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I have a different theory. There will be a capped total of 21m BTC. In say 10 years, there will be a number of BTC "users". By "users" I mean people who in thei
by cft 7y ago
I have a different theory. There will be a capped total of 21m BTC. In say 10 years, there will be a number of BTC "users". By "users" I mean people who in their ordinary business use BTC for value exchange. To facilitate that use, we need to have a certain freely available amount of BTC per user at any time, say $1000 in USD equivalent. Call this "float"
Then, assuming no BTC lost or locked in long term storage (I suspect these cause upward corrections of 5-10x from below estimates), the price of BTC will be btc_px ~= float * users / 21m.
I do not know how to estimate "float".
For users there are two scenarios:
1. Low adoption/high government restrictions, BTC is used for mostly illicit transactions: say 50,000 users worldwide
2. High adoption, legal use: perhaps 50m users worldwide.
Assuming my float = 1000 USD we get btc_px ~$20 for scenario 1 and ~$20,000 for scenario 2. I may be off by an order of magnitude in the "float" assumption. Would love to hear your thoughts.
- aaroninsf 7y agoWhat do you imagine would be the incentive for users to use BTC, rather than later-generation alternatives?
- Vadoff 7y agoWhat do you imagine would be the incentive for users to use later-generation alternatives, rather than BTC?
- tuesdayrain 7y agoThe benefits of alternative cryptocurrencies are faster, cheaper, and potentially anonymous transactions. Bitcoin's use of PoW and limited supply means that transaction fees will always be necessary to provide miners with rewards once all the coins have been mined. In my opinion that is a tradeoff that will cause most people to use BTC as a digital store of value rather than a form of payment. I think that if a cryptocurrency ever becomes widely used for payments, it will be one that uses Proof of Stake/an inflationary supply and can therefore avoid relying on transaction fees.
- glofish 7y agosomething that is not limited perhaps? there is growth everywhere, every day millions of people create new value, if limited bitcoin were to represent it then it would have to rise in value - but that makes it a bad deal to spend the bitcoin if you know tomorrow will rise in value
- sudouser 7y ago> 2. Isn't bitcoin ruled by less than 1000 people?
- glofish 7y agoamusingly, the long term the availability of bitcoin will be zero. every day someone loses their passcode, backups are lost, people die and forget to share the information etc ... eventually, over a long enough time horizon, everyone will make a mistake or be struck down by a series of unfortunate events, thus long term the number of bitcoins available to a transaction will be zero, all will be locked away and lost forever (this is a joke, but worth considering hypotetically)