There is an interesting discussion between Hal Finney and Satoshi in 2009 about the possible value of bitcoin. This is back when it was just a random software project, and had zero value: http://diswww.mit.edu/bloom-picayune/crypto/142207

    As an amusing thought experiment, imagine that 
    Bitcoin is successful and becomes the dominant payment
    system in use throughout the world.  Then the total
    value of the currency should be equal to the total 
    value of all the wealth in the world. Current estimates
    of total worldwide household wealth that I have found
    range from $100 trillion to $300 trillion. With
    20 million coins, that gives each coin a value of
    about $10 million.

And why, exactly, total value of currency should equal total amount of wealth? What exactly is the contradiction, arbitrage or other mechanism that sets total value of currency to total amount of wealth?

It's not, actually - the total value of all physical $USD (M0) is only about $3.8T, vs. the figure of $100-300T given for total wealth (which seems low to me, BTW).

The actual truth is even weirder: if Bitcoin takes over as the world currency, its value in $USD will be infinite, but the question will be meaningless, as the dollar will be worthless. Currencies tend to be winner-take-all within a society; if one takes over, its rivals lose all value, as their only value is in being a medium of exchange and store of value.

This is perhaps a contributory factor to the Bitcoin's volatility: if you actually believe it's going to succeed, unambiguously, the rational thing to do is to move all your wealth to Bitcoin. And similarly, if you believe it's going to fail, the currency by definition is worthless.

There are 164 national currencies in the world. The USD is the defaco world currency and the USD is not worth infinite of other currencies and the rest are certainty not worthless.

I think the US government tolerates crypocurrencies because realistically they are far more damaging to countries like Venezula and China who have much more restrictive economies and in those countries the flexibility of bitcoin is a huge advantage.

How many aircraft carries does bitcoin have? 0. Which (in my opinion) happens to be the exact same chance of bitcoin usurping the USD as a global currency short of some fundamental change in world power.

The thought experiment explicitly implies BitCoin usurping the $USD as a global currency, and presumably all other ones as well. I'd agree with your assessment of which countries/currencies are realistically much more likely to suffer, but thought I'd engage with the thought experiment on its original premise.

On the aircraft carrier issue - the killer app (literally) for cryptocurrencies is autonomous weapon systems. Imagine if you could deposit $Xm Bitcoins into an address and have access to a fleet of 100,000 drones on 10,000 speedboats. At that point, we're really in uncharted territory, though.

The original assumption was just world cash supply (M0), include all m3 supply and you in for a surprise.

Who creates money is the best answer to your questions.

You mean (US) M3 equals (US) wealth? Why? Can you back that claim with statistics?

Does anyone think the current owners of capital are going to sit by and let their powers and wealth be destroyed? If bitcoin were ever likely to become close to being the dominant payment system it will be outlawed with "extreme prejudice".

Do the current owners of capital principally hold their money in cash? If they're holding their money in ownership of companies and things, then their wealth wouldn't be destroyed as (current) monies became displaced by bitcoin.

No they mostly own assets, but they need control over the money supply to ensure they don't lose control of the assets. How would the GFC gone if they did not have control of the money supply?

I'm not convinced. If I own a row of houses, bitcoin displacing dollars won't change that.

If you just own a row of houses you are not part of the 0.01% who are in control of the money supply.

If I own so many houses (or other such assets that aren't simply a pile of dollar bills) that I'm part of the 0.01% (since you've changed the argument from "owners of capital" to "0.01%"), the dollar being displaced by the bitcoin as currency of choice doesn't change that.

It does when the interest rate you have to pay on the mortgages you have over the properties can no longer be controlled. If you were the owner of many houses in 2007 and we used bitcoin rather than dollars you would have been in for a world of pain.

Nah someone just needs to gift Donald Trump a fat stack of it and it'll be recognized as genuine legal tender in no time.

I think Bitcoin has potential but the majority of people do not want their everyday currency to change value everyday

Every currency changes its value every day. Every minute even.

Plus I don't think anybody would mind if their currency tends to increase in value.

This is exactly what keeps moving the price up.

Last one out holds the bag.

The finite bag of 21m coins? Vast majority of which are likely lost from when it was worth a few cents?

If bitcoin has utility, its price will reflect that.

Not, but you have to be prepared for not touching your investment for 5 years because of the high volatility (which means the price could go down to $1000 for a year temporarily, than back up to $10000).

Here's a logarithmic graph of the price over the last few years, the slow price drop from $1000 to $200 was painful for most investors:

https://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25...

> which means the price could go down to $1000 for a year temporarily, than back up to $10000

I'm bullish on Bitcoin, but you should also acknowledge the price could go to down to $1000 or $100 or $0 and stay there.

It could go to $0 instantly, if ECDSA + RIPEMD160 would be cracked. I don't see any other way currently.

It is not, but you might want to dollar cost average in.

Bitcoin adjacent companies like Nvidia are riding the craze and would be less susceptible to a tulip mania style crash if that's your concern

You can't profitably mine Bitcoin with GPUs. It has been this way for 3-4 years.

scroll down and look at the pricing history of the rx 470: https://www.videocardbenchmark.net/gpu.php?gpu=Radeon+RX+470 and the 480: https://www.videocardbenchmark.net/gpu.php?gpu=Radeon+RX+480

Notice what happened during the alt-coin bubble?

Now go look at nvidia's stock price around that time. Everything went bonkers in May.

So I understand what you are saying, but there is clear historical evidence for my claims. When it comes to market manias the safest place to make money from it is adjacent to it in a way that supplies the maniacs.

The cyptocurrencies that can be mined with video cards are different from bitcoin. Ethereum is probably what you are thinking of being mined by GPUs.

obviously it's for the less valuable coins with lower difficulties.

It's not obvious if you call them bitcoin when that isn't their name. That's like calling 7-UP a coke.

ok, but 7-up adjacent companies are coke adjacent companies; canning, sugar, labeling ...

I don't know what you are saying. You can't mine bitcoin with a GPU. You can mine ethereum and probably other cryptocurrencies with GPUs. Bitcoin is a specific cryptocurrency. Nothing you are going to say is going to change that reality.

I'd also look at quality ICOs if you can do the technical due diligence on them e.g. https://hackernoon.com/the-dawn-of-the-1b-ico-a0486f6587a2

consider some of the up and coming alt coins instead. you can triple your investment in a week. Very unlikely with bitcoin.

Or, considering that these are almost surely zero-sum pump-and-dump scams, you can also lose your entire investment.

eh I already sold enough to cover my initial investment back years ago, it's smooth sailing for me since then :]

In the words of Roger Ver - it's never too late. 5 years from now people will be kicking themselves for not getting into bitcoin when it was at $4000.

Ver is a convicted felon. He's also the guy who posted a video saying he'd looked at Mt. Gox's records and they had all the assets they said they had.

And what does his background have to do with the logical statement that it's never too late to get into Bitcoin? When Bitcoin crosses $5000 are you still going to bring up his background?