7 ms·

not to add fuel to the fire: but if bitcoin is really un-hackable (can't guess individual keys held offline by private owners), untraceable, and all that goodne

by lmg643 13y ago

not to add fuel to the fire: but if bitcoin is really un-hackable (can't guess individual keys held offline by private owners), untraceable, and all that goodness ... ... and there are only 21 million of them in the world ... ... then the value of each bitcoin could be $100,000 or more, assuming it can attract 1/4 of the interest that gold currently enjoys worldwide. of course, as the value creeps up, it's use as a currency will diminish, and it becomes more of a store of value. eg, without bitcoin dimes and quarters, you'd have a hard time buying smaller items. but it is lighter than a pound of gold for sure. the possibilities are interesting.

carlosdp 13y ago
There are smaller denominations. You can have .00000001 bitcoins, for example (it's 8 decimal places = 1 satoshi right?)
- joezydeco 13y ago
  Yes. More decimal places can also be added later on. If we really get to the point where 1BTC = USD100,000, I could see the decimal point shifting and rebase (e.g. 1BTC now = 100,000 new BTC)
  - lcampbell 13y ago
    I hear a lot of people talking about the need to shift decimal points, but never really understood -- what's the benefit of this over just using SI prefixes? To me, it's clear how 1mBTC relates to 1BTC and 1µBTC. I think people underestimate consumers. Before Decimal Day (1971), 1 British pound was worth 20 shillings, and 1 shilling was 12 pence[1]. As confusing as it seems to me, apparently that worked for awhile. Likewise, I think consumers could deal with SI prefixes in a decimal system (rather than needing to redefine how much 1 BTC is). -- [1] http://en.wikipedia.org/wiki/Decimal_Day http://en.wikipedia.org/wiki/Decimal_Day
    - joezydeco 13y ago
      There is no benefit, it's just a technical possibility. The other possibility is that the eventual client app on your smartphone just works in femtoBTC and handles the UI however people choose {BTC, satoshis, femtoBTC, USD, CNY, whatever}.
w4 13y ago
But they do have "bitcoin dimes and quarters," in the form of fractional bitcoins.
wlesieutre 13y ago
And my company will be huuuuge, once it captures 1/4 of the market of China.
- SwellJoe 13y ago
  Bitcoin isn't a company. It's not comparable to much that has existed before, actually. So, while I won't try to predict where BTC will end up, I think it's not a useful analogy to compare it to a company and discuss market share in those same terms.
  - astrodust 13y ago
    It is not going to eclipse gold in terms of importance. It won't even come within an order of magnitude.
    - SwellJoe 13y ago
      That's an assertion I've heard, mostly from goldbugs who have a vested interest in gold remaining high and going higher. But, I haven't heard any useful evidence to support the thesis.
      - astrodust 13y ago
        Seriously? Will the US and other major countries hold their reserves in Bitcoin? It's not goldbugs or small-time hoarders. There's literal tons of the stuff held in vaults around the world. This is just one vault: http://www.dailymail.co.uk/news/article-2247196/Pictured-Professor-Poliakoff-takes-TV-cameras-inside-Bank-Englands-gold-bullion-vault-197BILLION-precious-metal-stored.html http://www.dailymail.co.uk/news/article-2247196/Pictured-Pro... The total reserves are 31,000 tons of gold (http://en.wikipedia.org/wiki/Gold_reserve http://en.wikipedia.org/wiki/Gold_reserve) which at $35M works out to about $1 trillion. So if the sum of all Bitcoins is to be worth the same, then you'd need a per-Bitcoin price of $51,600 for all 21 million theoretical Bitcoins. I find it unlikely that price could be sustained.
VladRussian2 13y ago
>but if bitcoin is really un-hackable it may be un-hackable, yet not irreplaceable. One can imagine a government initiating a similar crypto-currency, controlling it through humongous server farms built somewhere where real estate and electricity is cheap, and accepting tax payments in that currency and blessing businesses to accept it as well.
- polarix 13y ago
  Yes, you're right. If people had trust in said government that such a currency would hold value, it would probably win.
  - VladRussian2 13y ago
    people just need to have trust that government would accept the tax payment in that currency and at that rate to the other, paper, currency if it is still around - very low bar of trust for a government to meet and it would provide strong bottom line value for a currency. Especially if some deflatory (or limited inflatory) machinery is algorithmically built-in (bitcoin-style) so the government couldn't "print" the money faster than some limit. Interesting variant would be a 2-tier system where government would accept only bitcoins "printed" by the government while allowing other bitcoins to be circulated as well. My main point here is that whatever technology achieves is ultimately made to serve government as well (or sometimes almost exclusively).
exit 13y ago
> the value of each bitcoin could be $100,000 or more, assuming it can attract 1/4 of the interest that gold what market capitalization of gold are you basing that estimate on?

by lmg643 13y ago

carlosdp 13y ago

There are smaller denominations. You can have .00000001 bitcoins, for example (it's 8 decimal places = 1 satoshi right?)

joezydeco 13y ago
Yes. More decimal places can also be added later on. If we really get to the point where 1BTC = USD100,000, I could see the decimal point shifting and rebase (e.g. 1BTC now = 100,000 new BTC)
- lcampbell 13y ago
  I hear a lot of people talking about the need to shift decimal points, but never really understood -- what's the benefit of this over just using SI prefixes? To me, it's clear how 1mBTC relates to 1BTC and 1µBTC. I think people underestimate consumers. Before Decimal Day (1971), 1 British pound was worth 20 shillings, and 1 shilling was 12 pence[1]. As confusing as it seems to me, apparently that worked for awhile. Likewise, I think consumers could deal with SI prefixes in a decimal system (rather than needing to redefine how much 1 BTC is). -- [1] http://en.wikipedia.org/wiki/Decimal_Day http://en.wikipedia.org/wiki/Decimal_Day
  - joezydeco 13y ago
    There is no benefit, it's just a technical possibility. The other possibility is that the eventual client app on your smartphone just works in femtoBTC and handles the UI however people choose {BTC, satoshis, femtoBTC, USD, CNY, whatever}.

w4 13y ago

But they do have "bitcoin dimes and quarters," in the form of fractional bitcoins.

wlesieutre 13y ago

And my company will be huuuuge, once it captures 1/4 of the market of China.

SwellJoe 13y ago
Bitcoin isn't a company. It's not comparable to much that has existed before, actually. So, while I won't try to predict where BTC will end up, I think it's not a useful analogy to compare it to a company and discuss market share in those same terms.
- astrodust 13y ago
  It is not going to eclipse gold in terms of importance. It won't even come within an order of magnitude.
  - SwellJoe 13y ago
    That's an assertion I've heard, mostly from goldbugs who have a vested interest in gold remaining high and going higher. But, I haven't heard any useful evidence to support the thesis.
    - astrodust 13y ago
      Seriously? Will the US and other major countries hold their reserves in Bitcoin? It's not goldbugs or small-time hoarders. There's literal tons of the stuff held in vaults around the world. This is just one vault: http://www.dailymail.co.uk/news/article-2247196/Pictured-Professor-Poliakoff-takes-TV-cameras-inside-Bank-Englands-gold-bullion-vault-197BILLION-precious-metal-stored.html http://www.dailymail.co.uk/news/article-2247196/Pictured-Pro... The total reserves are 31,000 tons of gold (http://en.wikipedia.org/wiki/Gold_reserve http://en.wikipedia.org/wiki/Gold_reserve) which at $35M works out to about $1 trillion. So if the sum of all Bitcoins is to be worth the same, then you'd need a per-Bitcoin price of $51,600 for all 21 million theoretical Bitcoins. I find it unlikely that price could be sustained.

VladRussian2 13y ago

>but if bitcoin is really un-hackable it may be un-hackable, yet not irreplaceable. One can imagine a government initiating a similar crypto-currency, controlling it through humongous server farms built somewhere where real estate and electricity is cheap, and accepting tax payments in that currency and blessing businesses to accept it as well.

polarix 13y ago
Yes, you're right. If people had trust in said government that such a currency would hold value, it would probably win.
- VladRussian2 13y ago
  people just need to have trust that government would accept the tax payment in that currency and at that rate to the other, paper, currency if it is still around - very low bar of trust for a government to meet and it would provide strong bottom line value for a currency. Especially if some deflatory (or limited inflatory) machinery is algorithmically built-in (bitcoin-style) so the government couldn't "print" the money faster than some limit. Interesting variant would be a 2-tier system where government would accept only bitcoins "printed" by the government while allowing other bitcoins to be circulated as well. My main point here is that whatever technology achieves is ultimately made to serve government as well (or sometimes almost exclusively).

exit 13y ago

> the value of each bitcoin could be $100,000 or more, assuming it can attract 1/4 of the interest that gold what market capitalization of gold are you basing that estimate on?