[Eleazar]

Originally Posted by lewdog

$20 Bitcoin?

http://time.com/money/5136184/econom...facebook_money

Interesting


The supply of bitcoin increases only slowly towards its famous fixed limit and is now around 15m. The use of bitcoin as a means of payment is currently around $100m per month, or $1,200m a year. Were bitcoin just like ordinary money each bitcoin would be used around four times a year in making transactions. So we have 60m bitcoin payments supporting $1,200m worth of bitcoin transactions, which requires that each bitcoin is worth $20.

There’s always a “but” with such analysis. And the “but” in this case is that bitcoin could be worth its current value, but it would have to see a 1000-fold increase in its use as a form of payment.

“Of course that is possible; bitcoin currently supports only a tiny fraction of transactions,” the duo said. “But to assume so enormous an increase requires faith not only in the superior cost efficiency of the technology but also in the absence of any effective competition.”