On Fri, 31 Dec 2010 14:37:21 +0000, Ben Hutchings wrote: > However, so far it does look like an exercise in crypto wanking and not > a useful currency. There are currently about 1.3 million issued > bitcoins (and the protocol limits the total number to only 21 million). > The market value of a bitcoin is about USD 0.3 and there are no > bitcoin-denominated bank accounts, bonds, etc., so the money supply is a > mere USD 390,000.
If we can learn something from the currency markets, it is that the relative value of a currency versus another is not fixed, and is definitely not determined by the number of notes issued. It is determined by demand for each currency, which is (in the long term), determined by the relative value of the goods produced/exchanged in each currency and the trade balance between them. In the short term, changes in the note supply, currency speculation and other sorts of short-term sudden flows can (temporarily) shift the market price. However, the top value of 21 million can present a problem: if bitcoin starts to become popular, it means more people are using it. If we assume 21 million people each earn in bitcoins the equivalent of 46000/12 ~= 3833 USD monthly (approx. the US GDP per capita), it means 1 bitcoin would be worth 3833 USD. Thus, buying 1 USD worth of goods means spending ~ 0.00026 bitcoins. This would probably become problematic as numbers that small can be hard to deal with in day to day usage. -- Saludos, Felipe Sateler -- To UNSUBSCRIBE, email to [email protected] with a subject of "unsubscribe". Trouble? Contact [email protected] Archive: http://lists.debian.org/[email protected]
