How much will BTC be worth when it replaces what percentage of fiat?

Dr Bloggood

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Quote from: Zarathustra on January 15, 2014, 08:40:19 AM

Quote from: Dr Bloggood on January 14, 2014, 09:16:41 AM

Thanks for that post - now that's something to work with!

Quote from: MajikPiG on January 14, 2014, 08:41:06 AM

The Gross World Product (GWP) is currently around 80 trillion US$. (That's a US trillion, a British billion.)

Wouldn't the GWP be all the money the world economy turned over in a given period of time? How is that related to M2, M3 or whatever?

When you got some money on your account or under your mattress, it counts for the M's, but doesn't do anything, so doesn't count for the GWP.

Worldwide money (which is debt) is 200 Trillion.

With "money" defined as what (M2, M3,...)?

Source?

keithers

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This is the land of wolves now & you're not a wolf

Bitcoin will never replace fiat. Fiat will always be used for a large number of transaction, Bitcoin and other cryptos can strive to be the best alternative, but there is no way for a virtual currency to replace a physical currency, when not everyone on the planet has an internet connection.

Zarathustra

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Quote from: Dr Bloggood on January 14, 2014, 09:16:41 AM

Thanks for that post - now that's something to work with!

Quote from: MajikPiG on January 14, 2014, 08:41:06 AM

The Gross World Product (GWP) is currently around 80 trillion US$. (That's a US trillion, a British billion.)

Wouldn't the GWP be all the money the world economy turned over in a given period of time? How is that related to M2, M3 or whatever?

When you got some money on your account or under your mattress, it counts for the M's, but doesn't do anything, so doesn't count for the GWP.

Worldwide money (which is debt) is 200 Trillion.

mestar

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Quote from: Dr Bloggood on January 14, 2014, 02:29:32 PM

Quote from: mestar on January 14, 2014, 11:31:31 AM

I have estimated that if BTC hits 1 million dollars in the next 3 years, mining will be so profitable that miners can spend up to 3.6$ billion every day in electricity. So there will be billions of dollars worth of Bitcoins hitting the exchanges every day.

But there is always the same number of BTCs coming into existance every day, no matter what they are worth, right? So I don't see how spending more on mining brings more BTCs into existance.

"Billions of dollars worth of Bitcoins" in this case does not mean more bitcoins. If one Bitcoin is selling for 1 million, then daily 3600 Bitcoins becomes $3.6 billion.

mestar

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Quote from: porcupine87 on January 14, 2014, 11:34:51 AM

Exchanges? What exchanges? With being so expensive who would pay your super market, Amazon.com, your employees, your dentist, your mother with Bitcoin and only would receive Bitcoin. What exchanges?

More interessting would be, how much electricity would get wasted and how many hardware. Bitcoin would be much more secure than it would be necessary...

You got a point there. But, until you can pay your utility bills in Bitcoins, mining costs will push the price of Bitcoin down.

Dr Bloggood

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Quote from: pietje on January 14, 2014, 02:34:02 PM

Quote from: Dr Bloggood on January 14, 2014, 02:29:32 PM

Quote from: mestar on January 14, 2014, 11:31:31 AM

Quote from: Dr Bloggood on January 14, 2014, 08:27:04 AM

I have heard if BTC replaces all fiat money in the world, 1BTC would be worth approximately 1 million $ (I have also heard 2 million $, so maybe that 1 million is more on the lower side).

I have estimated that if BTC hits 1 million dollars in the next 3 years, mining will be so profitable that miners can spend up to 3.6$ billion every day in electricity. So there will be billions of dollars worth of Bitcoins hitting the exchanges every day.

But there is always the same number of BTCs coming into existance every day, no matter what they are worth, right? So I don't see how spending more on mining brings more BTCs into existance.

Yea true, actually it becomes smaller when block rewards half.
But as bitcoin value is 1 million, the bitcoins going into the market are maybe worthmore then now.

Ok, I see. That's obvious though, and they will do much less to the market than they would do now.

pietje

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Quote from: Dr Bloggood on January 14, 2014, 02:29:32 PM

Quote from: mestar on January 14, 2014, 11:31:31 AM

Quote from: Dr Bloggood on January 14, 2014, 08:27:04 AM

I have heard if BTC replaces all fiat money in the world, 1BTC would be worth approximately 1 million $ (I have also heard 2 million $, so maybe that 1 million is more on the lower side).

I have estimated that if BTC hits 1 million dollars in the next 3 years, mining will be so profitable that miners can spend up to 3.6$ billion every day in electricity. So there will be billions of dollars worth of Bitcoins hitting the exchanges every day.

But there is always the same number of BTCs coming into existance every day, no matter what they are worth, right? So I don't see how spending more on mining brings more BTCs into existance.

Yea true, actually it becomes smaller when block rewards half.
But as bitcoin value is 1 million, the bitcoins going into the market are maybe worthmore then now.

Dr Bloggood

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Quote from: mestar on January 14, 2014, 11:31:31 AM

Quote from: Dr Bloggood on January 14, 2014, 08:27:04 AM

I have heard if BTC replaces all fiat money in the world, 1BTC would be worth approximately 1 million $ (I have also heard 2 million $, so maybe that 1 million is more on the lower side).

I have estimated that if BTC hits 1 million dollars in the next 3 years, mining will be so profitable that miners can spend up to 3.6$ billion every day in electricity. So there will be billions of dollars worth of Bitcoins hitting the exchanges every day.

But there is always the same number of BTCs coming into existance every day, no matter what they are worth, right? So I don't see how spending more on mining brings more BTCs into existance.

allthingsluxury

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I doubt anyone would be able to accurately predict this.

porcupine87

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hm

Quote from: mestar on January 14, 2014, 11:31:31 AM

Quote from: Dr Bloggood on January 14, 2014, 08:27:04 AM

I have heard if BTC replaces all fiat money in the world, 1BTC would be worth approximately 1 million $ (I have also heard 2 million $, so maybe that 1 million is more on the lower side).

I have estimated that if BTC hits 1 million dollars in the next 3 years, mining will be so profitable that miners can spend up to 3.6$ billion every day in electricity. So there will be billions of dollars worth of Bitcoins hitting the exchanges every day.

Exchanges? What exchanges? With being so expensive who would pay your super market, Amazon.com, your employees, your dentist, your mother with Bitcoin and only would receive Bitcoin. What exchanges?

More interessting would be, how much electricity would get wasted and how many hardware. Bitcoin would be much more secure than it would be necessary...

mestar

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Quote from: Dr Bloggood on January 14, 2014, 08:27:04 AM

I have heard if BTC replaces all fiat money in the world, 1BTC would be worth approximately 1 million $ (I have also heard 2 million $, so maybe that 1 million is more on the lower side).

I have estimated that if BTC hits 1 million dollars in the next 3 years, mining will be so profitable that miners can spend up to 3.6$ billion every day in electricity. So there will be billions of dollars worth of Bitcoins hitting the exchanges every day.

porcupine87

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hm

Quote from: MajikPiG on January 14, 2014, 09:47:31 AM

Okay, I found an estimate of world M3 at $75 trillion, which, if it's at all accurate, makes my numbers not horrifically far off.

ETA:
http://gizmodo.com/5995301/how-much-money-is-there-on-earth

Quote

For the narrowest definition, or what's called "M0", that includes only physical money, paper bills and metal coins that constitute currency. That figure is around 5 trillion dollars. The next step up is M1, which includes all the physical money, plus quickly accessed money like that in checking accounts, and comes in at $25 trillion. M2 includes M0 and M1, but also pulls in stuff like savings accounts and CDs under $100,000. That figure is around $60 trillion. And the last figure, the $75 trillion M3, is much more abstract and not often cited in official figures. It includes institutional money market funds, long term deposits, and other stuff rich people possess that can somehow be spent but confuses the rest of us.

ETA:
But actually, I think M1 or M2 is a better measure for this than M3.
Using M1: If M1 =~ $2.5e13, then, at 100% BTC, 1BTC =~ $1.2 million
Using M2: If M2 =~ $6e13, then, at 100% BTC, 1BTC =~ $2.85 million

The 21mio. bitcoins are the monetary base. It is "physical".
1. When I have 1Mio. btc and deposit it on a bank, M1 grew by 1mio. to 22mio., because I have 1mio. which I can withdraw all the time and the bank has 1mio. in theier physical power.
2. When I lend 1mio. btc to you and we make a contract that you pay me back 1mio. in one year, M1 stays the same, but M2 grew by 1mio.

So does it make sense to take the M0 number, the monetary base? Not really, because Bitcoin is not a money like we knew it. Maybe we need no banks in the future. Less lending, because no manipulating of the money supply. etc.

But this is all just hypothtical. I think it is possible to go to 100 000$ in terms of purchasing power of 1$ today. But that's it. And this number we reach only if everything works perfekt. Not only the state is a thread. Google etc. could come up with a better money. As so can do other cryptocurrencies.

Dr Bloggood

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Quote from: Mike@Coinswag on January 14, 2014, 10:23:25 AM

Rather than in $ terms, I think we need to look at it like this:

When/If BTC becomes 10,50,70,80, to 100% of all World currency, what is it's purchasing power?

I welcome the day that .000006 BTC pays a month's rent, or buys that new 50in LED tv you need.

But that's just a different way of calculating it, right?

We are just doing our calculations in terms of todays purchasing power.

Dr Bloggood

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Quote from: MajikPiG on January 14, 2014, 09:47:31 AM

Okay, I found an estimate of world M3 at $75 trillion, which, if it's at all accurate, makes my numbers not horrifically far off.

ETA:
http://gizmodo.com/5995301/how-much-money-is-there-on-earth

Quote

For the narrowest definition, or what's called "M0", that includes only physical money, paper bills and metal coins that constitute currency. That figure is around 5 trillion dollars. The next step up is M1, which includes all the physical money, plus quickly accessed money like that in checking accounts, and comes in at $25 trillion. M2 includes M0 and M1, but also pulls in stuff like savings accounts and CDs under $100,000. That figure is around $60 trillion. And the last figure, the $75 trillion M3, is much more abstract and not often cited in official figures. It includes institutional money market funds, long term deposits, and other stuff rich people possess that can somehow be spent but confuses the rest of us.

ETA:
But actually, I think M1 or M2 is a better measure for this than M3.
Using M1: If M1 =~ $2.5e13, then, at 100% BTC, 1BTC =~ $1.2 million
Using M2: If M2 =~ $6e13, then, at 100% BTC, 1BTC =~ $2.85 million

I remember reading somewhere about $75 trillion, but I'm not sure and don't remember if it was M2, M3 or whatever.

We need M3 IMO, your quote is describing it in a bit of a strange way. BTC can for sure substitute long term deposits, and what are money market funds, something like a pension fund or so (this might just be a language problem, my mother tongue isn't English)? In that case, it would be better to calculate without those funds.

I'm pretty sure though M1 is not enough, that one is really too narrow. M2 or M3.

Using M3: If M3 =~ $75 trillions, then, at 100% BTC, 1BTC =~ $3.57 million

EDIT: I guess something between M2 and M3 would be accurate (depending on what institutional money market funds exactly are and how much of M3 they actually make up..)

Dr Bloggood

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Quote from: zeetubes on January 14, 2014, 09:44:02 AM

I'm probably going to embarrass myself here because it's been a few years and I don't have a good web connection to research. I think m3 is the figure you want. Even though it's still lies, it shows all of the money floating around the system including printed money. Bernanke stopped releasing the m3 figures because they weren't relevant (what a b.s. fuck that guy is). You'll probably find that every day around $3T passes hands through the world's financial systems and that is the figure that btc is chasing. GDP is a meaningless measure which includes things like unsold houses and cars plus all that government spending. So the government proudly claims GDP is rising when all that happened was they started a new war, or gave more money to bail out the welfare banks. Checkout shadowstats for some excellent estimates.

I read you guys' reply after my post - I agree, M3 is what we want! World M3 should be a lot higher than 3 million though. GDP, as I initially suspected, is meaningless.

And yes, Shadowstats is awesome (I just got to it while doing my research - we probably researched simultaneously on the same pages, all of us...

).

Mike@Coinswag

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Rather than in $ terms, I think we need to look at it like this:

When/If BTC becomes 10,50,70,80, to 100% of all World currency, what is it's purchasing power?

I welcome the day that .000006 BTC pays a month's rent, or buys that new 50in LED tv you need.

zeetubes

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Here's a clue. From today's headlines too.

' The Fed, which supervises U.S. bank holding companies, is among authorities from London to Washington probing whether traders shared information that may have let them manipulate prices in the $5.3 trillion-a-day foreign-exchange market to maximize their profits, said a person with direct knowledge of the matter, asking not to be named because it’s confidential. The central bank’s involvement in the probe hasn’t been previously reported.'

Dr Bloggood

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Quote from: MajikPiG on January 14, 2014, 09:34:03 AM

Quote from: Dr Bloggood on January 14, 2014, 09:16:41 AM

Thanks for that post - now that's something to work with!

Quote from: MajikPiG on January 14, 2014, 08:41:06 AM

The Gross World Product (GWP) is currently around 80 trillion US$. (That's a US trillion, a British billion.)

Wouldn't the GWP be all the money the world economy turned over in a given period of time? How is that related to M2, M3 or whatever?

When you got some money on your account or under your mattress, it counts for the M's, but doesn't do anything, so doesn't count for the GWP.

You're right. Monetary Base (MB) is probably the best bet to figure this out. MB of the US is supposedly $3,736,101,000,000. What about the world?

The first question is which one of the M's to take (M0, M1, M2, M3,M4).

I guess it should be either M2 or M3.

M0 and M1 would be too narrow, I'm pretty sure. So let's go with M3 (or maybe even M4), because this somewhat resembles the use of BTC and shows which part of the economy BTC could theoretically substitute.

I googled the world M3 for 20 minutes, I couldn't find it.

But $75 Trillion is what I remember having read somewhere as well - that is why initially I thought you were on the right track.

It's probably even higher than governments admit, with all the money printing (making 1BTC in our example worth more) - for example, the US government stopped reporting the M3 8 years ago.

MajikPiG

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But even with that, I'm only finding statistics for the US. In order to answer the OP's original question, we need to know the value of the world's entire money supply.

ETA: Okay, I found an estimate of world M3 at $75 trillion, which, if it's at all accurate, makes my numbers not horrifically far off.

ETA:
http://gizmodo.com/5995301/how-much-money-is-there-on-earth

Quote

For the narrowest definition, or what's called "M0", that includes only physical money, paper bills and metal coins that constitute currency. That figure is around 5 trillion dollars. The next step up is M1, which includes all the physical money, plus quickly accessed money like that in checking accounts, and comes in at $25 trillion. M2 includes M0 and M1, but also pulls in stuff like savings accounts and CDs under $100,000. That figure is around $60 trillion. And the last figure, the $75 trillion M3, is much more abstract and not often cited in official figures. It includes institutional money market funds, long term deposits, and other stuff rich people possess that can somehow be spent but confuses the rest of us.

ETA:
But actually, I think M1 or M2 is a better measure for this than M3.
Using M1: If M1 =~ $2.5e13, then, at 100% BTC, 1BTC =~ $1.2 million
Using M2: If M2 =~ $6e13, then, at 100% BTC, 1BTC =~ $2.85 million

zeetubes

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I'm probably going to embarrass myself here because it's been a few years and I don't have a good web connection to research. I think m3 is the figure you want. Even though it's still lies, it shows all of the money floating around the system including printed money. Bernanke stopped releasing the m3 figures because they weren't relevant (what a b.s. fuck that guy is). You'll probably find that every day around $3T passes hands through the world's financial systems and that is the figure that btc is chasing. GDP is a meaningless measure which includes things like unsold houses and cars plus all that government spending. So the government proudly claims GDP is rising when all that happened was they started a new war, or gave more money to bail out the welfare banks. Checkout shadowstats for some excellent estimates.

MajikPiG

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Quote from: Dr Bloggood on January 14, 2014, 09:16:41 AM

Thanks for that post - now that's something to work with!

Quote from: MajikPiG on January 14, 2014, 08:41:06 AM

The Gross World Product (GWP) is currently around 80 trillion US$. (That's a US trillion, a British billion.)

Wouldn't the GWP be all the money the world economy turned over in a given period of time? How is that related to M2, M3 or whatever?

When you got some money on your account or under your mattress, it counts for the M's, but doesn't do anything, so doesn't count for the GWP.

You're right. Monetary Base (MB) is probably the best bet to figure this out. MB of the US is supposedly $3,736,101,000,000. What about the world?

Dr Bloggood

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Quote from: whtchocla7e on January 14, 2014, 08:46:27 AM

Why does it matter how much BTC will be worth in USD in the future? Why does it matter now? Unless you're a speculator, the whole idea is to abandon fiat. Once bitcoin replaces fiat, fiat will be worth 0 because nobody will use it, ideally.

Speculators Angry

I for one am a speculator, although I sincerely hope BTC will win against fiat via technical k.o.

Btw, speculators are necessary now, they speed up this process of adoption A LOT.

This whole calculation is just to get a refernce for where the BTC-price is right now, and I have to say, if you think about the possibilities, that calculation is more than amazing!

Dr Bloggood

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Quote from: RaTTuS on January 14, 2014, 08:39:25 AM

umm there is what 10Trillion dollars ? floating around the world that does not include all the other currencies

21million BTC in to 10 Trillion goes how many times ?

you need to do some homework

21 mio goes into 10 trillion 476,000 times, and that number would be higher if we calculate with more than 10 trillion. So really, your post doesn't make any sense.

Better would be if you helped finding out with which number we should actually calculate (instead of 10 trillion).

Dr Bloggood

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Thanks for that post - now that's something to work with!

Quote from: MajikPiG on January 14, 2014, 08:41:06 AM

The Gross World Product (GWP) is currently around 80 trillion US$. (That's a US trillion, a British billion.)

Wouldn't the GWP be all the money the world economy turned over in a given period of time? How is that related to M2, M3 or whatever?

When you got some money on your account or under your mattress, it counts for the M's, but doesn't do anything, so doesn't count for the GWP.

Quote from: MajikPiG on January 14, 2014, 08:41:06 AM

So, if today you managed to mine the entire 21 million BTC and replace all fiat currency with it, 1BTC would be roughly equal to 3,800,000 US$.

Wow, that's a lot of $ for 1 BTC! Now, if you only took the BTCs currently in existence for that calculation, you would even get 6,500,000 US$ for 1 BTC!

Quote from: MajikPiG on January 14, 2014, 08:41:06 AM

However, the GWP grows approx. 3% per year, making BTC worth way more by the time it's all mined should it replace fiat.

Good point! Then, one could debate about the calculation of the GWP anyways, so it's all very complicated.

Furthermore, I don't believe the official GDP numbers for a second, they are "managed" intensely by the governments, especially the US one. Just calculating the US GDP with the real inflation would mean a negative growth for the US - which is exactly what is taking place! Europe is fucked as well.

In any case, we can see that all of those calculations are just a very rough number and you could calculate the variables in many different ways.

Quote from: MajikPiG on January 14, 2014, 08:41:06 AM

And, despite what we all wish, unless you had a hegemony that adopted BTC, you wouldn't replace all fiat. And, BTC being a pretty libertarian currency, I highly doubt most BTC proponents want a world government.

I totally agree. This is just to get a feeling for the current evaluation, and this seems to be even better than I thought...

BTC to $100,000 is good enough for me...!

Meuh6879

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Quote from: Dr Bloggood on January 14, 2014, 08:27:04 AM

BTC Market Cap 100% of all fiat = 1 BTC $1 000 000

that's why µBTC exist ... Grin

MajikPiG

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True, but it will matter how much buying power I have in a fiat-free future.

whtchocla7e

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Why does it matter how much BTC will be worth in USD in the future? Why does it matter now? Unless you're a speculator, the whole idea is to abandon fiat. Once bitcoin replaces fiat, fiat will be worth 0 because nobody will use it, ideally.

Speculators Angry

MajikPiG

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The Gross World Product (GWP) is currently around 80 trillion US$. (That's a US trillion, a British billion.)

So, if today you managed to mine the entire 21 million BTC and replace all fiat currency with it, 1BTC would be roughly equal to 3,800,000 US$.

However, the GWP grows approx. 3% per year, making BTC worth way more by the time it's all mined should it replace fiat.

And, despite what we all wish, unless you had a hegemony that adopted BTC, you wouldn't replace all fiat. And, BTC being a pretty libertarian currency, I highly doubt most BTC proponents want a world government.

RaTTuS

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Bite me

umm there is what 10Trillion dollars ? floating around the world that does not include all the other currencies

21million BTC in to 10 Trillion goes how many times ?

you need to do some homework

Dr Bloggood

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The question is: What percentage of the market cap of fiat does BTC have to reach in order to be worth x dollars?

I didn't calculate it myself, I'm just throwing out numbers I have heard here and hopefully you guys can confirm/correct and go into specifics:

I have heard if BTC replaces all fiat money in the world, 1BTC would be worth approximately 1 million $ (I have also heard 2 million $, so maybe that 1 million is more on the lower side).

That would mean:

BTC Market Cap 0,1% of all fiat = 1 BTC $1000
BTC Market Cap 1% of all fiat = 1 BTC $10 000
BTC Market Cap 10% of all fiat = 1 BTC $100 000
BTC Market Cap 100% of all fiat = 1 BTC $1 000 000

I'll stop here...

Does anybody know how much the total M2 of fiat in the world is? And should we use exactly M2?

Topic: How much will BTC be worth when it replaces what percentage of fiat? (Read 3079 times)