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That's still astronomically low compared to non-bullshit money. The US economy goes through its M1 money supply 7 times per quarter, or over twice per month [0]

That's still astronomically low compared to non-bullshit money. The US economy goes through its M1 money supply 7 times per quarter, or over twice per month [0]. If Bitcoin had that ratio, it would now be running $30 billion of meaningful transactions per month, not $30 million. [0] http://research.stlouisfed.org/fred2/series/M1V http://research.stlouisfed.org/fred2/series/M1V [Ctrl-F keyword: "velocity of money"]

saalweachter 13y ago
Bitcoin actually isn't doing too bad, according to blockchain.info. They estimated a transaction volume of 82,659.87740705 BTC for the previous 24 hour period. Multiply that by 365 and divide by 12.5 million, and you get 2.4x. 2.4x is less than half 7x, but it really ain't bad. Of course, if you take the same stats, and divide the money which went to miners -- 4,811.59892633 BTC -- by the transaction volume, you get an effective transaction fee of 5.8% for that same period... EDIT: Whoops, mixed up quarters and years. BTC goes through its money supply 0.6x per quarter. I'm not sure if that's good -- "only" an order a magnitude off from USD -- or bad -- a "full" order of magnitude off from USD.
- throwaway_yy2Di 13y ago
  Yes, but what fraction of that is "economic" stuff that goes into a GDP? With cryptocurrency you have clearly non-economic transactions that get registered in the global blockchain, like someone reorganizing their wallet internally, or a group shuffling bitcoins in circles as a money laundering method. Bitcoin transaction volume could be orders of magnitude higher than the Bitcoin "GDP'; it's not a measurement of it. "They estimated a transaction volume of 82,659.87740705 BTC for the previous 24 hour period. Multiply that by 365 and divide by 12.5 million, and you get 2.4x. 2.4x is less than half 7x, but it really ain't bad." I think that's off by a factor of four: the Fed uses financial quarters (3 months) as the time interval.
mrb 13y ago
You don't understand Bitcoin. $30 million/month is just the Bitpay figure. In reality, there are many more payment processors other than Bitpay, and many economic transactions happen outside of payment processor networks. It is hard to estimate money velocity in Bitcoin: http://blockchain.info/charts/estimated-transaction-volume-usd http://blockchain.info/charts/estimated-transaction-volume-u... shows approximately $3 billion/month ($100 million/day) but this is an upper bound, because some of these transactions are just people moving coins around their wallets. The real figure is probably $100+ million/month to give an order of magnitude. And $100 million/month is not bad at all considering that it started from zero merely five years ago!
- throwaway_yy2Di 13y ago
  "The real figure is probably $100+ million/month to give an order of magnitude." So we are completely in agreement on the numbers. I used $30 million as my anchor point: the same power of 10. Either way it's 2.5-3 orders of magnitude from $30 billion (B), which is what you'd predict if money was moving around as fluidly as the rest of the economy. Emphasis: you're fiddling with a factor of 3, within an uncertainty of a factor of 10 and a shortfall of a factor of 1,000.

saalweachter 13y ago

Bitcoin actually isn't doing too bad, according to blockchain.info. They estimated a transaction volume of 82,659.87740705 BTC for the previous 24 hour period. Multiply that by 365 and divide by 12.5 million, and you get 2.4x. 2.4x is less than half 7x, but it really ain't bad. Of course, if you take the same stats, and divide the money which went to miners -- 4,811.59892633 BTC -- by the transaction volume, you get an effective transaction fee of 5.8% for that same period... EDIT: Whoops, mixed up quarters and years. BTC goes through its money supply 0.6x per quarter. I'm not sure if that's good -- "only" an order a magnitude off from USD -- or bad -- a "full" order of magnitude off from USD.

throwaway_yy2Di 13y ago
Yes, but what fraction of that is "economic" stuff that goes into a GDP? With cryptocurrency you have clearly non-economic transactions that get registered in the global blockchain, like someone reorganizing their wallet internally, or a group shuffling bitcoins in circles as a money laundering method. Bitcoin transaction volume could be orders of magnitude higher than the Bitcoin "GDP'; it's not a measurement of it. "They estimated a transaction volume of 82,659.87740705 BTC for the previous 24 hour period. Multiply that by 365 and divide by 12.5 million, and you get 2.4x. 2.4x is less than half 7x, but it really ain't bad." I think that's off by a factor of four: the Fed uses financial quarters (3 months) as the time interval.

mrb 13y ago

You don't understand Bitcoin. $30 million/month is just the Bitpay figure. In reality, there are many more payment processors other than Bitpay, and many economic transactions happen outside of payment processor networks. It is hard to estimate money velocity in Bitcoin: http://blockchain.info/charts/estimated-transaction-volume-usd http://blockchain.info/charts/estimated-transaction-volume-u... shows approximately $3 billion/month ($100 million/day) but this is an upper bound, because some of these transactions are just people moving coins around their wallets. The real figure is probably $100+ million/month to give an order of magnitude. And $100 million/month is not bad at all considering that it started from zero merely five years ago!

throwaway_yy2Di 13y ago
"The real figure is probably $100+ million/month to give an order of magnitude." So we are completely in agreement on the numbers. I used $30 million as my anchor point: the same power of 10. Either way it's 2.5-3 orders of magnitude from $30 billion (B), which is what you'd predict if money was moving around as fluidly as the rest of the economy. Emphasis: you're fiddling with a factor of 3, within an uncertainty of a factor of 10 and a shortfall of a factor of 1,000.