5 ms·

If Bitcoin continued its 2017 growth rate for 5 more years, the market cap of Bitcoin would be about 140 quadrillion dollars, which is about 300x the value of a

If Bitcoin continued its 2017 growth rate for 5 more years, the market cap of Bitcoin would be about 140 quadrillion dollars, which is about 300x the value of all public and privately owned assets in the entire world.

deleted 9y ago
[deleted]
kylehotchkiss 9y ago
When would it hit the value of all public and private assets at current growth rate?
- throwaway0255 9y ago
  Based on the numbers I chose (~500 trillion global assets, 1500% compounded annually) I think it'd take a little under 3 years.
albertgoeswoof 9y ago
This is a good point. A lot of people are investing expecting 1000x returns based on historical data, but that ship has long sailed. I wonder if it’s possible to use power and cpu manufacturing capacity to work out a maximum price the network could support.
- vasco 9y ago
  It hasn't sailed. If it crashes again, it can climb again just as fast.
  - everdev 9y ago
    I think there's much more historical support for rapidly growing investments than one that rapidly grows, rapidly declines then rapidly climbs again. After the first rapid expansion it had everyone's attention and is probably less volatile. Only thing close might be healthcare stocks based on clinical trial results and FDA approval.
- carbocation 9y ago
  Currently, bitcoin uses about 1 out of every 5,500 Watts being generated on the planet.[1,2] So, unless bitcoin is secretly a paperclip optimizer, that should offer some upper limit. 1 = https://en.wikipedia.org/wiki/World_energy_consumption https://en.wikipedia.org/wiki/World_energy_consumption 2 = https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption
- djsumdog 9y ago
  I think I had like $60 NZD in mBTC back in 2014. I pulled the backup key for my wallet, waited to sync 40 months, and was surprised to see over $800 USD. Like everyone else, I was I had gotten more bitcoin back then. But it all of us had, it probably wouldn't be worth as much. Everyone lost their private keys over the years, you are the reason btc is so valuable today.
- logicallee 9y ago
  > A lot of people are investing expecting 1000x returns based on historical data, but that ship has long sailed. You are right. A more reasonable expectation is a 5x return. Analysis below. ----------- There have been approximately 187,200 tonnes of gold ever mined (+/- 20%, I know I know), which at current spot prices of $41.56 / gram means that the value of all gold ever mined -- almost all of which is held in circulation, or ownership -- is $7.7 trillion. Bitcoin is a similar store of value in that its worldwide existence increases slowly. It is expensive and a pain to transfer bitcoin, but so is gold when used for monetary purposes. Likely a good estimate for the "proper" market cap of bitcoin is $7.7 trillion, matching the market cap of all gold ever mined. While many bitcoins were lost, the bitcoins still in circulation are substantial in quantity and have a higher velocity than gold. Bitcoin is susceptible to technical problems, but the price of gold is predicated on the difficulty of transmogrifying any other element (aluminum, say) into gold. But I include this paragraph just to say that in no way is there some metaphysical guarantee that gold will be equally scarce forever, just as there are issues that could happen to the bitcoin network. For the next 3-4 years, a decent target for an "appropriate" price of bitcoin is parity with gold - $7.7 trillion, say, or about 40 times its current price. In my personal opinion you should consider the fundamental price of bitcoin to be around 40 times its current price, which you should then discount by certain systemic risk. If you have gold it cannot just disappear (without being stolen), but bitcoin can disappear if its network has some kind of systemic problem. An extremely safe way to generate 5x return on any amount of money (up to about fifty billion dollars) in the next five years, is to buy bitcoin after finding an credible insurer who will sell a policy against a systemic problem that causes it to go to 0, or against your personal bitcoins being stolen. The risk of the bitcoin network having some unforeseen problems is vastly undervalued today - nobody seems to consider that possibly it will not be a functional network in five years, at all. Bitcoin is essentially distributed (peer2peer). I searched Google to see if 5 year old p2p networks typically still are up and healthy - you can read the author's findings here: https://www.vice.com/en_au/article/vdqepm/illegal-downloading-sites-of-my-youth-p2p-limewire-kazaa https://www.vice.com/en_au/article/vdqepm/illegal-downloadin... In terms of technology few p2p networks survive 5 years. I would take a 5-year position on bitcoin only if I could adequately protect against this risk. Bitcoin is certainly not a bubble and there is next to no risk of an adjustment of losing, say, 98% of its value, while containing to remain healthy at 2% of its current value by its legitimate users. It is not a ponzi scheme. It is not subject to sudden hyperinflation. You do not have to worry about this eventuality if you are considering a long position in bitcoin. You don't have to watch its price day to day. You do have to have a very active policy against its going to zero for technical reasons. If you don't have a signed contract with a traditional, brick-and-mortar insurer, you should not have any position in bitcoin, period. Nobody is giving technical network problems the correct probability of surfacing. They're idiots. Let me put it in these terms for you: -> I would bet better than even money that the price of bitcoin on December 3rd, 2021 will be more than 5x its current price, if it is at least 10% of its current price. -> I would not bet even money that the price of bitcoin will be >= 10% of its current price. Do you understand these two constraints? You can get a 5x return, easily - as long as you ensure against a total loss, which is very, very likely.
- emerged 9y ago
  I just invested figuring that it won't crash until I buy into it, and I sorta want it to crash. Unfortunately, it has gone up another 20% since then so my strategy is failing.
  - taneq 9y ago
    Hang in there buddy, early days yet. :)
    - emerged 9y ago
      Sigh. It's a bad sign because I never wanted to invest in bitcoin, even if it would mean enormous profit (not a fan of speculative profit). But, I just bought some. So what if other people equally skeptical and disinterested in profit should suddenly decide to buy in? Then all of us will unfortunately reap the profit of our own folly. :( There's some solace knowing that I could just leave the BTC sitting in my "wallet" indefinitely, forever refusing to convert it into any other currency and refusing to spend it. Could serve well as a personal test to know how much I'm authentically morally opposed to speculative profit.

deleted 9y ago

[deleted]

kylehotchkiss 9y ago

When would it hit the value of all public and private assets at current growth rate?

throwaway0255 9y ago
Based on the numbers I chose (~500 trillion global assets, 1500% compounded annually) I think it'd take a little under 3 years.

albertgoeswoof 9y ago

This is a good point. A lot of people are investing expecting 1000x returns based on historical data, but that ship has long sailed. I wonder if it’s possible to use power and cpu manufacturing capacity to work out a maximum price the network could support.

vasco 9y ago
It hasn't sailed. If it crashes again, it can climb again just as fast.
- everdev 9y ago
  I think there's much more historical support for rapidly growing investments than one that rapidly grows, rapidly declines then rapidly climbs again. After the first rapid expansion it had everyone's attention and is probably less volatile. Only thing close might be healthcare stocks based on clinical trial results and FDA approval.
carbocation 9y ago
Currently, bitcoin uses about 1 out of every 5,500 Watts being generated on the planet.[1,2] So, unless bitcoin is secretly a paperclip optimizer, that should offer some upper limit. 1 = https://en.wikipedia.org/wiki/World_energy_consumption https://en.wikipedia.org/wiki/World_energy_consumption 2 = https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption
djsumdog 9y ago
I think I had like $60 NZD in mBTC back in 2014. I pulled the backup key for my wallet, waited to sync 40 months, and was surprised to see over $800 USD. Like everyone else, I was I had gotten more bitcoin back then. But it all of us had, it probably wouldn't be worth as much. Everyone lost their private keys over the years, you are the reason btc is so valuable today.
logicallee 9y ago
> A lot of people are investing expecting 1000x returns based on historical data, but that ship has long sailed. You are right. A more reasonable expectation is a 5x return. Analysis below. ----------- There have been approximately 187,200 tonnes of gold ever mined (+/- 20%, I know I know), which at current spot prices of $41.56 / gram means that the value of all gold ever mined -- almost all of which is held in circulation, or ownership -- is $7.7 trillion. Bitcoin is a similar store of value in that its worldwide existence increases slowly. It is expensive and a pain to transfer bitcoin, but so is gold when used for monetary purposes. Likely a good estimate for the "proper" market cap of bitcoin is $7.7 trillion, matching the market cap of all gold ever mined. While many bitcoins were lost, the bitcoins still in circulation are substantial in quantity and have a higher velocity than gold. Bitcoin is susceptible to technical problems, but the price of gold is predicated on the difficulty of transmogrifying any other element (aluminum, say) into gold. But I include this paragraph just to say that in no way is there some metaphysical guarantee that gold will be equally scarce forever, just as there are issues that could happen to the bitcoin network. For the next 3-4 years, a decent target for an "appropriate" price of bitcoin is parity with gold - $7.7 trillion, say, or about 40 times its current price. In my personal opinion you should consider the fundamental price of bitcoin to be around 40 times its current price, which you should then discount by certain systemic risk. If you have gold it cannot just disappear (without being stolen), but bitcoin can disappear if its network has some kind of systemic problem. An extremely safe way to generate 5x return on any amount of money (up to about fifty billion dollars) in the next five years, is to buy bitcoin after finding an credible insurer who will sell a policy against a systemic problem that causes it to go to 0, or against your personal bitcoins being stolen. The risk of the bitcoin network having some unforeseen problems is vastly undervalued today - nobody seems to consider that possibly it will not be a functional network in five years, at all. Bitcoin is essentially distributed (peer2peer). I searched Google to see if 5 year old p2p networks typically still are up and healthy - you can read the author's findings here: https://www.vice.com/en_au/article/vdqepm/illegal-downloading-sites-of-my-youth-p2p-limewire-kazaa https://www.vice.com/en_au/article/vdqepm/illegal-downloadin... In terms of technology few p2p networks survive 5 years. I would take a 5-year position on bitcoin only if I could adequately protect against this risk. Bitcoin is certainly not a bubble and there is next to no risk of an adjustment of losing, say, 98% of its value, while containing to remain healthy at 2% of its current value by its legitimate users. It is not a ponzi scheme. It is not subject to sudden hyperinflation. You do not have to worry about this eventuality if you are considering a long position in bitcoin. You don't have to watch its price day to day. You do have to have a very active policy against its going to zero for technical reasons. If you don't have a signed contract with a traditional, brick-and-mortar insurer, you should not have any position in bitcoin, period. Nobody is giving technical network problems the correct probability of surfacing. They're idiots. Let me put it in these terms for you: -> I would bet better than even money that the price of bitcoin on December 3rd, 2021 will be more than 5x its current price, if it is at least 10% of its current price. -> I would not bet even money that the price of bitcoin will be >= 10% of its current price. Do you understand these two constraints? You can get a 5x return, easily - as long as you ensure against a total loss, which is very, very likely.
emerged 9y ago
I just invested figuring that it won't crash until I buy into it, and I sorta want it to crash. Unfortunately, it has gone up another 20% since then so my strategy is failing.
- taneq 9y ago
  Hang in there buddy, early days yet. :)
  - emerged 9y ago
    Sigh. It's a bad sign because I never wanted to invest in bitcoin, even if it would mean enormous profit (not a fan of speculative profit). But, I just bought some. So what if other people equally skeptical and disinterested in profit should suddenly decide to buy in? Then all of us will unfortunately reap the profit of our own folly. :( There's some solace knowing that I could just leave the BTC sitting in my "wallet" indefinitely, forever refusing to convert it into any other currency and refusing to spend it. Could serve well as a personal test to know how much I'm authentically morally opposed to speculative profit.