Bitcoin and GDP

[iamTom123]

Let's talk about Gross Domestic Product or GDP here. According to Investopedia.com, GDP is defined as "one of the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period; you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year."

There are those who consider Bitcoin as an asset -- an asset which we bought using our cash or fiat money. It is just like buying a certain product only this time we are buying something in digital (almost akin to buying a digital book or eBook for that matter). Of course, this is a very simplistic comparison.

What I am driving is this: Can we consider Bitcoin as part of the GDP of a certain economy or maybe part of the global GDP output? Or is it the services related to Bitcoin which is a part of the country's GDP?

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[davis196]

Let's talk about Gross Domestic Product or GDP here. According to Investopedia.com, GDP is defined as "one of the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period; you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year."

There are those who consider Bitcoin as an asset -- an asset which we bought using our cash or fiat money. It is just like buying a certain product only this time we are buying something in digital (almost akin to buying a digital book or eBook for that matter). Of course, this is a very simplistic comparison.

What I am driving is this: Can we consider Bitcoin as part of the GDP of a certain economy or maybe part of the global GDP output? Or is it the services related to Bitcoin which is a part of the country's GDP?

Bitcoin is just a currency or asset.I think that you answer your own question in your thread.GDP measures all the goods and services produced and sold in some economy during a year.
We have to make the difference between product/service and currency/asset.
Bitcoin price growth is not a GDP growth.
Bitcoin related businesses create GDP,but most of them are part of the shady economy,so they can`t be measured properly. 

[bitbunnny]

For Bitcoin to become a part of GDP in some countries it should be formaly recognized and regulated and official part of economic system. At the moment this is still not very likely so we can forget about Bitcoin beeing calculated for GDP. But still we can't deny that is has the influence direct or indirect, the only problem is that it stays somwhere in grey or even black area of the economy.

[maku]

For Bitcoin to become a part of GDP in some countries it should be formaly recognized and regulated and official part of economic system. At the moment this is still not very likely so we can forget about Bitcoin beeing calculated for GDP. But still we can't deny that is has the influence direct or indirect, the only problem is that it stays somwhere in grey or even black area of the economy.

What about Japan? Bitcoin is legalised in Japan, services embraced it, which will make bitcoin effective part of Japanese GDP.
I don't know how it is calculated exactly but I am sure that bitcoin transactions should be declared in Japan and therefore are part of their GDP.

[Mometaskers]

I have limited economic knowledge but I don't think it would be part of GDP the way it is now. Getting bitcoins is just like buying a foreign currency, you are letting go of your fiat to get some bitcoins. Any "profit" you get from holding your bitcoin as an asset is simply just because of the exchange rate.

Now if bitcoin is being earned, rather than being exchanged for with fiat, then we can say that it is affecting GDP. People doing freelance for btc for example, is adding money into their countries' economies by exchanging labor, like how BPOs are increasing GDP in countries like Philippines and India.

[d5000]

What I am driving is this: Can we consider Bitcoin as part of the GDP of a certain economy or maybe part of the global GDP output? Or is it the services related to Bitcoin which is a part of the country's GDP?

For me it's clearly the second answer. If I have a Bitcoin service (like an exchange or wallet) and am located in a certain country, then the Bitcoin activities of my company become part of this country's GDP.

It looks more difficult if you are buying and selling only in the "crypto-space" without fiat or a "company" (that can be localized) involved, e.g. if you buy things from unregistered sellers on OpenBazaar. But even in this case there is a place where the "value" is consumed - if you buy tangible things then you are consuming them in a certain location, and that is where it becomes part of the GDP. Obviously it's not easy to calculate this "portion" of the Bitcoin economy, but that happens with all parts of the "shadow economy" (unregistered activity) and so it is equivalent of the cash black markets.

[iluvpie60]

The thing to remember about GDP when looking at it, is that the value of the USD has gone down by nearly 97% since the Fed was created.

If you had a million dollar bills when the Fed was created and invest to keep pace with inflation, that million dollars today is still worth a million dollars was worth back then.

Or in other words, your purchasing power dropped by 97% if you just sat on your million dollars and didn't earn interest on it. If it was under your bed lets say. Another way of looking at it is if you had 1 bitcoin and it was worth 1 million USD 80 years ago, today it is worth 3,000 USD(lost 97% of its value).

So when they talk about trillions of dollars in the GDP, it is kind of a bullshit number. Had the FED not been created the value of the USD could have stayed almost the same and we would be talking about billions of dollars for our GDP and not trillions.

[JMVB]

Let's talk about Gross Domestic Product or GDP here. According to Investopedia.com, GDP is defined as "one of the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period; you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year."

There are those who consider Bitcoin as an asset -- an asset which we bought using our cash or fiat money. It is just like buying a certain product only this time we are buying something in digital (almost akin to buying a digital book or eBook for that matter). Of course, this is a very simplistic comparison.

What I am driving is this: Can we consider Bitcoin as part of the GDP of a certain economy or maybe part of the global GDP output? Or is it the services related to Bitcoin which is a part of the country's GDP?

Bitcoin related businesses create GDP,but most of them are part of the shady economy,so they can`t be measured properly. 

[LuanX3]

Let's talk about Gross Domestic Product or GDP here. According to Investopedia.com, GDP is defined as "one of the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period; you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year."

There are those who consider Bitcoin as an asset -- an asset which we bought using our cash or fiat money. It is just like buying a certain product only this time we are buying something in digital (almost akin to buying a digital book or eBook for that matter). Of course, this is a very simplistic comparison.

What I am driving is this: Can we consider Bitcoin as part of the GDP of a certain economy or maybe part of the global GDP output? Or is it the services related to Bitcoin which is a part of the country's GDP?

Partly no. As GDP really is products of the country. If the country buys more bitcoins then that can not be considered as part of the GDP but more like imports as money went out of the country. You can consider it as GDP if they produce it themselves. However, since bitcoins really new, economics has not really yet coupe up on how this should be included in the calculation of gdp.

[krishnapramod]

Let's talk about Gross Domestic Product or GDP here. According to Investopedia.com, GDP is defined as "one of the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period; you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year."

There are those who consider Bitcoin as an asset -- an asset which we bought using our cash or fiat money. It is just like buying a certain product only this time we are buying something in digital (almost akin to buying a digital book or eBook for that matter). Of course, this is a very simplistic comparison.

What I am driving is this: Can we consider Bitcoin as part of the GDP of a certain economy or maybe part of the global GDP output? Or is it the services related to Bitcoin which is a part of the country's GDP?

Bitcoin is just a currency or asset.I think that you answer your own question in your thread.GDP measures all the goods and services produced and sold in some economy during a year.
We have to make the difference between product/service and currency/asset.
Bitcoin price growth is not a GDP growth.
Bitcoin related businesses create GDP,but most of them are part of the shady economy,so they can`t be measured properly.  

Absolutely.

GDP = C + G + I + NX

C is equal to all private consumption, or consumer spending, in a nation's economy.
G is the sum of government spending.
I is the sum of all the country's investment, including businesses capital expenditures.
NX is the nation's total net exports, calculated as total exports minus total imports (NX = Exports - Imports).

Currencies have no GDP, it is the sum of C,G,I, and NX. I do not think G could be applied to bitcoin. Most importantly until a country accepts bitcoin as their official currency there is no way we could come up with what percentage of GDP is linked with bitcoin businesses, consumer spending, investments etc.

Bitcoin is a global currency so bitcoin businesses/services, spendings, investments are spread globally. The GWP is $78.28 trillion and now hypothetically if bitcoin gains 1% of GWP then 782,800,000,000 and if 18,000,000 bitcoins are in circulation by 2020 then price per BTC would be  $43,488.88.

It's just an assumption.

[deisik]

The thing to remember about GDP when looking at it, is that the value of the USD has gone down by nearly 97% since the Fed was created.

If you had a million dollar bills when the Fed was created and invest to keep pace with inflation, that million dollars today is still worth a million dollars was worth back then.

Or in other words, your purchasing power dropped by 97% if you just sat on your million dollars and didn't earn interest on it. If it was under your bed lets say. Another way of looking at it is if you had 1 bitcoin and it was worth 1 million USD 80 years ago, today it is worth 3,000 USD(lost 97% of its value).

So when they talk about trillions of dollars in the GDP, it is kind of a bullshit number. Had the FED not been created the value of the USD could have stayed almost the same and we would be talking about billions of dollars for our GDP and not trillions

Your post is full of outright lies

Basically, you just take some concept (in this case GDP) and twist it so that it would somehow fit your point. I guess you would do a lot better if you had just started a separate thread and expressed your opinion about how much the dollar devalued since the establishment of the Fed. Nevertheless, you should remember too that real GDP growth is always calculated using inflation-adjusted prices, i.e. it shows the actual growth (well, at least as long as inflation rates are assessed correctly). That basically means that your point is essentially a pile of trash