Reposting one of my earlier articles on this new media plat…

Reposting one of my earlier articles on this new media platform, enjoy :-)

Calculating the number of bitcoins (BSV) required to reach a given wealth level in a future world dominated by bitcoin
Important NOTE: The term “bitcoin” in this article refers to Bitcoin SV (Satoshi Vision)
With that said, Forbes states that in year 2017 there exists approximately 2000 billionaires in the world measured in US dollar terms.
https://www.forbes.com/billionaires/list/46/#version:static
This is a very exclusive group of people compared to the total population of the world which currently is 7.5 billion people.
Most people would probably like to be part of this exclusive billionaire club, but naturally only a few people can. However, most people would feel great just to climb the wealth ladder up to a fraction of a US dollar billionaire.
If we make a thought experiment that bitcoin in the future will play a dominating role in the world economy, the following interesting question arises:
How many bitcoins do you need to own to reach a certain wealth level in the future?
To define “wealth level” we will make use of the famous pareto principle, first discovered by economist Vilfredo Pareto, which is a principle that is applicable in many areas of our everyday life. The pareto principle is also known as the “80/20 rule”, which means that 80 % of the effects come from 20 % of the causes. Vilfred Pareto discovered for instance that 80 % of the land in Italy was owned by 20 % of the population.
Assuming that the 80/20 rule can be applied on bitcoin wealth distribution we define the wealth levels according to:
Wealth level 0 definition:
Wealth level 0 is defined as the average number of bitcoins hold by the 80 % of the population that will own 20 % of all bitcoins according to the 80/20 rule.
Wealth level 1 definition:
Wealth level 1 is defined as the average number of bitcoins hold by 80 % of the people that are not part of the population belonging to wealth level 0.
Wealth level 2 definition:
Wealth level 2 is defined as the average number of bitcoins hold by 80 % of the people that are not part of the population belonging to wealth levels 0 and 1.
…
Wealth level N definition:
Wealth level N is defined as the average number of bitcoins hold by 80 % of the people that are not part of the population belonging to wealth levels 0, 1, 2, …, N-1.
With these definitions in place, let us now use the 80/20 rule to calculate how many bitcoins you need to own in order to be considerably richer than the average person (wealth level 0) in a future world dominated by bitcoin.
As input for the calculations we will use the following numbers:
• World population: 7.5 billion
• Number of bitcoins: 21 million
Wealth level 0 (the ordinary net worth person):
Applying the 80/20 rule we get that 0.8 x 7.5 billion = 6 billion people will own 0.2 x 21 million = 4.2 million bitcoins, i.e. on average 4.2 million / 7.5 billion = 0.0007 bitcoins per person at wealth level 0 (=the ordinary wealth level).
Wealth level 1:
Now to the really interesting part, if working with a large data set, which we do here (7.5 billion people) the pareto principle can be applied again to calculate the amount of bitcoins needed to achieve wealth level 1.
Applying the 80/20 rule on the population not belonging to wealth level 0 we get that 0.8 x (7.5 - 6) = 1.2 billion people will own 0.2 x (21 – 4.2) = 3.36 million bitcoins, i.e. on average 3.36 million / 1.2 billion = 0.0028 bitcoins per person at wealth level 1.
This is a quite eye-opening result meaning that to be 0.0028 / 0.0007 = 4 times richer than the average person in the future (given that bitcoin becomes a major part of the world economy) would require only 0.0028 bitcoins.
Please note that in a global economy, a person with a net worth 4 times the average person has considerably better ability to invest in a higher living standard for example a house/car/holidays etc.
Wealth level 2:
Applying the 80/20 rule again on the population not belonging to wealth level 0 and 1 we get that 0.8 x (7.5 – 6 – 1.2) = 240 million people will own 0.2 x (21 – 4.2 – 3.36) = 2.668 million bitcoins, i.e. on average 2.668 million / 240 million = 0.0112 bitcoins per person at wealth level 2.
Please note that in today’s bitcoin prices it is still very cheap to acquire 0.0112 bitcoins, which would be sufficient to reach wealth level 2. Achieving this wealth level means additional possibilities to raise your living standard in a future world dominated by bitcoin, i.e. bigger house/better car/more holidays etc.
Wealth level N:
We can see that each time we apply the 80/20 rule like this it corresponds to a big step up on the wealth (and social status) ladder, i.e. 4 times more wealth than the previous wealth level.
So how many bitcoins would it require to join the exclusive US dollar billionaire club mentioned in the introduction of this article?
Here are the calculation results:
• Wealth level 0: On average 0.0007 bitcoins (held by 6…