Quote from: Elwar on September 28, 2011, 01:28:58 PM

Ok, my numbers are not exact mainly because I am lazy and do not wish to waste my time finding the exact numbers.

I have taken the calculations from this thread for this:
https://bitcointalk.org/index.php?topic=45882.0

I keep seeing how Bitcoin needs over a million USD per month to maintain the current price. Running the numbers based on the amount of Bitcoins created times the current price that would seem like simple math.

In fact, it is not.

Only those who are trading Bitcoin are affecting the price in relation to the various currencies. So everyone else is just using Bitcoin as a currency like it was meant to be.

Doing a broad assumption I am throwing out the figure that there are 1 million Bitcoins in the trade exchanges. This is based on MtGox having 432k BTC back in June and it was estimated that they have around 600k BTC now. And I figured the other exchanges may add up to at most around 400k BTC.

So that makes 1,000,000 BTC being traded at the exchanges. This is out of over 6,000,000 BTC in existence.

This means that 1 million BTC that are traded affect the price of the other 5 million in terms of a currency.

So, taking the figure from the other thread that $1 million needs to come into the economy each month and divide it by the portion that is actually being traded (1/6th) and you get $166k. Divide that by 30 and you get $5,500 per day.

Only 1200 new Bitcoins need to be purchased daily to maintain the current price levels. This is why when we get a sudden influx of people buying BTC the price swings so much.

Over the next year we only need 365 people to invest $5,500 each to maintain the current price. And then the rate gets cut in half and it will be down to $2750 per day. That is not much inflation for such a growing community.

If someone wants to tweak my numbers with more accurate findings then I will update the OP.

Your assuming that people sell all coins mined every single day. That's a false assumption because that does not happen.