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Author Topic: What is Bitcoin's tipping point?  (Read 1913 times)
dissipate
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September 11, 2012, 06:05:31 PM
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I have a theory and it is fairly simple. As market depth and liquidity of Bitcoin approaches that of gold or silver, it becomes a much more attractive option to those looking for a store of wealth. The reason for this, of course, is because Bitcoin is much more convenient to hold and transfer than gold or silver. So as Bitcoin nears the liquidity and volatility of gold or silver, a rush of more capital will go into Bitcoin as an alternative to gold and silver. The liquidity and volatility of gold or silver is an upper and lower bound as a tipping point for Bitcoin, respectively.

However, Bitcoin would have to start nearing a market cap of billions of dollars in order to reach the liquidity of gold or silver. Is it possible that there is a much lower tipping point threshold that will trigger a large amount of new capital to flow into Bitcoin? I have seen the arbitrary market cap of $1 billion thrown around.
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September 11, 2012, 06:14:17 PM
 #2

I don't think there is any one "tipping point".  Each incremental improvement to the Bitcoin economy improves liquidity, market depth, and volatility.
They are all improved relative to 1 year ago and 3 years ago.  If they keep improving Bitcoin will keep growing and become more and more attractive.

If they don't ... then Bitcoin will shrink significantly.  I don't think it will ever go away at this point. 
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September 11, 2012, 06:23:05 PM
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I don't think there is any one "tipping point".  Each incremental improvement to the Bitcoin economy improves liquidity, market depth, and volatility.
They are all improved relative to 1 year ago and 3 years ago.  If they keep improving Bitcoin will keep growing and become more and more attractive.

If they don't ... then Bitcoin will shrink significantly.  I don't think it will ever go away at this point. 

Agreed, it will be a curve. In hindsight, we might be able to point at different moments and say "this was the tipping point", but there's no way of predicting them from this side of the arrow of time.

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September 11, 2012, 06:26:07 PM
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I don't think there is any one "tipping point".  Each incremental improvement to the Bitcoin economy improves liquidity, market depth, and volatility.
They are all improved relative to 1 year ago and 3 years ago.  If they keep improving Bitcoin will keep growing and become more and more attractive.

If they don't ... then Bitcoin will shrink significantly.  I don't think it will ever go away at this point. 

That's true, but there are probably significant tipping points that will trigger investments from say institutional investors. Can we possibly construct a road map of tipping points where a certain market cap will trigger an influx of new capital from a certain type of investor?
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September 11, 2012, 07:08:54 PM
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I also don't think you can tell in advance, but somewhere around the time that you can get pretty much anything directly for coin in most large cities there will just be an absolute explosion imo. And I happen to know that it'll be March 2016.

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September 11, 2012, 07:21:01 PM
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There may not be a single tipping point, but as far as a threshold for being taken seriously goes—on the order of $1B market cap, an exchange rate of about $50.

What kind of new money will go into Bitcoin at a market cap of $1 billion?
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September 11, 2012, 07:24:42 PM
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The tipping point is when > 10% of the people of the world know what Bitcoin is, why it is useful, and advocate for its use.

http://www.trendsspotting.com/blog/?p=2123
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September 11, 2012, 08:54:21 PM
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There may not be a single tipping point, but as far as a threshold for being taken seriously goes—on the order of $1B market cap, an exchange rate of about $50.

What kind of new money will go into Bitcoin at a market cap of $1 billion?

$1 billion

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September 11, 2012, 08:57:52 PM
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There may not be a single tipping point, but as far as a threshold for being taken seriously goes—on the order of $1B market cap, an exchange rate of about $50.

What kind of new money will go into Bitcoin at a market cap of $1 billion?

mostly old money: YEN, EUR, USD, GBP, gold, silver,...

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September 11, 2012, 09:16:32 PM
 #10

The tipping point was when Bitcoin reached parity with the US dollar. Now it's just a matter of time.

Not that tipping point is some kind of well defined thing... but if we're going from the point at which it was inevitable I'd say the pizzas or thereabout.

Later (maybe not too much later) there will be a point where things start happening really fast (seeming unstoppable to everyone) and that's more what I think of as a tipping point.

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September 11, 2012, 10:42:27 PM
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I don't think there is any one "tipping point".  Each incremental improvement to the Bitcoin economy improves liquidity, market depth, and volatility.

The BitInstant debt card is going to be another big milestone for the economy because it makes bitcoins much more liquid and greatly lowers the friction between getting in and getting out.

I know several businesses that will probably start paying their employees half in USD half in BTC as soon as the debt card comes out.

The current banking and financial system is an incredible liability to many businesses so having a back-up plan in place and functioning is what any reasonably prudent business owner would do. And for a board of directors to not consider may be grounds for negligence.

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September 12, 2012, 01:42:47 AM
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The BitInstant debt card is going to be another big milestone for the economy because it makes bitcoins much more liquid and greatly lowers the friction between getting in and getting out.


but what are the fees? it'll be expensive to use.

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September 12, 2012, 05:06:38 AM
 #13

I don't think there is any one "tipping point".  Each incremental improvement to the Bitcoin economy improves liquidity, market depth, and volatility.
They are all improved relative to 1 year ago and 3 years ago.  If they keep improving Bitcoin will keep growing and become more and more attractive.

If they don't ... then Bitcoin will shrink significantly.  I don't think it will ever go away at this point. 

Agreed, it will be a curve. In hindsight, we might be able to point at different moments and say "this was the tipping point", but there's no way of predicting them from this side of the arrow of time.

The tipping point will be imminent if and when we see exponential growth in adoption, not in the influx of fiat capital. Only wide adoption can lead to a tipping point which, in turn, will lead to reasonable stability and entrenchment.

By "wide adoption" I don't mean a universally accepted world currency (this is a pipedream), but a share comparable to silver or gold, as suggested in the OP.

Also, as suggested in some of the posts above, we might arrive to the same state of affairs without going through a dramatic expansion and a tipping point, but rather through a series of incremental (and somewhat boring, if you are addicted to drama) improvements.

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September 12, 2012, 05:31:25 AM
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http://en.wikipedia.org/wiki/Diffusion_of_innovations

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September 12, 2012, 06:41:07 AM
 #15

By "wide adoption" I don't mean a universally accepted world currency (this is a pipedream), but a share comparable to silver or gold, as suggested in the OP.

You are grossly underestimating the size of silver and gold markets. There is trillions of USD value contained within the gold market capitalization; 160,000 tons at 35,274 ounces per ton at $1,730 per ounce or about $9.76T.

If there are 7.8m bitcoins in existence, since about 2m have been destroyed, and if the BTC market cap were $.06T, a rounding error of the gold market capitalization of about 0.6%, then the price per bitcoin would be about $7,692.

I did not miss a few zeros here or there did I?

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September 12, 2012, 01:24:12 PM
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By "wide adoption" I don't mean a universally accepted world currency (this is a pipedream), but a share comparable to silver or gold, as suggested in the OP.
...since about 2m have been destroyed...

Wait a second... 2 million bitcoins have been destroyed? You got a source for that? I would have thought it would be nowhere near that high.
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September 12, 2012, 01:42:03 PM
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There's no real proof, but we know they didn't moved yet from their origin address.
Here's a post on these 2 millions bitcoins :

https://bitcointalk.org/index.php?topic=98641.0

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September 12, 2012, 05:19:18 PM
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By "wide adoption" I don't mean a universally accepted world currency (this is a pipedream), but a share comparable to silver or gold, as suggested in the OP.

You are grossly underestimating the size of silver and gold markets. There is trillions of USD value contained within the gold market capitalization; 160,000 tons at 35,274 ounces per ton at $1,730 per ounce or about $9.76T.

If there are 7.8m bitcoins in existence, since about 2m have been destroyed, and if the BTC market cap were $.06T, a rounding error of the gold market capitalization of about 0.6%, then the price per bitcoin would be about $7,692.

I did not miss a few zeros here or there did I?

What percent of gold's market cap is based on demand for jewelry and industrial uses? Subtract those and what is left? I suspect a significant percentage of gold's market cap is jewelry and industrial.
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