How much bitcoin value would be needed to support a given amount of internet commerce?
Let say that the daily value of all internet purchases is X US$, and suppose that the payments are made with N bitcoins whose market value is B US$ each. How big must N and B be?
It is not as simple as X = N × B, because in practice the same bitcoins will probably be be reused many times during the day. Most clients will start out with common currency, and merchants will want to have common currency in the end, so the bitcoins will make many short trips exchange->client->merchant->exchange. In fact, if both client and merchant use the same exchange, then the bitcoin conversions could be bypassed entirely and the transaction would be just a bank transferof ordinary currencies, only cheaper.
Presumably, with automated exchanges these transactions would be very fast, and the bitcoins could be reused may times per day.
So, what is the minimum ratio N × B / X? Is it 10%? 1%? 0.01%?
Topic: How much bitcoin is needed to support internet trade? (Read 424 times)
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