. "Evaluations of a Continued Fraction of Ramanujan". Rend. Sem. Mat. Univ. Padova, Vol. 133 (2015). (submited 2013)