There is already 1000 Bitcoin Millionaires in the world - effects on price

[BitChick]

There may be 1000+ Bitcoin "millionaires" but most of them are probably not cashing out any of their coins at this point.  Perhaps they are selling off a small amount?  I would think that they would just sell a small percentage to live off of but who knows.  Everyone has their own idea of when they want to sell and for.  Also, many might be the true Libertarian types that are just waiting until they no longer even have to trade their Bitcoin for "yucky fiat" as they seem to put it.

[Domrada]

Put yourself in the bitcoin millionaire's shoes. Option 1: "cash out" thereby deliberately entrusting your new fortune to a counterparty; Option 2: "stand pat" and continue to enjoy zero counterparty risk.

[vokain]

The world at large is still absolutely clueless about Bitcoin. We can say that the general awareness was only really reached last month. The previous bubbles generated publicity, which faded away. Now it is not fading away, it is gaining grassroots adoption, and I believe that by trickling the knowledge that I and others generate, to the masses, the party can go on and on. It is possible that 2014 will be the year of Bitcoin. Yes, I am aware that 2013 already saw 100x gains

I do appreciate your writings and thoughts Mr. Rpietila, they are very influential in helping me realize the future power potential of Bitcoin and what that responsibility entails

Perhaps next year will also see the rise of the Supernode.

[Cluster2k]

Put yourself in the bitcoin millionaire's shoes. Option 1: "cash out" thereby deliberately entrusting your new fortune to a counterparty; Option 2: "stand pat" and continue to enjoy zero counterparty risk.

Bitcoin has zero counterparty risk?  Not true.  To cash out and use the money for buying a car, house, taxes, food, schooling, etc, the bitcoin holder must have someone to sell to.  If no one turns up to buy those bitcoins then the holder just has a bit of worthless data.  That's a counterparty risk, although of a slightly different nature to say, a bank going bankrupt and taking all the money.

Bitcoin has another counterparty risk coming up in the next few years.  If bitcoin becomes popular enough for even a tiny percentage of the world's population to use it daily, the blockchain will become enormous.  There will be few people willing to store terabytes of data on their computer just to send and receive bitcoins.  The data and wallets will be kept in the hands of relatively few companies.  Better hope they're good and honest.

[Spaceman_Spiff]

Put yourself in the bitcoin millionaire's shoes. Option 1: "cash out" thereby deliberately entrusting your new fortune to a counterparty; Option 2: "stand pat" and continue to enjoy zero counterparty risk.

Bitcoin has zero counterparty risk?  Not true.  To cash out and use the money for buying a car, house, taxes, food, schooling, etc, the bitcoin holder must have someone to sell to.  If no one turns up to buy those bitcoins then the holder just has a bit of worthless data.  That's a counterparty risk, although of a slightly different nature to say, a bank going bankrupt and taking all the money.

Bitcoin has another counterparty risk coming up in the next few years.  If bitcoin becomes popular enough for even a tiny percentage of the world's population to use it daily, the blockchain will become enormous.  There will be few people willing to store terabytes of data on their computer just to send and receive bitcoins.  The data and wallets will be kept in the hands of relatively few companies.  Better hope they're good and honest.

You are talking about risks, not counterparty risk, imo.  A bitcoin in your personal wallet will always be a bitcoin in your personal wallet, and provided you took the necessary safety precautions, its not going anywhere.

[Syke]

Bitcoin has another counterparty risk coming up in the next few years.  If bitcoin becomes popular enough for even a tiny percentage of the world's population to use it daily, the blockchain will become enormous.  There will be few people willing to store terabytes of data on their computer just to send and receive bitcoins.  The data and wallets will be kept in the hands of relatively few companies.  Better hope they're good and honest.

The blockchain can grow up to 1 MB every 10 min. That will take roughly 20 years to reach a single 1 TB. 1 TB isn't that large now, imagine how tiny 1 TB will be in 20 years.

[calian]

Put yourself in the bitcoin millionaire's shoes. Option 1: "cash out" thereby deliberately entrusting your new fortune to a counterparty; Option 2: "stand pat" and continue to enjoy zero counterparty risk.

Bitcoin has zero counterparty risk?  Not true.  To cash out and use the money for buying a car, house, taxes, food, schooling, etc, the bitcoin holder must have someone to sell to.  If no one turns up to buy those bitcoins then the holder just has a bit of worthless data.  That's a counterparty risk, although of a slightly different nature to say, a bank going bankrupt and taking all the money.

Bitcoin has another counterparty risk coming up in the next few years.  If bitcoin becomes popular enough for even a tiny percentage of the world's population to use it daily, the blockchain will become enormous.  There will be few people willing to store terabytes of data on their computer just to send and receive bitcoins.  The data and wallets will be kept in the hands of relatively few companies.  Better hope they're good and honest.

You're discussing currency risk. I.e. the risk that the currency value fluctuates. However given a global currency with a fixed and declining rate of inflation the currency risk is probably lower than just about any other currency you can hold.

[Spaceman_Spiff]

Bitcoin has zero counterparty risk?  Not true.  To cash out and use the money for buying a car, house, taxes, food, schooling, etc, the bitcoin holder must have someone to sell to.  If no one turns up to buy those bitcoins then the holder just has a bit of worthless data.  That's a counterparty risk, although of a slightly different nature to say, a bank going bankrupt and taking all the money.

Bitcoin has another counterparty risk coming up in the next few years.  If bitcoin becomes popular enough for even a tiny percentage of the world's population to use it daily, the blockchain will become enormous.  There will be few people willing to store terabytes of data on their computer just to send and receive bitcoins.  The data and wallets will be kept in the hands of relatively few companies.  Better hope they're good and honest.

You're discussing currency risk. I.e. the risk that the currency value fluctuates. However given a global currency with a fixed and declining rate of inflation the currency risk is probably lower than just about any other currency you can hold.

Meh, I think bitcoin is still a lot riskier than fiat. We still have to see how everything works out.

[wobber]

Here I was thinking that perhaps a mere 1 million does not change anybody's life at least in high-cost countries. But several million will do. Depends on person, but most of us will feel considerable economic freedom after the net worth hits 2, 3, 5 or 10 million. I don't think anyone who started with humble means can say that $10 million is not enough for personal needs for the rest of his life.

If you live in 1st world country, I'd say 5 mil USD are more than enough.

[RAJSALLIN]

Here I was thinking that perhaps a mere 1 million does not change anybody's life at least in high-cost countries. But several million will do. Depends on person, but most of us will feel considerable economic freedom after the net worth hits 2, 3, 5 or 10 million. I don't think anyone who started with humble means can say that $10 million is not enough for personal needs for the rest of his life.

The number of 10-millionaires is still small, but this (the economically free people, no matter how many million) is the class that can have considerable impact if they just

It is easy to give himself as an example. So I do I switched to all-Bitcoin in March 2013 and have spent 66 hours per month writing on this forum. If I was short of money, I could rake in anything between $200-$5000 per hour doing various things. But I regard writing about Bitcoin economics as more important. I am free to do it, and I am changing the world with my own small part.

The world at large is still absolutely clueless about Bitcoin. We can say that the general awareness was only really reached last month. The previous bubbles generated publicity, which faded away. Now it is not fading away, it is gaining grassroots adoption, and I believe that by trickling the knowledge that I and others generate, to the masses, the party can go on and on. It is possible that 2014 will be the year of Bitcoin. Yes, I am aware that 2013 already saw 100x gains

You really are a great asset for this forum. I wouldn't even be here if it wasn't for you. Was tipped off on another forum about a "a crazy Finnish guy who wrote great pieces about bitcoin". Huge thanks for your work here. I'm not sure that all bitcoin millionaires would go in your direction though but I could be wrong.

[keystroke]

The number of 10-millionaires is still small, but this (the economically free people, no matter how many million) is the class that can have considerable impact if they just

If they just what? Tell us.

[niner]

The number of 10-millionaires is still small, but this (the economically free people, no matter how many million) is the class that can have considerable impact if they just

If they just what? Tell us.

Rpietila, I think you mean "if they just put their minds to it"

[rpietila]

Perhaps next year will also see the rise of the Supernode.

$1.4/mBTC.

[GriTBitS]

to DA moon

[Trade101]

It is possible that 2014 will be the year of Bitcoin. Yes, I am aware that 2013 already saw 100x gains

I think the "average joe" will hesitate to invest at a price of >1000 $ / BTC... on a psychological level
lower prices should really increase investment.

a change to mBTC as proposed by many users already would be a nice solution for this.
otherwise many (uninformed) newcomers will simply buy 40 litecoins instead of a single bitcoin

[rpietila]

I also think that since litecoins are a ridiculous noninnovation, BTC people should really stop being so smug and move on to mBTC.

It is a shame to be beaten by ltc!

[Its About Sharing]

I also think that since litecoins are a ridiculous noninnovation, BTC people should really stop being so smug and move on to mBTC.

It is a shame to be beaten by ltc!

mBTC is definitely in the future.
But I also think mLTC is.

[Odalv]

I also think that since litecoins are a ridiculous noninnovation, BTC people should really stop being so smug and move on to mBTC.

It is a shame to be beaten by ltc!

I think LTC is controlled by single wealthy entity. He was able to collect/create large amount of LTC (creating currency, using GPU mining), and now he can pump and only he can dump :-) (he is owner of majority of LTC ... smart ass :-) ). 

[Rampion]

I also think that since litecoins are a ridiculous noninnovation, BTC people should really stop being so smug and move on to mBTC.

It is a shame to be beaten by ltc!

I think LTC is controlled by single wealthy entity. He was able to collect/create large amount of LTC (creating currency, using GPU mining), and now he can pump and only he can dump :-) (he is owner of majority of LTC ... smart ass :-) ). 

Satoshi has quite a big stash too. I guess that sooner or later we will end up knowing about him.

[KFR]

I also think that since litecoins are a ridiculous noninnovation, BTC people should really stop being so smug and move on to mBTC.

It is a shame to be beaten by ltc!

I have an immense respect for your analysis but I'd strongly urge you to think through the potential implications of the differences between the two.  I think you might be missing a trick.