I was having a chat with one of my friends, to whom I have introduced bitcoin lately, and he said
“Bitcoin has a limited number of coins, so it can’t grow to be one of the world’s top currencies”,
I answered him that Nakomoto designed bitcoin so that it has 100,000,000 units, which he named “satoshis”.
That’s when my friends was really amazed and started saying
“so, if one satoshi is equal to 1$, with more than 12 million bitcoins on the blockchain right now, the bitcoin economy would be worth more than 1200 trillion dollars and one bitcoin would be worth more than 100 million US Dollars, so it really has the potential to outgrow all other currencies”.
And I decided to write a piece about this theoretical question “Can Bitcoin ever grow so that one satoshi would be worth $1?”
Bitcoin’s Logarithmic Growth Curves:
I am one of those who believe that the price of bitcoin has followed the path of most assets that make it in free markets; as all begins with a slightly upward sloping trend, followed by a steep surge and then the bubble bursts and the price starts crashing. Yes, I believe that bitcoin price burst a few bubbles already; however, after each and every one of those bubbles; bitcoin price doubles the value it was before the bubble started to build up.
If we take a look at the weekly (BTC/USD) charts (take a look at the below chart), we can notice an exponential growth rate period, between September and November 2013, which was terminated by the a burst bubble after the price exceeded $1100.
Theoretically speaking, if this exponential growth rate would have continued throughout 2014, we would have seen bitcoin price now exceeding $20,000 now. However, I believe that the whole bitcoin economy is still suffering from the aftermaths of the “burst bubble” of 2013 and every price surge now is always feared to be followed by a steep drop leading to another burst bubble.
If by any means, Bitcoin can sustain a logarithmic growth curve for more than 20 years or so, we can see bitcoin’s price exceed 1 million USD, yet I don’t think this would ever happen!!