Some government making Bitcoin illegal will only serve to legitimize it and accelerate its growth. Remember also that Bitcoin is GLOBAL, I don't believe you suggest all of the worlds' governement would ban BTC do you?
The market share, in the proposed "steady state" can only be 100%. Only when it has attained 100% of its potential market adoption does it then become "steady". The universe wants ONE money. Good money drives out bad money.
The universe doesn't want any one money. Even with gold, there was also silver. And there are many, many other stores of value, such as famous paintings and other artwork, real estate and so on.
I wouldn't be so sure that a few big governments wouldn't agree on banning bitcoin. For the moment bitcoin has legal problems in Russia and in China to a certain extend. The day the US government also jumps in, I don't see how bitcoin can become a universal currency rapidly.
Because, after all, as long as there is no general *merchant* adoption, the only gateway to "buying stuff" with bitcoin are exchanges between fiat and bitcoin. This is why I think that the first adoption has to be merchant adoption.
But it has to be more than that: merchant adoption has to be such that the price is quoted in bitcoin, and is not just the "latest conversion of the price in fiat according to the rate at a given exchange".
I do not have to argue against your misrepresentation of Bitcoin holders. So without any huge expectations in gain, and given a scenario where BTC's value is "stable" I would put 100% of my wealth into it for the reasons stated previously :
1. Deflationary 2. Ideal property as money 3. Distributed and outside the reach of any singular entity (read: government) 4. Programmable 5. Highly secure 6. Unseizable
I don't think many people would, at the moment. I wouldn't. I might change my mind if I could buy most of the stuff directly quoted in bitcoin. If I could buy a car in bitcoin (and not as "a conversion from $ into bitcoin"). At that point, I would start to trust bitcoin as a store of value. I think many people would. Maybe I'm wrong here, but I wouldn't think right now, or in the coming years, that many people with a lot of money would put it into bitcoin as a store of value.
Again, good money drives out bad money. Given a choice to transfer their stake 1:1 into Bitcoin and have it remain "stable" then it is obvious that given proper education and some time to realize the benefits of Bitcoin money vs. Fiat the choice would be a no brainer.
The devil is in the details: it is in the assumption of "stable". Stable in the sense of buying power. That can only be taken seriously if a lot of important stuff can be bought directly quoted in bitcoin, I would think.
In several developing countries, you're probably right, and I think that developing countries are probably the potentially biggest attraction pool of bitcoin usage, because their fiat is not very reliable. But the main currencies, like Euro or $$, I don't think people would bet on bitcoin in the coming years as "safer".
Your point is useless if you choose to ignore the speculative aspect. This is simply a dishonest way to argue against reality.
I do consider the speculative aspect, but the speculative big growth expectation has to be based upon something else than "more growth", because that is exactly what drives a Ponzi. There needs to be something else.
Now, I was given a clear answer: bitcoin is going to be the unique and universal money and value store.
Ok, but I do buy that only at very low probability in the foreseeable future, and I would think, most people with money, too.
http://nakamotoinstitute.org/mempool/speculative-attack/Bitcoin will not be eagerly adopted by the mainstream, it will be forced upon them. Forced, as in "compelled by economic reality". People will be forced to pay with bitcoins, not because of 'the technology', but because no one will accept their worthless fiat for payments. Contrary to popular belief, good money drives out bad. This "driving out" has started as a small fiat bleed. It will rapidly escalate into Class IV hemorrhaging due to speculative attacks on weak fiat currencies. The end result will be hyperbitcoinization, i.e. "your money is no good here".
That makes me smile a bit. *Fiat* is forced upon you because you have to pay your taxes in fiat. As long as a government decides that you have to pay your taxes in fiat, and as long as taxes make up a serious fraction of the economy, bitcoin *can't* take over the whole of payments. Because fiat will be in high demand to be able to pay taxes with !
Of course, the day that you are allowed to pay your taxes in bitcoin, your hypothesis has come true. I don't see that happening for a long, long time. I would think that most people would think that too.
This is where we disagree again and where I have to insist that your argument is disingenuous and brings no value to the discussion. The speculative "to the moon" aspect is absolutely substainable. In fact it is only getting started.
Once you are on the moon, the "to the moon" argument won't work anymore, right.
Now, I understand your stance here: you say that "to the moon" is a justified expectation as long as not everything monetary isn't done in bitcoin, and once everything is done in bitcoin, the discussion is over.
My point is that that scenario is highly unrealistic in the coming several decades, and if no "moon" is realised earlier, I think many will LEAVE bitcoin if there is no widespread merchant adoption.
If your scenario is realized 100 years from now, I'm honestly not interested, and I don't think many people would be interested. I'll be dead, my children will probably be dead, and I don't care further along the road. I don't think many people would buy into bitcoin if they had to wait for 100 years for "full moon".
And if your scenario is realized much earlier, I would be surprised. I don't think that 10 or 20 years from now, this will be the case. I wonder how many people would want to hold serious money into bitcoin waiting for more than 20 years "for full moon".
So we have to consider something less ambitious, but more realistic as a "fundamental". This is what I'm after. What will be the expected market share of bitcoin, say, in 20 or 30 years ? Because that gives a *realistic* idea of the price of bitcoin to expect.
Step aside from your dream for a moment because right now, the speculative "to the moon" drive is alive and well.
I have to disappoint you, but the current price doesn't indicate that. In order to have an idea what price expectations to hold realistically, you need also to have a realistic view on fundamentals in a few decades. And that's what I wanted to discuss. Now, you made your point, you think "full moon" is realistic. In that case, indeed, the real price should be tens of millions of $ per coin. Fact is, it isn't for the moment, which means that most market players don't think so. Now, of course, the main reason to be in a market is that one thinks one is smarter than the market - me too.
In order for a high price, say, $100 000, - to be sustainable, this would mean that enough people need to believe "full moon" with enough money. I don't think that moment is there yet.
So your claim is essentially, that bitcoin will take over all of the money market, and the store of value market.
That the 50 trillion dollar equivalent worldwide of M2 fiat money will completely turn into bitcoin. And you think that governments will let that happen any time soon. And that most of the rest of store of value will be in bitcoin (gold, ...).
When do you think that will happen ? A century from now ? 50 years from now ?
Yes I believe this could happen. I don't want to guarantee it but it is likely and becoming more inevitable every day.
Governments will be powerless unless they turn into full on tyranical totalitarian states which I can tell you that as much power as you can bestow to governments history has shown that they are effectively no match against a full on revolution.
If it does happen. Then it will be MUCH quicker than you would tend to believe. And IMO, yes gold will be relegated to a useless relic used only for certain industrial purposes. It is no match for Bitcoin.
Ok, at least your views are clear.
I would like to believe them, but unfortunately, I don't. I do think there is a place for bitcoin, but a much more modest one than you describe here (even though deep inside I wish you were right). In my opinion, the scenario you describe is at least a century away. It would be great if not, but I can't believe it.
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