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Author Topic: Nice blog post on potential adoption and price appreciation  (Read 1116 times)
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June 02, 2011, 08:51:20 PM

Finally, a blog that is not just trying to make a media flaming flood! (I hope this wasn't posted already.)

Posts like this need more attention. Unlike most bloggers, this guy is actually trying to make reasonable models and think about how the world might react to Bitcoin.

I really like the estimates on comparable types of money, though I think we can't use the numbers as they are without some major corrections, which unfortunately can't be calculated as easily. The entire behavior and value of USD is dominated by book money right now, as hardly any big purchases are made in cash. This does not compare to a Bitcoin situation well. Especially since we have no clue how big the role of banking will be in Bitcoin.

One more thing to complain: some estimates do strange things, such as using the average amount of cash on a person times some developed country factor to estimate the amount they invested into Bitcoin. While the resulting number seems reasonable, this method of getting there isn't.

Still, I recommend the article. It's a nice read and takes parts of the world into account some people tend to forget about. Most of the news and blogs right now are just babbling or hyping, so this tone is refreshing to me.
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June 02, 2011, 11:06:21 PM

Well, that article, - is like chewing the same snots again. Sorry.

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June 03, 2011, 12:07:49 AM

Vandroly, thank you for the nice comments -- I'm the author of that post. 

There are two long-term estimates of demand in the post: (1) potential demand for Bitcoin might be should it replace cash for some people (not credit cards, not debit cards, not bank deposits, or any other form of payment involving a third party like a bank); and (2) potential demand for Bitcoin as a store of value should it become as popular with some people as gold is popular with the world today.  To the extent that demand for Bitcoin ever expands beyond those two uses, its price would be higher.

Also, I did not multiply "cash" per person to estimate how much they've invested -- or anything of the sort.  What I did is this: I took an estimate of how many US dollars the average person in the planet might want to own in Bitcoin as a store of value, and adjusted it upward to reflect the fact that the Bitcoin owners *at present* are on average wealthier than the average person in the planet.  (There are billions of people in this planet who can't even afford a PC.)

Hope this is helpful.
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