$500,000 per Bitcoin, baby. The math behind it.

[Peter R]

2. Trezor is very secure and $119.  You may not consider this cheap but, of course, the price will drop over time.

My goal with sigsafe was to make an extremely simple and low cost hardware wallet, that will have both low-security and high-security applications. The BOM cost is < $8 and could be further reduced.  I don't think we will be launched until the winter, however.  

[tucenaber]

If BTC were to go to $500,000 in this era it would cause a catastrophic mining bubble:

   $500,000 x 25 = $12,500,000 per block = $75,000,000 per hour

   $75 million per hour would drive the mining to attempt to use 675 GW.  This is about 30% of all the power generated on the planet.

This seems wrong. The world electricity production 2008 was 20 181 TW according to wikipedia.

0.675 TW / 20181 TW = 0.003%

Quite a lot of energy but nowhere near world production

Got the units wrong.

[smooth]

If BTC were to go to $500,000 in this era it would cause a catastrophic mining bubble:

   $500,000 x 25 = $12,500,000 per block = $75,000,000 per hour

   $75 million per hour would drive the mining to attempt to use 675 GW.  This is about 30% of all the power generated on the planet.

This seems wrong. The world electricity production 2008 was 20 181 TW according to wikipedia.

0.675 TW / 20181 TW = 0.003%

Quite a lot of energy but nowhere near world production

That is TWh/year, not TW. Divide it by 365 day/year * 24 hour/day and his number was about right.

[tucenaber]

That is TWh/year, not TW. Divide it by 365 day/year * 24 hour/day and his number was about right.

Right. Thank you.

[Rakitich]

I've seen the math, and I like the math.

[jubalix]

Yes, it will take a while to reach $50,000. Many years.

But it will hit $5000 within the next 6 months.

A sustained $5000/BTC price would drive mining to attempt to consume about 0.3% of world wide power production.  That is a lot, but at least is it possible.

How much does the banking sector consume of world power, eg servers, atms, branches, minting cash, credit cards etc etc. I think that BTC can repalce 50% to 10% of banking finance sector at least. The Banking sector must be at least 5% and so will consume about 5% of power. This 0.3% is ok. Also mining as heating will be a very good using in cold countries as the power will be already paid for.

Having said that A POS such As Peercoin could take over at this point as it does not face the mining head wind

[gusty]

i cant wait until btc reaches $1 million

[ammy009]

Bitcoin is the 3rd revolution I'm living through

1st revolution was Personal Computer's which are now tablets and smartphones to many (1980's-2000's)
2nd revolution was The Net the age of instant free info (1990's-2000's)
3rd revolution was Digital Cryptocurrency (2010's-)

I honestly believe most here will be telling our grand kids about a thing we used to have called money that evil governments printed at will to fuel stupid wars.

They will ask, "Gramps, how did you become so rich?"

You will say, "Because I SAW THE REVOLUTION COMING and put lots of worthless government notes into tech notes you call BITCOIN."

After you've been front lines in a couple of revolutions you start to see them coming.

BITCOIN is like the Internet and the personal computer. It is the NEXT revolution.

Bitcoin had four ten-fold growth bubbles:

• $0.05 per bitcoin. The start.
• $0.50 per bitcoin. First tenfold bubble
• $5.00 per bitcoin. Next tenfold bubble
• $50.00 per bitcoin. Next tenfold bubble
• $500.00 per bitcoin. Our current bubble

Next bubbles:

• $5,000 per bitcoin.
• $50,000 per bitcoin.
• $500,000 per bitcoin.

For $5,000 to happen you need ONLY 0.1% acceptance of world population for Bitcoin. We are at 0.01% now.

$50,000 is just 1% of Gross World Product by Bitcoin. This produces the $50,000 bubble.

$500,000 per Bitcoin is just 10% Gross World Product by Bitcoin.

Can Bitcoin hit 10% growth of population?

Credit cards did and they reject 90% of the world.

Bitcoin rejects no one.

So Bitcoin will go in trade where Visa/Mastercard refuse to go.

So way over 10% of Gross World Product can eventually be Bitcoin.

10% of Gross World Product is $8.5 trillion.

Divide 12M coins into $8.5 trillion

$500,000 Bitcoin baby.



- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

The original poster of this was not me. Full credit goes to this guy "domainbrokers". I liked his post so much that I wanted to share it.

I wanna believe your theory  but, I frankly say .... is it really possible 
 

[AtheistAKASaneBrain]

It's perfectly possible, respectable individuals like the Xapo founder believe it so as well:

"In a video interview with the Wall Street Journal, Mr. Casares says he’s not worried about bitcoin’s own volatility hampering its adoption – though he expects significant volatility over the next few years. He predicts that in a decade, one bitcoin will be worth somewhere between half a million dollars to one million dollars."

http://blogs.wsj.com/digits/2014/04/02/bitcoin-price-to-1-million/

Of course, the dumb ass average Joes that cannot think outside the box and consider any prediction like that as insane, will never make it. They will always find excuses "Oh he's heavily invested, oh this Bitcoin thing will crash". It's what they want to believe so they don't have the risk of buying and holding, and the ones that already have coins will not be able to resist the urge to sell when we are back to 1K or so. The people that is going to make it big within the next decade are only the 1%, which is what makes such a big price possible, because there will be a massive redistribution of Bitcoins in each bubble-burst cycle.

[Hyena]

I wanna believe your theory   but, I frankly say .... is it really possible  
 

Everything that is possible IS POSSIBLE. If it's not impossible, then it must be possible. Basic laws of the universe. Is it possible for you personally to get sick ass rich by holding bitcoins? Now that's separate question. Most of you bulls here fail to grab this once in a lifetime opportunity and GO ALL IN. You will get your profit as a nice lottery winning but that profit won't be significant.

You don't have any time at all to test it out and see if you can double your 200 euro investment before investing a significant amount of fiat. If you hesitate, you are already a loser. The honey badger does not hesitate. It is your basic human right to become sick ass rich, now exercise that right.

If we, the bulls, all honestly believe that we have every right in the world to be part of the greatest redistribution of wealth in the history of mankind, then this will happen. It's sorcery and our rulers have been doing this for centuries with their bizarre rituals (reptiles are very ritualistic). We, however, have been dumbed down by the mass media and education system to believe ridiculous shit such as that making career and working hard is the only socially acceptable path to prosperity and good life.

If you go all in, you can be sure that you will be tested by the machine. The matrix tries to shake you out at all cost.

• You will throw away your 10000 bitcoins with trash at time when the coins costed perhaps only 1$.
• You will lose your coins by making dumb assumptions such as that the coins on your address will remain there after you have made a 0.0001 BTC test transaction, ignoring the fact that your remaining 9999.9999 coins were sent to a change address. By the time you realize your mistake, you have already deleted the wallet.
• You will lose your coins because you used Windows OS and a trojan stole them.
• You will lose your coins because you wanted to test out the martingale strategy on satoshidice.com.
• You will lose your coins because you hold them on an exchange and it got hacked/went rogue.
• You will lose your coins because of daytrading. You bought high, sold low and turned into a bitter duck fucker.
• You will lose your coins because you spend them on an ASIC that will mine you less coins than it originally costed.
• You will lose your coins to pirateat40 or similar scams.
• You will lose your coins because you go all in on scam and shitcoins such as the AuroraCoin and PayCoin.

 

Such things happen only to break your will and play on your petty human emotions in the future, making it hard for you to buy in again. It is demotivating to lose your stash and this will filter out the majority of early adopters who subconsciously believed that they don't deserve to become a rich motherfucker. At the end of the day, it is your personal mindset and description of the world that will determine your monetary outcome. The system feeds on the energy you radiate with the emotions you express as you lose your stash and it will play all the nasty tricks on you to pump that energy out of you. You don't get rich by being so much better and smarter than everyone else. You get it by understanding how this universe really operates. The stuff they teach you at school is mostly deception. They even teach you wrong history, especially about the colonization of America (where the slaves came from, how America got its name, for example).

[IIOII]

It's perfectly possible [...]

It's not only possible, it's likely if Bitcoin doesn't fail. Bitcoin's value will be either zero or very very high. I don't think a scenario where Bitcoin continues to exist as a niche currency has a high probability, because its benefits are too disruptive. So either there is a systemic failure and Bitcoin is replaced by something better, or Bitcoin will conquer the whole economy.

[BurtW]

"In a video interview with the Wall Street Journal, Mr. Casares says he’s not worried about bitcoin’s own volatility hampering its adoption – though he expects significant volatility over the next few years. He predicts that in a decade, one bitcoin will be worth somewhere between half a million dollars to one million dollars."

http://blogs.wsj.com/digits/2014/04/02/bitcoin-price-to-1-million/

Again, this is not possible or even desirable until maybe era 6 - unless the value of the dollar falls significantly.

We cannot/do not want to get to $500,000 per BTC any time soon.  Here is the math behind it:

https://bitcointalk.org/index.php?topic=694401.0

If BTC were to go to $500,000 in this era it would cause a catastrophic mining bubble:

   $500,000 x 25 = $12,500,000 per block = $75,000,000 per hour

   $75 million per hour would drive the mining to attempt to use 675 GW.  This is about 30% of all the power generated on the planet.

So, in order to keep our power consumption under about 2% of world wide power production, we cannot/do not want the price to get to $500,000 before era 6, which is about 2033 or so.

Using my previously derived formula for the power consumption:

P = (6(50/2^e) + f)(x)(1 - g)/c [kW]

where:

x = exchange rate [USD/BTC]
e = era [0..32] (we are currently in era 1)
f = average fees per hour [BTC/hour]
c = cost of energy [USD/kWh]
g = average gross profit margin [unitless ratio]

we can look at the power consumption in each era assuming a price of $500,000 per BTC.

In order to make it simple I will make the following assumptions:

x = $500,000 per BTC
f = fees per hour will keep the coinbase above 6 BTC/hour (1 BTC/block) in all eras
c = $0.10 per kWh
g = 0.1 miner gross profit margin

Code:

     Original target      Subsidy    Est Fees  Power  % of total world
Era    starting year    BTC/block    BTC/hour     GW  power production
---  ---------------  -----------  ----------  -----  ----------------
  0             2009  50.00000000  0.00000000  1,350            58.41%
  1             2013  25.00000000  0.00000000    675            29.20%
  2             2017  12.50000000  0.00000000    337            14.60%
  3             2021   6.25000000  0.00000000    169             7.30%
  4             2025   3.12500000  0.00000000     84             3.65%
  5             2029   1.56250000  0.00000000     42             1.83%
  6             2033   0.78125000  1.31250000     27             1.17%
  7             2037   0.39062500  3.65625000     27             1.17%
  8             2041   0.19531250  4.82812500     27             1.17%
  9             2045   0.09765625  5.41406250     27             1.17%

[Oscilson]

If BTC were to go to $500,000 in this era it would cause a catastrophic mining bubble:

   $500,000 x 25 = $12,500,000 per block = $75,000,000 per hour

   $75 million per hour would drive the mining to attempt to use 675 GW.  This is about 30% of all the power generated on the planet.

So $500k price will not happen now. It could happen in 13 years, when the block reward is 1/16 of 25 bitcoin/block. The electricity cost of mining bitcoin is less than 2% of world electricity cost. The electricity is even lower if you include the building, salary and management cost.

We also need to include the cost saving by removing some of the present banking service.

[Elwar]

It will likely be $500,000 next week.

And I am willing to loan anyone 1 bitcoin now for only $100,000 as a down payment.

Rock bottom interest of only 1% APR!!!!

[mattiadeabtc]

It will likely be $500,000 next week.

And I am willing to loan anyone 1 bitcoin now for only $100,000 as a down payment.

Rock bottom interest of only 1% APR!!!!

Yeah bro, loan me 4 btc at 400,000 i have an island for collateral, LoL 

[saturn643]

It's perfectly possible, respectable individuals like the Xapo founder believe it so as well:

"In a video interview with the Wall Street Journal, Mr. Casares says he’s not worried about bitcoin’s own volatility hampering its adoption – though he expects significant volatility over the next few years. He predicts that in a decade, one bitcoin will be worth somewhere between half a million dollars to one million dollars."

http://blogs.wsj.com/digits/2014/04/02/bitcoin-price-to-1-million/

Of course, the dumb ass average Joes that cannot think outside the box and consider any prediction like that as insane, will never make it. They will always find excuses "Oh he's heavily invested, oh this Bitcoin thing will crash". It's what they want to believe so they don't have the risk of buying and holding, and the ones that already have coins will not be able to resist the urge to sell when we are back to 1K or so. The people that is going to make it big within the next decade are only the 1%, which is what makes such a big price possible, because there will be a massive redistribution of Bitcoins in each bubble-burst cycle.

Give it time, the main thing is to get more adoption, businesses, and people using it.
The price will take care of itself once  Bitcoin is seen as viable to the masses.

[brg444]

"In a video interview with the Wall Street Journal, Mr. Casares says he’s not worried about bitcoin’s own volatility hampering its adoption – though he expects significant volatility over the next few years. He predicts that in a decade, one bitcoin will be worth somewhere between half a million dollars to one million dollars."

http://blogs.wsj.com/digits/2014/04/02/bitcoin-price-to-1-million/

Again, this is not possible or even desirable until maybe era 6 - unless the value of the dollar falls significantly.

We cannot/do not want to get to $500,000 per BTC any time soon.  Here is the math behind it:

https://bitcointalk.org/index.php?topic=694401.0

If BTC were to go to $500,000 in this era it would cause a catastrophic mining bubble:

   $500,000 x 25 = $12,500,000 per block = $75,000,000 per hour

   $75 million per hour would drive the mining to attempt to use 675 GW.  This is about 30% of all the power generated on the planet.

So, in order to keep our power consumption under about 2% of world wide power production, we cannot/do not want the price to get to $500,000 before era 6, which is about 2033 or so.

Using my previously derived formula for the power consumption:

P = (6(50/2^e) + f)(x)(1 - g)/c [kW]

where:

x = exchange rate [USD/BTC]
e = era [0..32] (we are currently in era 1)
f = average fees per hour [BTC/hour]
c = cost of energy [USD/kWh]
g = average gross profit margin [unitless ratio]

we can look at the power consumption in each era assuming a price of $500,000 per BTC.

In order to make it simple I will make the following assumptions:

x = $500,000 per BTC
f = fees per hour will keep the coinbase above 6 BTC/hour (1 BTC/block) in all eras
c = $0.10 per kWh
g = 0.1 miner gross profit margin

Code:

     Original target      Subsidy    Est Fees  Power  % of total world
Era    starting year    BTC/block    BTC/hour     GW  power production
---  ---------------  -----------  ----------  -----  ----------------
  0             2009  50.00000000  0.00000000  1,350            58.41%
  1             2013  25.00000000  0.00000000    675            29.20%
  2             2017  12.50000000  0.00000000    337            14.60%
  3             2021   6.25000000  0.00000000    169             7.30%
  4             2025   3.12500000  0.00000000     84             3.65%
  5             2029   1.56250000  0.00000000     42             1.83%
  6             2033   0.78125000  1.31250000     27             1.17%
  7             2037   0.39062500  3.65625000     27             1.17%
  8             2041   0.19531250  4.82812500     27             1.17%
  9             2045   0.09765625  5.41406250     27             1.17%

I won't be satisfied until 51% of the world's power is used to secure the Bitcoin network.

[Oscilson]

I won't be satisfied until 51% of the world's power is used to secure the Bitcoin network.

How much of world power is used to secure fiat by all the countries? We should also include the cost of police, army etc and convert that into electricity power.

[NorrisK]

I won't be satisfied until 51% of the world's power is used to secure the Bitcoin network.

How much of world power is used to secure fiat by all the countries? We should also include the cost of police, army etc and convert that into electricity power.

We could do that by counting the amount of donuts they eat, convert this into calories, which can then be calculated into Joules. This can then be compared to the electricity. Easy calculation right?

[Oscilson]

I won't be satisfied until 51% of the world's power is used to secure the Bitcoin network.

How much of world power is used to secure fiat by all the countries? We should also include the cost of police, army etc and convert that into electricity power.

We could do that by counting the amount of donuts they eat, convert this into calories, which can then be calculated into Joules. This can then be compared to the electricity. Easy calculation right?

Good point