The Bitcoin Bubble and the Future of Currency
> <i>"A few days ago, the value of all the bitcoins in the world blew past $1 billion for the first time ever"</i><p>Can somebody help me understand something? Might be very basic, and perhaps I should understand this already, but...<p>How is it possible for the <i>"value</i> of all the bitcoins in the world" to be anything, in truth?<p>I understand that this comes from saying "1 BTC is selling on average for $X USD, and there are X Bitcoins in circulation, therefore the total market size is $1BN"<p>But... knowing that they are not underwritten or backed, surely they're only "worth" what somebody will pay for them. Nobody would pay $1BN for all of them, because that would render them all worthless.<p>Even if 10% of them were sold in one day, surely the value would drop precipitously, therefore slashing the total "value" of all the bitcoins to maybe half or a tenth of its current estimation.<p>So I ask again, how can the "value of all the bitcoins in the world" be any figure, let alone $1BN?