So, I was checking out some info on Wikipedia, and it says that about 5.3 billion troy ounces of gold have been mined throughout history. Right now, gold is trading for around $1600 per troy ounce, which puts the total market value of all mined gold at about $8.5 trillion. Now, the demand for gold and its price aren’t just tied to how useful it is as money; it’s also used for stuff like jewelry and electronics. But let’s say, just for the sake of argument, that only 25% of gold’s price comes from its role as money. That gives us a total “money value” for gold of roughly $2 trillion.
Now, let’s assume all 21 million bitcoins have been mined. If we take the current price of $6.40, that puts the total value of all bitcoins at $134 million. That's way less than $2 trillion. The thing is, bitcoin is often called a "better" form of money compared to gold based on its qualities like being divisible, fungible, durable, portable, identifiable, and scarce. Still, if we go with the earlier assumptions, and say bitcoins were worth just 1/1000th of the value of gold considered as money, they’d be valued at $2 billion total, which means about $95 per BTC. If they matched the monetary value of gold, they’d be at $95,000 each. And since bitcoins are at least 10 times better than gold, they should really be valued at no less than $950,000 each. But here I am, still living with my parents and driving an '89 Geo Metro. So that makes me wonder:
1) Why haven’t I struck it rich yet?
2) An
you must be good at math.
you lost me after trillions
hear this theory of mine
rich people get richer. and you will find out why we aren't "filthy rich yet"
Yeah, that's kinda what I figured, but like I said, I wanted to be conservative. I'm not one for making outlandish claims. And if I'd suggested that each bitcoin should be worth $3.5 million instead of $950,000, some people might have dismissed my post as crazy.
A lot of people do. It is the kernel in their Android devices and therefore the dominant smart-phone operating system in sales. If you mean GNU/Linux as a desktop operating system then the figure is 1%. Now Bitcoin has a very long way to go in order to match GNU/Linux as a desktop operating system in market share.
1% of all gold 85 Billion USD
1% of world M1 money supply (cash / chequing accounts) 200 Billion USD http://news.goldseek.com/GoldSeek/1231778551.php
The combined valuation speculation / protection of value (gold) and medium of exchange (M1) for a 1% market share is 285 Billion USD or based on 21 million Bitcoin maximum 13,600 USD per BTC. So my insane pie in the sky valuation for Bitcoin is based on a market share equivalent to that of GNU/Linux on the desktop.
The core group of bitcoin has decided to go for the long con. That's why.
Bitcoin will survive it though.
It's the birth, death and rebirth of an online community, happens every time.
I haven't received my bitcoin magazine yet.
Nuff Said.
Just make a site called Bitconica, and go from there...
Oh, dont forget to leave doors open so you can be "hacked"
After, denounce bitcoin, and move on to greener pastures..
If its good enough for Bruce Wagner...
I agree with you here. A lot of the gold bugs see conspiracies of manipulation and price suppression on the paper gold market. So they advocate taking possession of the physical gold to put pressure on the paper market. But with bitcoin its simple and cheap to take possession of the actual coins - just withdraw the bitcoins.
Also, the global economy is in a deflationary contraction phase of the cycle. Real estate falling, commodities, gold and silver prices dropping, stocks probably topped and trending down, etc. But bitcoin still holding up. If/when the shit hits the fan, or global credit starts expanding again, and inflation returns to global paper fiat, I could see bitcoin rising much faster (faster than gold even) in such an environment.
Of course, that depends on there being a strong bitcoin economy, a reliable network of trustworthy exchanges and financial services. Some thriving commercial services could only help (silk road is rumoured to have a revenue of some 400k+ btc stored at an address suspected to be for their coin-tumbler).
As long as we have such an ecology, the price/value will continue to flourish. Its been two months for you, but only six months since the price reversal from $2 after the bubble. You don't see the full consequences of a disruptive revolution overnight (Falkvinge predicts 10 years or 2019 for bitcoin, based on other disruptive technologies in his interview in the magazine). Give it two years, or more..
I'm a super bull, but give it a few months/years. Information takes time to spread.
I don't recommend investing money that you need for the next 2 years. Ideally 5 years.
I do think we'll see a huge rise soon, but I'm not betting anything on it ... just buy and hold, don't fudge.
Ha, yeah I was serious (mostly). The problem is I go back and forth. Bitcoin really DOES seem like it has the potential to be revolutionary and MASSIVELY successful. And I sometimes think I'm a genius for understanding its implications earlier than most. But then I remember that I'm not that smart. And I haven't exactly won over the friends and family I've tried to convert. ("Dude, you've got to drop the bitcoin sh*t. Seriously, I don't care.") And then I wonder if I'm not just a moron who spent several grand on "Mario money" (my wife's preferred term) that will soon be worthless. I guess we'll find out.