[EM] A secure distributed election scheme based on Bitcoin's Proof-of-Work protocol

[Mike Frank]

On Sat, Jun 18, 2011 at 11:30 AM, Jameson Quinn <jameson.quinn at gmail.com>wrote:

> I agree, though again, I don't believe bitcoin are a worth what they go for
> today. I would happily nakedly short bitcoin up to 10% of my net worth
> today, on a 2 year option period, if I could do so conveniently and without
> risk of getting called prematurely. I understand that by capping my downside
> at 10x that's not technically a fair bet, but since my utility for
> bankruptcy is more than 10x worse my utility for losing 10%, I think it is
> fair in utility terms.
>

Well, I disagree with your assessment of its value.  Supposing that Bitcoins
may eventually take over the world economy (whose totoal money supply
today in all national currencies is approx. $100 trillion), given that the
total supply of BTC is limited to at most $21M, this means the equilibrium
price of 1 BTC after the market stabilizes will be the equivalent of ~US$5M
today (assuming the world economy doesn't shrink drastically in the
meantime).

Even if you assess that there is only a 1% chance of that particular
scenario coming to pass, that still means the expected eventual-equilibrium
value of a Bitcoin is at least ~$50,000 in today's dollars.  So, at the
current price of $15, Bitcoins are under-valued by a factor of over 3,000,
at least.  That's the way I see it...  I expect it to increase by several
more orders of magnitude before it maxes out.

-Mike
-- 
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