Bitcoin Forum

This has been debated to death, but perhaps re-framing the argument might show how hollow Bitcoin's scarcity argument is.


Bitcoin cultist's claim one of its greatest virtues is that the supply of Bitcoins is limited to 21 million, but of course if Bitcoin was ever to become the global default currency its promulgators dream about, each Bitcoin would denominationally represent a huge USD equivalent. To this end, if the US treasury said that it was restructuring the USD such that there would be 21 million MegaDollars maximum, but that each of those MegaDollars could be dived up to infinity, does it suddenly become sound money?

When you start your argument with an insult, it is hard to treat it as anything but a troll.

What are you taking ?

Seems good stuff.

Infinity <> 8 decimal places.   ::)

Please every kid knows that only people who are entitled to seven magnitudes of capital gains have it in their rational self interest to guarantee the soundness of money.

Then stop bringing it up. You are wrong.

^^-- This!!

1.00000000 Bitcoin = 100,000,000 Satoshi's

21,000,000 x 100,000,000 = 2,100,000,000,000,000 Satoshi's

Need more, add decimal places...

Besides, the USD can do this, look at any US gasoline pump, it is denominated down to 1/10 of a cent.


The words chosen in the white paper were chosen very carefully?? Unless one thinks about it.


Just 'Priming the pump now, can't wait to see what happens down the road with bitcoin!

8 )

Remarkable, not a single reply addressing the argument as put  ::)

That's because it was a shit argument. You get what you deserve around here.

http://bitcoin.org/en/faq#wont-the-finite-amount-of-bitcoins-be-a-limitation

So, down to 8 decimal places, and perhaps more as the protocol is modular.  1 bit is all you really need to indicate 'interpret the following units as decimal places 9-16.'  Put it on the backlog for the Bitcoin developers of the 25th century.

If the treasury issues 21 million MegaDollars maximum, and someone owns 1 million Megadollar, that still means he has 5% of all money. If the plebs then decide to pay for bread with 0.000000001 Dollar because it's dividable to infinity, well then just imagine how many breads the dude with 1 million MegaDollar can buy.

>> His megadollars will only become relatively worth more by adding more decimal places. Not less.

If that's the case then debunking it should be trivial.

Just read the post above you.

What kind of argument ? 1 BTC = 1 / 21,000,000 of supply no mater how many zeros you add to your 1.00000000 BTC  ;)

Quite so.

The trick Bitcoin has used is to limit a unit representing a large chunk of the monetary base, but to make the chunk infinitely divisible. By contrast the US treasury inflates supply, but does so in small units.

Did I argue otherwise? Read what I said again and answer the question.

So what is your argument then? Yes you can divide bitcoins up as much as you want. You could divide gold to its bare atoms - that doesn't make the value of a whole bitcoin or a chunk of gold any less.

Or are you just pointing out that the divisibility is a great feature that ensures bitcoin can be used in the long run, when 1 BTC is valued at too much for the normal daily business, and thus we need to switch to milli or micro BTC?

Ugh perhaps: http://www.theguardian.com/technology/2013/nov/27/hard-drive-bitcoin-landfill-site

 ???
Bitcoin is limited supply, period.

And 1 USD need to be inflated over time, otherwise the debt interest could not be paid very quickly

OP is so stupid I have no words for it. Good luck with your paper fiat is all I can say.

If I have 4 apples, I have 4 apples.

If I have 4 apples, each in halves, I have 4 apples.

If I have 4 apples, each in thirds, I have 4 apples.

If I have 4 apples....

You have taken a logical fallacy and based your entire criticism on it.

1/2=0.5
1/2≠2

Go learn maths, and logic, and manners.

Yeah, if US treasury would gurantee that if you get one of 21 million megadollars you will hold it for as long as you wish, and you will be able to prove that no new megadollars would ever be created - then yes, the dollar would suddenly become a sound money. And no, it is not going to happen, because printing new money equals creating new megadollars.

http://troll.me/images/futurama-fry/not-sure-if-trolling-or-just-stupid.jpg

So is XRP sound money too?

Not it wouldn't be creating new megadollars, it would be creating subordinate denominational units.

*facepalm*

So instead of 1 cent (0.01 USD), I will have 10 mili dollars (0.010 USD)   ???   :D

The analogy is specious.


Saying that there can only ever be 21 million Bitcoins is an empty scarcity argument, because the actual value of a Bitcoin is not yet settled by the market.

Your argument is not even an argument thats why you don't get any answers.

The amount of gold in earth is limited. You get that right?
Lets say that amount is 1kg.
You can express that amount as :
1kg
1000 gr
1000000 mgr etc.
No matter how you express it, it is the same finite amount.

The same with bitcoins.
1 bitcoin can be expressed as
1000 mbtc
100000000 satoshis
100000000000000000000000000000 of the smallest denomination that may be introduced in the future.
Still it will be 1 bitcoin and only 21000000 bitcoins will ever be mined.

Is there a meaningful difference between 1kg of gold and 1 gram of gold?

Is there a meaningful difference between 1 Bitcoin or 1 satoshi?

OK.  I see what you are saying.  I modified your OP so as others can see what you are saying.

So the real question you are asking is:  Does the fact that Bitcoin have a limit of 21 million make it sound money?

Now, everyone, debate away the very same economic debate that we have had from the start.  Go!

Right, but you do understand, that if government would be dividing cents in halfs, it won't suddenly get more wealth, they will just have much smaller units of money. Wealth, or buying potential of other existing dollars and megadollars, does not change if you split your cent in halves. You do understand that, right? ..

I don't know exactly what you ask but if you still don't get it then i doubt that you 'll ever do  :-[

His OP was so inflamitory (lie!, etc.) that no one has actually read it ;)

I think it's a pretty straightforward question.

My god you're right. I totally see it now. 1kg of gold is exactly the same as 1g of gold - If you asked me which was worth more, I would have to agree that they are both worth the same amount!

How could we all be so stupid for the last 5 years, and bid the price of 1 Bitcoin all the way up to $1000?

Sorry guys, the party is over - sell all your Bitcoins now for whatever you can get, the system is flawed.

Some of you are giving him way too much credit. Calling a fundamental component of bitcoin a lie right in the title, using words like cultists. The guy's a troll, let's just move on.

You guys are still not reading his post.  Stripped down here is what he said:


He did post the question as a troll so I am out of here...

Is that some kind of zen buddhism? :D One bitcoin is one satoshi and you can substitute them freely if you just call them different things, just forget that there is actual value behind them, nothing has value in this world, we are all a superposition of energy and information brightly burning for a shortest moment in the infinity of the endless emptiness.



you are right, of course, just trying to make fun at the expense of the especially silly troll which is stuck in the swamps :)

This thread.

But it isn't the morning  ???

Its the afternoon silly!

Ok, tell me if I understand the question correctly paraphrased for fiat:

If I can buy a radio with a $20 bill and I go to the bank and break that $20 bill into twenty $1 bills, then can I buy 20 radios?

If I can buy a coke for $1 and go to the bank and turn that dollar into a hundred pennies, can I buy 100 cokes?

I think the OP wants you to explain how that's not correct. Have fun...

Assuming their promise was credible (which is an insane assumption but for the sake of argument), yes! It would be as good as sound money. Divisibility makes absolutely no difference. Your 0.008 megadollars still represent a certain slice of the pie, no matter how finely you subdivide that slice.

Regardless of the valuation of each megadollar? Let's say each megadollar was equal to 1 trillion USD? Still sound?

Since the scenario is that the USD has been restructured, there is no "dollar" anymore, just megadollars, so I assume you mean that each megadollar has the same purchasing power as $1 trillion in today's dollars (note this is something that can't be decreed but only decided by the market). If that's what you mean, then yes, it is entirely sound given the government is somehow guaranteed not to issue more than 21 million megadollars. You could buy Google for 0.1 megadollars, a mansion for 0.00001 megadollars, a decent house or Lambo for 0.0000001 megadollars, a nice TV for 0.000000001 megadollars, lunch for 0.00000000001 megadollars, and a gumball for 0.0000000000001 megadollars.

Oh no, there would still be dollars, like there are satoshis. It's just that a megadollar would be the top denomination like a Bitcoin is the top denomination. Now, you talk about the market deciding value. Where would Bitcoin be had it not leeched value from the very currencies its fans decry? All that mining hardware and other infrastructure, all the speculative capital. Bitcoin exists because it has assimilated value that people like you claim is non existent )because the dollar and other state fiat are worthless).

Dude think about it this way: there are 10 equal shareholders of a company, if no new shares are handed then it doesn't matter if the 9 other share holders split their shares with their friends and whoever - you will still own the same portion of the total pie (this is bitcoin). However if new shares were created out of thin air and given to people so that now there is 20 people equally sharing that same pie - then now your share of the total pie has been diluted and what you own has decreased (this is the fiat system).

In that case, the government didn't really restructure the USD, just renamed the denominations. (Keep in mind a dollar (or a trillion-dollar bundle) is already infinitely divisible. There's just no practical way to pay less then a penny. But exchamges and such have been known to deal in smaller subdivisions internally.)

You have a piece of pie. Dice it, mince it, or liquefy it. It's still the same amount of pie.

didnt the OP make this same exact post a week ago?

The 21 million is limited by the mining software.  The USD / BTC exchange rate is not relevant to this.

Well, it is. The more value that accrues to a Bitcoin the greater the demand for subunits to fractionalise value. It's why Litecoin pisses the Bitcoiners off so much, because it is perceived to be preventing people buying satoshis, buyers instead preferring the perception of getting more for their money with Litecoin. The goal is to transition the speculation over to subunits so as to lower the price of speculating on Bitcoin and broaden the speculator base.  It's why the press is inundated with fake Bitcoin stories, like the guy who lost his Bitcoin containing hard drive; 5 minutes research would show he has all the Bitcoins he ever did and it was simply sa way of getting a big news story in the press about Bitcoin. The whole thing is about manipulating people into conferring more and more value up the denominational chain.

And here I thought this was all some kind of weird deja-vu. 

Guess I'm not prescient after all. I Better go adjust my bids and asks, lol.

Open your eyes.  There is a whole world outside of your little piece of Earth.  It is always morning somewhere.

Yes.

Well ok, there's no formal definition of "sound money", but it stops being inflationary money if that's what you mean.

Does that answer your question?

revans,

There's several more basic confusions to clear up.

Try this: http://freedom-school.com/money/how-an-economy-grows.pdf

No thanks. He's a Libertarian crackpot

Lies! Your telling me its somehow different times in different places? Get out of here!

You caught me... I was just trollin  :D

So op, by your logic, adding or removing the nickel or the ha-penny from circulation will affect the value of the U.S. dollar? If I remove the canadian nickel from circulation is everyone's canadian dollar worth more?
 ;D ;D ;D ;D

No one's addressing your argument becuase it's already been addressed hundreds of times whenever a troll brings it up. Still, gotta love how you act entitled to a thorough rebuttal despite being the 'n'th person to post about this in the last year. It's nearly effortless to debunk and if everyone knows the argument by heart, no one's going to bother to respond to you - instead, we'll just troll you back and make fun of you.  :'(

The logic is laid out step by step. Stop on the page where you either start disagreeing or don't understand. That would enable a productive dialog.

The number of fractional sub-units is also defined.  The minimum unit is 1 Satoshi.  There are 2,100,000,000,000,000 of them.

Yeah he's a boring and repetitve troll. No wonder his Ignore button is getting much use.

Op, sadly, your title is a lie, instead of limited supply being a lie. Go look at the bitcoin's code.

As for dividing into smaller digits, it makes no difference.

why feed the troll? he's obliviously trying to sound stupid for some unknown reason.

Not another one of these threads

Sigh!

Op, please address this post, are you maybe thinking about it like this:

2 years ago, person A bought 100 BTC for $0.01. Yesterday person B bought 100 SATOSHIS for $0.01. Both persons bought a hundred of units of bitcoin currency for the same amount of $. But in fact it's not the same, the 100 that person B bought for $0.01 is worth far less! Those are not the same units, just the number "100" is the same. Person A is 100.000.000 times more wealthy than person B.

Op, I'm asking you, is this what you mean?

I think his argument is more .. philosophical.  Here we have an infinite amount of something (his megabucks).  It only makes sense to assign a $0 value to something which is infinite.  What he fails to comprehend is that those infinitesimally small chunks of megabucks all combine to form something which is scarce (the total supply of megabucks).  It's a semantics paradox.  In the limit, the chunks are worth $0, but in practicality (outside the limit), those (gold bars, let's say) are split into atoms, each with a very small value which when summed together equal the total value of the gold bar.  I'm not sure whether he is genuinely confused or simply trying to confuse the readers on this forum.  Either way, not a very impressive argument against Bitcoin.  Don't quit your day job ..

Yeah, could be that. But "infinite divisibility" is a theoretical construct, in practice every divisibility is finite. Therefore parts remain > 0.

Well in case he's not trolling, it could be that he's just really bad at explaining his ideas. But it looks like he's not even trying, so it's probably trolling.

Yes it does. Because if the U.S. treasury decides this, who effectively gets all the new units (the microDollars or picoDollars) that are introduced by dividing MegaDollars?

Compare this to: who gets all the new money that is introduced when the FED prints yet another $150 billion?

In case you still don't see the point, let me spell it out for you:

Dividing existing money into smaller units = new money gets evenly distributed amongst everybody who already owned money before. If you owned 0.00x% of the wealth before, you still do now, excepts it is worth a bit more. Seems fair to me.

Printing new money = only FED and banks get the new money, at the expense of the rest of society (as our existing dollars become less valuable). If you owned 0.00x% of the wealth before, you no longer do now, and it's worth less. SUCKS.

Scarcity and divisibility are two different concepts.

Scarcity, in how it applies to Bitcoin, means that if I have one Bitcoin I can know for sure that I will forever own at least one 21 millionth of the total Bitcoin M0 money base. The fact that my 1 Bitcoin can be divided to however many decimal places does not change that.

Bitcoin has its weak points (mainly the scalability thing), but this is not one of them.

What part of scalability you see as a weak point in bitcoin? Block size? There are concerns but nothing that can't be addressed.

We are less than one order of magnitude away from hitting the max block size limit. And I can see no long term solution to the limit anyway.

We'll see much higher transaction fees when we start to pound against the block size limit.

(The fixed limit should have been replaced with a dynamic one when Satoshi was still around. It's much harder to do a hard fork now.)

Well there is some talking taking place right now around max block size and i don't see anyone panicking or something.
Developers seem pretty sure that things will scale well with the necessary changes.

If there were no counterparty risk, then yes. It's the fact that you still have to trust the US government that would make it unsound in this case.

Changing the definition of your units of measurement means nothing if the thing you are measuring stays the same.  If you cross the border into canada we measure distance in kilometers. This doesnt mean our cars go faster, just that the nominal value we use to measure speed is smaller.  We could measure speed in centimetres / hour if we wanted and the only thing it would affect is our road signs and spedomoeters.

They say that in public, but read what they say on the private forum. Same with selfish mining problem, in public it was dismissed, on the mailing list  it is treated as a serious problem.

Has this thread cleared up your confusion on the infinite divisibility paradox?

This is so right lol