velocity of money (number of times each unit turns over on average during the period in question)
Doesn't this equation assume that all payments are made by exchanging the actual currency (banknotes in the case of dollars, blockchain transaction for BTC)?
How does one define V when most dollar payments are made by moving numbers from one bank ledger to another? Wouldn't the same issue arise with BTC?
(Sorry for the stupid question, but when BTC are traded at an exchange, is each transaction immediately realized on the blockchain, or are transactions tracked in internal accounts, to be combined and realized at a later time?)
V can be read from the blockchain.
Er, sorry again, what is V now for bitcoins? How is it expected to change as PQ increases?
No exchanges use the blockchain for internal transactions. In common-book interexchange transactions, movements are aggregated as well.
The blockchain is a ledger. Whether dollars are currency or not is irrelevant to GDP. FRNs are functionally ledger entry tokens.
Last I checked V was 5.98, which is similar to the historical norm for USD, although USD is currently well below mean, meandering about 4.
My own expectation is that V will remain in the normal zone, but reserve demand will mean that the circulating fraction is small, and turns over relatively more rapidly. I know of no better predictor of future velocity in BTC than the present velocity. One or the other or both M, V will increase with increasing PQ. Given the reserve demand it is hard to understand how V can increase, since an increasing proportion of M has V=0.
I wish the price to be $5000 in a week or so but in my opinion it wont go that high in a week 
