2
If all of the world suddenly decided they want to use BTC as their currency, what would the value of 1 BTC be, as measured in today's US dollars?
(Of course dollars would drop to zero in this theoretical case, but we can still measure BTC in today's dollars and get a finite result)
5
Basing on this set of data from XKCD, world's GDP is $62,900,000,000,000, If all of it was expressed in 21 million bitcoins, then each bitcoin would be worth $2,995,238.10, so roughly 3 million dollars.
4Even at this point, 8 decimal place accuracy looks just enough. 1 satoshi will become 10 cents USD. – vi.su. – 2013-01-11T07:13:21.387
@vi.su. A good observation, I didn't even notice that... Although $3 million divided by 100 million satoshis is 3 cents, not 10 ;). – ThePiachu – 2013-01-11T08:01:46.420
2One paper dollar can be responsible for one thousand dollars worth of GDP if it were to turn over three times a day (e.g., velocity of about 1,000 on an annual basis.) The Federal Reserve says velocity for MZM is about 1.5 times per year, but M1 is nearly 7 times per year. So if GDP is 62.9 trillion, then just under 10 trillion M1 money is needed. – Stephen Gornick – 2013-01-11T08:11:30.910
Unaccepting this as per the comment on reddit - http://www.reddit.com/r/Bitcoin/comments/16d6ti/maximal_value_of_1btc_at_the_moment_about_3/c7uyrp2
2 @ripper234 this is the key point http://www.reddit.com/r/Bitcoin/comments/16d6ti/maximal_value_of_1btc_at_the_moment_about_3/c7v238d "If I pass one bitcoin around a billion times that's a GDP of a billion bitcoins.
That bitcoin wasn't worth a billion bitcoins though (how could it be). GDP therefore has nothing to do with the value of the currency used to measure it."
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I think a more reliable way is to compare it to gold, since the exact value of currency in the world is very difficult to calculate. It's estimated that 171,300 tonnes of gold have been mined in human history, which is roughly equivalent to 5.5 billion troy ounces.
5.5 billion oz/21 million bitcoin = 261.9 oz/bitcoin
The value of one ounce of gold is about $1,668 so the value of bitcoins in current dollars would be about:
261.9 oz/bitcoin * 1668 USD/oz = 436,849.20 USD/bitcoin
If bitcoin is lucky enough (and I hope it is) to be valued at 1% of the total gold supply, then each bitcoin would be around $4,368.49. This would make the entire bitcoin supply worth about $91 billion.
2Welp, this happened. – Michael – 2017-11-02T22:20:51.210
2
As of 2009, we have some random guy on the Internet estimating $4.5 trillion as the value of all paper and coin around the world. That's a pretty decent number to use if you're looking to imagine replacing all fiat money with Bitcoin.
One big problem: there would be more demand for "cash" transactions since Bitcoins are more convenient than physical cash.
That is, due to convenience factors, a lot of us like monetary transactions that don't require the existence of any paper or coin. If we all switched to Bitcoin, how many of us would transfer BTC to a bank for the promise to pay back?
Anyway, $4.5 trillion divided by $21 million is $214,285.71. That said, that's in 2009 dollars with the 2009 world economy, and a lot of assumptions. Also, with a deflationary currency that is far more convenient than paper and coin, its value would likely be far greater than that if every single human being wanted to only use Bitcoin and have all financial transactions denominated in BTC.
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All of those answer are right but they do not take in effect that bitcoins can, are and will be destroyed (I am talking about lost bitcoins not the network crash).
That said the value of one bitcoin will be higher than the expected value we calculated and should continue to rise as more bitcoins are destroyed.
Bitcoins can be destroyed by many ways:
-Losing one's wallet
-Making a payment to an invalid address (like the 0x0 puclic key, an elleptic curve in ECDSA cannot pass by (0,0))
1Care to explain why downvote, bitcoins can and will be destroyed....just loose your wallet. – Gopoi – 2013-01-13T01:11:19.297
It sounds like you are asking what the value of bitcoin would be if all of the M2 money supply in the entire world had to be exchanged into bitcoins. Of course, this is an apples to oranges comparison. – Stephen Gornick – 2013-01-11T08:06:27.237
@StephenGornick - it is and is not apples to oranges. Bitcoin derivatives could replaces some aspects of the M2 money supply that is today denominated in Fiat. – ripper234 – 2013-01-11T10:04:40.263
Why vote to close btw? Was it you @StephenGornick? – ripper234 – 2013-01-11T10:05:04.587
I am one of the two that voted to close this, yes. – Stephen Gornick – 2013-01-13T01:57:33.920
@StephenGornick - on what grounds? – ripper234 – 2013-01-13T06:44:46.787
@ripper234 - Because a discussion like this wouldn't be constructive? It would be a discussion, that itself, is grounds to be closed. It wouldn't be possible to even guess what the price would be because we wouldn't be able to calculate how many BTC there actually would be at said point. – Ramhound – 2013-01-16T17:21:11.773