Topic: Just over $228,000 per day required to maintain current Bitcoin price. - page 2. (Read 5030 times)

Not at all. I assume that only 1/6th of all coins mined are sold for a currency. Which is in line with the amount of Bitcoins held at the exchanges.

I suppose I was unclear in my wording. By "trading currencies" I mean that they are being traded on the exchange for money.

If someone mines Bitcoins and then trades it for something that is then traded in Bitcoins and kept within the currency, then it is not being traded on the exchange. At this point about 5/6th of Bitcoins are either being traded among each other or being held on to.

Your assuming that people sell all coins mined every single day. That's a false assumption because that does not happen.

Actually it's 100% is used for trading currencies...   the other 5/6 are used to store to eventually trade,  buy and the seller then trades or stored to trade... eventually every single one of those coins are traded.

unless someone wants to die with a USB stick in his pocket filled with unspent bitcoins.

From what it looks like right now, only about one sixth of the Bitcoin economy is used for trading currencies.

thats only if everyne sells every single new bitcoin mined right? what about if people dont sell any at all? or ift hey only sell 25% of them? or 50%?

I have to give this s +1

I believe in the future, btc will be on par with gold..  the only difference is that you can dig more gold up, you cannot create more btc after 21M

Bitcoin is like gold. Even though it's much more practical than gold as a medium of exchange, from an economic standpoint it's best as a store of value. Bitcoins that are saved, are in fact Bitcoins that are used as a currency. Not perhaps as a medium of exchange, but still.

I feel that in the future Bitcoins value will rise significantly not only from increased trade but from the fact that more and more people will use it for very-long-term savings. Because it holds value well. This is currently clouded by the fact that the market is so small and speculation has caused wild price swings, but in the long term Bitcoin will be successful as a store of value as long as it's legal and the cryptography behind it remains unbroken.

Of course, I also see Bitcoin developing as a medium of exchange. The anonymity features, the decentralized nature and low fees will attract people and services similar to Bit-Pay will also help to increase trade using Bitcoins. Bitcoin is a practical, digital alternative to gold. It has a good chance of succeeding very well as long as the core fundamentals stay solid, which are legality, reliability and functionality. So far no problems with those.

Divided by 6.

A bitmunchies purchased exchanged for dollars still has to go through the exchange which is what is factored in here.

(7200 blocks per day * 4.7) / 6 = $5640

Or just: 7200 / 6:
1200 Bitcoins per day.

A lot of the Bitcoins mined to date have never been moved.  I wouldn't assume that the majority of Bitcoins are being used as currency at this point.

I think it's closer to 6 * 24 * $241.29 = $34,745.76

6 blocks per hour, 24 hours per day,  $241.29 printed every block = $34,745.76

Now if you limit it to just exchanges,  your number might be more accurate,  but I believe you'd be shorting the economy about 30,000 a day hence leading to a few pennies drop every day at that rate.  Eventually those coins will be sold...  you buy something with them on bitmunchies,  they sell them to buy more product...

unless they are hording the coins and then buying the products separately,  but then what they buy separately is added to the 34,000 figure.

Ok, my numbers are not exact mainly because I am lazy and do not wish to waste my time finding the exact numbers.

I have taken the calculations from this thread for this:
https://bitcointalksearch.org/topic/bitcoins-have-lost-17410837660-since-june-9th-2011-45882

I keep seeing how Bitcoin needs over a million USD per month to maintain the current price. Running the numbers based on the amount of Bitcoins created times the current price that would seem like simple math.

In fact, it is not.

Only those who are trading Bitcoin are affecting the price in relation to the various currencies. So everyone else is just using Bitcoin as a currency like it was meant to be.

Doing a broad assumption I am throwing out the figure that there are 1 million Bitcoins in the trade exchanges. This is based on MtGox having 432k BTC back in June and it was estimated that they have around 600k BTC now. And I figured the other exchanges may add up to at most around 400k BTC.

So that makes 1,000,000 BTC being traded at the exchanges. This is out of over 6,000,000 BTC in existence.

This means that 1 million BTC that are traded affect the price of the other 5 million in terms of a currency.

So, taking the figure from the other thread that $1 million needs to come into the economy each month and divide it by the portion that is actually being traded (1/6th) and you get $166k. Divide that by 30 and you get $5,500 per day.

Only 1200 new Bitcoins need to be purchased daily to maintain the current price levels. This is why when we get a sudden influx of people buying BTC the price swings so much.

Over the next year we only need 365 people to invest $5,500 each to maintain the current price. And then the rate gets cut in half and it will be down to $2750 per day. That is not much inflation for such a growing community.

If someone wants to tweak my numbers with more accurate findings then I will update the OP.