Very good point mtgox etc represent also many users but is that really off blockchain because whenever you transfer btc to an exchange you do create a btc address that you also send to. Confused here about that.
Every time a transaction corresponds to bitcoin coming *into* the exchange, or *leaving* the exchange, sure.
But a huge part of the everyday trading, I'm sure, consists of BTC and USD just trading back and forth. And for those trades, to my knowledge, the exchanges don't creat new transactions -- they just move around the traded bitcoins between their customers in their internal balance sheets, but the actual btc are held in a combination of a 'hot' wallet and 'cold' wallet of the exchange. Others can correct me if I'm wrong about that.
Thanks for sharing your thoughts, 50k seems too low for me too. 1 million is possible though that would be already a serious penetration considering that's 1 in 6000 people in the world that own bitcoins. I don't think that's the case for Africa or South America or Asia. It could be the case for North America and Europe but it should in fact be 1 in 1000 in North America and Europe just to balance out the rest of the world. That seems possible though.
Yes. I wanted to give a range that I feel comfortable is really inclusive of the actual number, so I picked a rather low and a rather high number.
Still, I'm not completely sure if 1 million is really so completely off target. Sourceforge registered ~3.5 M client downloads since the beginning of time.
Sure, quite a few of them are duplicate downloads, and not everyone who downloaded the client actually owns bitcoin. Then again, that inflation of the target would be countered by those who hold btc but use an alternative client, or those who own btc without ever having downloaded a client.
If I had to pick a single number, I would probably say around 500k people hold bitcoin worth more than 1 USD.
Seems plausible, let's go with the 500k amount of bitcoin users/owners.
The next question would be, is $1 billion market cap too high, or too low?
$1 billion divided by 500k users is $2000 per user/owner. Meaning each user/owner values bitcoin for $2000 on average (is that correctly said?)
If we compare this with fiat currency, that has $30 trillion market cap if I remember correctly for 6 billion people. That's $5000 per person.
Or looking at the USA, base money supply (balance fed) of $3 trillion, amount of people 316 million. That's $10,000 per person.
Or looking at Eurozone, base money supply (balance ECB) of €2.4 trillion, amount of people 332 million. That's €7000 per person, or $10,000 per person too.
From this I would conclude that if indeed there are 500k bitcoin users/owners than the current valuation of $1 billion, or $2000 per person, is certainly not excessive, in fact it's undervalued compared to fiat. Or maybe not considering bitcoin is still used much less than fiat, even by the bitcoin users/owners. But it does not look overvalued.
However if there are only 100k users/owners than it seems overvalued as this would mean each bitcoin user values bitcoin for $10,000 on average, the same as his fiat, eventhough he uses it much less.
And inversely if there would be say 2 million users/owners it seems undervalued as each user is valuing bitcoin for only $500 and his fiat for $10,000.
