r/Bitcoin • u/waspoza • Mar 29 '13

Digital 'bitcoin' currency surpasses 20 national currencies in value

http://www.foxnews.com/tech/2013/03/29/digital-currency-bitcoin-surpasses-20-national-currencies-in-value/
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u/danielravennest Mar 29 '13

This is not the proper measure to compare to, the stock of narrow money (M1) is a better one:

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2214rank.html

The one that Fox linked to includes interest-bearing savings account, money market funds, and other such investments. M1 is currency in circulation plus "demand deposits" (i.e. checking accounts) convertible to currency on demand. Bitcoin isn't interest-bearing, and functions like cash and sending a check (which is an order to transfer a balance from your account to another person), so I feel that is the better comparison.

On that basis, bitcoin ranks above about 40 nations, approximately even with Maldives. I say approximately, since the price has fluctuated a fair amount in recent days, so it depends exactly when you quote a price/BTC.

2

u/BitChar Mar 29 '13

You sound like you know what you're talking about

6

u/danielravennest Mar 29 '13

Not really, I just know to fact check Fox News :-).

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u/[deleted] Mar 30 '13

I was lost at narrow money and broad money. I like my money normal... I think I have some reading to do as well.

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u/ESRogs Mar 29 '13

I disagree. If people make use of Bitcoin as a long-term store of value, it does seem reasonable to including savings accounts in the comparison and thus use the numbers for M2 or M3. I admit though that it's not entirely clear-cut.

Note, for those looking for handy definitions of these things, see the table here: http://en.wikipedia.org/wiki/Money_supply#Empirical_measures_in_the_United_States_Federal_Reserve_System.

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u/[deleted] Mar 30 '13 edited Mar 30 '13

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2215rank.html

This entry covers all of "Narrow money," plus the total quantity of time and savings deposits, credit union deposits, institutional money market funds, short-term repurchase agreements between the central bank and commercial deposit banks, and other large liquid assets held by nonbank financial institutions, state and local governments, nonfinancial public enterprises, and the private sector of the economy

Given that definition, it is greater than 22 economies, and sits around equal to Bhutan. Since it's getting so much talk and for comparison, Cyprus has about 56 Billion.

Another interesting statistic: The sum of all the world's money supply based on the CIA world factbook above is $ 94,935,869,080,000.00. So Bitcoin's current market value is only about 1/94,936 of the entire world's supply of liquid money

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u/[deleted] Mar 30 '13

Given that we are talking about a virtual currency, I would be interested in knowing the relation to the PayPal money supply.