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Author Topic: How is infinite divisibility different from infiniate printablitiy?  (Read 1033 times)
Bitcoin Swami
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June 06, 2011, 09:39:31 PM
 #1

I know that bitcoins are divisible by 8 decimal places or so, but I've also heard that they can be expanded if need be.  

How is this different than inflating a currency.

I'm just can't seem to wrap my mind around this.

Sorry I'm kinda new, and am 100% behind the idea of this, just trying to understand a bit better.
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Freakin
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June 06, 2011, 09:41:45 PM
 #2

I know that bitcoins are divisible by 8 decimal places or so, but I've also heard that they can be expanded if need be.  

How is this different than inflating a currency.

I'm just can't seem to wrap my mind around this.

Sorry I'm kinda new, and am 100% behind the idea of this, just trying to understand a bit better.

if you take a single bitcoin and split it into 100 billion pieces, the sum of all those pieces still equals a single bitcoin.

There are max 21 million bitcoins ever allowed.  

Splitting a single bitcoin does not make whole bitcoins, it makes smaller units of trade.


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June 06, 2011, 09:42:31 PM
 #3

I know that bitcoins are divisible by 8 decimal places or so, but I've also heard that they can be expanded if need be.  

How is this different than inflating a currency.

I'm just can't seem to wrap my mind around this.

Sorry I'm kinda new, and am 100% behind the idea of this, just trying to understand a bit better.

Dividing a bitcoin does not inflate it's value artificially.  If the value of .5 btc goes up to what 1btc used to be, then it's because of natural market forces.

Exchanging a dollar for 4 quarters doesn't inflate the money supply, but arbitrarily minting new dollar bills does.

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rezin777
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June 06, 2011, 09:43:49 PM
 #4

You aren't increasing the total amount, just dividing it.

Imagine you have one pie.

You can cut it in half, and you have 2 pieces, but you still have the same amount of pie.

You can cut it in half again, and now you have 4 pieces, but you still have the same amount of pie.

The whole pie will always be worth 5 bucks. The pieces will be worth less, depending on how small you cut them.
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June 06, 2011, 09:49:41 PM
 #5

If you have some money and 10x more is printed you lose 90% of your purchasing power. If people start using smaller fractions you lose nothing. Big difference.

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Bitcoin Swami
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June 06, 2011, 09:53:48 PM
 #6

Ok guys simple enough, makes sense to me now.  thank you.
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