Again - get real. 1% of the world economy is ~ 300,000,000,000.00USD.
That's 300 billion. The total amount of coins ever is going to be 84 million.
It means that in that rate a coin will be worth ~3571.42$ per coin.
If it goes so high inflation will destroy world's economy. It might go to 1000000$ per coin, then drop to 1000$ because there are no real money to cash you out!
Do you get it or shall I explain in more detail?
Let's get it a bit easier.
If a bitcoin is worth 100$ today, and there are for instance (just an example) 1,000,000 BTC traded every day through MtGox, it means that MtGox needs 100,000,000$ to exchange all these. However if it goes to 200$ for a single day it will need 200,000,000$. Do you really think they have that kind of leverage? Who is their liquidity provider? The Federal Reserve?
If it gets so expensive so fast it will burst. Yes it might increase in value, but it shall happen within reasonable timeframe of years in order for the exchangers to be able to adjust the volume and money supply they currently have. Otherwise a lot of people will end up burning up graphic cards and all kind of equipment for mining and thousands of BTCs worth nothing.
Another thing that no one thinks about and no one can control - greed.
Most of the bitcoin exchange is done by DIY traders, not miners. When it gets expensive, they sell. Period. They do not care about the whole picture.
If Gox bankrupts it all goes south.
FYI a bitcoin is
technically classified as an
"over the counter (OTC) derivative" it is NOT a "common nor preferred share" in a business "security" (since it is pure-fiat, unbacked and representative of nothing but itself), nor is it token of a "Future Quantity Buying Contract" for any quantity of commodity, material product or produce. It only "represents" the right to an externally derived future exchange-value of itself accepted between it's counter-parties.
A Bitcoin is a commercial "over the counter (OTC) derivative" of the current price and future possible values of itself and it's network, which are only (at best) commercial resources, and not "commodities". This is why with it's value changing every two seconds it is useless as a "money" because you need an hour to accept and/or spend it. It is really only any good as a delayed-exchange "funding" medium.
Bitcoins and those who trade or exchange it are totally, completely and invincibly "DEREGULATED" in ALL REGARDS save for so called general “safety and soundness” standards (nobody bitches). Bitcoins (a straight-up "confidence gamble") fall under the blanket gaming "bucket shop" exemptions to the CFMA that were placed there to exempt State casinos and back door "funded credit default swap" (fCDS) instruments (largely used to bid-rig market prices) from any and all regulation, and therefore, what is good for the private bankster goose is great for the public currency gander.
http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000You see almost every other day either Morgan or Goldman go nearly bankrupt dumping (so-called "naked" shorting) massive gold and silver futures contracts to depress their prices and make practically income-less Bonds and counterfeited FRNs look more attractive. In fact they are never "naked", they just ping-pong the (thus -"funded") "counter-party losses" back and forth (keeping any profits of their own) out their back doors effectively sharing known, prearranged, totally "deregulated" fCDS swapfunds to sustain each of their maximum daily losses.
A Bitcoin functions exactly in much the same way as a CDS. You fund it's former owner's "loss" (costs) on it, and the next owner funds yours.
The supply of Fiat Bitcoins is totally irrelevant and unrelated to their values, and likely to remain so for a long, long time. Small (or even large) quantitative changes in the small intrinsic and utilitarian characteristics of it's values should have practically no impact on it's exchange value, which is solely a "fiat election" of it's futures-market traders (and owner counter-parties) alone.
The (largely utilitarian) demand for Bitcoins is thus far for the most part entirely a function of their intrinsic curiosity, utilitarian novelty and speculative exchange values. Their original purpose was as a gambling casino utility, and they also apparently work pretty well to deal with certain other nastinesses at SR and sports gambling sites.
The best way to think of the exchange-value of Bitcoins is as a kind of a "virtual toilet" which, regardless of what has been dumped through it, only bears the memory-value of the position that it's last user left the seat in, to it's own current owner, alone. The actual "price" (exchange-value) of any given Bitcoin remains forever unknown and unknowable until after it has been re-sold (re-exchange valued) to the next guy, in the future.At an Exchange, the customers bring all the bitcoins and all the money and then, simply make off with almost all of both in exchanged amounts. Nobody puts any assets of any value into a "Bitcoin Central Reserve-Bank" that then prints up and rents out both original and countless extra counterfeit They-Owe-Us Asset-Receipt Notes to some armed gang of rich political dictators they own and run. (because everybody can't come back for all their assets at once)
People
pass their own money around to each other
"through" Bitcoins. The number and market-priced fiat value of them are really completely irrelevant.
Although it would profit itself and us all much more if it stably went only up at a well controlled and predictable rate and never went down (devalued/inflated).
