What Would Happen if Someone Bought All Existing Bitcoins?
The question of what would happen if all existing Bitcoins were bought up, by just 1 person, sometimes gets thrown around in arguments against the currency. It’s a highly theoretical situation with a simple answer: Even if someone wanted to buy all of the Bitcoins in the world, they would not be able to.
There are a lot of factors at play that lead to this answer.
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Value Increases as Demand Increases
Bitcoin is not a centrally regulated currency. Its value depends on the market’s demand for the virtual currency. If someone became interested in buying every Bitcoin in existence and started buying up wherever they could, the price would raise considerably.
The value of 1 Bitcoin is directly proportional to the demand for that 1 Bitcoin. As soon as Bitcoins started being bought in mass, whether this was a rapid or slow process, the price would inevitably rise to a point where it would be impossible for one person to afford all of the Bitcoins.
As an example, there are currently just over 15 million Bitcoins in existence. These are not all available for sale or even all used in the market but, if they were, they would cost a total of $9.93 billion US dollars at the current value of roughly $665 per coin. If someone had enough money to buy all of these coins, they would have to buy them all at the same time if they wanted to avoid price increases such as the rapid increase that led Bitcoins to a value of $1130 in late 2013.
A relatively small jump in price from $665 to $700 would cost the buyer $1.6 billion more. In reality, no one could buy all the Bitcoins on the market at the exact same time, let alone all the Bitcoins in the world. This would lead the currency to experience dramatic price increases as it was bought up, making it increasingly impossible for anyone to keep up with the money needed to make the total purchase.
Not All Bitcoins are for Sale
This example also doesn’t take into account the fact that not all 15 million Bitcoins are for sale. The large majority are not for sale, as they are typically stored for investment purposes and wealth accumulation. The Bitcoins for sale on the marketplace likely represent a very small percentage of the total coins in existence.
There are also coins that have been lost, one way or the other, by owners who lose the private and public key sets for their coins. Lost coins cannot be recovered by the owners and become useless to the system.
New Bitcoins Are Still Being Released
On average there are new Bitcoins created every 10 minutes. Currently the rate is 12.5 new Bitcoins every 10 minutes. At the present rate of roughly $665 per Bitcoin, the potential Bitcoin monopoly buyer would have to spend $1,197,000 every day to keep up with new coins being produced at the current price level.
Overall, this theoretical situation is more than just unlikely, it is actually an impossibility. If, in some miraculous chance, it did happen, the price of Bitcoins would skyrocket and the currency would become more valuable than ever before, until it collapsed and crashed due to lack of movement. A sedentary currency cannot last long.
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