Bitcoin Forum

I was looking at relationships between the dollar value and bitcoin value, and had an interesting thought and wanted to share it.

If you get the total value of the worlds money (as dollars) and divide it by the worlds population, how much of a share of money would everyone have?
Then, if you got the cost of a can of Coke how many Cokes could everyone buy?
I know that the value would be much different if everyone in the world had the same exact share, but using this theory I wanted to compare it to bitcoin.
Using maths to do an almost 'reverse' of the calculation, I wondered how many bitcoin would be needed to buy a Coke can (assuming that a can would be $1 and that bitcoin had the same value as the dollar)

Now I know this may seem a silly concept, but it seems to make sense to me as a fair (but not exactly 'value' realistic) comparison.

After some research I came up with figures that were enough to satisfy me to begin the calculation. I will write it below and provide sources:

The Population of the world now is about 7.21 billion
The total amount of dollars in the world is about $10.5 trillion. (USD. I'm not 100% sure what this figure includes exactly. See the source below.)
If you divide that between everyone equally, that would be
10,500,000,000,000   /   7,210,000,000    =    $1,456.31 each person
so going with a Coke can = $1, that's 1456.31 cans each.

If you use the same population as now and swap bitcoin with dollars then (with 21 million bitcoin limit)
21,000,000    /    7,210,000,000    =    BTC 0.0029126 each person (to 5 significant figures)
Now sticking with 1456.31 cans each, you divide the BTC/per person to get the 'per can' value
0.0029126    /    1456.31    =    0.000002 (5 significant figures)
Since 1 Satoshi = 0.00000001 BTC then a can of Coke would be 200 Satoshis

Ok so obviously this is only if you were to SWAP dollars for bitcoin at the dollars current value, and this isn't how it would play out in real life - but maybe this is how it will end up when the dust settles?

If it did turn out that 200 Satoshis was the same as a can of Coke, then 1 bitcoin would be about $500,000 USD.
(1 BTC    /    200 Satoshis    =    500,000)


Another thing is that by the time we get to 21 million bitcoins the population will have increased
to an estimated 8,850,045,889
which gives 0.002372869052137 bitcoin per person.
divide by 1186.4345 (new 'per person' value assuming the amount of dollars in the world remains the same, which it wont)
then you still end up with 200 Satoshis for a can (5 significant figures)



Thoughts? 
Maybe a donation? 18kNCNAoexsJ12d4Vc2cgKVVEgCMVC77GF   (BTC)
lol


Litecoin would be 4 times as much (800 'Satoshi' equivalent in Litecoins). If a cryptocurrency was to hold the same value as the dollar I think it would need to be roughly 100,000 times more 'currency max'.

If the value did end up as high as 200 Satoshi equals a dollar how could anyone expect to transfer funds to purchase $10 worth of something?
My theory is that bitcoins would then only be for large value transactions.
Who knows.

P.S I'm a bitcoin n00b. Bought my first ever 0.1 of a bitcoin last week for £50. Maybe a waste of money, only time will tell.




Sources:
http://www.worldometers.info/world-population/
http://money.howstuffworks.com/how-much-money-is-in-the-world.htm
http://www.worldometers.info/world-population/

Nice first post!

That kind of reasoning is why some people think bitcoins are still massively undervalued. It suggests each bitcoin will be worth around 5 million dollars.

Who knows. I think it is too late to kill Bitcoin because the technology is open-source and free.
If you do the math 21 mil Bitcoin cannot satisfy the masses at this price. If the government embrace it and it goes main stream, the only way is up.
Just have patience and wait 1-5 years. Mass adoption will take some time, nothing happens overnight.

Also the trend is bullish since we still have the chinese on our side ;)

So yeah, hope I will buy a coca-cola with 1 satoshi ;)

Personally I would not pay 200 Satoshi at current market value for a can of Coca Cola; having said that, the OP's analysis is very much in the right ball park.

Edit: I would also not pay the equivalent of 200 Satoshi in a fiat currency, even one in hyper-inflation, for a can of Coca Cola.  

Why are these calculations always done with M0, or M0 + M1 only?

If we are being honest my credit card, or line of credit buys a can of coke the same as m0/m1.

Why leave credit out of the calculations?

This is a valid point. The argument for using only M0 is that there is the same degree of fractional reserve banking with BTC than say with USD. I would argue that this is not the case and that the M0 in BTC, actual BTC created, should actually be compared to M1 or M1+part of M2 in say USD. 

theres way more than 10 trillion dollars out there, try 1000T

your only looking at spending cash sort of money.

BTC/PeerCoin is looking to the store of wealth, backbone, appreciating assets. Thats where most of the value is going to come from