All, I’m just learning about bitcoin so if I say something dumb please correct me. I see a growing number of posts suggesting bitcoin could be the currency of the internet or even replace traditional currency (fiat). I’ve done some math to try to understand this and it doesn’t totally add up for me.
1 sat = 1/1M bitcoin with 21M total bitcoin = 2,100 trillion total sats available
Estimated that anywhere from 20-30% have been lost and that number will only ever go up. Let’s assume 20% are gone for this math, 1,680 trillion sats available.
There are 8B people in the world and that is growing, this means an average of 210,000 sats per person today (best case as people are going up and sats are going down.
There has to be a minimum transactional amount, eg. one penny, one cent, one pence, etc. if we assume that is the case then the average person can only have ~$2,100 of purchasing power when translated in terms of USD. (1 Btc = $1,000,000)
If we assume the min transactional block is raised to 1/4 dollar = 1 sat (which seems reasonable) then each person would have ~$52,500 worth of purchasing power which seems pretty low to be sustainable. (1 Btc = $25,000,000)
Btc also opens the door to real hoarding of wealth so if we take a pessimistic view of it, let’s make the following assumptions: BTC lost rises to 30%, population increases to 10B, hoarders hold 30% then the average person would only have access to 102,900 sats. With 1 sat = $0.25 (1BTC = $25,000,000) then each person would only have purchasing power of $26k.
From a purely mathematical look, it would suggest BTC is destined to fail because it can be hoarded, has diminishing supply, has increasing users, and needs to maintain a small enough denomination to allow for small purchases like gum or whatever. In order to survive, BTC would need to have the ability to increase infinitely but to do that it would need to be broken into smaller units than sats.
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