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Author Topic: Bitcoin Economy Value --> $519,555,304.09  (Read 2513 times)
the founder
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March 18, 2013, 01:40:04 PM
 #1




EDIT:  I know it's  $1,034,747,895.29 today, just making light that it doubled in a freaking week.




I don't like using the word "market cap" because I believe it's somewhat irreverent.  However labeling it as "bitcoin economy value/ BEV" does make sense.

Basically it's worth over 1/2 a billion dollars as of this morning.  It's been close of course for the past few days,  but additional coins with increased value has pushed it past that threshold this morning.

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How is that relevant to you and I?  Day to day.. it doesn't' matter...  but that threshold is the level where many VC companies start looking at it as something valid.

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March 18, 2013, 01:50:21 PM
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This thread has been Max Keiser'd.

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March 18, 2013, 01:57:09 PM
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and the official bitcoin stamp of approval

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March 18, 2013, 10:02:13 PM
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That guys face is too punchable

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March 18, 2013, 10:08:36 PM
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I don't like using the word "market cap" because I believe it's somewhat irreverent.

And wrong, since bitcoin isn't "capital".

Total Dollar Valuation (TDV) would probably be the correct term.  It represents the purchasing power at the current market rate.


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March 21, 2013, 07:41:25 PM
 #6

I don't like that term either (though it may be a legit market term for all I know). "Total" implies adding all the values which is clearly not what's being done.

Maybe "Market Value Product" or "Calculated Exchanged Value" or perhaps even "Big Meaningless Number"

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March 21, 2013, 10:47:41 PM
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"Total" implies adding all the values which is clearly not what's being done.

That is exactly what is being done.   If a bitcoin trades at $65 then the total dollar valuation (TDV) is the sum total of each bitcoin that exists at the trade value of $65.

Or am I misinterpreting your comment?

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March 21, 2013, 10:53:57 PM
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"Total" implies adding all the values which is clearly not what's being done.

That is exactly what is being done.   If a bitcoin trades at $65 then the total dollar valuation (TDV) is the sum total of each bitcoin that exists at the trade value of $65.

Or am I misinterpreting your comment?

It isn't because not all bitcoins market at the same value. Bitcoins that have been destroyed, for example, have no value because they are not of any use. The term "market capitalization" is therefore better than "total dollar valuation", because market cap includes those assets which have low or reduced value (e.g., the market cap of a company includes unreleased and dead shares).

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March 22, 2013, 01:45:58 AM
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Actually it is the bitcoin monetary base (MB) .. I've brought it up before in other threads, market cap. is just wrong.

http://en.wikipedia.org/wiki/Monetary_base
http://en.wikipedia.org/wiki/Money_supply

... and somewhere between MB (monetary base) and M0 classification is probably close for a sufficiently narrow definition.

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March 22, 2013, 03:08:31 AM
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That guys face is too punchable

That's sorta the whole point ^_^ Tongue

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March 22, 2013, 03:09:25 AM
 #11

M1 is the the term you are looking for

Quote
total quantity of currency in circulation (notes and coins) plus demand deposits denominated in the national currency held by nonbank financial institutions, state and local governments, nonfinancial public enterprises, and the private sector of the economy, measured at a specific point in time. National currency units have been converted to US dollars at the closing exchange rate for the date of the information. Because of exchange rate movements, changes in money stocks measured in national currency units may vary significantly from those shown in US dollars, and caution is urged when making comparisons over time in US dollars. Narrow money consists of more liquid assets than broad money and the assets generally function as a "medium of exchange

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March 22, 2013, 04:07:46 AM
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M1 is the the term you are looking for

Quote
total quantity of currency in circulation (notes and coins) plus demand deposits denominated in the national currency held by nonbank financial institutions, state and local governments, nonfinancial public enterprises, and the private sector of the economy, measured at a specific point in time. National currency units have been converted to US dollars at the closing exchange rate for the date of the information. Because of exchange rate movements, changes in money stocks measured in national currency units may vary significantly from those shown in US dollars, and caution is urged when making comparisons over time in US dollars. Narrow money consists of more liquid assets than broad money and the assets generally function as a "medium of exchange

I don't completely disagree (or agree) but  will say that bitcoin doesn't really fit precisely into any of these big-M definitions all that well because they were made up with fiat in mind ... for example we can say that there are exactly 10.XX million bitcoin units in existence.

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March 22, 2013, 01:44:13 PM
 #13

"Total" implies adding all the values which is clearly not what's being done.

That is exactly what is being done.   If a bitcoin trades at $65 then the total dollar valuation (TDV) is the sum total of each bitcoin that exists at the trade value of $65.

Or am I misinterpreting your comment?

It isn't because not all bitcoins market at the same value. Bitcoins that have been destroyed, for example, have no value because they are not of any use. The term "market capitalization" is therefore better than "total dollar valuation", because market cap includes those assets which have low or reduced value (e.g., the market cap of a company includes unreleased and dead shares).

Exactly. Try buying all bitcoins at $73 or selling all at $73. It just doesn't work that way. So multiplying the current price times the number of coins (and which number do you use for that) is nothing more than producing a number which might vaguely track with the market. And what do you do with that number anyway? Bear in mind that it doesn't take account of velocity either.

Don't get me wrong, it's cool to hear that the number is going up but it's not a good number to attach any real significance to.

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March 22, 2013, 01:45:47 PM
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M1 is the the term you are looking for

Quote
total quantity of currency in circulation (notes and coins) plus demand deposits denominated in the national currency held by nonbank financial institutions, state and local governments, nonfinancial public enterprises, and the private sector of the economy, measured at a specific point in time. National currency units have been converted to US dollars at the closing exchange rate for the date of the information. Because of exchange rate movements, changes in money stocks measured in national currency units may vary significantly from those shown in US dollars, and caution is urged when making comparisons over time in US dollars. Narrow money consists of more liquid assets than broad money and the assets generally function as a "medium of exchange

I don't completely disagree (or agree) but  will say that bitcoin doesn't really fit precisely into any of these big-M definitions all that well because they were made up with fiat in mind ... for example we can say that there are exactly 10.XX million bitcoin units in existence.

Though looking at it philosophically, lost bitcoins are not really in existence any more than bitcoins not-yet-mined are.

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March 25, 2013, 05:47:45 AM
 #15

"Total" implies adding all the values which is clearly not what's being done.

That is exactly what is being done.   If a bitcoin trades at $65 then the total dollar valuation (TDV) is the sum total of each bitcoin that exists at the trade value of $65.

Or am I misinterpreting your comment?

It isn't because not all bitcoins market at the same value. Bitcoins that have been destroyed, for example, have no value because they are not of any use. The term "market capitalization" is therefore better than "total dollar valuation", because market cap includes those assets which have low or reduced value (e.g., the market cap of a company includes unreleased and dead shares).

Exactly. Try buying all bitcoins at $73 or selling all at $73. It just doesn't work that way. So multiplying the current price times the number of coins (and which number do you use for that) is nothing more than producing a number which might vaguely track with the market. And what do you do with that number anyway? Bear in mind that it doesn't take account of velocity either.

Don't get me wrong, it's cool to hear that the number is going up but it's not a good number to attach any real significance to.

Monetary base for Bitcoins is $10.9 million BTC. The monetary base for Bitcoins has to be denominated in BTC, not dollars. I like total dollar valuation (TDV), it's a very descriptive term but I like market cap better. Why? Because everyone knows what the term "market cap" means (or should know the term), so lets keep it simple. I used to work with mutual funds and although technically they can't have a market cap, we used the term "market cap" for all the financial reports to the SEC. It is accepted finance lingo to say that shares outstanding multiplied by current price = market cap for any financial instrument whether or not the finance instrument really have "market cap".

With that, I say that I'm VERY interested in market cap and it's significance. Market cap is one of my primary reasons why I purchased BTC. There is 2 reasons.
A) Market cap determines liquidity. Major players cannot purchase Bitcoins if there is no liquidity. At our firm we classified "small cap" as companies with market caps of less than $500 million. Mid cap as companies with market caps of more than $500 million and less than 2 billion and Large Cap as companies with market caps of more than 2 billion. My opinion is that in order for the major players to purchase BTC, the market cap has to reach 2 billion or more. In order for the market cap of Bitcoins to reach this level the price for one BTC is around $180.

B) Reason A (above) I used market cap to valuate $180 as being the price where I think that the big money will roll in. Now I will use market cap to determine the price that I'm going to sell some of Bitcoins. I strongly believe that the market cap of Bitcoins will reach 1 trillion within 5 years. This is just a rough estimate, but I figure that there will be 14 million BTC outstanding at that time and it would put the price at $71,400 per 1 BTC.  Now that may seem high, but just keep in mind that there is about 8 trillion dollars in money markets and equivalents whose 30 day yield is less than 1 cent.  But in order to get the price to $71K, the market cap for bitcoins has to be more than 2 billion.



 
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March 27, 2013, 11:45:07 AM
 #16

Monetary base for Bitcoins is $10.9 million BTC.

That's the wrong currency symbol though.  Should be:
 Monetary base for Bitcoins is ฿10.9 million BTC 

(Or Ƀ10.9 million BTC, if you prefer Ƀ symbol, which is not used for any other currency like how the ฿ symbol is used for at least one other currency).

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March 28, 2013, 03:47:55 AM
 #17

Monetary base for Bitcoins is $10.9 million BTC.

That's the wrong currency symbol though.  Should be:
 Monetary base for Bitcoins is ฿10.9 million BTC 

(Or Ƀ10.9 million BTC, if you prefer Ƀ symbol, which is not used for any other currency like how the ฿ symbol is used for at least one other currency).

$ is more of a generic currency symbol for any currency, even those which are not pesos or dollars (see R$, etc.), so at least I don't have issue with $10.9 million XBT.

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March 28, 2013, 04:30:45 AM
 #18


How is that relevant to you and I?  Day to day.. it doesn't' matter...  but that threshold is the level where many VC companies start looking at it as something valid.

--  side note : good chance android app goes live today.


True, but when so many coins are used only as a store of value without any underlying economic activity VC's don't really have an incentive to invest.

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