USD$1B: 2012-05-01
1BTC=1gAu: 2012-04-01
This is like
Yabusame with a moving target. Gold's price will fluctuate and the number of Bitcoins will continue to rise, not to mention the potential for exogenous shocks.
Yes ,you are right, it was a bit like comparing apples to oranges.
The example was just to get some proportions of the size of the markets that are possible for bitcoin.
If bitcoin were -for example- to replace paypal there would be no way to have 100B of commerce over a period
of 1 year with "only" a total value of 1B ( unless 1/3 of all bitcoins were spent EVERYDAY)
Bitcoin Days Destroyed is a measure of transaction volume, analogous to
velocity. Being calculated per block, it shows that about 1/3rd of all Bitcoins are exchanged at a given time (unless my interpretation is mistaken). This has been holding steady since the bubble high in June, so it is easily within the realm of possibility that a great deal of nominal value has changed hands.
PayPal is not used as a currency trading platform; behind the scenes may be different. I think Bitcoin might be seeing high unit turnover because of algorithmic trading on exchanges in combination with new inflows. Some back-of-envelope calculations (i.e. inaccurate and probably flawed):
Assume a $10mm economy size with 1/3rd of Bitcoins exchanging hands (everything including exchanges, API trading and private transactions) every block:
10,000,000 x 0.33 = 3,300,000/block
Amount per hour:
3,300,000 x 6 = 19,800,000/hr
Amount per day:
19,800,000 x 24 = 475,200,000/day
Amount per year:
475,200,000 x 365 = 173,448,000,000/yr
So over $173 billion per year transacted with an economy at a static size of $10mm; a
very active economy, much like existing forex markets. Even if the transaction volume ratio is actually 1%, that still puts the annual exchanged amount at over $5 billion, using the same assumptions as above. I would expect the ratio to decline somewhat as the economy increases in size, but being $50mm now, a drop to 10% would still be greater than in the example ($5mm vs. $3.3mm) for a total of $262.8 billion transacted per year.
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