[ExI] What happens when Bitcoin goes to a million bucks?

[Keith Veronese]

The bitcoin spoke over the past few days has certainly been interesting and fun to watch. I've been buying litecoins (just a small amount) for fun, something to make me keep an eye on the market. 

The lower cost per whole unit versus bitcoin might make litecoins a little more attractive and useful for retail transactions (at least at current USD/LTC and USD/BTC values).

- Keith Veronese

> On Nov 7, 2013, at 12:10 AM, Max More <max at maxmore.com> wrote:
> 
> Brent: You say that "Everyone should have at least one Bitcoin". I don't pretend to have a good understanding of bitcoins, despite having read (lightly) many posts here and some articles (such as the helpful one by Keegan Macintosh in the November issue of Cryonics), but I do have the strong feeling that I really ought to have a few of these peculiar things. However, my impression is that it's now too late -- that you can only generate new bitcoins if you have some fairly serious computing power. 
> 
> Is this right? If so, are there any reasonably non-speculative ways to acquire bitcoins? 
> 
> My question is not just from a personal perspective. Several people would like to pay for their some part of their cryopreservation (or gift Alcor) using Bitcoins, so I would like to understand the situation better.
> 
> --Max
> 
> 
> 
>> On Wed, Nov 6, 2013 at 10:12 PM, Brent Allsop <brent.allsop at canonizer.com> wrote:
>> 
>> Transhumanist economists,
>> 
>> As most of you know, in 2010, some guy purchased about $25 worth of Bitcoin, which is now worth over $800K.  My working hypothesis is that this will continue and that before 2020, Bitcoin will be worth a million bucks.  It's so funny to tell people that, and see them look at you with that "Your CRAZY" look in their eyes, as they say "A Bitcoin isn't going to be worth a million bucks!"
>> 
>> Have you checked the price of Gold, lately?  It's been crashing, dramatically, for 2 years now.  Why do you think?  The so called gold experts, are saying things like:
>> 
>> "The bear market in gold has been going on for two years. It seems to fly in the face of fundamentals, as central banks print enough currency to paper the world."
>> 
>> Once you factor in the fact that there is a new competitor in town, and that people are starting to sell Gold to buy Bitcoin, that explains what otherwise doesn't make sense to these traditional gold "experts" that have made lots of money up till two years ago.  In other words, All the money that is in the pockets of holders of Gold, is now flowing into the pockets of holders of Bitcoins, at a very rapid rate.
>> 
>> And My belief is that this Gold casualty that is just getting started, is just the first casualty.  It will soon spread to stocks, bonds, real estate, and anything with value that can be sold.  All the money in the pockets of the people holding them, will be quickly draining into the pockets of Bitcoiners at an increasing accelerating rate.
>> 
>> Bitcoin, as many experts are starting to say: "is simply the best investment out there, bar none."  So what would you expect?  Money flows to where it is treated the best, just like water flows downhill.  And if you have a Bitcoin in your pocket, that is looking increasingly tempting.
>> 
>> As the cost of money and interest rates starts to skyrocket, as all sources of capital continue to flow into Bitcoin what will happen? I think at least the following will happen:
>> 
>> 1.    People will be selling anything they can liquidate, so they can buy Bitcoin.  Even at a loss, since that loss will soon be made up for, once it is in Bitcoin.  (Do you think a tax penalty of 10%, will stop people from liquidating their IRAs?)
>> 2.    People will be borrowing money, mortgaging things, like their house, to buy Bitcoins, because no interest rate will come close to the rate at which Bitcoin will continue to go up.
>> 3.    The price of stocks will decline.  The PE ratio of stocks has historically been at around 20.   This will drop by half or more, as nobody will want to buy stocks, unless it is a very good value.  The greatly reduced PE, will become "the new normal" and it will be much harder to make money by going public.
>> 4.    Interest rates will go up significantly, because of the demand for money, to buy Bitcoins.
>> 5.    The economy will convert from a consumer economy with lots of debt to everyone will only want to only buy something when they absolutely need it.  As it will be far better to spend it on something that will be worth 10 times its value in a year or so.  It will convert to a bit time saving economy.  Will this stabilize the boom and bust cycle?
>> 6.    The Winklevoss twins will be laughing at Facebook, and Zukkerberg, as Facebook  stock price continues to decline and fails to keep pace with their 1% of all bitcoins.
>> 
>> When we head into a recession, the fed lowers the interest rate to Zero to provide 'liquidity' and in hopes people will borrow money to invest in the economy.  But this doesn't work very well as there is nothing that is making money, to make it worth borrowing during a recession.
>> 
>> But Bitcoin will change this dramatically.  Everyone will want to borrow money even more in a recession, as recession will cause Bitcoins to go up even faster than they are now.  People will have even less motivation to invest in the economy.  So there will be two market forces.  Bitcoins driving up interest rates, and the federal reserve printing money and trying to lower interest rates.  People will be borrowing this printed money, purchasing Bitcions.  WIll that cause rapid inflation of fiat currency?
>> 
>> Who will win such an epic battle between Bitcoin trying to increasa interest rates, and the Fed trying to lower them?  What will the effect be, when Bitcoin starts rapidly approaching one million $$ ?
>> 
>> My minds seems to get all scrambled when I try to analyze such.  Can you guys help provide some additional rational to my attempt to get my head around what could happen?  Could everyone brainstorm some of the long term possibilities, here?
>> 
>> I've tried to browse some of the Bitcoins forums for some intelligent information on this, but all of them are idiots that can only think linearly, and they haven't got a clue.  While Transhumanists are good at thinking exponentially.  So, what are some of the more extreme possibilities you guys see?
>> 
>> One thing I feel for sure.  Everyone should have at last one Bitcoin.  And people only say there is no such thing as a "Get Rich Quick Scheme", because they don't know how close the singularity is.
>> 
>> Brent Allsop
>> 
>> 
>> 
>> 
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> 
> 
> 
> -- 
> Max More, PhD
> Strategic Philosopher
> Co-editor, The Transhumanist Reader
> http://www.amazon.com/Transhumanist-Reader-Contemporary-Technology-Philosophy/dp/1118334310/ref=sr_1_1?s=books&ie=UTF8&qid=1372225570&sr=1-1&keywords=the+transhumanist+reader
> President & CEO, Alcor Life Extension Foundation
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