Will bition eventually deflate to oblivion?

[RealBitcoin]

moving one satoshi it's harder because of fee, so they should hard fork the client to add this option in the future if we can really sustain those awesoem value in the future

because spending one satoshi by paying 10k satoshi in fee would look at least stupid...

Or we just use Litecoin for smaller transactions and bitcoin will remain the online diamond for larger transactions and wealth storage.

I higly doubt bitcoin will ever have 100% market share, so there will be plenty of sub altcoins to use for small TX.

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[franky1]

I agree bitcoin isn't going to deflate to oblivion in my life time but it seems that's the way it'll  go eventually unless it's replaced by something else or more coins are introduce (or released from dead wallets?). I certainly think decentralised currencies are here to stay, and hybrids will likely be invented soon.

I was also thinking, after my OP, if someone (maybe a state) wants to attack bitcoin it might be cheapest[1] to buy a load of bitcoin and freeze the wallets?

Sorry I you think I'm being negative and am attacking bitcoin but that's the best way to strengthen it, IMO. It's called critical thinking.

[1] I mean cheaper than buying a load of mining hardware to gain 51% control.

a government wont buy all 15mill coins in circulation..
the reason is just buying lets say 200,000 is enough to cause a price rise from $500-$1000
the more they buy the more the price rises.. costing them more and more each time

so they would run out of funds before even buying 1million coins.. and along with that by bumping up the price wont kill off bitcoins but get more people involved.

it would actually cost more to buy a hoard then to mine.

no way in hell would any government do that. and even if they did get their hands on lets say 10million coins cheap to drop into a deadwallet, that would make the remaining coins worth more.
so here is my theory of how governments can get coins.. for free..
easy.. start accepting them as tax
10%
every week people put 10% of their income into government address.. within a year the government receives a large stake of coins
as it passes through many hands weekly
imagine for 3 weeks.. Bob gets paid 1BTC for a weeks work, Bob pays jane and jane pays jim, each of which will spend it during the week

EG
january 1st: Bob gets paid 1btc.. pays 0.1btc tax, buys food and bills from jane with 0.9btc during week one
january 8th: jane received 0.9btc.. pays 0.09 tax, buys food and bills from jim with 0.81btc during week two
january 15th jim received 0.81btc.. pays 0.081 tax, buys food and bills from jim with 0.729btc during week three

and its only 3 weeks of the first month and the tax address already has 0.271 (27%) of bills 1btc funds

now imagine 10 million Bob's getting paid 1btc and buy thing things that week..  that 10 million coins by week 3 has given tax office 2.71mill coins.

so here is a lesson guys DO NOT advocate governments accept bitcoin directly.. because within 1 year they can hoard them all. whilst still printing them bank notes to pay public services

[hunnaryb]

I agree bitcoin isn't going to deflate to oblivion in my life time but it seems that's the way it'll  go eventually unless it's replaced by something else or more coins are introduce (or released from dead wallets?). I certainly think decentralised currencies are here to stay, and hybrids will likely be invented soon.

I was also thinking, after my OP, if someone (maybe a state) wants to attack bitcoin it might be cheapest[1] to buy a load of bitcoin and freeze the wallets?

Sorry I you think I'm being negative and am attacking bitcoin but that's the best way to strengthen it, IMO. It's called critical thinking.

[1] I mean cheaper than buying a load of mining hardware to gain 51% control.

a government wont buy all 15mill coins in circulation..
the reason is just buying lets say 200,000 is enough to cause a price rise from $500-$1000
the more they buy the more the price rises.. costing them more and more each time

so they would run out of funds before even buying 1million coins.. and along with that by bumping up the price wont kill off bitcoins but get more people involved.

it would actually cost more to buy a hoard then to mine.

no way in hell would any government do that. and even if they did get their hands on lets say 10million coins cheap to drop into a deadwallet, that would make the remaining coins worth more.
so here is my theory of how governments can get coins.. for free..
easy.. start accepting them as tax
10%
every week people put 10% of their income into government address.. within a year the government receives a large stake of coins
as it passes through many hands weekly
imagine for 3 weeks.. Bob gets paid 1BTC for a weeks work, Bob pays jane and jane pays jim, each of which will spend it during the week

EG
january 1st: Bob gets paid 1btc.. pays 0.1btc tax, buys food and bills from jane with 0.9btc during week one
january 8th: jane received 0.9btc.. pays 0.09 tax, buys food and bills from jim with 0.81btc during week two
january 15th jim received 0.81btc.. pays 0.081 tax, buys food and bills from jim with 0.729btc during week three

and its only 3 weeks of the first month and the tax address already has 0.271 (27%) of bills 1btc funds

now imagine 10 million Bob's getting paid 1btc and buy thing things that week..  that 10 million coins by week 3 has given tax office 2.71mill coins.

so here is a lesson guys DO NOT advocate governments accept bitcoin directly.. because within 1 year they can hoard them all. whilst still printing them bank notes to pay public services

Its impossible to tax Bitcoin.

[franky1]

Its impossible to tax Bitcoin.

yet some dumbasses who are honest to declare their 'income' from bitcoin are trying to get their local tax offices to accept bitcoin..

i know.. mega face palm!!

even if we were all honest declaring our bitcoin earnings. its far more better to sell our coins privately and give the tax man the crappy debtnotes (fiat) which they love.. and thus know bitcoin is still in circlation.. and not hoarded by government

[ATguy]

AIUI, fiat currencies tend to be inflated to oblivion. AISI, bitcoin is the symmetric opposite to fiat so will deflate to oblivion.

While there can be maximally only about 21 million Bitcoins, all these Bitcoins are released by mining over time. For the next century, still new Bitcoins will be distributed by mining, you can think about this slowly distribution as continuous inflation of available Bitcoins - now the real deflation of Bitcoin becomes only after more Bitcoins becomes lost than is mined over certain period.

no..
there are only 6 million coins left to mine.. this is not evenly distributed over the next 125 years (2140)
in 2016 there will only be 4 million coins left (dont knit pick exact numbering cant be arsed to quote numbers for a useless point)
2020 2million
2024 1 million
2028 half million

then the other 112 years is less and less and less..
meaning there is no inflation just deflation.. with a calculated supply limit spread over the 4 years

Your obviously right with the numbers, but I mean deflation occurs only when there are more lost coins than mined ones, otherwise more new coins are available for spending. And hardly to imagine people will become so careless to loose more coins than is mined, considering how mining is costly with current hashpower.

[Blawpaw]

If the blocksize issue isn't properly addresses or governments decide to turn bitcoin an illegal asset, it will most probably deflate to oblivion...

[oblomov]

How does a currency deflate to oblivion?

If BTC continues to go up, it's because it is a stable store of value while fiat currencies are incinerating in the inflationary bonfire.

[Yakamoto]

AIUI, fiat currencies tend to be inflated to oblivion. AISI, bitcoin is the symmetric opposite to fiat so will deflate to oblivion.

There are already a fair few bitcoins 'lost' in wallets to which no one has the private key. This can only increase with time and lead to fewer and fewer bitcoins in circulation and thus deflation. Eventually so few will be in circulation that it'll be impractical as a currency.

Well yes, Bitcoin would technically end up deflating into oblivion. But it's the same thing with gold, other precious metals, and other depletable resources in general. There will constantly be fewer coins available, because as Bitcoin becomes more and more common, more will be lost for one reason or another.

Hypothetically, at the worst point, if necessary, a hard fork can be added to the chain to "reset" the missing coins, which will hopefully become apparent once the 21m coin cap hits.

[Velkro]

AIUI, fiat currencies tend to be inflated to oblivion. AISI, bitcoin is the symmetric opposite to fiat so will deflate to oblivion.

There are already a fair few bitcoins 'lost' in wallets to which no one has the private key. This can only increase with time and lead to fewer and fewer bitcoins in circulation and thus deflation. Eventually so few will be in circulation that it'll be impractical as a currency.

moving 1 satoshi (0.00000001) is just as easy as moving one bitcoin (1.00000000).

say 1million coins are lost to oblivion.
that still leaves
2,000,000,000,000,000 potential satoshi's to be useful... 2 quadrillion

even if we measure bitcoins in 'bits' 0.00000100 due to deflation there are 20 trillion 'bits', which still allows 2 decimal places to be used as 'cent' measures

moving one satoshi it's harder because of fee

Its harder now, but when we will be in situation described it will be as easy as breathing.

[Drewski]

Do you guys really think that the price of Bitcoin will go this high? Or are you just saying this stuff pretty lightly and figuratively.

at the moment, figuratively.

because the units of measure are not the problem. but transactions per second is..

at the moment its estimated that people using fiat, make 42 transactions a month via various methods(visa, wire transfer, cash).
bitcoin can only handle 2000 tx every 10 minutes (8640000 a month)
which if everyone in bitcoin right now were to use bitcoin alone.. for proper daily living stuff, to pay bills and buy food each day (the 42tx a month average)
bitcoin could only right now cope with 205714 peoples daily usage.

which if those people put their average life savings (stats: $45k) the total bitcoin market cap would be just
$9,257,142,857.

so unless transactions per second increase for daily use. it will limit people wanting to put their life savings in bitcoin, because they cant use it due to bottlenecking..

until transactions per second is increased, the majority of bitcoiners will just use it as a investment hoard. doing maybe 2 tx a month average
allowing for 4 million people to make tx's smoothly

Can you quote your source for max transactions?  Also, what's actually causing that processing bottleneck?

[zimmah]

I believe the 8 decimal places aren't a hard limit and can easily be increased. So if there's only a few satoshi left we can just increase the amount of decimals and we trade in fractions of satoshi, no big deal.       
And the few people who still have large amounts would be pretty rich in that case.

[franky1]

Do you guys really think that the price of Bitcoin will go this high? Or are you just saying this stuff pretty lightly and figuratively.

at the moment, figuratively.

because the units of measure are not the problem. but transactions per second is..

at the moment its estimated that people using fiat, make 42 transactions a month via various methods(visa, wire transfer, cash).
bitcoin can only handle 2000 tx every 10 minutes (8640000 a month)
which if everyone in bitcoin right now were to use bitcoin alone.. for proper daily living stuff, to pay bills and buy food each day (the 42tx a month average)
bitcoin could only right now cope with 205714 peoples daily usage.

which if those people put their average life savings (stats: $45k) the total bitcoin market cap would be just
$9,257,142,857.

so unless transactions per second increase for daily use. it will limit people wanting to put their life savings in bitcoin, because they cant use it due to bottlenecking..

until transactions per second is increased, the majority of bitcoiners will just use it as a investment hoard. doing maybe 2 tx a month average
allowing for 4 million people to make tx's smoothly

Can you quote your source for max transactions?  Also, what's actually causing that processing bottleneck?

https://blockchain.info/charts/n-transactions-per-block
number of transactions divide by
https://blockchain.info/charts/avg-block-size
= roughly 500bytes a tx

with bitcoin being 1mb, thats 2000 possible tx a block (max)..
more evidence?
there has never ever been more than 2000 tx per block
https://blockchain.info/charts/n-transactions-per-block?timespan=all

but mining pools prefer to keep it under 1300tx or under 0.8mb blocks to blackmail fee's out of people, but thats a whole different argument

[disclaimer201]

then when i need to move 1 satoshi there will be the need to add another decimal, then what if i want to spend that decimal as the new minimu spending, which would be 1/10 of a satoshi?

you see where i'm going

if bitcoin grows into a $2 quadrillion currency.. the year would be long after your death. and yea its easy to add more decimals into the protocol..

but for now even a $20 trillion currency is something that people dont need to worry about any time soon.. and that allows 'bit's to be used.

so relax.. bitcoin is not going to grow and surpass $20 trillion any time soon.

the more worrying thing to be thinking about is how bitcoin can handle the transaction volume of 500million people (by that i mean bandwidth and databloat, not units of measure)

If it's so easy and technically possible to add more decimals into the protocol, it actually means Bitcoins can be just as easily dilluted as fiat!

(!!!)

This is purely a theoretical option as that would call for a consensus of the miners, but wait a minute, in a few decades let alone a few years (now?) mining will be as highly centralized as the Fed's power to print money.

[Kepler510]

In this thread I get a lot of science about the workings of the BTC.


and I am grateful to all the masters who have told this

[zimmah]

I agree bitcoin isn't going to deflate to oblivion in my life time but it seems that's the way it'll  go eventually unless it's replaced by something else or more coins are introduce (or released from dead wallets?). I certainly think decentralised currencies are here to stay, and hybrids will likely be invented soon.

I was also thinking, after my OP, if someone (maybe a state) wants to attack bitcoin it might be cheapest[1] to buy a load of bitcoin and freeze the wallets?

Sorry I you think I'm being negative and am attacking bitcoin but that's the best way to strengthen it, IMO. It's called critical thinking.

[1] I mean cheaper than buying a load of mining hardware to gain 51% control.

a government wont buy all 15mill coins in circulation..
the reason is just buying lets say 200,000 is enough to cause a price rise from $500-$1000
the more they buy the more the price rises.. costing them more and more each time

so they would run out of funds before even buying 1million coins.. and along with that by bumping up the price wont kill off bitcoins but get more people involved.

it would actually cost more to buy a hoard then to mine.

no way in hell would any government do that. and even if they did get their hands on lets say 10million coins cheap to drop into a deadwallet, that would make the remaining coins worth more.
so here is my theory of how governments can get coins.. for free..
easy.. start accepting them as tax
10%
every week people put 10% of their income into government address.. within a year the government receives a large stake of coins
as it passes through many hands weekly
imagine for 3 weeks.. Bob gets paid 1BTC for a weeks work, Bob pays jane and jane pays jim, each of which will spend it during the week

EG
january 1st: Bob gets paid 1btc.. pays 0.1btc tax, buys food and bills from jane with 0.9btc during week one
january 8th: jane received 0.9btc.. pays 0.09 tax, buys food and bills from jim with 0.81btc during week two
january 15th jim received 0.81btc.. pays 0.081 tax, buys food and bills from jim with 0.729btc during week three

and its only 3 weeks of the first month and the tax address already has 0.271 (27%) of bills 1btc funds

now imagine 10 million Bob's getting paid 1btc and buy thing things that week..  that 10 million coins by week 3 has given tax office 2.71mill coins.

so here is a lesson guys DO NOT advocate governments accept bitcoin directly.. because within 1 year they can hoard them all. whilst still printing them bank notes to pay public services

And this is exactly why taxes are so taxing and why the government insists inflation is a good thing.       

But like someone else mentioned, don't pay taxes in Bitcoin, sell a part of your Bitcoin, pay taxes in fiat. Let the government keep their trash money.

[zimmah]

then when i need to move 1 satoshi there will be the need to add another decimal, then what if i want to spend that decimal as the new minimu spending, which would be 1/10 of a satoshi?

you see where i'm going

if bitcoin grows into a $2 quadrillion currency.. the year would be long after your death. and yea its easy to add more decimals into the protocol..

but for now even a $20 trillion currency is something that people dont need to worry about any time soon.. and that allows 'bit's to be used.

so relax.. bitcoin is not going to grow and surpass $20 trillion any time soon.

the more worrying thing to be thinking about is how bitcoin can handle the transaction volume of 500million people (by that i mean bandwidth and databloat, not units of measure)

If it's so easy and technically possible to add more decimals into the protocol, it actually means Bitcoins can be just as easily dilluted as fiat!

(!!!)

This is purely a theoretical option as that would call for a consensus of the miners, but wait a minute, in a few decades let alone a few years (now?) mining will be as highly centralized as the Fed's power to print money.

No of course not.       

For example, let's say I have 1 gold bar of 1 kg.     

I can only pay for a car or something with that gold bar, because I can't break the gold bar in half and the stores can't give me change. 

Now if I had 100 coins of 10 gram each I would still have 1 kg of gold total, but now I can also buy groceries, because I can spend 1/100th of my total amount of gold by only spending 1 coin and not all 100 of them.

But it's still the same amount of gold.

Same with Bitcoin. There will never be more than 21 million Bitcoin, but if Bitcoin become so rare or so valuable that 0.00000001 Bitcoin becomes worth a lot of money we can just make transactions of 0.0000000000000000001 Bitcoin instead.     

There will not be any more Bitcoin, the denominations just become smaller. It's like trading gold atoms instead of gold coins.

[knightkon]

In every currency there are lost funds.  There are millions of dollars out there that have been lost, destroyed or misplaced.  This will happen with BTC also.  From what I am reading this will only happen with all of those people who loose their wallets and do not know how to access them, but, like treasure hunters, I am sure there will be people who attempt to find them and make claim to them.  This is one key to be able to tell that sooner or later BTC will be acknowledged as a currency.

[LiteCoinGuy]

moving one satoshi it's harder because of fee, so they should hard fork the client to add this option in the future if we can really sustain those awesoem value in the future

because spending one satoshi by paying 10k satoshi in fee would look at least stupid...

Or we just use Litecoin for smaller transactions and bitcoin will remain the online diamond for larger transactions and wealth storage.

I higly doubt bitcoin will ever have 100% market share, so there will be plenty of sub altcoins to use for small TX.

yes, there will always be other coins like Litecoin but Bitcoin will be the leader. but it is nice to have the second coolest crypto too 

[RealBitcoin]

AIUI, fiat currencies tend to be inflated to oblivion. AISI, bitcoin is the symmetric opposite to fiat so will deflate to oblivion.

There are already a fair few bitcoins 'lost' in wallets to which no one has the private key. This can only increase with time and lead to fewer and fewer bitcoins in circulation and thus deflation. Eventually so few will be in circulation that it'll be impractical as a currency.

I hope so, bitcoin deflating means that it's a perfect long term saving system.

It willl replace the current (bankrupt) ponzi scheme pension fund systems, that are ponzi schemes, and it will help the youth save up for their retirement.

Most pension funds are looted by banks 24/7 because they dump their bad trades there, plus they are a ponzi scheme, so it will collapse soon.


I want to save up for my retirement in bitcoin, not in ponzi scheme pension plans.