What happens to the price if OPEC starts pricing oil in bitcoins?

[Ducky1]

According to Marketwatch http://www.marketwatch.com/story/6-market-surprises-for-2014-2013-12-24 one of the 6 possible surprises for 2014 is bitcoin being used for pricing oil from OPEC. This is probably not very realistic, but who knows. Shall we speculate about the price in such a scenario?  

Opec prices oil in bitcoin

There has been speculation for months about whether bitcoins might be accepted as legal tender by a major developed nation, whether the Chinese will accept them, or whether big web retailers will take then instead of conventional currencies. But the big breakthrough for digital money is more likely to come from the oil cartel, OPEC.

For decades, oil has been priced in dollars but key member states such as Iran, Algeria or Angola are not particularly friendly to the United States, even if they are not quite as hostile as they once were. They have been making noises about switching the price of oil out of the American currency for years, but have never quite managed to agree on alternative.

The euro was a runner for a while, until it started to implode. But what about bitcoins? It is a global currency, with no central bank trashing its value, and it might well prove a better store of value for countries that know their oil won’t last forever. If any single move establishes bitcoin as a serious monetary rival to the dollar, that will be it — and there will be more than a few wry smiles in Tehran over that.

[zimmah]

The OPEC has tried (but failed) many times to price oil in anything other than dollars.

Gaddafi tried to introduce the dinar (a gold coin) as the only acceptable currency for oil (basically trading gold for oil, which is a fair deal in my opinion). America obviously didn't like it and assasinated Gaddafi.

You have to consider though that the only thing giving the dollar value right now is the fact that it's accepted as the most important global reserve currency, mostly because it's the only currency the OPEC allows. (which is not entirely by choice, as the USA kinda blackmails them with their entire army).

This is also the true reason behind almost all the wars in the middle east. (including WW1 and WW2 and the gulf wars (last one is kinda obvious), which were for a large part fought in the middle east and africa, not in europe!)

So, america will invade any OPEC countries that will accept bitcoin as a payment method. However, China and Russia are protecting Iran, which is one of the last remaining countries left that does not sell oil solely for dollars (or attempts to). And attacking Iran will likely result in nuclear warfare, something even America does not want.

Pricing oil in bitcoin, is therefore unlikely to happen anytime soon, because they are afraid for the results. However it could happen as soon as the dollar loses the petrodollar status (which might be sooner than you think). Because once america loses the petrodollar status, there will already be a war anyway, and pricing oil in bitcoin may be the most politically neutral option. Not a single country will have the advantage america had, to print unlimited amounts of dollars and buy everything from every country with monopoly money.

Pricing oil in bitcoin will likely not be the cause of the coming wars, but it will be a logical next step once the wars are already escalating, to prevent any country to have the advantage of unlimited money printing. If any sole currency that is tied to a single country or group of countries is the only acceptable currency for oil, the issuer of that money will have practically unlimited wealth. (but will need a huge army to keep that advantage).

It will be interesting to see how 2014 will develop, but we're likely to see a lot of political tension in the OPEC countries and between China & Russia and America.

http://www.youtube.com/watch?v=HP7L8bw5QF4
http://www.youtube.com/watch?v=8ZK5gRLJ9h0

[MatTheCat]

What happens to the price if OPEC starts pricing oil in bitcoins?

WW3, which is actually one of the very last reasons why OPEC wouldnt ever do such a mad crazy suicidal thing, but a good reason nonetheless.

Hope I helped clear that up for you.

[Wilhelm]

So if oil is priced in bitcoin the result will be ...  

[MatTheCat]

So if oil is priced in bitcoin the result will be ...  

If you cant figure out why a certain Super-power would strongly object to the pricing of oil in any other currency except the USD, and don't understand what the whole Middle East endless war zone thing is about...then....then.... 

.....then....... nothing that comes out your mouth regarding economics or politics is worth shit, I am afraid.

[Notanon]

They could also easily start pricing oil in the Chinese Yuan as an alternative.

[MatTheCat]

They could also easily start pricing oil in the Chinese Yuan as an alternative.

Another, probably even faster route to WW3, as i am sure you are aware.

[stompix]

They could also easily start pricing oil in the Chinese Yuan as an alternative.

Alternative? To what?
How the hell is that an alternative to $ when the Chinese are pegging their yuan to other currencies including the $.

[Manna]

They could also easily start pricing oil in the Chinese Yuan as an alternative.

Also Russia could price their gas in rubel, but they don´t do that

[the_sunship]

I'm an American and I have to tell you that I don't think the country would be willing to support a war at this point. Syria was the first step towards sanity and I think we're going to have more sanity (ie diplomacy) as time goes on. I may be a Pollyanna, but the hawks had their day and the public is tired of seeing the Government try to fix things by breaking them (aka bomb countries into submission). Now, if we could just get the American public to demand and end to the covert wars and espionage, that would be really something.

I do think America is willing to work with bitcoin at this point. It's new, exciting, and saves money - America loves all of that. If bitcoin were floated as an alternative to the dollar for barrels of oil, I don't think it would be dismissed outright.

The more discussion about this as a possibility, the better for bitcoin anyway.  

[MatTheCat]

This whole topic is totally inane.

What would happen if Martians invaded and stipulated that humanity paid taxes to them in Bitcoin!?

ZOMFG, I AM GONNA BE RICH!!!!

I cant wait!

I'm an American and I have to tell you that I don't think the country would be willing to support a war at this point.

What makes you think that public opinion is a critical factor in deciding whether to take a nation to war or not?

In Britain the vast majority of the population was against the Iraq war, over 1 million protested on the streets against it, cabinet ministers resigned, 'expert witnesses' decided to commit suicide, but what happened.

We went to fkn war!

[ElectricMucus]

OPEC is a cartel, which came partly into being to support the petro-dollar. OPEC and "free market" is a contradiction, as well as is anything about trading oil in other than dollars. OPEC countries have control over US imperialism and it's in their interest that it stays that way.

So no it will never happen, it can't. Now if you rephrase the question, can the petro-dollar become less relevant? Yes, eventually it can, watch out if there is any country other than the US which has more than two aircraft carriers. The US has 10 Nimitz Class Supercarriers alone...

[Ducky1]

Some interesting replies, from WW3 to not impossible. I'm thinking, why would it be so bad for USA if $ disappeared? After all, the dept would also disappear (or am I missing something?) The bottomless pit of depth that they are into now can not possibly be payed back anytime soon, if at all. I'm actually thinking it would be worse for China if $ lost its value because they actually own some positive amount of it. I'm living in a country with a large budget surplus (Norway) so it would not apply so much to us, although the bitcoin value would  surge against our own currency.

But none of you have speculated about price changes for bitcoin. How much market cap would be needed to do oil trading in bitcoin?

[Notanon]

They could also easily start pricing oil in the Chinese Yuan as an alternative.

Alternative? To what?
How the hell is that an alternative to $ when the Chinese are pegging their yuan to other currencies including the $.

Considering the debt ceiling in the US is dangerously close to being breached, I don't think the Chinese will want to peg their currency to the US dollar for much longer and might start to unpeg it from the dollar and other currencies in the near future, particularly now that their economy is in a fairly strong position to do so. Not only that, but they do have a significant presence in Africa by providing funds for infrastructure such as roads and working to help develop some industries, so it really wouldn't be too much of a stretch for any African countries with significant oil fields that the Chinese are involved with to directly trade oil for the yuan without needing to get the US dollar involved in any way, shape or form, particularly if they are not part of OPEC or decide to break away from them if the value of the US dollar tanks due to the debt ceiling being breached. After all, motor vehicle use in China is on the rise due to their burgeoning middle-class and a decent deal for relatively cheap oil in exchange for industrial and infrastructure funding and development would be a good case of scratch-my-back-and-I'll-scratch-yours.

[Ducky1]

My fast calculation:

World oil consumption: 90 mill barrels/day
Given a price of 100$/barrel, thats $9 billion /day or $3,285 trillion / year. Lets imagine that 50% of all bitcoins are involved in oil trade, and all are mined, that gives 10.5 mill bitcoins for oil, and a price of $312857 / bitcoin if one years worth is enough. (any depreciation of dollar value not included)

I would agree if anyone suggest that these are meaningless numbers, but this is speculation forum after all.

[adamstgBit]

if oil is priced in BTC its over.

everything is priced in BTC the next day

[GigaCoin]

According to Marketwatch http://www.marketwatch.com/story/6-market-surprises-for-2014-2013-12-24 one of the 6 possible surprises for 2014 is bitcoin being used for pricing oil from OPEC. This is probably not very realistic, but who knows. Shall we speculate about the price in such a scenario?  

Opec prices oil in bitcoin

There has been speculation for months about whether bitcoins might be accepted as legal tender by a major developed nation, whether the Chinese will accept them, or whether big web retailers will take then instead of conventional currencies. But the big breakthrough for digital money is more likely to come from the oil cartel, OPEC.

For decades, oil has been priced in dollars but key member states such as Iran, Algeria or Angola are not particularly friendly to the United States, even if they are not quite as hostile as they once were. They have been making noises about switching the price of oil out of the American currency for years, but have never quite managed to agree on alternative.

The euro was a runner for a while, until it started to implode. But what about bitcoins? It is a global currency, with no central bank trashing its value, and it might well prove a better store of value for countries that know their oil won’t last forever. If any single move establishes bitcoin as a serious monetary rival to the dollar, that will be it — and there will be more than a few wry smiles in Tehran over that.

not gonna happen.

War and Oil are powered by USD and will remain so.