I meant, the supply of bitcoins is limited to 21M BTC (not $21M). On Sat, Jun 18, 2011 at 12:19 PM, Mike Frank < michael.patrick.fr...@gmail.com> wrote:
> On Sat, Jun 18, 2011 at 11:30 AM, Jameson Quinn > <jameson.qu...@gmail.com>wrote: > >> I agree, though again, I don't believe bitcoin are a worth what they go >> for today. I would happily nakedly short bitcoin up to 10% of my net worth >> today, on a 2 year option period, if I could do so conveniently and without >> risk of getting called prematurely. I understand that by capping my downside >> at 10x that's not technically a fair bet, but since my utility for >> bankruptcy is more than 10x worse my utility for losing 10%, I think it is >> fair in utility terms. >> > > Well, I disagree with your assessment of its value. Supposing that > Bitcoins may eventually take over the world economy (whose totoal money > supply today in all national currencies is approx. $100 trillion), given > that the total supply of BTC is limited to at most $21M, this means the > equilibrium price of 1 BTC after the market stabilizes will be the > equivalent of ~US$5M today (assuming the world economy doesn't shrink > drastically in the meantime). > > Even if you assess that there is only a 1% chance of that particular > scenario coming to pass, that still means the expected eventual-equilibrium > value of a Bitcoin is at least ~$50,000 in today's dollars. So, at the > current price of $15, Bitcoins are under-valued by a factor of over 3,000, > at least. That's the way I see it... I expect it to increase by several > more orders of magnitude before it maxes out. > > -Mike > > -- > Full name: Michael Patrick Frank > Email addr.: michael.patrick.fr...@gmail.com (pers. email) > Snail mail: 820 Hillcrest Ave., Quincy, FL, 32351-1618 > Phone/voicemail: (413) 842-6670 (main number, uses Google Voice) > Webpage URL: http://www.facebook.com/M.P.Frank (pers. profile) > > -- Full name: Michael Patrick Frank Email addr.: michael.patrick.fr...@gmail.com (pers. email) Snail mail: 820 Hillcrest Ave., Quincy, FL, 32351-1618 Phone/voicemail: (413) 842-6670 (main number, uses Google Voice) Webpage URL: http://www.facebook.com/M.P.Frank (pers. profile)
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