bitcoin

Five Possible Scenarios for Bitcoin’s Future

by bitcoinblog · January 7, 2014

We’re going to discuss the purchasing power of 1 milliBTC (that is 0.001 BTC) in each of the possible future scenarios for Bitcoin the future once its value gets stabilized:

1. Money becomes omnipresent: In this utopian and hard to imagine scenario, the world will be very different than it is today and nobody will be poor in the sense people of not having all the basic needs covered. In this case it’s not really important what the price of 1 milliBTC is exactly a the money we know today might even have evolved to other forms. Let’s say that in this scenario 1 milliBTC is equivalent to $1,000.
2. Bitcoin replaces fiat currency completely and become the only currency on earth: The world is valued at $400T (that is $400,000,000,000,000), and most part of it corresponds to financial assets, so we can estimate that the whole Bitcoin market would be valued at $100T in this scenario, which means 1 milliBTC is $5,000.
3. Bitcoin becomes an important currency just like USD or EUR: Bitcoin shares most of its economical properties with gold, and we could approximate the value of Bitcoin in this scenario by taking the current value of all gold in the world, and thus 1 milliBTC would be $300.
4. Bitcoin’s price stops rising for some reason: This means the value of Bitcoin gets stuck at some value in between scenarios 3 and 5, not going up but not losing its potential either. This scenario would be rare in today’s economics since it won’t be a stable situation, but could happen. Seems fair to take a logarithmic average value between scenarios 3 and 5, which means 1 milliBTC is equivalent to $17.
5. Bitcoin fails: The value of Bitcoin drops to some value near zero. Can you imagine this scenario? This scenario may look very unlikely but it’s a possibility we need to consider. One reasonable cause for this to happen would be a bug in the Bitcoin protocol or failure of today’s cryptography in the future. Of course, in this sad scenario 1 milliBTC is $0.
   

Today, the value of 1 milliBTC is around $1. It is very uncertain for now and of course nobody knows exactly what’s going to happen, that’s why we can’t tell which one of the following scenarios will be the future be like. If we assign equal probability to each of the five scenarios, the expected value of 1 milliBTC could be somewhat around $1,300, too crazy to become true?
Place your bets and leave your comment below, we’d like to hear any comments regarding the different scenarios. If you can think of a completely different scenario, let us know, we’d love to hear about it!
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