Can we look through the hype?

[SeeBettor]

I'm not an economist. Please critique and tell me what's flawed in my following attempt to 'look through all of the hype'.

Am I correct in saying that the two value forces on a currency are:
1) utility
2) future speculation ("hype")

USD (or any stable fiat currency)
98% utility
2% future speculation ("hype")

BTC
2% utility
98% future speculation ("hype")

So, let's acknowledge that, over time, assuming BTC becomes more widely accepted, the force from "hype" will decrease and the force from utility will increase. Can we make some educated calculations on what the "actual value" of 1 BTC should be? (I know I'll get ripped apart for that last sentence.) What I mean is, can we make some educated calculations on what the value of 1 BTC would be if the force of "hype" approaches 0%; if the only thing that determined it's value was it's utility? Or is there even such thing as 'the force of utility'?

I read a comment on here that read something like, "What if all of the World's equivalent of US M2 was in BTC, the perfect "global currency"? Shouldn't then 1 BTC be worth [some insanely high USD number]...".

What if we took a more realistic view using this idea?

1) What will it be used for? Step one is foreseen to be; a certain percentage of the smartphone savvy user type of the world will use it (with a certain percentage of their spending money) for purchasing household types of goods or electronics from online retailers, and pay for items on eBay.
2) What percentage of all of the 'smartp.world' does all of that equate to and what percentage of their 'checking accounts' do they choose to have money held in BTC instead of local currency?

The fact that the total amount of BTC that will ever exist is finite, means that the greater the amount of that total 'spending money allocated for use in BTC' by the world is, then the greater the value of 1 BTC will be.

My rough attempt at 'looking through all of the hype'
an attempt at removing "hype", and looking at utility
entertain this:

number of smartphone users in the US: 145,000,000 people ("smartUS")
number of smartphone users in the World: 1,400,000,000 people ("smartWorld")

if 10% of the smartUS (at some point in the future) use BTC that would be: 14,500,000 people
if these smartUS-BTCers hold an average of 200 USD-worth-of-BTC (4% of a 5,000 USD checking account)
then there would be 2,900,000,000 USD-worth-of-BTC in the US
multiplied by 10 (because the smartUS represents approx 1/10th of the smartWorld)
then there would be 29,000,000,000 USD-worth-of-BTC in the World

current total of BTC: 12,000,000 BTC
less the rough estimate of 30% "lost"* would equal a current "working" total of: 8,400,000 BTC

Obviously some adjustments for future projections need be made (i.e. 5 years from now there is projected to be 250M smartUS and 17M BTC).

But, for now, lets assume that tomorrow morning 145M people in the world held an average equivalent of 200 USD worth of BTC.
Shouldn't 1 BTC be worth 3,452 USD? (29,000M/8.4M)

Of course, I too am laughing at the idea of saying 1 BTC should be worth exactly x. And even when looking at it this way you have a huge amount of variance to these assumptions that can be speculated upon.

But is it not possible to come up with some realistic range that the value 'should' stabilize towards if we first assume and generally agree that, for example; 5 years from now 10% of smartphone users in the world will be utilizing BTC to some extent to pay for goods and services? It certainly cannot mathematically be 40 USD/BTC? Can it?

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[hilariousandco]

Nobody can out a price on it, that's why it's mere speculation. It's futile even attempting to do calculations on this with such wild and unpredictable variables.

[kdrop22]

Nice analysis, with conservative and realistic assumptions.

[sailsh-sea]

agreed

[pungopete468]

One thing to consider is that the price won't be based on the total coins in existence. The price will be determined by the amount of coins up for sale in relation to the amount of demand to buy. The coins that people hold will be no different than coins that are lost as far as the market is concerned...

The price can swing greatly as people trade...

[coinpharmer]

looking threw the hype, a conservative number of 1million USD per bitcoin was found. ironically, this number is so high that nobody believes this is a possible situation so we have to jokingly say lower numbers like 1k-10k tops, in dreamland. it can easily go over 1million, so very easily.

[Sweetbee]

The USD is a lot more than 2% hype.

Want to know why we spend more than 8x than all other countries on earth combined on our military spending? To force (with the threat of violence) all oil producing countries to only accept USD for their oil. Without that the United States would of collapsed during the Cold War, again during Vietnam, and again after the gold standard was dropped (aka the US committed fraud on it's allies) again in 2008, and again this year in 2014, but it looks like nothing can stop the collapse of the dollar this time. We've hit the end of the road.

While bitcoin the hype isn't 98% but lower because the real value is on the protocol, which is a given that merchants will prefer not having a 1-2% fee, a given that people prefer that their money not be inflated into obscurity, that they don't want it to be controlled, confiscated, frozen, reversed, or slow and expensive for receiving or sending money.

"Hype" suggests false value based on brand name instead of fundamental worth. I disagree with your assumption that a decentralized, highly liquid, immune to counterfeiting, currency is inferior to traditional Government controlled fiat.