RE: German Bank says BTC "should" be worth $90k in 2020
These things are hard to predict, especially since every day is essentially uncharted waters when talking about crypto. When we talk about Bitcoin, the proverbial pioneer of this asset class, there are some very interesting things to consider. Like 85% of all the Bitcoin that can exist, already does exist. The remaining Bitcoin is a known quantity, with a known (or at least a reasonably known) "extraction" cost and time-frame, making the mining a comparatively easy cost-benefit calculation, if future value is stable.
Imagine if the same were all known knowns for gold: that we KNEW how much gold there was in the world, and that would ever exist in the world, knew when and where the remaining would be found and at what extraction cost. What would this knowlege do to the price of gold?
Then, we also have to consider "burn rate" for Bitcoin. I've read where it is estimated that anywhere from 5-10 million Bitcoin have been burned or lost, virtually cutting in half the available quantity, EVER available, almost in half. So, again, what does that do to the price of an asset's supply and demand calculations?
I dunno. But if I figure it out, I'll let you know...for a fee of a million bucks per!
There are estimates of how much gold is left to be mined. The thing with gold is that if demand increases, so does mining (which means more supply). Bitcoin's supply increases at a known fixed rate, irregardless of demand. Plus there is the issue of gold on asteroids and other planets etc that will likely come onto the market in the future. Bitcoin doesn't have that problem either. Which is why bitcoin is and will be harder money than gold in the near future.
My point exactly.
To my knowlege, there has never been a widely accepted currency that has an absolute fixed maximum supply. As the supply is a known, not just estimated, quantity, and the currency has no intrinsic or practical use (gold CAN be used for other things other than a currency) demand will largely be determined by acceptance. If it becomes widely accepted, as it seems to be more and more each day, then the network effect will kick in and make Bitcoin a very hard currency.
That's why I've never understood those who wish to "burn" crypto as a strategy to increase demand by decreasing supply. If it is harder for people to get into crypto, that is more expensive, then mass adoption will be harder to achieve. For a currency that has no practical or intrinsic value, like crypto, it seems to me that easy and cheap acquisition by the masses is a much better way to achieve mass adoption, and thus inducing the holy network effect. I think STEEM could use something like this where instead of burning STEEM by sending to "null" (I assume there are folks still doing this...I'm not as active here as I used to be), that the "null" account keep the STEEM in play, but just delegate it to new users for a certain time frame. Something like 100 STEEM for those who make one post a week for a year's time. Maybe a graduated program like 200 STEEM for those making 3 posts a week and 500 who make at least one post a day. Then you get people hooked on the site, on making STEEM and, after a year, their delegated STEEM goes to another newbie, but we've hooked the first one already so they continue on with their own account as a result of the network effect.
But, I digress. My point in all this is that I agree Bitcoin, as well as STEEM, can become hard currencies, if they can become the beneficiaries of the network effect of mass adoption and demand. However, "If" is a small word, with a big meaning.
I agree about the network effect and steem needing the masses to have value. However, steem will never be hard money with its current configuration, at least not as hard as bitcoin. Steem's supply increases indefinitely at .95% (once it gets there), there is no cap on supply, which means it also must have a steady stream of demand otherwise prices go down.