I started this by comparing to Paypal, and by finding some statistics of Paypal.
Please note that all of this is based on the assumption Bitcoin will have very conservative success - but success over the long term nevertheless.
350mil+ Paypal users, from 2009 data we can estimate that that 135million of them are active users.
Active account average balance was 45$ in 2009, we shall use that without correction for expected growth.
This means 6 075million USD in just active account balances on Paypal in 2011.
So by 2022, if Bitcoin achieves just 5% of the current mass of Paypal, which could be very conservative, especially if Bitcoin is made easier for Joe Averages and some kind of Killer application becomes reality, ie. eBay + Craigslist type of events. Technological advances will make a huge influence as well to make this a reality, think about how things were in 2002.
If i calculated right there will be already ~19.03mil BTC in the wild by 2022.
That seems too much, but i based it on the halving of mined return per 210,000 blocks or 4 years.
If it's too much, it only makes this even more conservative.
If we assume 5% get lost forever by this time, that leaves us with 18.08mil BTC.
If even 5% of Paypal's mass today is reached by 2022 this means these will represent 303.75million USD, or 16.80USD/BTC. Seems far too conservative? Because it is.
Due to nature of Bitcoin, people will be inclined to hoard and keep them, in hopes of future gains. Bitcoin is also a value store, unlike with Paypal you are mad to keep any significant balance there for any period of time.
So we can assume safely people will keep atleast 4 times more, ie. 180$ or more in their balance.
This already leaves us with 67.20USD/BTC. That looks a lot more realistic - still conservative tho
But it remains extremely conservative STILL
. It does not account for new people getting connected, the growth of eCommerce, and that many wants to use Bitcoin also as a offline transaction medium, which AFAIK is happening to some degree already? ie. cash based exchanges, actual coins & bills etc. Which is impossible with Paypal.
We will buy more and more stuff online, and for many parts of the world internet is just beginning to see widespread adoption in some parts of the world. There still remains billions to be connected to internet. With the raise of better and better mobile devices, these people will get connected.
Just from eCommerce growth we can assume at least 50% growth by 2022, which is probably off by order of magnitude.
Add to that it's quite likely we will probably see nearly double the internet users by 2022, let's say 80% for a total of 58% of current world population using internet.
eCommerce growth will bring us to 100.80USD/BTC
Internet user growth will bring us to 159.26USD/BTC.
Unlike credit card companies, and almost any method of transactioning out there has fees of at least % for merchants. Only cash, and in most parts of the world bank wire transfers are free, neither of which is easy to automate for some portions.
This will mean a lot of Merchants will choose to support BTC when value slightly stabilizes, easy to automate, no transaction fees, likely to just increase in value - what's there not to like?
Assume this adds an conservative 10% to the % using BTC.
Russia, United Arab Emirates, Asia, are pretty much blocked off Paypal - In real world this would easily triple the amount of user base. We will choose an very conservative 50% for this figure too. This too would of course increase adoption within Merchants but we are not adjusting for that separately.
Merchant adoption increase: 175.19USD/BTC
Russia, UAE, Asia: 262.79USD/BTC
Add that to other potentially disrupting technologies: Think pre-paid Bitcoin "Credit cards" to use @ grocery stores, this "CC" would store the keys required for the grocery store to make the transaction from your wallet. Remember that with real cards merchants are trusted like this too. And this isn't even that hard to do.For short term someone could offer regular prepaid Mastercards which are prepaid using BTC
To recap the percentages of increase from 16.80$/BTC Are:
Hoarding/Investing into bitcoins: 400%
eCommerce Growth: 50%
Internet userbase Growth: 80%
Merchant Adoption: 10%
Russia, UAE, Asia Access: 50%
IMHO, these should be calculated in exponential fashion as in described above.
The 16.80$/BTC came from:
5% of Paypals mass 2011
users with 45$ average balance representing 6 075million USD.
18.08Million BTC in circulation
(135mil * 5%) * 45$ = 303.75Million USD
303.75 / 18.08 = 16.80$/BTC
1 518.75million USD
Russia, UAE, Asia: 1496.88$/BTC
My instinct is telling me however that we are going to see somewhere in vicinity 1000$/BTC.
If we use the 45$ average balance figure, and 10% of internet users are actively using BTC in 2022:
18 362million USD.
This holds better with my instincts
I did do some heavy assumptions here, but please do point out if i had blatant mistakes. Just remember on this i assumed mainstream success if the value seems too high to you.
If you did like my speculation, please donate something: 1983sUSuHXAWSMnYCX1ZJ2RFZBPPQwNVYD