Sounds pretty accurate and I think all intentional...Need an enemy to blame and BTC will be it.
You are probably right that bitcoin will be blamed when many people's savings are wiped out. That worries me as well. But what do you mean by "intentional"? 
Topic: How and When Fiat Will End - page 3. (Read 2613 times)
Sounds pretty accurate and I think all intentional...Need an enemy to blame and BTC will be it.
Intro
Reasonable economists like Peter Schiff and many others have for a long time foreseen a currency collapse in the USD and other currencies but they have not been succesful at predicting a timing for this possible future event. I now believe that I know how and when this will materialize and I wish to present my case in this thread. There are some formulas in this thread. If you are not comfortable with them, just skip them. The main point that they make is that bitcoin rises in price when more goods are being traded in bitcoins.
Monetary Theory
The classical velocity equation for money states that the value of a currency is given by
PQ = MV, where P is inversely proportional to the value of a currency -- the price level. Q is the value of goods being traded in that currency within a given amount of time, M is the number of currency units. V is the average velocity for the currency, i.e., how many times it changes hands within the same time interval that defines Q.
In another thread here I show that the value of any currency can be expressed as val=Q/(M*V). This means that the market cap of a currency is val*M = Q/V.
Hyperinflation of USD and State Currencies
The long-term trend of a rising bitcoin value is due to an increased amount of goods and services being traded in bitcoins. But this also have an inverse impact on the dollar. When goods are traded in bitcoins, they are no longer traded in dollars and this reduces the demand for dollars which lowers the price. This effect has not yet been felt for the dollar since bitcoin is still such a small currency (market caps is thousands of times less than USD). But if, and I am quite certain it will, bitcoin continues to experience more good and services being traded then this is just a matter of time.
This leads me to my first conclusion: Bitcoin will be the catalyst for the collapse of the USD. I should add that the world will be better for it although it will be a heavy storm which will destroy the savings of many and might have adverse political consequences. See this thread for more on that: Bitcoin's Dystopian Future, by dacoinminster
When will this occur?
The second question is timing: When will bitcoin hyperinflate the world's fiat currencies?
My thesis is that this will occur when bitcoin's market cap becomes so large that people will start to see the dollar fall because of it and the debasement of the dollar exceeds that of regular price level rises which is around 2 % (some claim that it is higher, though). But since Bitcoins rise in value is exponential, the exact ratio at which this will happen is less important. Here, I simply assume that fiat will hyperinflate when bitcoin reaches a market cap of between 1 and 10 % of all the world's fiat currencies. I use the Forum user rpietila's economic analysis presented here to support the claim of exponential rise and to calculate future values of bitcoin.
It is easier to know M in bitcoin than it is in USD but I will use the M2 supplied by the Federal Reserve which is 11215bn USD or 11.2tr USD. If someone has a better measure, I am happy to fix this later. The US share of world GDP is 22.3 according to the UN (source).
So assuming that the rest of the world has a monetary system comparable to that of the US, I estimate that the world M2 converted into USD is 11.2tr USD/0.223 = 50.20tr USD. Remember that it is mainly the order of magnitude that I am trying to calculate here. The exact numbers are interesting but irrelevant for the core of my argument.
So I predict that my scenario will happen when (or if) bitcoin reaches a market cap of between 500bn USD and 5'000 USD which is approximately 67 to 667 times the current value. According to the forum user rpietila's calculations, the Bitcoin price ten doubles every 325 days (see the formula in the top link in his thread that I linked to above. This means that Bitcoin will increase in value by a factor of 67 within 518 days which is Friday, 30 October 2015. Bitcoin will increase by a factor of 667 times within 844 days which is Tuesday, 20 September 2016.
Conclusion
I therefore predict
(1): Bitcoin will catalyse the collapse of world fiat currencies.
(2): Fiat currencies will hyperinflate when Bitcoin reaches a market cap of between 500bn USD and 5'000bn USD. This means a price between 30'000 USD and 300'000 USD per bitcoin.
(3): This will probably occur at some point between October 2015 and September 2016.
I think (1) and (2) are fairly certain but of course many unexpected things can happen. (3) is entirely dependent on the rate of the exponential rise and whether bitcoins rise in value i exponential at all. I believe it is but the timing might be adjusted as the exponential rates change.
Reasonable economists like Peter Schiff and many others have for a long time foreseen a currency collapse in the USD and other currencies but they have not been succesful at predicting a timing for this possible future event. I now believe that I know how and when this will materialize and I wish to present my case in this thread. There are some formulas in this thread. If you are not comfortable with them, just skip them. The main point that they make is that bitcoin rises in price when more goods are being traded in bitcoins.
Monetary Theory
The classical velocity equation for money states that the value of a currency is given by
PQ = MV, where P is inversely proportional to the value of a currency -- the price level. Q is the value of goods being traded in that currency within a given amount of time, M is the number of currency units. V is the average velocity for the currency, i.e., how many times it changes hands within the same time interval that defines Q.
In another thread here I show that the value of any currency can be expressed as val=Q/(M*V). This means that the market cap of a currency is val*M = Q/V.
Hyperinflation of USD and State Currencies
The long-term trend of a rising bitcoin value is due to an increased amount of goods and services being traded in bitcoins. But this also have an inverse impact on the dollar. When goods are traded in bitcoins, they are no longer traded in dollars and this reduces the demand for dollars which lowers the price. This effect has not yet been felt for the dollar since bitcoin is still such a small currency (market caps is thousands of times less than USD). But if, and I am quite certain it will, bitcoin continues to experience more good and services being traded then this is just a matter of time.
This leads me to my first conclusion: Bitcoin will be the catalyst for the collapse of the USD. I should add that the world will be better for it although it will be a heavy storm which will destroy the savings of many and might have adverse political consequences. See this thread for more on that: Bitcoin's Dystopian Future, by dacoinminster
When will this occur?
The second question is timing: When will bitcoin hyperinflate the world's fiat currencies?
My thesis is that this will occur when bitcoin's market cap becomes so large that people will start to see the dollar fall because of it and the debasement of the dollar exceeds that of regular price level rises which is around 2 % (some claim that it is higher, though). But since Bitcoins rise in value is exponential, the exact ratio at which this will happen is less important. Here, I simply assume that fiat will hyperinflate when bitcoin reaches a market cap of between 1 and 10 % of all the world's fiat currencies. I use the Forum user rpietila's economic analysis presented here to support the claim of exponential rise and to calculate future values of bitcoin.
It is easier to know M in bitcoin than it is in USD but I will use the M2 supplied by the Federal Reserve which is 11215bn USD or 11.2tr USD. If someone has a better measure, I am happy to fix this later. The US share of world GDP is 22.3 according to the UN (source).
So assuming that the rest of the world has a monetary system comparable to that of the US, I estimate that the world M2 converted into USD is 11.2tr USD/0.223 = 50.20tr USD. Remember that it is mainly the order of magnitude that I am trying to calculate here. The exact numbers are interesting but irrelevant for the core of my argument.
So I predict that my scenario will happen when (or if) bitcoin reaches a market cap of between 500bn USD and 5'000 USD which is approximately 67 to 667 times the current value. According to the forum user rpietila's calculations, the Bitcoin price ten doubles every 325 days (see the formula in the top link in his thread that I linked to above. This means that Bitcoin will increase in value by a factor of 67 within 518 days which is Friday, 30 October 2015. Bitcoin will increase by a factor of 667 times within 844 days which is Tuesday, 20 September 2016.
Conclusion
I therefore predict
(1): Bitcoin will catalyse the collapse of world fiat currencies.
(2): Fiat currencies will hyperinflate when Bitcoin reaches a market cap of between 500bn USD and 5'000bn USD. This means a price between 30'000 USD and 300'000 USD per bitcoin.
(3): This will probably occur at some point between October 2015 and September 2016.
I think (1) and (2) are fairly certain but of course many unexpected things can happen. (3) is entirely dependent on the rate of the exponential rise and whether bitcoins rise in value i exponential at all. I believe it is but the timing might be adjusted as the exponential rates change.
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