First published at 17:56 UTC on September 6th, 2020.
Since Saifedean Ammous wrote his book, 'The Bitcoin Standard' and introduced 'The Stock To Flow Ratio' everyone is using the term, as if they know exactly what it means
Two questions; 1. What is stock? and 2. What is flow?
If you h…
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Since Saifedean Ammous wrote his book, 'The Bitcoin Standard' and introduced 'The Stock To Flow Ratio' everyone is using the term, as if they know exactly what it means
Two questions; 1. What is stock? and 2. What is flow?
If you have an oversimplified answer to each, then you prove my point
Bitcoin miners are creating 900 new bitcoins every day
This suggests that the number of bitcoins in circulation is rising
I contend that the net supply of bitcoin is shrinking, because there are more bitcoins lost each day, than are created, by mining
Therefore the 'flow' isn't clear, because it doesn't include daily losses of bitcoin
The estimate of 4 million was made on November 25, 2017 by Chainalysis
They reported a range: 2.78 million lost bitcoins, on the low side and 3.79 million lost bitcoins on the high side
This date, November 25, 2017 was 3,248 days after Jan 3, 2009, the date bitcoin began to be traded
8 years, 10 months, 3 weeks and 1 day
When this number is used, the daily loss on the high side is 1,166.87 BTC lost per day
The low side is 855.9 BTC lost per day
What is the average? 1,011.39/day
So my use of 996 BTC lost per day, is conservative
The bitcoin money supply is shrinking now at 96 BTC per day and by 2024, it will shrink by 546 BTC per day, a rate that is nearly 6 times faster, 5.6875 times the current rate
What will that do to the price?
Bitcoin is already doubling in price every year
That could accelerate to three times the price every year
We have no experience with a money supply that shrinks
Some will bet on bitcoin and some on gold
Some will stay in fiat and go down with the ship
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