Monday, 8 September 2014

Great Myths about Doctor Who #457 - "The Sky Is Falling!"

A story familiar to all of us is surely that of Doctor Who's falling ratings.  We've all heard the rumours at one time or another, that viewers are finally leaving the series, and the ratings are dropping.  The new series isn't as well received as the last…or was it the one before?  You may not quite remember when you heard this rumour (or was it on the internet…or in a newspaper?), so let me remind you.

30th May 2006.  Doctor Who has been on the air for 1 year, and already things are going badly…according to The Guardian.

"Doctor Who loses momentum"

It's another mystery for Doctor Who - where have the viewers gone?

BBC1's Doctor Who revival has been lavished with critical praise and awards, but there are signs midway through its second series that viewers may be tiring of the time travelling sci-fi drama.

Saturday's Doctor Who, the seventh out of 13 episodes in the second series, had the lowest audience share of any instalment yet since the show returned last year to rave reviews and big audiences.

[This was The Idiot's Lantern,]… a fairly typical Doctor Who storyline then, but one which only attracted 6.3 million viewers and a 32% audience share.

[About the same as "The Doctor Dances" a year ago, "Daleks in Manhattan" a year later, "The Sontaran Strategem" the year after that, "Vampires in Venice" in 2010…]

Doctor Who has shed 2.3 million viewers and 10 share points in two weeks, since the Cybermen episode of May 13, which got a ratings boost to 8.6 million by following the Liverpool v West Ham FA Cup final on BBC1.

A week later the second and concluding episode of the Rise of the Cybermen two-parter dropped to 6.9 million viewers and a 36% share.

[Correct.  About the same as "Boom Town" a year before, "The Sound of Drums" a year later, "Planet of the Ood" in 2008, "Flesh and Stone" in 2010…and "Deep Breath" in 2014]


However, lest anyone accuse me of bias, let's see what the Daily Mail said on the 4th April 2010, after Matt Smith's first outing:

"Matt Smith's Doctor Who debut equals David Tennant's 8million viewers as critics praise first show"

More than eight million people tuned in to watch Matt Smith's debut as Doctor Who last night as he took over the role from David Tennant.

Smith, 27, wowed in his first appearance in the iconic part and critics are already declaring he could be the best Time Lord to date.

Their verdicts will be music to the ears of BBC chiefs, who have been anxiously waiting to see if the 11th incarnation of Doctor Who would be as popular as Tennant.

In fact, Smith secured exactly the same viewing figures as the Scottish actor did when he first officially took over the role in April, 2006.

[Technically correct.  Well no. Not correct at all really. Firstly, although "The Eleventh Hour" did get the same overnight viewers as "New Earth"… "the Scottish actor" actually took over the role at Christmas 2005, where "The Christmas Invasion" received 9.4 million viewers.  

Secondly the Final viewing figures for "New Earth" were 8.62 million, whereas the final figures for "The Eleventh Hour" were 10.08 million…incidentally also beating the final figures for that Scottish actor's actual Christmas debut (9.84 million)]


So what does The Daily Telegraph has to say a few months later on the 29th June 2010?

"Doctor Who loses 1.2m viewers"

The latest Doctor Who series has lost 1.2million viewers compared to the previous one, the latest figures show.

It gained an average of 6 million viewers compared to the previous incumbent David Tennant’s average of 7.2m.

[That would be Tennant's last but one series (if you ignore the Specials Year).  Series 4 – Overnight average of 7.2 million.  And yes they are almost correct again – Series 5 averages 6.11 million Overnights.   

But what about Final figures?  Well Series 4 was watched by 8.05 million, Series 5 by 7.7 million.  So why the big difference in Overnights? Could it be that in 2010 more people are recording Doctor Who and watching it later than in 2008?]

The last show in the latest run was screened on Saturday night and had just 5.1m viewers, although it was on at the same time as a World Cup football match on ITV.

[And there we have it. 23% of viewers recorded "The Big Bang" and watched it later (this is known in the business as "Timeshifting"). 

In fact the average Timeshift for Doctor Who has been steadily increasing over the years, probably as more households buy equipment that can record TV programmes, such as TIVO, Freeview with Hard Drive or DVD-R, Sky+. Average Timeshift in 2008 was about 10%.  In 2014 it's about 28%]

Despite the apparently disappointing figures, managers at the BBC claim overall viewer numbers are the same because many people watch on the internet or after recording it at home.

[Oh. Yes. What I just said.]


So Overnight figures are increasingly less relevant than Final figures.  Surely the tabloids know this by now?  Well no.  Not if it gets in the way of a good headline. Here's the Daily Mail again, a year later in April 2011.

"New Doctor Who episode billed as scariest yet sees ratings FALL by 1.5m"

It was billed as one of the scariest  Doctor Who episodes ever. But when the series returned on Saturday, the Time Lord found himself facing an unexpected enemy – the sunshine.

[This would be "The Impossible Astronaut", and actually they mean 6.5 million, but let's not quibble. They've pinpointed the exact reason why 26% of viewers chose to record it rather than watch it while the sun was shining outside]

The first episode was watched by an average of 6.4million viewers, according to overnight figures, down by almost 1.5million on the equivalent episode last year.

[Again correct.  Although the equivalent episode last year was Matt Smith's debut…you know, the one where he got the same figures as the "Scottish actor" did…according to the Daily Mail.]

With many choosing to make the most of the good weather, it meant it was the lowest-rating series opener since the much-loved drama was revived on Easter weekend in 2005 with Christopher Eccleston in the lead role.

[Again technically not wrong. But less relevant. With Timeshifting on the increase, Overnight ratings are never again going to be as high than they were in 2005, 2006, 2007 etc. 

I mean come on, what is the point of having Freeview or Sky with hundreds of channels, and the ability to record them all, if you don't use it?]


And a week later on the 3rd May 2011, the Mail continues the horror story of Doctor Who's inevitable demise, with some possible explanation as to the drop in viewers.

"Now Doctor Who scares off another one million viewers"

It has been one of the BBC’s success stories of recent years.

As Doctor Who begins its latest series with disappointing viewing figures, however, some fans are asking if the plotlines are too scary and too complex for its largely family audience.

[I'm sorry, but… too scary for a family audience? What does that even mean?]

Early figures for the second episode of the new series starring Matt Smith as the Doctor and Karen Gillan as companion Amy Pond show that more than one million viewers turned off the show.

It secured 5.39 million viewers – down 1.01 million on the series opener the week before. Overnight figures for that first episode were down by almost 1.5 million on the equivalent episode last year, although ratings released yesterday showed it had a final total audience of 8.86 million.

[At last! The Mail has discovered Final Viewing figures!...]

Even so, the apparent downturn in popularity has led to doubts among some avid viewers over the plotlines being pursued by executive producer and main writer Steven Moffat.

[…but they have nothing to do with popularity.  Oh well…]


Surprisingly 2012 is almost devoid of "Doctor Who Ratings Disaster" headlines.  But, as we reach April 2013, and a new series , The Week magazine has this to say:

'Boring rubbish': Doctor Who sheds a million viewers

Rings of Akhaten 'worst ever' episode say fans, while original director says show has become too 'sexual'

THE BBC'S Doctor Who has shed a million viewers in a week and some fans have branded Saturday's episode – the second featuring the Time Lord's new assistant Clara Oswald – the worst ever.

The episode, titled The Rings Of Akhaten, was watched by 5.7 million people compared to the 6.7 million who tuned in to the show at Easter.

[For once they've erred on the positive side.  The episode actually pulled 5.5 million overnight…the same as "The Power of Three" and "Dinosaurs on a Spaceship" at…umm…Easter, "A Good Man Goes to War" in 2011, and in fact "The Satan Pit" in 2006.  

I'm not sure where they're getting the 6.7 million from, unless the mean the average of the first half of Series 6?  Nope, that's 6.25.  Haven't a clue then.]

The Sun says the ratings slump is bad news for Jenna-Louise Coleman, the actress who plays Oswald, as well as Neil Cross, the "respected scriptwriter", who wrote the episode.

[Laughingly the article ends with an promise that "further concise, balanced comment" can be found in the magazine version!]


May 2013 and has the Daily Mail taken on board its revelation about Final viewing figures two years ago?  Probably not.

"INSIDE THE BOX: Exterminate Doctor Who boss, BBC is urged"

Only 4.6million people have tuned in to some episodes, and though the BBC insists the resurrected drama has eightmillion viewers, even this is well down from the tenmillion when the show was revived in 2005

[Good on the Mail, they're actually referring to the 10.08 million Final viewers that "Rose" received in 2005!  

Except of course they're comparing it to the 4.6 million Overnight figures received by "some" episodes.  By which in fact they mean "one" episode – "The Crimson Horror"]

Tomorrow’s episode, The Name Of The Doctor,  will set up November’s movie-length 50th anniversary episode, which sees the return of popular Doctor David Tennant and his companion Billie Piper.

However, Tennant’s appearance will be a one-off, and existing Doctor Matt Smith, who is highly regarded, is expected to leave to launch a film career.
A Beeb source says: ‘The 50th anniversary episode seems a good opportunity for him [Moffat] to bow out. Either way, something dramatic needs to take place to improve ratings.’

[I'm curious as to where this "Beeb source" gets his or her figures from. The average Final ratings for Series 7 are about 7.8 million…making it the 3rd most watched regular series of Doctor Who since 2005, behind Series 4 (8.05 million) and Series 1 (7.95 million). 

Surely something dramatic should have been done a long time ago to improve the ratings of Series 2, 3, 5 and 6?]

But a BBC spokesman said: ‘The show has the highest audience share of all dramas on any channel this year and is in the top three most requested shows on iPlayer.’

[The BBC Spokesman appears to know more than the Beeb source. Is it possible the Beeb source was...made up?]


Before we leave May 2013 behind, here's an online article from Yahoo!  Presumably sourced from the above Daily Mail story…with a little artistic embellishment.

"Has Doctor Who lost it? Will the 50th anniversary episode bring viewers back? - BBC apparently set to fire Steven Moffat"

Ratings for the second half of season seven have continued to plummet, and now there are concerns from the BBC that the show's creative quality has taken a nosedive, and dodgy storylines have become way too common, with Steven Moffat at the helm.

When the Doctor regenerated onto our screens under the stewardship of Russell T. Davies with Christopher Eccleston as his ninth incarnation, the show repeatedly had ten million people glued to their seats in giddy anticipation.

[Ten million? For "repeatedly" read "once".]

But the BBC has now reported that this figure has plummeted to between 4.5 and eight million viewers, and insiders are apparently worried that the show is in decline.

[Aside from the fact that only one episode of Doctor Who has ever had Overnight figures as low as 4.5 million (2010's "The Hungry Earth") most TV programmes these days would give their eye-teeth to "plummet" to 8 million viewers!]


And so here we are in 2014.  Three stories into a new Series 8, with a new Doctor, and already the Finals are on a par with previous series. The Overnights are of course lower, reflecting the continued increase in TV Timeshifting (the average so far is 27.5%, the highest for any series of Doctor Who since 2005). Surely even on the 31st August can manage a little bit of optimism?
"Doctor Who’ Down 1.59M UK Viewers In Sophomore Outing"

"Into The Dalek", the second episode of Doctor Who‘s new season averaged 5.2M viewers on BBC One on Saturday night from 7:30-8:15PM local. The sophomore turn by Peter Capaldi as the 12th Time Lord earned a 24.7 share. It was BBC One’s most watched show of the day, but 1.59M, or 23.4%, down on last week’s season 8 launch.

Most watched show of the day? Pah! 1.5 million down on the series opener.  Bad bad Doctor Who!  Cancellation on the way!


Wednesday, 23 July 2014

New Series, New Doctor

This is an unashamed Doctor Who post, and before I continue, let me state that this is just an opinion and I'm quite prepared to be proved utterly and totally wrong.  OK. Here we go...

Series 8 of Doctor Who starts exactly a month from today (23rd July 2014), and as is usual in such cases there is a ton of speculation, hyperbole, hype and hope in the on-line fan community.  Admittedly there's a lot for fans to be excited about - a new Doctor in Peter Capaldi, a new starting date (Autumn) and allegedly a full season of 13 episodes - but will any of these affect how many people actually watch?
To be honest, these are all fan concerns.  How will the general viewing public react to a new series, and a new Doctor?  Well probably not much differently to how they've been reacting since the series came back in 2005.  So I feel it's time to make some predictions.  How many people will watch the first episode of the new series of Doctor Who?

Looking back to 2005 when Series 1 started, here are the Final viewing figures for the opening story of each season, including the timeshift (that's the percentage of viewers who recorded the programme on the night, but watched it up to a week later).

Note I've ignored the 2009 Specials as they're not really representative of a "normal" season of Doctor Who.

New Season openers

Season 1    10.8 million (timeshift 8%) *New Doctor

Season 2    8.6 million (timeshift 7%)

Season 3    8.7 million (timeshift 6%)

Season 4    9.1 million (timeshift 8%)

Season 5    10.08 million (timeshift 20%) *New Doctor

Season 6     8.8 million (timeshift 26%)

Season 7     8.3 million (timeshift 23%)

The first thing to notice is that the number of viewers for a new season opener are remarkably consistent.  Between 2005 and 2013 they've been between 8.3 and 9.1 million.  

Ah but what about Seasons 1 and 5 you say?  Yes, and now we get to the second noticeable thing.  A new Doctor draws more viewers.  About 2 million more.

Season 2 was a bit unusual as David Tennant's 10th Doctor was actually introduced in the preceding Christmas Special, so the first story of Season 2 didn't have that "new Doctor" boost.  Let's look at New Doctor Story Final viewing figures then:

New Doctor Eps

Season 1    10.8 million

Season 2    9.8 million

Season 5    10.08 million

OK, not many to go on, but still fairly consistent with a 2 million increase on an ordinary season opener.

The third thing to notice is the timeshift.  The difference between people who watched on the night and who  saved it for later has gone up from around 8% in 2005 to 23% in 2013.  This is across the board for all TV, and is not peculiar to Doctor Who.  In fact the timeshift hasn't been steadily increasing since 2005.  Rather there was a dramatic jump in 2010, which was probably down to SKY providing all new subscribers (and upgrading existing customers) with a SKY+ box that included the facility to record.  The timeshift has only increased very slightly since then.

So can we make a prediction of Final Viewing Figures for the first story of Doctor Who Series 8 on August 23rd?

Well, as a standard new season opener I would expect it to be somewhere between 8 and 9 million.  Notice this has nothing to do with the time of year it is being broadcast (August during one of the UK's hottest summers).  That's what the timeshift is for.  Regardless of when a season of Doctor Who has started (Seasons 1-6 began in April, Season 7 in September) the opening episode always attracts the same amount of viewers.  In fact Seasons 6 and 7 are remarkably similar, considering they both start at opposite ends of the year.

However as a New Doctor opener I would also expect it to have 2 million more viewers. it would therefore likely be more around the 10 million mark. 

And the timeshift?  When the weather is warm there is often an increase in people who would rather stay out in the sun and record Doctor Who instead, so I'm going to predict a timeshift of about 26%.
Right.  So I'm going for an overnight of 7.82 million, a final of 9.85 and a timeshift of 26%.  And if I'm wrong...I predict the actual figures will be lower. 

Roll on August 23rd!

Thursday, 3 July 2014

"DAZE OF FUTURE PASSED” - Sue Markham talks to Dave Levett of The Haize

He sprawls in a decidedly ragged armchair, giving me a decidedly ragged smile. The sun shines through the half-drawn curtains, illuminating a decidedly ordinary face.  Indeed, there’s nothing spectacular about the guy at all.  Nothing to indicate that I’m sitting opposite the rhythm guitarist\song-writer\driving force of one of the most influential rock bands of the Seventies, The Haize.

Dave Levett peers at me from behind that smile.  “Come on, ask me a question.”

It’s difficult.  What do you ask a legend?  I glance at my notes.

How about the recent split from Private Plastic?

Dave scratches his nose, looking thoughtful.  “I think all I could say about was inevitable...”  There is a long pause as Dave frowns, staring at a large purple patch on the left knee of his jeans.  I begin to wonder if he’s forgotten the question, when suddenly he glances up and, grinning jovially, continues (I have since learned that he does this a lot when being interviewed, seemingly without realising it!).

“Yeah, inevitable.  Like, in the early days, it wasn’t a record company, it was just a couple of guys we knew who had the right equipment to press up a few hundred copies.  I mean, we didn’t have licences, we didn’t have anything.  Christ, most of the money went on bribing people, like the printers!”

But you got your first licence in 1976?

“Yeah.  January the seventh!  We were legal at last!  The General Election was June the previous year, and we waved bye-bye to the right honourable Sir Hamilton more ways than one!

He was assassinated.

“He was, and before you ask, it wasn’t me!  Anyway, they scrapped DM in November, but it still took till the next year to get the licence thing sorted out properly.  And then we became a limited company.  And I was f----ing chairman!

“That was when it started, the trouble.  I mean, it was great at first, having total control over our own product.  But we just couldn’t devote enough time to the company.  The band would have suffered, and suddenly we had all these gigs!  Legit ones!  So over the next couple of years it got handed over, till we had less and less control.  Eventually I think I had two percent of the voting shares!  Anyway, it’s not as if Private Plastic needed us anymore, they’ve got some good acts on the label - Sigma-Z, Nouveux Riche, and they’ve got some of the Gene Hawkins Band back catalogue.  They’re doing okay.”

Have you seen Gene recently?

Dave laughs.  “That wanker?  He’s out on bail.  Been round to see us, but I told him we didn’t want to see him!  We made it plain there was to be no drugs involvement else you’re out on your ear.  Let’s face it, the drug scene was almost non-existent over here up till ‘76.  Then the Americans came back over, all the big US bands, and the hard stuff just seemed to follow.  A lot of people thought they could take it, and couldn’t.”  He pauses.  “Pete couldn’t.” [Pete Story, Haize's bass player from 1973 until 1977] 

Your third single, “SMACK”, was written after Pete Story’s death at the first Knebworth Festival in June 1977, dedicated to him, I believe?

“Yeah, I felt so sick after that.  Just plain sick.  He was a good mate, but I never knew.  None of us knew.  Though, to be fair, it could’ve been his first time on heroin.  Christ knows.  Anyway, prats like Gene deserve all they get.”

Sounds like you don’t think much of him.

“Christ, no, he’s a brilliant vocalist!  I mean, we really peaked when he joined, although there was a lot of bad feeling from the fans at the time.”  Dave laughs, “ I think everyone reckoned we were gonna emigrate to Florida after the US tour went so well, and then popping up with an American vocalist!  Nar, I respect him as an artist, sure, I just don’t want to see him.  That’s it.  Mind you, he sure left his mark on the band when we collaborated on the Techronomicon thing.  I was really pleased with that.”

Critics have said that the Techronomicon Road show was a particularly “overblown” period for The Haize.

“Oh yeah!  Amazingly so!  But it was great!  And yet I’m glad we can still play the smaller venues...both ends of the scale, y’know?  Like the Stonehenge thing this year.  I haven’t enjoyed a gig so much in years.  We had Johnny Balso on guitar, and did mostly old stuff.  After all, a bit of nostalgia never hurt anyone!”

Johnny Balso used to be with The Mutual, didn’t he?

“Yeah, they all got busted back in ‘74, after the French film came out.  Johnny’s got folks over in Australia though.  I didn’t know he’d got out until around Christmas the same year, when he came back for a few months and did some gigs with us.  In fact he’s on the Traffic Jamming single - not a lot of people know that.  Good guitarist, Johnny.  Wrote most of The Mutual’s stuff.

Is the new line-up permanent?

“Ha!  Is it ever?  I dunno.  We’re in a bit of a flux at present, what with Barry buggering off again, so no drummer [Barry Bueno, intermittent Haize drummer since 1972].  But Marc says he knows a bloke who knows someone.  We’ve got a couple of gigs lined up next month, if we can get a f-----ing band together!”

Do you think you’ll ever regain the stability of the 1978 to 1980 period?

“I don’t believe in stability.  You have to have a little bit of uncertainty to make everything spark.  Sort of dynamic tension, if you like!  Hopefully we’re getting back to a less polished, more basic approach.  Alright, so we were a success on the foreign market after Techronomicon, we were slick, we were professional...but so what?  I personally wasn’t happier.  Nar, it’s the end of another era.  Let the past bury itself.”

Speaking of the past...

“Oho, I know what you’re going to say...the RCA thing, right?”

Why did you bring out the injunction? Surely the tapes are still valid, even after three years?

“The injunction was an attempt to stop the release as quickly as possible, to give us time to negotiate some kind of licensing deal.  Sure, the recordings are valid.  They’re very good quality, and the gigs were good too.  But what we’re against is where the money’s going.  You see, pre-’76 we weren’t legal, we had no licence.  So, effectively, anything recorded before ‘76 is sole property of whoever eventually releases it.  In this case, RCA.  What’s the price of the album?  Three, four quid?  Most of that money is going straight back into RCA wallets!  That money could be put to better use.”

Some people might Dave Levett’s pocket?

“Bollocks.  Most of what we grossed from the Techronomicon live album went straight back into the music business.  I mean, Christ, this country’s poor!  There’s a bit of money available from local Government, entertainment grants and such, but it’s not enough to just lift all the restrictions and say “Okay, the law’s not against you, go ahead and play”, because like everything else in this world, it costs!  Christ, we could be millionaires if we’d stayed in the States!  RCA is solely US-owned now, anyway, and all the money from that album, a British group, recorded live in Britain, is just sailing out of this country!”  He pauses, smiling resignedly.  “Anyway, it’s water under the bridge now.  The injunction failed, and they released it.  Come on, I’ve had my gripe, change the subject!”

Any news of a record deal?

“Well, Jeff's been nosing around [Jeff Hoffman - The Haize's long-suffering agent/manager/fall guy].  There’s some London-based Indie labels who’d jump at the chance, but we’ve got to choose the right one because I don’t want loads of distribution hassles.  It’s got to be British too, there’s no question of signing to EMI or Polydor.  Actually, we’ve got some good demo material in the can - mainly me, Taylor [Taylor Sindon, keyboards/synth since 1974], and Barry - so as soon as we get some kind of deal worked out there’ll probably be an album on the way.  Need a drummer first though.  Can I put an ad in your paper?”

Be my guest.  Male or female?

“Ho ho, a leading question! I like girls in the band. I’m not on this big male ego trip that women can’t play rock music.  I mean, Donna McKenzie was a f----ing good guitarist, and Maxine was one of the best drummers we’ve ever had.  Her old man played bass with us for a while too. The only difficulty with women in the band though, is that they gotta habit of getting pregnant and leaving, at the worst possible two months before a world tour!”

What about Judi Delaney [The Haize's original bass-player]?

“Ah, shit, Judi couldn’t play worth a damn!  But that was back in ‘71...and I don’t think I was that great myself!”

Wasn’t she arrested?

“We thought so.  But she wrote to me about six months back.  She’s living in Switzerland now.  Seems she had to split really fast towards the end of ‘71, and couldn’t even let us know without putting the rest of the band at risk.  She got hold of a copy of War Zone last year, you know, one of the re-pressings, and there’s a song on there we wrote for her ["Song For Judi"].  She’s married now.  Cheered me up no end, you know, hearing from Judi.  Like, events from the past suddenly turning up rosy like that.  Sort of makes the future brighter, don’t you think?”

I did indeed.  And then the phone went, and it was Jeff Hoffman.  The interview was over and I left.  Dave’s last words behind me...”Hi Jeff...a drummer? Great...what’s she like?”

- Sue Markham
(originally published in New Musical Express 31st May 1980)

Monday, 2 June 2014

Why You Should Still Buy 0.01 Of A Bitcoin

Remember my February 2014 post, "Why You Should Buy0.01 Of A Bitcoin"?  In this I pointed out that one of the reasons that the price of Bitcoins will rise is that it has to rise, in order for it to function as a currency .  At present the maximum amount of Bitcoins that can be traded is 12 million (since that is all that exists).  With the current price (of writing) about $620 per BTC, this means that the maximum dollar transaction that can be made is $7,440,000,000 - $7.4 Billion.  Slightly down from my March estimate of $10.8 Billion (when the BTC price was higher) but still in the same ballpark.

I also made the assumption that the highest amount of bitcoins held by one individual would be around 12,000.  This was very much a rule of thumb estimate, and working on that figure today we would find that the largest financial transaction any individual could make would be 12,000 x $620. 

Or $7.44 Million.

Who holds the most Bitcoins?

Well it turns out my figure of 12,000 BTC was a bit conservative.  There are currently three individuals (or groups of individuals) who own the most Bitcoins:

The American rowers and Internet entreprenours, Cameron & Tyler Winklevoss claim to have cornered 1% of all Bitcoins.  With approximately 12,000,000 in circulation, this means they could own 120,000.  Since they have recently purchased seats on Richard Branson's Virgin Galactic, their claim is probably accurate.

In September 2013, the FBI closed down the Silk Road online drug marketplace, and in doing so became the proud owners of a single wallet containing 144,000 coins.

While of course the creator of Bitcoin – Satoshi Nakamoto – is estimated to have mined (and therefore presumably still owns) 1 million of the little blighters.

So How Much Can They Buy?

While the majority of Bitcoin owners will have substantially less than these, we can still use them to examine the most important factor in Bitcoin's rise to a global currency – how much can you buy with them?

With their coins, the Winklevoss twins could buy one or more items totaling 74.4 million dollars.  The FBI on the other hand could splash out to the tune of $89,280,000.  While the probably fictitious Nakamoto has 620 million dollars to play with.  While this may sound like incredibly large amounts of money, in the world of corporate finance, it's peanuts.  To put things in perspective, Google recently bought Nest Labs for £3.2 billion.  With Bitcoin trading at $620, not even Satoshi Nakamoto holds enough  coins to make a purchase like that – he would need to own just over five million Bitcoins.

As a thought experiment, what would the Bitcoin price need to be for the Winklevoss brothers to be able to afford to purchase a company for $3 billion with their 120,000 coins?  That's easy to figure out.  Divide $3 billion by 120,000.


That's right.  If the dollar value of 1 BTC rises to $250,000, Bitcoin becomes a viable currency for purchasing corporations.  If it rises to $1,000,000 it becomes viable for purchasing bigger corporations.  

But Bitcoin is Unstable…Isn't it?

The inherent instability and fluctuations of the Bitcoin/Dollar price has led to Bitcoin being compared to a Ponzi scheme, and to a certain extent this looks to be true.  The more people who buy Bitcoin, the more the dollar value increases, until suddenly a significant amount of people sell, and the price crashes, leaving those still holding coins out of pocket.  

In fact, I'm actually one of these at present.

In February you may remember I bought 0.1 BTC for £47. With a BTC value of $620 my coins are now worth $62, or £37 at the current exchange rate.  However in April, during the aftermath of the MtGox crash, they were only worth £25, so as usual Bitcoin is climbing once more.

So is Bitcoin just another Ponzi scheme? Well a true Ponzi scheme has nothing behind it, no product of worth (other than the inflated worth that the scheme itself confers) and is, like any bubble, certain to burst.  However Bitcoin has (and always has had) something waiting in the wings - it's a currency, and it can be used as trading. 

As we have already surmised, the higher the dollar value of Bitcoin grows, the more of the trading market opens up to it.  Look at me.  I own 0.1 BTC and can currently make purchases up to about $62.  However in April 2013, Bitcoin was worth about $70.  My 0.1 BTC would have allowed me to buy items totaling no more than $7.  In May 2012 the price was about $6, and I wouldn't even be able to scrape up a dollar.

Let's look back at 2011. The price fluctuated a lot more then, going from $1 to $30 in the space of a couple of months, and instances like this are used as evidence for Bitcoin's instability.  But what we do notice is that the higher the price of Bitcoin, the less these price swings seem to be.  2014's peak was somewhere around the $1,000 figure, and last month it dropped to $416. 

Yes that's a fairly big drop, but firstly it's only a 41% drop, and previous price swings have been far higher.  Secondly the peak figure wasn't exactly a stable figure to begin with, and prior to that the price had been relatively stable at about $600.

So What about the Future?

Well, in June 2014 the current price is $620.  A year ago it was $70.  Two years ago it was $6.  Forgive me for noticing a pattern here, but I can just see 1 BTC being worth between $4,000 and $6,000 a year from now.   By which time my 0.1 BTC will enable me to buy items to the value of between £230 and £350.  Not bad for an initial investment of £47.

Of course if I wait another year…