Like China has any sort of economy...or people...

 

Divided by 6.

A bitmunchies purchased exchanged for dollars still has to go through the exchange which is what is factored in here.

(7200 blocks per day * 4.7) / 6 = $5640

Or just: 7200 / 6:
1200 Bitcoins per day.

Ok, my numbers are not exact mainly because I am lazy and do not wish to waste my time finding the exact numbers.

I have taken the calculations from this thread for this:
https://bitcointalk.org/index.php?topic=45882.0

I keep seeing how Bitcoin needs over a million USD per month to maintain the current price. Running the numbers based on the amount of Bitcoins created times the current price that would seem like simple math.

In fact, it is not.

Only those who are trading Bitcoin are affecting the price in relation to the various currencies. So everyone else is just using Bitcoin as a currency like it was meant to be.

Doing a broad assumption I am throwing out the figure that there are 1 million Bitcoins in the trade exchanges. This is based on MtGox having 432k BTC back in June and it was estimated that they have around 600k BTC now. And I figured the other exchanges may add up to at most around 400k BTC.

So that makes 1,000,000 BTC being traded at the exchanges. This is out of over 6,000,000 BTC in existence.

This means that 1 million BTC that are traded affect the price of the other 5 million in terms of a currency.

So, taking the figure from the other thread that $1 million needs to come into the economy each month and divide it by the portion that is actually being traded (1/6th) and you get $166k. Divide that by 30 and you get $5,500 per day.

Only 1200 new Bitcoins need to be purchased daily to maintain the current price levels. This is why when we get a sudden influx of people buying BTC the price swings so much.

Over the next year we only need 365 people to invest $5,500 each to maintain the current price. And then the rate gets cut in half and it will be down to $2750 per day. That is not much inflation for such a growing community.

If someone wants to tweak my numbers with more accurate findings then I will update the OP.

Your math has helped me to understand that we do not need $1 million per month to maintain the current price.

As the traders are just a fraction of the total Bitcoin market so the price can be maintained at a fraction of that cost.

So...if all of the miners switch to a new client...

would that mean that I could mine on the existing client and get all of the booty for myself on a network that is used by everyone else?

So at its peak the Bitcoin economy had $210,000,000 worth of coins.

And you are saying that we have lost $210,000,000 since then.

So the entire Bitcoin economy is now worth $0?

Would be easier to just print up a bunch of Bitcoin cards with information on them.

I usually pay about $90 for 5000 cards.

This would be good for just about any event. I used to hand out Ron Paul cards with info at events.

And you can get them easier.

for now...

Even if we convince a retailer to accept Bitcoins, it will be even harder to convince people with Bitcoins to actually spend them.

I have not seen the big money person throwing the price up and down. That was usually when people would jump in or out with a lot of trades.

If you have 3 apples worth $1 each you have $3 worth of apples.

If you have 300 apples worth $.01 each you still have $3 worth of apples.

You do not say that you have lost $297 since apples were worth $1.

Going beyond your $10,000 idea...

How to increase the price of Bitcoin.

Get a conglomeration of several wealthy people with enough money to put into a pot which makes up several hundred thousand to a million dollars.

Have a contract written up where each person follows the strategy.

With the price currently at $4.97 I would have all people in the group buy to $5(which would not take much) and put up a true bid wall at $5.

I would then let the Bitcoin community know that the price will never go below $5 unless someone is able to break the million dollar wall.

Each member would drop and replace their bid periodically for verification that they are still in.

As people start to hit the $5 wall, the person who is being sold the Bitcoins will be allowed to sell the Bitcoins at some price higher than $5 (say, $5.50).

The price will fluctuate above $5 and the wall holders will be able to gain on higher values as the wall is attacked.

Then, periodically, the wall will be moved up. 50 cents at random times.

Each time doing the same thing. Holding the wall.

The price of Bitcoin would become fairly stable and it may rise faster with the confidence that it will never crash and will constantly gain value. Bringing in more investors.

The limits are there for your protection.

So nobody can hack your password and steal more than the limit in one day. The hacker that got in back in June got away with $2,000 as opposed to much more.

Had an idea for a shop similar to http://w00t.com that sells one thing a day. But I figured I would add the twist and have it for the same price in Bitcoins each day.

Like 1 bitcoin or 2 bitcoins or 10 bitcoins. I settled on the idea of 2 bitcoins because the term "2 bits" is fairly known and catchy.

I did find: 2bitshop.com

So my plan will be to sell a new item each day that only costs "2 bits", whether it is worth $10 today or as the price goes up, for $200+ down the road.

When people want to know what a Bitcoin can buy or what it is worth...they will, on a daily basis, know what 2 Bitcoins is worth. And that will be at http://www.2bitshop.com.

I actually just went to google maps and drilled down to the area I am interested in and did a search for "rental" and "hotel". I found plenty and I could track them down to which was closest to the beach and distance to town etc.

I am looking at the Puerto Viejo area. They say it is more laid back and a lot cheaper than the Pacific side.

I have been wracking my brain on how a decentralized exchange would work in a similar way to Bitcoin.

The high level concept is easy. Have an amount of cash in the system and an amount of Bitcoins in the system, people put in and take out at different rates which gets propagated through the system to keep track of whom has what.

But the hardest part, I believe, is the part about putting money in and taking money out. Unless each user or each "miner" is going to be its own bank and allow physical cash deposits and withdraws, there needs to be a separate hook into regular banks.

I was checking out this site: http://www.neteller.com
They offer a money transfer service via several deposit methods and several withdraw methods including sending you a prepaid debit card.

The fees are what I am not so clear on. It says that a transfer of dollars is 1.9% which is not worth it since you can exchange your money to Bitcoin right now for less than .5%. But they did have a "merchant site" transfers for free.

So, in theory, each "miner" could be a merchant site. They get the cash paid to them, then return Bitcoins to the buyer. Or the buyer pays Bitcoins and they send them cash. The miner could get a cut of the transaction (.1% or so).


The way I saw the distributed program working would be:
Someone wants to mine: They set up the program with a deposit of either Bitcoins or money. Once they set it up, the system takes the amount deposited and distributes it evenly based on total amount in the system. So that if Bitcoin is worth $5 and you put in 10 Bitcoin, it would even you out so that you have $25 in your cash account and 5 Bitcoin in your BTC account. As more money is brought into the system, the ratio would adjust to where the "price" would go up for Bitcoin. If more Bitcoin are brought in, the ratio would favor having dollars.

The means of depositing and withdrawing could be expanded as the system evolves. But the underlying system of exchange could continue on.

Bitcoin is more than just a currency.

It is a Google trends predictor!

I am heading down to Costa Rica for a vacation and have several vacation rental places lined up. But I figured I would just contact
all of them and see if they are willing to accept Bitcoins as payment. I know that none of them probably do right now but at least
they can check it out and possibly start accepting them.

An international tourist destination would be a perfect place to accept Bitcoins. You avoid the exchange rates and can spend several
hundred dollars with just your phone or laptop.

True, I should just go to the ICANN's competitor and buy there.

Thanks for the advice.

It means that just before Greece crashes and burns they will implement a few stores that use Bitcoins then blame it for the financial collapse.

So "overlay currency" translates to "scapegoat".

j/k