A pseudonymous researcher calculated that a single bitcoin should trade at $5.8 million. The paper, titled \"Bitcoin: A $5.8 Million Valuation,\" argues bitcoin functions as better money than any existi
A pseudonymous researcher calculated that a single bitcoin should trade at $5.8 million. The paper, titled "Bitcoin: A $5.8 Million Valuation," argues bitcoin functions as better money than any existing alternative and should become the world's dominant currency. Its author, who uses the pseudonym Mr. Game & Watch, constructed an economic case around bitcoin's intrinsic value, its practical applications, potential adoption curves, and eventual replacement of fiat money. When asked about his identity, Mr. Game & Watch told MiningPool: "I prefer not to share my identity. The article advocates many serious crimes, and may offend many important people. Also, I would hope that the words speak for themselves. I will say that I am American and my background is in academia — that much would easily be guessed."
Mr. Game & Watch built his valuation on a straightforward claim about bitcoin's worth. The blockchain, he argues, has genuine utility because it enables transactions that existing financial systems cannot. "The collectible is required to make use of the payment network — even for transactions denominated in USD (not BTC)," according to the paper's abstract. "The payment network is of enormous general utility, particularly to criminals and victims of political oppression worldwide." Bitcoin maintains its core functions even when governments or other powerful actors work against it, the author contends. He dismisses altcoin competition partly because sidechains allow bitcoins to function on alternative blockchains while retaining their core properties.
The paper translates this into concrete terms. Bitcoin's value stems from its ability to create blockspace on its ledger. That blockspace, combined with bitcoin itself, enables what the author calls "Peer-to-Peer Digital USD Payments," or PDUPs. These transactions cannot happen without bitcoin.
The author then examines who needs bitcoin and why. New users must learn unfamiliar transaction processes. Bitcoin's wallet ecosystem and exchanges introduce new intermediaries and points of failure. Price swings make transactions risky. The case for bitcoin rests on what it provides instead: potential anonymity and a network that no single authority can shut down or censor. "These PDUPs cannot be made without BTC," he writes.
The author avoids romanticizing bitcoin's purpose. PDUPs "are, for better or for worse, optimal for illegal transactions," he states. "PDUPs are often the cheapest (or only) way to engage in gambling, capital flight, tax evasion, and payments for ransomware." He extends the list: "BTC helps its owner get paid, cheat on his taxes, shield his assets from a messy divorce, gamble, engage in underage drinking, defend his life and property, get stoned, and get laid." This intrinsic value, the author claims, stays "quite sustainable" wherever government control over money remains incomplete.
Valuing bitcoin as the world's dominant currency requires a single calculation, he argues. Take the total value of all broad money on earth, according to World Bank estimates, and divide it by 21 million bitcoins. The math produces the $5.8 million figure. The author draws on Nassim Taleb's observation that nearly all drinks sold in America are Kosher, despite fewer than 0.3% of Americans being Kosher. Retailers stock one type of beverage because non-Kosher consumers don't care if drinks happen to be Kosher, while Kosher consumers cannot drink non-Kosher beverages. "The generalization also applies to Bitcoin, as both factors are strongly present," the paper states. "First, sellers of goods (or of labor) far prefer to use a single currency, over two. Second, there exists a selective intolerance of the USD – some USD-users are willing to become BTC-users, but many BTC-users are unable to become USD users." Additional drivers of adoption, he adds, include network scaling, shifting cultural expectations, and self-reinforcing price increases.
