Bitcoin Forum

on many exchanges we can trade futures and derivative trading, with leverage upto  125x or more.
so there is total 19 millions bitcoins circulating ok , In which, many coins are lost or people holding for long term
my question is, we can trade more than 19miilions coins on exchanges with leverage like: an institution have 500k bitcoins and they are trading on 50x leverage (it's obvious no one will take this much risk just for example and understanding) and more like people or institution like this than we can rich more than 19miillion coins
or more than exchange's reserve ,
and buyer and seller are also agree to trade
(totally hypothetical or don't know we already trading like this or not)

is it can happen can we trade just numbers

On any centralized exchange you're trading just numbers. Those are real coins only at depositing and at withdrawing, when they are visible on the blockchain. All the rest is numbers in the exchange's internal database.

That should make you think how fake that trading is. As NeuroticFish says the real coins are visible on the blockchain. What you are trading in that kind of financial casino is mostly fake, created in such a way that there is a very high probability that you will lose your money.

Bitcoin was created precisely in response to that kind of false and speculative economics.

I do not think it is possible. Leverage trading is not as straightforward as knowing the ratios, there are peculiarities associated with the collateral and the exchange. So a collateral of 500,000BTC would influence the amount of leverage one can take considering the exchange reserve funds.

I am not absolutely certain on the laws, but it could be illegal for an exchange to allow margin trading beyond its reserves.

- Jay -

On leverage you actually don't trade with real coins, I can say if you own on-spot trading and have let's say 1BTC I can say to you, you don't own this BTC till you transfer it to your cold wallet. So all this leverage is an illusion to most people, and I can say from this point all the manipulation exists.

Its not how leverage works. It multiply the amount of cash you have available not the amount of coins you bought. So you have 10 mln $, with 50x leverage you have 500 mln$, but its still $. You still have to buy coins from market.

But your thinking is not 100% wrong. I was posting about this like 4 years ago:

Money creation system - is bitcoin creation resistant? (https://bitcointalk.org/index.php?topic=5094088.msg49096584#msg49096584)

Yeah, in additional, trading derivatives like future and option enable us to trade any underlying asset such as bitcoin, but not necessarily ownership.  Because an investor is not buying or selling the asset itself but the contract that gives the holder the right to buy or sell the asset at a later date at a predetermined price. This allows traders to speculate on the future price of an asset without actually owning it.


True it is the contract to buy or sell the asset they are trading and not the actual asset.  I do agree that as long as Bitcoin is not sitting in your wallet, that BTC is not yours yet.

Technically speaking it’s true that user doesn’t own the leverage tokens but it was bind by contract which making your asset as collateral to borrow more money for your trade. Saying it as an illusion is not factual right because you are borrowing a money with a contract that you will have a liquidation on your pice once your asset reach the amount which is just equal to the amount that you borrowed to pay for it.

It’s not an illusion but rather a contract trading.  :D

I know : Just like trading btc/eth pair it's an example

According to my analysis of Blockchain it's not possible but in side chains or you can say that somehow using a BTC to BTC Peddge system on a side chain it is possible to make more than 21M supply but dear than 1 to 1 Bitcoin Peddge is not going to work there will be a huge difference in market values of both coins. On the Bitcoin network, it is not possible.

You are just trading numbers on futures, Well the exchange possibly has the amount of bitcoin that they lend to you but they can't let you withdraw it and lock it to you in their own exchange since you don't own it and yeah it's just numbers that exchange lend it to you with the real bitcoin you have as a collateral. It is all just happening inside the exchange, You can't withdraw it or transfer it to others. As long as it doesn't appear on the blockchain, It is not yours. So yeah it is basically impossible for bitcoin to have more than 21 million supply.

It is what you're thinking that's happening and that's why it's hot on the news these days there's an implementation that these exchanges want to have and that's about proof of reserve.
It's to prove that they're holding this xx amount of bitcoins onto their reserve and they're far from being bankrupt and this is like the mechanism to avoid what has happened to FTX.

If we ever end up just trading numbers on the screen that is more than what the allocated number for bitcoin is, then we'll be no different with stocks and its derivatives trying to make money out of thin air. In futures that's the same case, although you're pretty much betting on the amount of a commodity in the future but the platform has the funds that they can release once the contract matures (expires).

No matter how many twists and turns an exchange or trading platform might have on the number of bitcoins available, 21 million is still the limit.

21 million is the bitcoin supply limit and cannot be added. There is no point in adding Bitcoin beyond the supply that has been set by Satoshi Nakamoto. The circulation of bitcoins circulating on exchanges is still far from 21 million, and some bitcoin voters also hold them in their wallets, but some leave the wallet without anyone being able to open it. So the circulating supply of bitcoins will not reach 21 million. this will make bitcoin even rarer when the mining process is complete, the price will be more expensive because of limited goods with great demand.

As you've said, if that is a huge amount put on exchange as a future trade no one will risk that big amount and trust the exchange, because people now learned how to store their own Bitcoin and of course have full control of the private key.  As pointed out above, on a centralized exchange it's only just a number because that's not recorded on the blockchain. 
So in exchange, there's no real number of Bitcoin.

The total Bitcoin supply should not exceed 21 million, nothing will break the code of the Bitcoin protocol and add an additional number of Bitcoin total supply.

Its total supply should not be increased because its limited total supply is one of factors contributes to make high value for Bitcoin. There are other factors but its 21M total supply, unchangeable is so important for the coin value.

It results in hype and greediness in speculators, investors together with its utility growth and adoption growth. All of those factors combine and make Bitcoin is an unique cryptocurrency.

I don't know. If Protocols for Segwit, Taproot can reach to consensus, why a protocol to change its total supply can not be submitted and voted?

And Bitcoin has 3 testnet generations so in future, we can have a protocol to upgrade Bitcoin algorithm, technically and have a second mainnet generation.

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

Irrecoverable Bitcoins that were sadly lost due to lost private keys? Will it be circulating again? What I'm worried about is the rate at which people lose their keys probably won't even become 0. Which means the supply of bitcoins in circulation will continue to decrease over time.

My question is will there be some sort of protocol to extract or mine more coins to maintain a circulating supply of exactly 21 million BTC? Maybe every 50-100 years a dormant coin will be unlocked for mining by miners?

To recover your bitcoins, you must have some clues because if you have nothing, it is impossible to find your wallets and keys. There are methods to brute force Bitcoin keys and wallets but it must have many clues. A more clues (words, characters) you have, a more chance you can find your keys and seed. If you have an empty hand, empty clue, accept that you lose your bitcoins forever.


Nobody want to approve such proposals if someone submit it and find consensus. No miner, no mining farm, no whales want to support that stupid idea. Because they don't need to be genius to realize that because of unchangeable total supply, Bitcoin has its price at $60,000 months ago and will have higher prices after future halvings.

Answer is simple: "Never". Thats the nature of bitcoin and that makes it more valuable as well.

This will totally kill the decentralization. So, I dont think it'll happen. Lost coins are lost and they will stay as such as long as bitcoin lives. The moment bitcoin was released by satoshi, its core design was set in stone for the rest of its lifetime. Btc will die if such things start to happen which you are talking about.

It is all fun and games till someone demand his bitcoins and withdraw them. Leverage, fractional reserve banking, investing with the customer funds… these all work fine till they don’t. Gox was probably the first and ftx won’t be the last example. On paper, These exchanges can create bitcoin out of nothing but it never ends well. The other example is tether. Everybody knows that’s not going to end well too.

This is why I always thought leverage trading is a scam since you're not actually trade with the real coin, but you're trading with the underlying asset created by the exchange. Leverage trading can trick anyone with false understanding like this one, not to mention there's a rules you need to understand and each exchange differ from the other. If you want to get a real experience to trade Bitcoin, you can use P2P platform e.g. localcryptos, hodl hodl.

It can be submitted, sure, but it will be widely rejected by the community. Why would every node and every miner agree to change which would devalue current coins and therefore make them all lose money? Someone can even create a fork which increases the block reward or slows down halvings or whatever in order to breach the 21 million coin limit, but no one will use it.

Many will eventually be recovered when the ECDLP is eventually broken (presumably) by quantum computers. But many will remain lost forever.

You are talking about a tail emission, in order to maintain the circulating supply at close to 21 million. If you are interested, there was a long discussion about this on the mailing list recently (https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-July/020665.html), and also on the forum (https://bitcointalk.org/index.php?topic=5405755.0).

I think this was already explained by some exchanges (if not all) before they implement such feature. This can be included in one of the rules or mechanics on how this game worked, so I wouldn't call it a scam. It only becomes a scam if the exchange itself is also a scam.

But, if it's true that rules for leverage trading differs from one exchange to the other then this might be (one of) the reason on why many traders are losing because they didn't bother checking the rules thinking all of them are still the same. Other than p2p, spot trading will also allows you to experience on what is like to trade a real crypto plus they are also less risky than leverage trading.

As much as I know, exchanges only provide futures trade with stablecoins as the main pair. With more specific, the contract between traders and brokers is just an agreement to sell or buy a coin that underlies the stablecoin (according to the order details) with an equivalent amount. So in this case it isn't an "increasing" bitcoin supply, but stablecoins.

What do you have to say about the proof of reserves being posted by exchanges ? How fake or trusted are they ?

They prove nothing for two main reasons.

First of all, you have no idea if the proof of reserves is accurate. Even with the exchanges which are trying to do it with Merkle trees, there is absolutely nothing stopping them from missing out some accounts or including fake accounts within those Merkle trees. Some exchanges have already been caught doing exactly that: https://news.yahoo.com/ftx-execs-hid-8-billion-173336895.html

Secondly, even if you assume the proof of reserves is completely honest and accurate, without proof of liabilities it means absolutely nothing. Let's say Binance can prove they are holding 100,000 BTC in reserve. So what? Obviously Binance own some bitcoin. What we don't know is how much bitcoin they are supposed to have in reserve. What is the total outstanding balance of every Binance user account? If they owe their users 200,000 BTC and only have 100,000 BTC in reserve, then they are massively insolvent, despite their proof of reserves.