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So let's suppose Bitcoin is a runaway success. What would the world look like in 2030?
In the year 2030, 20 million bitcoins are in circulation; all but 1 million of the 21 million maximum have been mined.
Unfortunately, the future didn't work out well for Crowley: He didn't pay close attention to Chapter 3 and lost all his bitcoins in the infamous WhatsMyInstaSnapAppBook.com hack in 2019. Consequently, he's spending his days as a real estate agent and driving semitrucks cross country on the weekends for a living.
So exactly what would 20 million bitcoins look like? Well, unbeknownst to Crowley, if the 20 million bitcoins were each the size of a penny and were stacked as tightly as mathematically possible, they would almost exactly fill the inside of Crowley's US standard-sized, 53-foot semitrailer!
What Will a Bitcoin Be Worth in 2030?
Most likely, bitcoins will be worth zero in the year 2030: Despite the currency's early extraordinary success, 2030 is just too far in the future and too many events could trigger its demise. However, we can predict what the value of a bitcoin would be if Bitcoin achieved mainstream adoption.
For the rest of this chapter, let's imagine a world in which 1 billion people use bitcoins regularly. That number doesn't include everyone, because traditional currencies will still be used as well. So how many bitcoins might a typical Bitcoin user own in this future world?
Given that 20 million bitcoins would be in use in 2030, on average each person would own 0.02 bitcoins. Of course, wealth is never evenly distributed, and in all likelihood the top 1 percent would own more than 50 percent of the bitcoins (unfortunately, Bitcoin is unlikely to solve this problem on its own). Therefore, the typical Joe would own approximately 0.01 bit-coins, most likely referred to at this time as 10,000 microbitcoins.
Referring back to the example of a semitrailer of penny-sized bitcoins, the typical Joe's savings would consist of a fragment of a penny, about the size of a grain of sand a cubic millimeter in size.
As discussed in Chapter 6, the role that Bitcoin could fulfill that would produce the highest possible value per coin is as a store of value, in which case the typical Joe might store $1,250 of his savings in Bitcoin. If this extreme scenario were true, calculating the value of a single coin would be $1,250 divided by 0.01, or a ludicrous $125,000 per coin.
Bitcoin Mining in 2030
Using bitcoins to buy morning coffee, lunch, car fuel, and some online products, an average user might make 10 transactions a day. A billion people making 10 transactions each per day is a substantial number of transactions! In fact, the number would be just over 100,000 transactions per second, which is 25-50 times more than the number VISA processes today. If transaction fees remained low (a must if many people adopt the currency)—let's say a penny each—the result would be $100 million dollars a day in transaction fees!
Although mining rewards in 2030 will be less than two bitcoins per block (based on the current schedule), if bitcoins have appreciated significantly in the interim, the mining rewards might still be considerable.
But most transactions might be off-chain transactions. (Off-chain transactions are Bitcoin transactions that are not handled by the blockchain but are instead handled by the ledgers managed by Bitcoin wallet vendors, in order to save on transaction fees for smaller payments.) Consequently, those 10 billion transactions per day may be only 1 million transactions per day as recorded on the blockchain. However, no matter how they are processed and reconciled, any payment system used by a billion people will generate many billions of transactions daily.
Mining would be very competitive, and the profit margins would be extremely slim. Only those with the most energy-efficient miners and cheapest electric power could stay in business. Assuming that the most efficient mining technology requires 0.1 J/GH, that electricity costs $0.10 per kWh, and that $100,000,000 a day in transaction fees is generated, the break-even hash rate would total more than 500 exahashes/s (500,000 PH/s)! Even assuming that mining technology is 100 times more computationally compact than it is currently, the amount of ASIC mining hardware required to achieve that level of mining power would fill around 5,000 small apartment buildings.
At a hash rate of more than 500 EH/s and an energy efficiency of 0.1 J/GH, a much greater amount of electric power will be needed to devote to mining. Over 50 GW would be used for Bitcoin mining, which is a bit less than 5 percent of the power produced by the United States today and about 0.3 percent of the global power output. Of course, if the expense of electricity increases, the network hash rate would drop. Bitcoin mining doesn't require a specific hash rate to function; however, the cheaper the electricity, the more Bitcoin miners will operate.
At this point, we've had fun speculating about the price of a bitcoin in a world dominated by this currency and discussing the infrastructure that would likely evolve around it. But what might life be like for an average bit-coiner in the year 2030?
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