Some quick thoughts on a Bitcoin Future

Summer 2014

Here is a quick and dirty sketch on the potential market capialisation of BitCoin

Nothing too scientific. Just a thought experiment.

The early adopters of the *currency* have been organised crime (Think Money Laundering, Illegal Drug Dealers and Cyber Criminals/Ransomware)

So what is the future value of Bitcoin if it fulfills its potential as the preferred unit of exchange for this disruptive community of financial innovators?

Well it is estimated that Illegal Drug Trafficing represents about 1% of World GDP. Money Laundering is somewhere between 2%-5% of world GDP.

So let's assume that's the range for calculating the potential addressable market.

Bitcoin was released in 2009. So we need to estimate the value of World GDP in 2019 and 2029 to complete the calculation.

For arguement's sake let's say $150 and $400 Trillion

Now all we need is a contagion model to forecast market adoption within the addressable market.

If we apply the growth of digital advertising as a forecast model we discover that @ 10 years the market share of digital advertising spend was 4% of global advertising spend and @ 20 years it was 40%.

So the *thumbnail* market cap forecast formula is: Estimated World GDP * Global Money Laundering as % of World GDP (ie. 1%-5%) * Marketshare (ie. 4% vs. 40%)

So what do the numbers look like?

2019: Between $60 - $300 Billion

2029: Between $1.6 - $8 Trillion

Now you can see why BitCoin is such an interesting thought experiment in the potential value of (a lack of) trust distributed (unevenly) across a networked economy

Something to think about. At least until next time ;-)

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