Topic: Unlikely Bitcoin price will ever surpass $5,000 (Read 6896 times)

It's a good point. Everyone has a different level of inflation depending on their spending habits, lgeography, etc. Even basic expenses vary wildly between families, depending on whether or not they have children. Has the price of meat been going up significantly? Yep, but it doesn't matter to a vegetarian.

Anyhow, just to play the devil's advocate, the monthly printing of money won't necessarily cause hyperinflation. Most of that money just gets passed around in derivatives and equities. It inflates those assets, but the average person isn't going to be affected by that. The concern is if the money breaks out of that big circle-jerk of hedge funds and starts puchasing real assets like farmland, cattle, rights to mine oil, etc. There are individuals with enough network who could corner entire markets and cause a massive run up in prices just for fun. When the Chinese start buying up prime farmland in the US, we should get worried.

that would be Jed McCaleb.

The only reason the US doesn't have double or triple digit inflation is because it owns the guns... but they'd do well to remember they aren't the only ones 

Where are you in the US that you don't think we have double-digit inflation *right now*?  Have you audited all your basic expenses from year to year?  I have, and the rate is hovering above 10% for the past 2 years.  Why do people believe the official numbers when all they have to do is run a few calculations on Quicken to see that those numbers are ridiculously low?

Hyperinflation is caused by economy grinding to a halt accompanied by grossly incompetent or corrupted monetary policy. I do not think that will happen to the USD at least in the next 20 years. Yes, they're stupid but they're not THAT stupid.

High inflation (double-digit, and not necessarily low double-digit annual inflation percentage), such as seen in 1990s Russia, however, is possible. All it takes is a significant economic contraction combined with China deciding they don't want to support the US economy any more.

They print 3% of M1 every month.

Are you serious?  You think bank notes in Zimbabwe magically sprouted 10 zeroes because people were fighting in the country?  I tend to believe the government had something to do with it...

Possably but even now it could even be as simple as going to a web page and entering the address you are sending to and have it create a forwarding address. Then you could send btc to the forwarding address and have ltc arrive at the other end, or vise versa.

i agree. The way i see it there is no good reason not to keep bitcoin small since cryptocurrencies can be exchanged against each other SO easily and fluidly. Just leave bitcoin the way it is and if transactions become a problem than we can use litecoins for micro transactions and bitcoins for big transactions, problem solved. This would of course be a little bit janky at first but in such an environment crypto-currency exchanges would evolve to become ubiquitous VERY quickly.

Bitcoin is open source. How do you lock that down?

Pictures of people who don't have children, but might do one day, and those currently non-existent children will be dead one day, that's the saddest.

pictures of children that you know will die in the future are also sad.

Its so sad to see pictures of children that you know are dead by now.

World narrow money is valued at $27 trillion.

Stock of narrow money:
$27.05 trillion (31 December 2012 est.)
$25.64 trillion (31 December 2011 est.)
$23.88 trillion (31 December 2010 est.)

Definition: This entry, also known as "M1," comprises the total quantity of currency in circulation (notes and coins) plus demand deposits denominated in the national currency held by nonbank financial institutions, state and local governments, nonfinancial public enterprises, and the private sector of the economy, measured at a specific point in time. National currency units have been converted to US dollars at the closing exchange rate for the date of the information. Because of exchange rate movements, changes in money stocks measured in national currency units may vary significantly from those shown in US dollars, and caution is urged when making comparisons over time in US dollars. Narrow money consists of more liquid assets than broad money and the assets generally function as a "medium of exchange" for an economy.

on a per country basis:
United States: $2.318 trillion (31 December 2012 est.)
Venezuela: $175.7 billion (31 December 2012 est.)
Zimbabwe    $12.28 billion (31 December 2012 est.)
Switzerland    $484.4 billion (31 December 2012 est.)
European Union    $6.205 trillion (31 December 2011)


So, it's not a matter of if, but when ...

ya i actually started thinking about this just as soon as i finished posting my previous message. Regular users could simply audit random transactions instead of every transaction.

This is a problem isn't it?

Maybe in the future instead of becoming an entire node yourself, a algorithm determines how many computers a node should be apart of based on internet speed and space available.

So in the the future you automatically connect into a node that contains perhaps 100 computers that you select or are automatically selected. And this node downloads the current transactions but each part of the node (1/100) downloads a smallish part that is a little slice of the whole)

This would mean the poor can continue to audit the network because they are apart of a node, just a smaller fraction. (and if they want to search within the node they connect to other computers to read the parts they don't have)

These are things we need to think about now or another currency will think about it and will fix it.

(also I understand that there is no need to download the entire blockchain, the client should give users a choice between full chain download or just the smallest part needed)

Imagine in the future you download the client and these are your options:

1. do you want to be apart of a node or an entire node
2. if you want to be a entire node, do you want the entire chain?

first BitCoin need to replace paypal and old fashion bank card transaction... then will see...

let say world tangible turnover of 7 bln people economics is

7 bln * 12 th = 84 000 000 000 000 only

10 mln of BitCoin can serve the 100% world people economics if 1 BTC will cost 8 400 000 US$ (10 mln BTC value 84 000 000 000 000)

so, 1 US$ will cost 0.000001 (about 1 microBTC)

but we are far away from this point

I think bitcoin will reach $1000 in maybe 5 years, and $5000 in another 5 years. Just a wild guess.

Lol, 2-3 % ??  Close your TV right now !

In the CPI calculation, they now account that an iPad2 is double the power of an iPad1, and sold at the same price, then, it account as 0.5 factor in the CPI calculation.  Have you tried to heat an iPad, heat you home of fill your gaz tank with an iPad.. ??

Is the iPad-like Stuff the major part of your expense ?

2-3% "official numbers" are such a scam !!!

Real inflation is way over 10% / year.. just look at your grocery bill, the price of gaz, electricity..

Here, our grocery bills have gone up arround 20% scince last year, same for Gaz, Electricity is almost 10% up.. construction wood +30%, wood to heat our house, 50%.. and all that, just last year..

Dont beleive this 3% official numbers...

There is no upper limit. People will be very happy sitting on their multi-trillion dollar worth bitcoin account and only spend a satoshi to buy a pizza, since that makes them feel good.  Do you ever feel not so good because you had too much money? 

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The amount of currency for circulation can be magnitudes lower than the amount of currency for saving. If someone always spend $3000 each month and get a salary of $3000 at the end of month, the total amount of currency needed to satisfy his transaction will never go above $3000

But if he plan to save money for retirement, then he will have to accumulate at least 3000 x 12 month x 30 years=1.08 million dollar when he reaches 60 years old, that is 360 times more money needed in his saving account than money in circulation. And some people will demand more than that amount

Of course bank will say that all these money saved there is just a waste of resource, let's loan out them and generate some return... And this means, 80% of that money get loaned out using FRB

But since all the investment carry some risk, sometimes the investment will generate huge loss, and when that hit eventually, non of those saving in banks survived. And banks can only hope that future generation will put their retirement saving into their banking system to be able to pay the previous account owner ...
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Bitcoin is best suited to avoid this kind of problem, it can hold whatever huge amount of value that is required for long term saving and it can make sure no one will steal these money to use on risky investment. If the citcoin price is always rising steadily, no one dare to loan out bitcoin savings, that will generate a loss for sure

And since it is a long term/high value saving account, the amount of transaction will not be too much, so the infrastructure today has enough capacity if it is not abused by rogue applications

Yeah, thats a pretty sensationalist puff piece.

Federal agencies blowing shitloads of taxpayer money on equipment they don't need and will never use is hardly new (look at the F-35 boondoggle), and certainly doesnt mean that civil war is about to erupt.

inorder for ordinary users to audit the blockchain they need to keep up to date with current transactions. Im not talking about a problem in the way of physically storing the blockchain on their computer, im saying they would be incapable of downloaing transactions as quickly as they were being produced.

Unless... http://www.naturalnews.com/039345_DHS_arms_race_armored_vehicles.html

Uhh, zimbabwe's inflation was due largely to a civil war destroying the economy.

Considering the US isn't fighting a major war on (or within) its borders (and likely wont be in the near future), neither post WW1 Germany or post Civil War Zimbabwe are really equitable to the current economic situation in the US.

 

Not quite - only unspent transactions are needed, and then, only on the miner nodes. This change is either already possible or will be possible soon without any serious changes. All spent transactions can be stored somewhere for history, or can be totally gone, it does not change anything.

Ordinary people need to download nothing.

Perhaps not. Other networks could always be strapped onto BTC that would allow for both faster confirmations and safe storage of coins, such as an online bank that is widely accepted by merchants. It's been brought up many times before, it could be easily audited, offer a higher comfort level for the non-technically savy, and take most of the small transaction volume off the network.

In general people only use national currencies because government have thus far been successful at blocking alternatives. If they fail to stop Bitcoin nobody is going to want to be the last person holding government-issued paper.

the problem here is more one of ordinary peoples inability to download a record of all the transactions in the world, which is what we do right now. Altering from this model fundamentally changes bitcoin. People would resist these changes and so reaching this limit would impose some sort of a soft cap on the value of bitcoin.

I think there is no reason why they could not co-exist.

Either Bitcoin fails or national currencies fail.

The transaction thing is a problem isn't it? For the blockchain to accommodate a massive economy it would have to run at least 5,000 - 10,000 fee per second right? We are talking about replacing most online transactions and many other transactions taking place in cash. The miners would make a lot of money though, which is good for the network.

Is 10,000 transactions ever going to be possible? Has anyone created a test net to optimize bitcoin for this future?

This gives total value around 1% of all gold, which feels about right, but it certainly could go higher.  And I'm talking about a few years, not 20. 

Where is proudhon when I need him?

LOL

Now that you started a thread we should see $5K/BTC within a month or two.  

there is no upper limit imposed here by the amount of capital that COULD flow into the bitcoin network. One potential upper limit though is provided by the fact that it would become almost imposable for the bitcoin system as it exists today to scale up to > 100 transactions per second. If bitcoin had 100billion in capitalization than there would be demand for far more than 100 tx per second. This would cause transaction fees to incrase to the point where bitcoins would become impractical for day to day trade.

Zimbabwean president in 1988 : "That was post-WW1 Germany, not Zimbabwe."

Yes the USD is doing terrible especially from an investment or savings perspective.  Inflation of ~2-3% is terrible, but real inflation is much higher I would estimate in the 5-7% range annually.  Governement CPI numbers are cooked numbers.  Check out the explanation at ShadowStats.com

Ask yourself this question.  Is it possible Bitcoin could become more valuable than the company Apple?   I think so.  And if it does it will be worth much more than 5,000 per coin.

Here's another thought.  Why is the U.S. Dollar better than Bitcoin?

So many of you have confidence that Bitcoin could be a 1 Trillion dollar economy? (in today's value)

Also lost coins will add to the scarcity.

http://www.youtube.com/watch?v=e3mxVjB4aqI

M0 is the wrong metric to use.

All the money in circulation and in our bank accounts, money which is used to trade for actual goods/services is M3. Everything in the world is not priced according to M0(which is only of relevance/accessible to banks and the Central Bank). As long as M3 does not collapse, you should price things in M3. If M3 collapses, the currency will be toast anyway as all banks will go under and people lose faith in the currency/finanical system.

More like 5 years. Yes, four digits is where my first sell orders are. buy at two digits, sell at four, double your digits investment

as long as inflation is only meassured with this "consumer price index" crap governments can pretend it is around 2 or 3 percent. It is just crap, as the entities "creating" the money (BANKS) will not buy plasma TVs, cars, holiday trips or whatever consumer stuff, but they will buy certificates, debt papers, precious metals or stocks/derivates. THERE you can see the real inflation ;-)


PS: you can also see it in the official figures already... when a computer hardware is getting 10 times faster they will artificially calculate the statistics that way that the price has lowered by factor 10 to "compensate" for increased fuel and/or electricity prices

That was post-WW1 Germany, not the US.

Learn from history:

No, and it is.

I'll be honest here, is the USD really doing that badly? I thought inflation was only around 2-3%

$5,000 long-term?
You can count on much higher, since the Dollar will be trash.

This is true, of course what ever $100 billion would be worth in 20 years.

Obviously OP is not taking into account INFLATION.

$100 billion could buy you some eggs in a few years lol

If its possible to have a secondary currency worth 1 trillion that would be awesome, but doesn't that mean some national currencies would have to take a back seat, and that seems unlikely right?

According to http://au.answers.yahoo.com/question/index?qid=20110104155108AAUzBen there is 260 billion Australian dollars in circulation, and Australia is a very strong and powerful economy. I can't imagine Bitcoin being worth more than the AUD

Well, for sure we will not see the 5000 USD within the next weeks, but hopefully i am wrong ;-))


IMO it is a wrong assumption to say that it is not possible. The bitcoin price should NEVER be interpreted as "All bitcoins have the actual market value". A price of 5000 USD can in theory show up on an exchange when nobody buys nor sells bitcoins at all, except for me selling to myself a very low amount 0.001 Bitcoin for 5 USD.

So in other words, the price alone does not tell you anything abuot the "magnitude" or "importance" of the currency, as usually the biggest amount is usually simply not traded.

Where do you get those numbers???

100 billion is not that much money for a medium size country and we are talking about a currency that the world can use! ANYONE connected to the internet can use bitcoin so please, provide a more elaborate explanation to your theory.

If each Bitcoin was worth $5,000, then the size of the Bitcoin market cap/circulation would be about $100Billion which feels like a upper limit.

Any higher than $100,000,000,000 would mean Bitcoin is being used as a national currency which seems unlikely.

Does anyone else feel that $5,000 per coin would be the upperlimit, maybe taking 20 years to reach?