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

[colinistheman]

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.



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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.

[Lauda]

Interesting read here. I'm pretty sure that this is possible, credit cards can be a pain I rather use Bitcoin.
This is just a matter of time. CCs were invented in the '50s right? So it took them quite some time for this level of adoption. We are in the age of technology now, so Bitcoin should/will spread at a much faster pace.

[lepirate]

Seems reasonable. Can't wait for that to happen!

[colinistheman]

Interesting read here. I'm pretty sure that this is possible, credit cards can be a pain I rather use Bitcoin.
This is just a matter of time. CCs were invented in the '50s right? So it took them quite some time for this level of adoption. We are in the age of technology now, so Bitcoin should/will spread at a much faster pace.

Yes, and look at the next step of credit cards in the USA. I just found and posted this today too:

https://bitcointalk.org/index.php?topic=720088.0

Credit cards are only going to become more and more expensive.

[SOAD]

It's still speculation / wishful thinking at the end of the day. 1% is a bigger number than you might think so $5000 is quite a while away if it ever comes/

[nope491]

Someone says 1 million $ per bitcoin, some other says 100.000$, all in all the future seems bright

[Welsh]

It's still speculation / wishful thinking at the end of the day. 1% is a bigger number than you might think so $5000 is quite a while away if it ever comes/

0.1% is still quite a reasonable way away (we don't want to get there anytime soon anyway) but, it's a realistic number to aim for considering the price of everything will continue to go up, for example charges on credit cards and other such services. Bitcoin is the way to go and more and more people are talking about it.


Welcome to the next revolution.

[bananaControl]

If you are wrong, I will be very, very disappointed with you!

[Baitty]

So it is not to late to get involved in Bitcoin? Great! Now go tell that to all the newbies who keep on asking the same questions.

[Lauda]

Interesting read here. I'm pretty sure that this is possible, credit cards can be a pain I rather use Bitcoin.
This is just a matter of time. CCs were invented in the '50s right? So it took them quite some time for this level of adoption. We are in the age of technology now, so Bitcoin should/will spread at a much faster pace.

Yes, and look at the next step of credit cards in the USA. I just found and posted this today too:

https://bitcointalk.org/index.php?topic=720088.0

Credit cards are only going to become more and more expensive.

Well all the expenses with CCs, sending money with just about any service is very expensive. If you compare it with Bitcoin, one would think why hasn't everyone already switched.
The first and last time that I used WU or any similar service to transfer money took me 1/4 of the money sent as a fee. With bitcoin it would have just been the transaction fee which is 0.0001 i.e. a few cents.

[BurtW]

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%

[runam0k]

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.

$500k in 2033? I'll take that. I can be patient.

[leex1528]

It would be nice to see it rise like that....I am skeptical mainly because I am involved now...When I first started on Bitcoin prices were around $800 dollars.  Highest I have seen since then is around $650. 

So, if Bitcoin fails we can blame me:0

[bitkilo]

I can't predict the future but i think $500000 per btc is wishful thinking, i really hope your right but theres a long way to go yet. It will probably be back at $1000 by end of year then slowly rise more i think. 2018 or something like that it may be worth $10000 if we're lucky but nobody really knows. I like your post though, keep it up.  

[Puberty]

But... Bitcoin only had three bubbles. First bubble was back in June 2011 when it reached $33. Next one was in April 2013 when it reached $265. Last one was in November 2013 when it reached $1,200.

[spazzdla]

I love your thinking we will be free from the grips of the Royal 13 in the future.  Alas you underestimate what they will do to never lose their power...  samson will be their final move.. :S.

[BurtW]

The power consumption over the next 50 years is harder to predict than the price.  There are many factors simplified above that could change.

x = $500,000 per BTC

    Sure, but in 50 years $500,000 may only buy you a cup of coffee
    As the value of the USD falls, we use less power.

f = fees per hour will keep the coinbase above 6 BTC/hour (1 BTC/block) in all eras

    This is very hard to predict and is only a total guess on my part.
    If the fees per hour are less, we use less power.

c = $0.10 per kWh

    This is bound to go up due to inflation and peak oil/coal/natural gas production over the next 50 years.
    As this goes up, we will use less power.

g = 0.1 miner gross profit margin

    I have no idea, in fact miners may average less than a 10% gross profit margin.
    If this is higher, say 20%, we use less power.

[colinistheman]

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

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

[SpontaneousDream]

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

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

$5,000 in the next 6 months!? LOL. What planet are you living on?

[BurtW]

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.