Bitcoin Forum

What if it's super popular and such? I know it can be divided, and a single Satoshi is 10^-8, but capping out make it seem more like real estate to me than currency.

My opinion is yes.

Ultimately when all the bitcoins are created, a deflation will occur. Deflation creates an incentive to reduce the number of financial transactions. Holders of the currency have an incentive to hoard. This will lead to sub-optimal use of the productive capacity of the bitcoin economy. Eventually, people will be forced to sell their productive assets to survive and consequently cause a misalignment of productive capacity within the Bitcoin Community.

However, that point is a long-time away. I also think that their will be a bitcoin credit boom, which will have cause inflation, and economic growth in the future.

Just my 2 cents.

Its more like gold than traditional currency. Whether thats good or bad for a currency depends on your economic views. Keynesians think no, goldbugs think yes.

I don't see deflation as a bad thing. It will strengthen the currency against weakening fiat currencies over time. This provides a reason to buy into Bitcoin over other currencies; as a store of value. Those who hold Bitcoins will slowly gain more purchasing power over time. I do not see hoarding as a becoming a problem. After all, currency is useless if you never spend anything, so there is no reason to hoard forever. Healthy savings is beneficial. Look at the USA with our massive debt problems. On the other hand, China, has a super heated economy, and a huge savings rate.

I would think it would be a bad thing. My thoughts are that once all the bitcoins are distributed the system would see some stagnation. If the user base is large enough to keep transactions going then this wouldn't be a problem but maybe there will be a retooling of the whole concept by that point. Some type of bitcoin v2.

Isn't it possible to add some more bitcoins to the network in the far future? Imagine what will happen in a few hundred years. People "lose" some bitcoins every now and then and they will never get these bitcoins back. So in several hundred years, we may have a problem to use bitcoins, because there aren't enough in the network.

There will never be a shortage of bitcoins. You can add more precision to the transactions and run world's economy on one coin.

Before all bitcoins will be generated the generation rate will gradually slow down. Before then the economy should start to move more and more and people should be trading enough to make transaction fees the dominant part of bitcoin economy, not block rewards.

Inflation is leading the world into economical crysis. Lets give deflation a go and see what happens. Just because sometihng is different doesn't mean it's bad. Even the economists, people that spend most of their lives studying and debating this aren't really sure which answer is the best. This is just one of the approaches. If you want to have an inflation economy, go ahead, make InflationCoins chain and start giving out 50 InflationCoins every 10 minutes until the end of the world or Internet and see what will happen. It might be the right solution, it might be the wrong solution. Try doing some science and experiment.

I like the idea of using something like bitcoins as an economic experiment. See how a deflationary economy pans out and use the lessons learned on future endeavors.

In theory, once a population relies on a fixed-quantity cryptocurrency, that currency will appreciate in value relative to the economic growth rate. So there would still be some investment, but it would be more conservative than with inflationary currency.

In opinion, this might be stagnation, or less bubbly-bursty, or more "fair" to poor people. Apply your economic school as desired.

Personally, when the last coin is minted, I think the whole thing is going to crash, I'll tell you why...

There are only 3 ways to get coins, mine them, buy them (including trading for good/services), and earning transaction fees.  This in itself is not a problem.  But if you look at the the fact that the majority of coins are held by hoarders because there is nothing to force the exchange of coins problems arise.

Right now, the majority of the network that allows BitCoin to run is supplied by miners, either solo, or in a pool.  So when the last coin is minted, all the miners go away.  So the majority of the network goes away. BitCoin will survive, but will be on life support.  It also leaves the network open to brute force attacks, such a chain takeovers at 51%, but that's a whole separate problem.

Mining is gone, so that leaves buying/trading, and transaction fees.  These two are linked, transactions fees are awarded when BitCoins are exchanged (bought/sold/etc.).  As it stands right now the majority of the polls out there keep the transaction fees for themselves, so the end user never even sees them.  But the fact is, transaction fees by themselves are not enough to pay to keep hardware running, either for a pool, or the end user.  So all the pools go away along with the few people still running BitCoin to keep the network going.  End of Bitcoin.


It's a bit more complex than this, but this is a general idea.

no, you're confused.

transaction fees are earned by miners who will gradually earn more and more transaction fees as they gradually earn less and less for block rewards.

miners are here to stay.

Well Considering all the bitcoins wont be found until our grand childrens, children wont see that day. I think that everyone would come into the agreement to happen what ever may need be.

That being said by that time some other alien currency will come out.
Maybe Perfect Coin!?!?!?

Oh wait wasent that soliccoins purpose?

Exactly. Although the volume of transaction fees depends on the number of transactions. So if bitcoin doesnt become more popular as payment method in the next few years, there wont be enough incentive to keep lots of miners around and the network could become vulnerable. Either that, or transactions would have to become rather expensive, limiting bitcoins adoption. It has potential for a catch 22.

Personally, I dont think it will become a problem. Mining for blocks will be around for long enough to give bitcoin time to expand. If it doesnt happen in the next 5 or so years, its probably not going to happen. Also Im pretty sure a fairly large crowd will continue mining even if its not profitable.

I can honestly say ill be here when everyone else drops off even when everyone else has no imcentive.
Bitcoin has saved me from debt when mining was profitable and i think i would owe it to bitcoin to get back into debt to keep it going.
*knock on wood

Dont say such a thing!!  :o

Oh bagezus.... I hope your tonka truck isnt for trolling :P

hahahaha no way. It's for driving. :)

It'd be cool if it was full of BTC tho

"...when the last coin is mined..."
It`s interesting when people use that phrase. I wonder if they know the process of halving the mined Bitcoins. If so, do they consider the last coin mined to be the time when the fraction goes below 1BTC, even though there will be some coins to mine still, or until it is so hard to divide that people will see it as noise in their accounts?;)

Maybe on a USB stick?

It can be divided more than 10^-8, so, don't worry

Although high deflation rates can lead to a deflationary spiral that would devastate any economy based upon that currency. As long as a currency's mean deflation rate is lower then the "real" rate of return for short-term deposits, it will not cause any significant problems.

21,000,000*10^8 = 2,100,000,000,000,000

If all 6,970,000,000ish people on earth used BTC, that'd be enough for each person to have 301,291 BTC (because I figure after they shift the 0 they'll call the new placement BTC as well...)

that's assuming they don't make it possible to shift the zero further than 8 times

It's possible without problems

If it's super popular, the people who were there before it got popular get rich.

OR: it's becoming super popular, the people who were there before it got popular ARE rich right now ;)

Unless they used Mybitcoin, in which case  :-X

bitcoins is in inflation right now, something akin to like 7,000 coins minted every day?.. It won't be bad until 10 years later when bitcoin is worth 2000 per us dollar. OR when this current currency fade out of popularity.

The price of bitcoin is not relevant to its usefulness as a way to conduct transactions. Even if bitcoins become nearly worthless with a trade value of $0.0001, it will still be an awesome way to transfer funds. You only have to type a few more zero's when you do a transaction. Volatility is a bigger problem if its value fluctuates too much on a short timescale it would make it less usable.

yea I heard that guy did he spent 40,000? Bitcoins to buy an pizza! Seriously who is gonna do this when bitcoin is worth .0001 us dollar? seriously. I lol at that concept. I'm sure they will just move onto solidcoin 3.0 before that shitz happen, or namecoin 10.0 etc...

Picture the old Zimbabwe money or the german mark during the 1920s.

http://newsimg.bbc.co.uk/media/images/40094000/jpg/_40094536_zim102203.jpg
http://1.bp.blogspot.com/_YGLQQZTHoU0/SsGAMeRAg6I/AAAAAAAAKM8/5q8waCjTjIs/s1600-h/inflation.jpg

The reason why people are holding onto bitcoins right now is 5-10 years down the line when it's harder to generate more coins and thus a bigger demand for the coins compared to what it is now.

Only a year ago, a pizza would have cost you about that many bitcoins. So what? Rather than using bitcoin, you'd typically use "KiloCoin" or whatever, and you pay for your pizza with 40KC. I dont see the problem with that as a trade instrument.

I definitively believe it is a really good thing to keep the Bitcoin supply limited to 21 million.

Fiduciary money such as dollars and euros are based on the trust you have on central bankers to keep inflation at bay. You can go back 100 years in History and see that fiduciary money has always been debased over time, whatever politicians have ever said. The US is flooding the country with oversupply of dollars which will definitely generate high levels of inflation in the long term.

On the other hand, the European Central Bank is trying to strictly control inflation, but this is causing instabilities in the most indebted countries, and the outcome is yet to be seen.

The 21 million threshold may make Bitcoin a currency or commodity nobody will like to borrow from, but it is in the cards that it well may be an excellent store of value and trading platform.

the code will be patched to tolerate a low inflation rate. 1% maybe 2%...whatever is needed to keep the hash rate of the network going.

I think the 21 million coin limit is a fatal flaw in Bitcoin, but luckily we won't reach it for a while.  So we still have a normal inflationary currency for now.

you trolling ? http://en.wikipedia.org/wiki/Bitcoin#Monetary_differences

why so mad? Bitcoin is IN inflation right now... 7000+ coins minted a day that is lowering the value of the coins you have today.


Quote from your link:


Ok, so he found flaw, 21 million coins, lol.

i was wondering, how many bitcoin are left "unmined"?

Since about 7 million of 21 million have been mined, there are about 14 million left unmined.

That makes no sense what so ever. That would be like saying I could invest 21 million bitcoins in someone and create another 21 million bitcoins out of thin air because it was an investment that I traded for something else. The 21 million bitcoins is not the base money supply, it is the entire the money supply. Once the last bitcoin is mined, no others will be created.

it is the entire bitcoin supply.

however other forms of money can easily include bitcoin IOUs or many other kinds of derivatives.

+1

Good and bad are in the eye of the judger, but I'll spout some words.

I believe 21 million coin limitation is the central reason for bitcoin's stagnant adoption rate. The lack of a stable value (not to be confused with a stable exchange rate!) is keeping people from using the currency. The reason is that there's always this spectre of radical price appreciation. And whenever there's a spectre of radical appreciation, there's also downward risk. The problem is value instability, and bitcoin has a lot of that because of the 21 million thing. Cryptocurrency will really take off as more people recognize this and start moving towards new designs with value stability in mind.

One such coin in the design stages right now is EnCoin, a coin based on the value of 10kwh of electricity. Another idea is HashCoin, one based on a particular # of ghash, which could be achieved by simply increasing the payout-per-block based on the difficulty of solving that block (and having on limit on the number of coins).

I suspect bitcoin is not the future of money, but something like it is going to be a major player. Whether or not that's bitcoin itself will depend on bitcoin's ability to own up to it's 21-million-coin flaw. If it does not, it probably will lose to a competing currency that deals with value stability. If the bitcoin developers agree to fix the 21-million-coin problem, then bitcoin could become a big deal. However, in that case you're not going to get rich off of it because in fixing the 21-million-coin problem you've remove the "radical-upside" (fantasy) that so many are talking about with bitcoin.

You may want to think twice if you're buying bitcoins as an "investment" and holding them on the expectation that they'll make you a lot of wealth. :) You're taking a very big risk.

This site has a lot of answers to questions like that

https://en.bitcoin.it/wiki/Myths

smaller increments will just be worth more, that's all

I think it's a good thing, because the value of BTC will increase slowly once the cap is hit.

There are not 21 million coins. There an infinite number for all practical purposes. Bitcoins can be divided to a thousand decimal places. It would take a simple programming change to do this.

Sure but you cant divide them without dividing their value too :) IOW, you can divide your coins all you want, but it wont affect mine. With dollars/euro's etc, some entity can create more and thereby affect yours.