One million dollar bitcoin

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Disclaimer: I’m not a finance professional, this article is just the result of some recent shower (and walking) thoughts l I’ve had.

Every time I hear or see one million dollar bitcoin I cringe. However, something happened the other day that shifted my thinking a bit and made me consider this. I downloaded the new honeyminer (this is not a referral link) client for Mac over the weekend to try out. It was super-easy to get up and running and it’s fun to watch your sats* count grow (ignoring the USD value of one sat). So I asked myself this question, ‘If bitcoin’s value was $USD 1 million, what would one sat be worth, and what would its total market cap be?’ Bitcoin is divisible in to 100 million sats, so the answer to the first question is that one sat would be worth one cent. The theoretical max number of bitcoin is 21 million so its total market cap could be up to $USD 21 trillion!

So that got me thinking about global wealth. What’s the value of the total circulating supply of global fiat currencies? What about other cash reserves? Other asset classes? There’s no definitive answer. But consider this ... the USD value of BTC goes up and down every day but compared to a one million dollar bitcoin, these day-to-day volatilities are meaningless! IF a one million dollar bitcoin ever becomes a real possibility it could take decades to play out with gradual shifts that we barely notice, or it could come quickly as a result of a massive catastrophic event (I hope it’s the first one!). If there’s no catastrophic event, and incremental changes move us towards a global reserve currency I think fiat systems around the world will collapse before the $USD value gets near one million dollars. If BTC gets to 100,000 and 200,000, surely at that stage we’ll have figured out that the system is broken. People will ascribe so much value to bitcoin that fiat currency will have such little value that it will just dissolve. Other assets classes’ value will just be in btc. Other cryptos’ (maybe steem) values will just be in btc. The 21 million btc market cap won’t have a $USD value, it will simply be what it is. I saw a really interesting talk on YouTube last week between Chris Dixon of a16z and Olaf Carlson-Wee of Polychain Capital (very interesting talk if you’re interested). In it Olaf made the point that crypto adoption is not about ideology for most people (non-crypto people think crypto people are crazy anarchists, right?), it’s the result of enabling technologies. When the crypto space matures (perhaps by the time btc is in the $USD 100,000-200,000 range) to ubiquity, old money won’t make sense anymore.

TLDR: the one million dollar BTC possibility is so far into the future that fiat currencies will dissolve before we get near it.

*As an aside, apparently it’s actually mining Monero as it’s more economical, but the prices quoted are in BTC and USD because when you withdraw your coins it converts the XMR to BTC.

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