Bitcoin MYTH #34: Owning 10% of money ≠ owning 10% of the world.

[Imahara]

You only own 10% of the world if you can actually buy it with the money you have.

Comparing the money supply with everything you could buy with money, you will find that these numbers are a factor 1000 different.

Bootstrapping a new currency like Bitcoin where everyone got a little would have been nice. But while the imperfect distribution of the nascent bitcoin money may mean some lucky guys get 'unfairly' rich, it really doesn't mean there will be zillionaires that determine our future if bitcoin becomes de facto money.

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[pandher]

Incorrect

[roslinpl]

Not correct this is not just so simple ...

[Erdogan]

You only own 10% of the world if you can actually buy it with the money you have.

Comparing the money supply with everything you could buy with money, you will find that these numbers are a factor 1000 different.

Bootstrapping a new currency like Bitcoin where everyone got a little would have been nice. But while the imperfect distribution of the nascent bitcoin money may mean some lucky guys get 'unfairly' rich, it really doesn't mean there will be zillionaires that determine our future if bitcoin becomes de facto money.

Correct, there is no connection between the value of money and what there is in the world to buy, or what is produced for that matter. The value depends only on what value the owners of money want to hold for day to day consumption or to hold for a rainy day.

[SlipperySlope]

Just suppose . . .

If all the world's currencies and bank accounts were replaced with bitcoin, then an implied price of bitcoin is determined by dividing M2 by the number of bitcoin available for transactions. It is assumed here that 80% of bitcoin will used as a relatively permanent store of value.

Coinbase has found that about 80 percent of its bitcoin wallet customers are viewing bitcoin as an investment.         

Code:

$61,000,000,000,000	world monetary base M2			
20,500,000	        estimated maximum bitcoins - 21M less those lost			
20%	                estimated fraction of bitcoin available for transactions			
$14,878,049	        implied price per bitcoin						

[twiifm]

You only own 10% of the world if you can actually buy it with the money you have.

Comparing the money supply with everything you could buy with money, you will find that these numbers are a factor 1000 different.

Bootstrapping a new currency like Bitcoin where everyone got a little would have been nice. But while the imperfect distribution of the nascent bitcoin money may mean some lucky guys get 'unfairly' rich, it really doesn't mean there will be zillionaires that determine our future if bitcoin becomes de facto money.

Correct, there is no connection between the value of money and what there is in the world to buy, or what is produced for that matter. The value depends only on what value the owners of money want to hold for day to day consumption or to hold for a rainy day.

Then what's the point of money if you can't buy anything with it? 

[Erdogan]

You only own 10% of the world if you can actually buy it with the money you have.

Comparing the money supply with everything you could buy with money, you will find that these numbers are a factor 1000 different.

Bootstrapping a new currency like Bitcoin where everyone got a little would have been nice. But while the imperfect distribution of the nascent bitcoin money may mean some lucky guys get 'unfairly' rich, it really doesn't mean there will be zillionaires that determine our future if bitcoin becomes de facto money.

Correct, there is no connection between the value of money and what there is in the world to buy, or what is produced for that matter. The value depends only on what value the owners of money want to hold for day to day consumption or to hold for a rainy day.

Then what's the point of money if you can't buy anything with it? 

You can buy anything with it. That is the point. It is the most sellable good on the market.

You can not aggregate everything of value in the real world, and think that there must be money to buy everything. There is no such relation. The aggregate value of money is different from the aggregate value of things to buy.

The aggregate value of money is the aggregate of what value each participant wants to have in reserve.

[twiifm]

You can buy anything with it. That is the point. It is the most sellable good on the market.

You can not aggregate everything of value in the real world, and think that there must be money to buy everything. There is no such relation. The aggregate value of money is different from the aggregate value of things to buy.

The aggregate value of money is the aggregate of what value each participant wants to have in reserve.

I agree.  My comment is directed at hoarding bit coins