Retire on Bitcoin

Hermann J. Stern
Dec 9, 2015 · 1 min read

Let’s assume the amount of cash held in the world is 5 trillion USD. The total annual credit card volume is another 5 trillion USD or — if divided by twelve months — 400 billion of credit debt outstanding at any point in time.

If Bitcoin becomes as prevalent as the www, we could guess it would consume half of the credit card volume (200 billion) and one tenth of the cash amount held (500 billion) or somewhat shy of one trillion USD.

Since the amount of assets held on bank accounts worldwide is another 20 trillion and we may assume that people will hold 5% of that in Bitcoin (1 trillion), we arrive at a value of two trillion USD held in Bitcoin at any one point in time in the Bitcoin powered future.

There will be around 20 million Bitcoins eventually. If we divide two trillion USD by 20 million Bitcoins, we have a value of 100 000 (one hundred thousand) USD for one Bitcoin. That’s the logical value — not an emotional one and not taking into account hording/reserve keeping that people may do and not taking into account other uses for Bitcoins that are already explored today.

Let’s buy ten Bitcoins today and retire with those ten coins when they are worth one million of today’s US dollars. Sounds like a plan — and/or wishful thinking. Only the future can tell.

Hermann J. Stern

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