> Nobody would pay $1BN for all of them, because that would render them all worthless
Not to nitpick, but do you mind elaborating on how so? As long as there's still demand for bitcoints, you could argue that they are worth approx. infinitively more.
Bitcoins will still be a scarce good. The demand will determine if they're worthless.
A recent (perhabs a bit far fetched) example of this is the bad loans in CDOs. Although they were rendered worthless, they increased in value because those who had insurances on the value of CDOs going bad, still had to buy the actual CDO in order to exchange it for cash. This happend because more insurances existed at AIG for the CDOs, than actual CDOs - thus an increase in demand at fixed supply so to speak.
Look at it this way: You print 1 billion klapinat0r bills. You're the only one who owns any and they're not backed by any other asset such as gold. What would one of those bills be worth? Why would it be worth anything? Why would there be any demand?
That's assumes you are starting from no one having any to one person having them all. If someone had 1 billion in demand for bitcoins it would drive the price up, some would sell hoping to cash out, but others probably more would save seeing this big new interest as a sign of increasing value. You can't count out the sociology and the theater of it. Or other external forces like unstable/untrustworthy national currencies, or the value of relative anonymity.
It would then be up to the owner to figure out how to make them valuable and I suspect the owner would have a very difficult time. With only one owner, there could be no trading and hence, no market value.
Not to nitpick, but do you mind elaborating on how so? As long as there's still demand for bitcoints, you could argue that they are worth approx. infinitively more.
Bitcoins will still be a scarce good. The demand will determine if they're worthless.
A recent (perhabs a bit far fetched) example of this is the bad loans in CDOs. Although they were rendered worthless, they increased in value because those who had insurances on the value of CDOs going bad, still had to buy the actual CDO in order to exchange it for cash. This happend because more insurances existed at AIG for the CDOs, than actual CDOs - thus an increase in demand at fixed supply so to speak.