Scaling bitcoin to world economy is unrealistic. - page 7.

mobodick

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Quote from: matthewh3 on September 16, 2012, 06:16:34 AM

Quote from: mobodick on September 16, 2012, 06:05:46 AM

Quote from: ?? on ??

I think a more realistic calculation would be the total number of Satoshi's minus a substantial percentage for loss and divided by the percentage of the worlds population likely to be in a position to use a digital currency.

So if quarter of the coins are lost and half the worlds population use bitcoin there are nearly half a million Satoshi per head.

From there distribute the worlds wealth through the population, 63 trillion / 7 billion = 9000 dollars per head. 9000 / half a million Satoshi's = 0.018 or about 2c a Satoshi, 1.8 million per coin (surprised how close that came out

)

But this distribution would need to be forced somehow otherwise it will never happen.
Or will everyone just allow the coin in their wallet to be distributed over the world?
So we will never see an equal distribution of bitcoin. It is not evenly distributed now and it will never be evenly distributed in the future.
And counting in satoshis is unfair when pople in this community sometimes already own thousands of bitcoin.

I'm talking about the economics of this community owning already half of the future total of bitcoin.
Then, even with your evaluation, this little community will own about half of the worlds currency.
Of course some of that will be spent, but it would still be the biggest amount of wealth owned by the smallest group of peaople ever in history of humanity.

So you haven't heard of the Rothschild's then.

Sure i have and that is my point.
Bitcoin would only shift the situation, not actually change it.

Etlase2

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Quote from: k3t3r on September 16, 2012, 06:48:05 AM

thats not really what i meant. i think of bitcoin as a form of money not just a way to send money.

But the gist is you're apologizing for the fact that bitcoin has its faults and that people will see that it isn't as revolutionary as it sounds. If bitcoin can't deflate in a stable manner, then fiat will be seen as more stable, and people will not store wealth in bitcoin as anything other than a risky investment. If bitcoin can't deflate in a stable manner, what incentive is there for people to "invest" in it? Why not just invest in gold instead? Oh because you can send money cheaply (then use it when you need to send money, like WU)? Because you can "fight the man" by getting in at the bottom of a pyramid and hoping more will do the same after you?

There is not much upside to anyone who wants the utility of a cryptocurrency that has had 50% of its money given away already who doesn't already have a vested interest. There will be competitors, and they will cause bitcoin stagnation at best, inflation at worst. Deflation is far from guaranteed. Once people realize that, what advantage does bitcoin have at all?

k3t3r

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Quote from: Etlase2 on September 16, 2012, 06:25:11 AM

Quote from: k3t3r on September 16, 2012, 05:49:17 AM

i dont see it as a replacement for other currencies. bitcoin will exist along side other forms of money including fiat currencies and people will choose which they want to use based on what value those forms of money offer.

So ^this is often the response. "Bitcoin wasn't particularly meant to be revolutionary, just a cheap way to send money."

See my signature for a palatable solution to having an unbounded supply that has significant protection against inflation and could actually replace fiat currency.

thats not really what i meant. i think of bitcoin as a form of money not just a way to send money.

Etlase2

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Quote from: mobodick on September 16, 2012, 06:05:46 AM

I'm talking about the economics of this community owning already half of the future total of bitcoin.
Then, even with your evaluation, this little community will own about half of the worlds currency.
Of course some of that will be spent, but it would still be the biggest amount of wealth owned by the smallest group of peaople ever in history of humanity.

This is the flaw of a closed supply. Even if everybody on earth was given 1 BTC, wealth will trickle its way up to those that lend or what have you, which in itself is not a problem, the problem is that the closed supply means that manipulation is much easier. So once someone gets ahold of a large part of the supply, they can manipulate it to make themselves even more and more wealthier. The same problem as gold. The same problem that is "baked in" to fiat currencies because the people with the gold influence the politicians to write the laws. Otherwise why would any government be silly enough to give up its right to produce currency, yet almost every single country in the world has done so. (Though admittedly many have done it by force of the influence of the more powerful countries.)

Quote from: k3t3r on September 16, 2012, 05:49:17 AM

i dont see it as a replacement for other currencies. bitcoin will exist along side other forms of money including fiat currencies and people will choose which they want to use based on what value those forms of money offer.

So ^this is often the response. "Bitcoin wasn't particularly meant to be revolutionary, just a cheap way to send money."

See my signature for a palatable solution to having an unbounded supply that has significant protection against inflation and could actually replace fiat currency.

k3t3r

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Quote from: mobodick on September 16, 2012, 06:09:07 AM

Quote from: k3t3r on September 16, 2012, 05:49:17 AM

i dont see it as a replacement for other currencies. bitcoin will exist along side other forms of money including fiat currencies and people will choose which they want to use based on what value those forms of money offer.

Realistically i agree completely with you.
I strongly feel that bitcoin is fully dependent on current underlying economic structures so it can only integrate with current systems but not replace them completely.

But i hear a lot of revolutionary talk on these fora and frankly i'm getting a bit scared by the completely unrealistic projections some people tend to dream up.
So i'm trying to point out flaws in that line of reasoning.
And frankly it's not very hard..

agreed

Quote

but it would still be the biggest amount of wealth owned by the smallest group of peaople ever in history of humanity.

i dont see this as a huge problem. and certainly not worse than under a central banking system. for the most part we live in a world were the money supply is largely owned and controlled by a handful (as a generous estimate) of families or corporations.

matthewh3

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Quote from: mobodick on September 16, 2012, 06:05:46 AM

Quote from: ?? on ??

I think a more realistic calculation would be the total number of Satoshi's minus a substantial percentage for loss and divided by the percentage of the worlds population likely to be in a position to use a digital currency.

So if quarter of the coins are lost and half the worlds population use bitcoin there are nearly half a million Satoshi per head.

From there distribute the worlds wealth through the population, 63 trillion / 7 billion = 9000 dollars per head. 9000 / half a million Satoshi's = 0.018 or about 2c a Satoshi, 1.8 million per coin (surprised how close that came out

)

But this distribution would need to be forced somehow otherwise it will never happen.
Or will everyone just allow the coin in their wallet to be distributed over the world?
So we will never see an equal distribution of bitcoin. It is not evenly distributed now and it will never be evenly distributed in the future.
And counting in satoshis is unfair when pople in this community sometimes already own thousands of bitcoin.

I'm talking about the economics of this community owning already half of the future total of bitcoin.
Then, even with your evaluation, this little community will own about half of the worlds currency.
Of course some of that will be spent, but it would still be the biggest amount of wealth owned by the smallest group of peaople ever in history of humanity.

So you haven't heard of the Rothschild's then.

mobodick

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Activity: 840

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Quote from: k3t3r on September 16, 2012, 05:49:17 AM

i dont see it as a replacement for other currencies. bitcoin will exist along side other forms of money including fiat currencies and people will choose which they want to use based on what value those forms of money offer.

Realistically i agree completely with you.
I strongly feel that bitcoin is fully dependent on current underlying economic structures so it can only integrate with current systems but not replace them completely.

But i hear a lot of revolutionary talk on these fora and frankly i'm getting a bit scared by the completely unrealistic projections some people tend to dream up.
So i'm trying to point out flaws in that line of reasoning.
And frankly it's not very hard..

mobodick

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Activity: 840

Merit: 1000

Quote from: ?? on ??

I think a more realistic calculation would be the total number of Satoshi's minus a substantial percentage for loss and divided by the percentage of the worlds population likely to be in a position to use a digital currency.

So if quarter of the coins are lost and half the worlds population use bitcoin there are nearly half a million Satoshi per head.

From there distribute the worlds wealth through the population, 63 trillion / 7 billion = 9000 dollars per head. 9000 / half a million Satoshi's = 0.018 or about 2c a Satoshi, 1.8 million per coin (surprised how close that came out

)

But this distribution would need to be forced somehow otherwise it will never happen.
Or will everyone just allow the coin in their wallet to be distributed over the world?
So we will never see an equal distribution of bitcoin. It is not evenly distributed now and it will never be evenly distributed in the future.
And counting in satoshis is unfair when pople in this community sometimes already own thousands of bitcoin.

I'm talking about the economics of this community owning already half of the future total of bitcoin.
Then, even with your evaluation, this little community will own about half of the worlds currency.
Of course some of that will be spent, but it would still be the biggest amount of wealth owned by the smallest group of peaople ever in history of humanity.

fivemileshigh

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Quote from: cedivad on September 16, 2012, 05:24:10 AM

The world financial economy and the world tangible economy are 2 real different things.

And the amount of cash that is needed to be in circulation is yet a 3rd very different thing. The value of everything that exists is one thing, but bitcoin only needs to replace the amount of cash in active circulation. Still a substantial amount compared to where it is today but nowhere near 3,000,000 of today's dollars. (unless my math is way off)

tosku

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Quote from: k3t3r on September 16, 2012, 05:49:17 AM

i dont see it as a replacement for other currencies. bitcoin will exist along side other forms of money including fiat currencies and people will choose which they want to use based on what value those forms of money offer.

This is the realistic view. Bitcoin will never be the #1 currency of the world. It will always be a niche currency, but that's good enough for me.

Savior

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As price goes up, more people will sell/trade their bitcoins away. We can already see this by the super early adopters, they have kept some probaly, but one of the firsts as an example bought himself a new house. The higher the value, the more tempting it will be to buy something.

If for instance bitcoin went up to 1000 $ now, I would sell more then half my bitcoins and buy stuff or diversify my investments.

k3t3r

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i dont see it as a replacement for other currencies. bitcoin will exist along side other forms of money including fiat currencies and people will choose which they want to use based on what value those forms of money offer.

mobodick

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Quote from: cedivad on September 16, 2012, 05:24:10 AM

The world financial economy and the world tangible economy are 2 real different things. There is a reason if the USD economy is orders of magnitude bigger than the others. Just saying.

Anyway, I don't see why it couldn't happen in 100 years.

Apple shares grow 1000 times in 10 years.

Yeah, they were early adopters...
And that's why i'm critical of bitcoin when it comes to this.
This small community already owns almost half of the possible bitcoins.
And due to deflation everyone is much more greedy than normally.
How the hell will 99.99999% of the world (almost everyone) agree on using what's left (about half) of the total amount of bitcoin.
Wouldn't that create a much much worse imbalance then is already there in the world?

cedivad

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The world financial economy and the world tangible economy are 2 real different things. There is a reason if the USD economy is orders of magnitude bigger than the others. Just saying.

Anyway, I don't see why it couldn't happen in 100 years.

Apple shares grow 1000 times in 10 years.

mobodick

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I just had a thought.
The crazy thing about it is i have never heared anyone actually talking about something similar.

Let's say the world economy is worth about 63 Trillion dollars.
Divide this by the ammount of bitcoin that will ever be made, 21 million.

63^12 / 21^6 = 3 milion dollar per bitcoin.

Soo...

In the end, for bitcoin to replace all other monies, it would have to be worth the equivalent of 3 milion dolars per bitcoin.

That also means, that everyone with more that 0.3 bitcoin would be the equivalent of a millionaire.

That's basicly everyone in the community right now.
And a lot of other people that will join soon enough.

It also means i'll be filthy rich in the future. Woohoo!

Now let's say Pirateat40 still has the 500.000 bitcoin that supposedly went through him.
He would then have owned $1.500.000.000.000 worth of bitcoin, or 1.5 trillion dollars worth.
He'd be the ritchest person to have ever been conceived.

So my question is, why do people keep thinking up fanasies about how bitcoin will take over the worlds moneys?
Isn't it blatantly clear bitcoin could never scale to a size that would allow it to operate as the worlds currency?

Topic: Scaling bitcoin to world economy is unrealistic. - page 7. (Read 10194 times)