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Author Topic: The state of bitcoin penetration  (Read 561 times)
sdp
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January 15, 2016, 12:51:03 PM
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I have been hearing again and again that bitcoin has a very small market cap in billions of dollars and this is why bitcoin is in a price discovery phase.  until adoption levels off the price will continue moving up like this.  According to the Daily Decrypt, all of the coins at coinmarketcap have a combined marketcap of seven billion dollars.  Now, silver has a market cap of 14 billion dollars.  The combined market cap is half of that of silver. 

Cryptocurrencies share these defining properties of fiat. What are the properties of fiat money?
  • They are created rather than found
  • It does not matter which of the currency you use
  • Their purpose is money.  Generally speaking, people do not get a two dollar bill to use as a bookmark.  Although the bitcoin blockchain can be used for other purposes than money, this is not its primary purpose.

Now bitcoin satisfies theses defining properties.  What makes bitcoin as a currency different from fiat currencies is the cost of issuance approximates the cost of the currency itself.  For convenience of familiarity, I will not refer to cryptocurrencies as fiat here.  All of the arguments for bitcoin having no utility and thus being of no value apply to dollars.

Silver and gold are assets and probably are just used to exchange them for something else at a later time.  I mean people keep them for speculation or holding value through time.  There are industrial uses however.   How much can we expect bitcoin to rise as people stop looking at gold and silver as a speculation engine and turn to bitcion and other cryptocurrencies?  I wonder how much will an ounce of gold cost if the demand came only from its industrial uses. Some of the value of bitcoin comes from the market that was in these metals but not all of it.
 
sdp

sources:
https://www.silverinstitute.org/site/supply-demand/
http://www.xe.com

On seeing people having their accounts deleted by twitter and Chase for their political beliefs.  Isn't it time we closed our Chase bank accounts and twitter accounts?
https://d.tube/#!/v/pressfortruth/legx29vc
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January 15, 2016, 01:11:52 PM
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I wonder how much will an ounce of gold cost if the demand came only from its industrial uses.

I have wondered this as well. According to

http://www.numbersleuth.org/worlds-gold/AboveGround.png

Only 12% of gold is used in industry. Unless I am mistaken, I think this means that gold's price would be ~12% of its current price were it to be used only for industry (massively simplifying of course).
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January 15, 2016, 03:19:19 PM
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compared to silver, silver has not 21M market cap with at least 3M lost and probably much more that will be lost in the future, not exactly the best comparison

but in the end it depend on the people, if they are wiling to embrace bitcoin the value will increase(this is true for everything), otherwise will remain there

but besides this, i believe that the value will increase slowly to a good level, around 5k, to allow miners to have their profit, maybe it will be manipulated to reach that value and be stable, but it will be there or died there is no middle way here
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January 16, 2016, 01:10:41 PM
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I wonder how much will an ounce of gold cost if the demand came only from its industrial uses.

I have wondered this as well. According to

http://www.numbersleuth.org/worlds-gold/AboveGround.png

Only 12% of gold is used in industry. Unless I am mistaken, I think this means that gold's price would be ~12% of its current price were it to be used only for industry (massively simplifying of course).


The chart is more enlightening than this number.  Jewelry accounts for more than half of the gold above ground.  I have changed my understanding of the problem.  The question should be: what would happen if gold were used for everything but "investment".  That leaves us with 16% surplus of supply over what we have today.  The market cap of gold is 5 trillion dollars.  If 16% of that worth went into bitcoin it would have a market cap of 900 billion dollars! 

sdp

On seeing people having their accounts deleted by twitter and Chase for their political beliefs.  Isn't it time we closed our Chase bank accounts and twitter accounts?
https://d.tube/#!/v/pressfortruth/legx29vc
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