Bitcoin Forum

I love trying to figure out how much capital could eventually move into bitcoin. Here's an infographic I made to try to describe the potential:

http://img6.imageshack.us/img6/7319/028trillions.png

The infographic is part of a larger presentation on the potential of bitcoin (http://bitcoinmedia.com/using-memes-to-explain-bitcoin/) which I made.

Excellent article, thanks.

Don't post shit like that or I might turn more bullish.

This perspective is not new to me. However I like the doodle :D

Another bullish signal: close to all times high in number of transactions excluding top 100 https://blockchain.info/charts/n-transactions-excluding-popular

https://i.imgur.com/n3mRc.png

What caused this?  ASIC pre orders?

This is great stuff.  Thanks for making it.

Lots of people are discussing this on reddit: http://www.reddit.com/r/Bitcoin/comments/vncz4/infographic_why_the_sky_is_the_limit_on_bitcoin/

I dont think so, 6 thusands preorders in one day? Bit much.


Edit: And today we broke ATH!

Many of those preorders would involve multiple transactions as people move funds from investments to their wallets before spending them.  Also, there was about 50,000 BTC worth of preorders the first day, so while it is unlikely it accounts for all 6,000 transactions, it certainly could put a dent in that figure.

People are so much nicer and more intelligent here than on Reddit. I'm not sure if its because there are less 12-year-olds here, or just that people on this forum have already done lots of thinking on these topics.

It seems like reddit reaches a very wide audience, and this forum reaches a very smart audience. :)

well, you cant even post here till you are white listed. Filters a lot of garbage out. Swing by the newbies forum sometime...

You have to remember that 18% of us have PhD's or Masters.

That's awesome! What is your source for that number? Did somebody do a poll?

We are PhD's and Masters; we are the source. Duh.  ::)

Yeah, there was a poll with 200+ respondents.  Don't know where though, you'll have to search for it.

Looks like the numbers have changed somewhat, but still a pretty well-educated crowd. Also, with reputation mattering so much here, people are a lot nicer to each other.

It would be amusing to see the same education poll taken of bitcoin redditors :)

Is SatoshiDice having a big effect on the number of transactions?

While there are some very smart people posting on this board I have considered more than once that this site is trafficked by a large number of total morons.

Well, I doubt anybody would make the case that ALL that money is moving into bitcoin. It's more of an exercise in showing how much money is floating around out there, and how tiny the value of bitcoins are in comparison. How much of that money will actually move into bitcoin is an exercise for the reader!


There are some, to be sure. It's just that the ratio is noticeably different from other places.

The price of bitcoin has and always will be speculative... The sky is the limit but so is the floor... :P

A very handy (because the math is simple) way to think about bitcoin's huge potential upside is to focus on the $20 trillion in the cash and checking account bubbles (which, as I understand it, gives you the world's M1 money supply).  There will be roughly 20 million bitcoins in circulation when they're all released. So the trick is to figure out what percentage of the value being held in the current M1 money supply will eventually move into bitcoin.  If you think it's only 0.001% (1/100,000th) that gets you a price per bitcoin of $10.

0.01% - $100 / BTC
0.1% - $1,000 / BTC
1% - $10,000 / BTC
10% - $100,000 / BTC
100% - $1,000,000 / BTC

I'm hoping for a hundred percent, but I'd settle for 10.  ;)

whats your formula

$20trillion * 0.0001 / 21million?

Yes but most of us can touch the floor not much of us can "touch" the sky ;D

This is one misconception I keep running into, and I'm not sure what makes people think that my proposal involves losing decentralization. Decentralization is key to the success of bitcoin, and to the success of anything built on top of bitcoin.

While I would like to see a "trusted entity" with a financial incentive to work on adding features to make the protocol extensions more valuable, perhaps I haven't emphasized enough that the trusted entity would NOT control the new features. They would still be open source and decentralized.

The M1 money supply a big deal. However, the world's money supply is dwarfed by all the speculation that goes on with derivatives, stocks, options, commodities, futures, etc. I want to attract THAT money into bitcoin, if only because there are a lot fewer people that need to be convinced (how many people have a checking account versus how many people have a brokerage account for trading futures, options, or forex).

The key to understand here is that fractional reserve banking can also be used for Bitcoin. I agree with the M1 analysis because Bitcoins themselves will likely replace cash or a chequing account but derivatives no way. We would have derivatives based on Bitcoin and the resulting Bitcoin money supply (M2, M3 etc) would be be much greater than 21,000,000 BTC.

I believe that derivatives based on bitcoin will draw more money into bitcoin than even if all the checking accounts and cash in the world moved into bitcoin. It can't be proven though until someone tries it :)

If you are able to leverage a multi-sig escrow against an Open Transaction, you should have very secure and transparent assets. I'm not sure how to make them fungible unless they use timed transactions that are then re-scripted at maturity and possibly sold.

I've made the decision personally to invest more in bitcoin. I'm wary of upcoming events that could have large impacts on every traded currency in the world. Bitcoin was never just a means for me to turn one currency into another, either.

I've been spending some BTC on things that make sense, and building a good reserve as well. Even if the smallest fraction flows into BTC from the sources you've mentioned, it could be quite interesting. Not just the external dollar valuations, but the network would benefit from more participants using BTC.

I was talking to someone about this the other day, (scarcity of supply built into the system) and said "maybe one day we'll look at someone buying a WHOLE bitcoin as the luckiest bastard on the planet."

Wouldn't that be something - all of us used to 0.0000<something> transactions instead of whole numbers and fractions.

If only...

Where does this: http://www.bbc.co.uk/news/business-18944097  21 Trillion fit in the infographic?

Rather, one day it will not be said "buy a bitcoin". What would you buy it with?

Good gravy!

His numbers are almost certainly high, but it does seem likely that a lot of offshore banking will eventually go to bitcoin once your average embezzler feels confident that bitcoins will be stable and secure enough to use.

I would imagine that estimates of offshore banking goes into estimates of the money supply, which I used to make my graph. Maybe under "savings accounts" . . .

I often wonder what would happen to those vast stores of fiat wealth if there was serious crisis to the faith behind the currencies. There probably aren't many people hoarding Euros anymore, except those who are trying to keep the Euro intact. But the dollar is another story. The Fed has a unique position in that it can print money without significantly affecting inflation because a lot of it flows out to the big power players and those looking for a "safe" haven. But what if the situation changed and enough individuals holding onto $B stockpiles decided to store their wealth somewhere other than fiat...

Would it go into stocks, PMs, real estate, etc? There are parts of the US where $1B could theoretically buy all the land in a small town or even county. Inflation in prices (deflation in the buying value of a dollar) could lead to more dumping of dollars. Perhaps there are a lot of players just waiting for the bottom of the current depression to buy back in (buy low, sell high).