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Author Topic: Is there really a limited supply of bitcoins?  (Read 4357 times)
limikael
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June 07, 2011, 06:40:30 AM
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I know that there will only ever exist 21 million bitcoins, and I trust that there is reliable algorithms in place to ensure that there will never be any more.

However, say that I take the source for bitcoin and start up a new genesis block and call this bitcoin2 and get some people starting to use that as well. And then someone else starts up bitcoin3 and so on to infinity. Then we have an unlimited supply of limited supplies. Any reason that this would not happen if bitcoin really become a household name?

I really like the idea of bitcoin and I'm trying to spread the word as much as I can. A friend of mine who is knowledgeable in economics brought up the argument above and I didn't know what to answer really...
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June 07, 2011, 06:42:16 AM
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It's so easy to make Bitcoin2,3,4,5 that you could practically say they already exist. The problem is that they have no difficult, no demand, no vendors, etc. And they offer nothing to compensate compared to Bitcoin.

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June 07, 2011, 06:53:21 AM
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It's so easy to make Bitcoin2,3,4,5 that you could practically say they already exist. The problem is that they have no difficult, no demand, no vendors, etc. And they offer nothing to compensate compared to Bitcoin.

So you are saying that the reason Bitcoin would work and not Bitcoin1,2,3 is that Bitcoin has more credibility and is more widely accepted?

Well, if that is the only thing it relies on then that is not much actually, because Bitcoin has no demand, no ventors, etc, compared to gold or traditional currencies. What is Bitcoin then more than a Ponzi scheme?
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June 07, 2011, 06:53:59 AM
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It's so easy to make Bitcoin2,3,4,5 that you could practically say they already exist. The problem is that they have no difficult, no demand, no vendors, etc. And they offer nothing to compensate compared to Bitcoin.

So you are saying that the reason Bitcoin would work and not Bitcoin1,2,3 is that Bitcoin has more credibility and is more widely accepted?

Well, if that is the only thing it relies on then that is not much actually, because Bitcoin has no demand, no ventors, etc, compared to gold or traditional currencies. What is Bitcoin then more than a Ponzi scheme?

No demand and no vendors? THIS again? That might have been true a year ago; it certainly is not true now.

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June 07, 2011, 06:59:12 AM
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One thing (probably the only thing) that limits competition at this point is that Bitcoin is very small in a very large market.  There are huge threats arrayed against it.  It is more profitable to cooperate rather than to compete.

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June 07, 2011, 07:03:33 AM
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It's so easy to make Bitcoin2,3,4,5 that you could practically say they already exist. The problem is that they have no difficult, no demand, no vendors, etc. And they offer nothing to compensate compared to Bitcoin.

So you are saying that the reason Bitcoin would work and not Bitcoin1,2,3 is that Bitcoin has more credibility and is more widely accepted?

Well, if that is the only thing it relies on then that is not much actually, because Bitcoin has no demand, no ventors, etc, compared to gold or traditional currencies. What is Bitcoin then more than a Ponzi scheme?

No demand and no vendors? THIS again? That might have been true a year ago; it certainly is not true now.

You misread me. Bitcoin2 has no demand and no vendors.

edit:nm

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limikael
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June 07, 2011, 07:32:16 AM
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Yes what we are saying is that Bitcoin has more demand and vendors than Bitcoin2 would have.

And what I said then was that Bitcoin (the original one) have no demand and no vendors compared to traditional currencies. Yes I know that there is a list of places where you can use Bitsoins on this site, and I agree that the list is getting impressive. However, just in comparison there are several thousand places in the city where I live where they accept traditional currency but I haven't seen any accepting Bitcoin.

Back to the original discussion. So say that Bitcoin become a household name, and Bitcoin2 would be started by someone who has a lot of money to put into promoting Bitcoin2 as _the_ digital currency. Say that it was started by a big corporation, who would put millions of USD into promoting it, or by the US government, the Chinese government or by the IMF who would put billions or trillions. Take this to the extreme and say that each and every one of us would start our own digital currency and we would try to promote it as _the_ currency and there would be an exchange rate between our currencies. The exchange rate would settle at something depending on our ability to promote our own currency, and that ability would be equal to the amount of money or gold we had before it all started. So we are back where we started, right? What difference does bitcoin do?
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June 07, 2011, 07:50:01 AM
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Bitcoin had advantages over all other currencies. Bitcoin2 has zero advantages and all disadvantages.

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limikael
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June 07, 2011, 08:14:57 AM
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Bitcoin had advantages over all other currencies. Bitcoin2 has zero advantages and all disadvantages.

That's not an argument...  Smiley

Shall I take it that you agree that Bitcoin is a Ponzi Scheme then?
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June 07, 2011, 08:30:24 AM
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One thing (probably the only thing) that limits competition at this point is that Bitcoin is very small in a very large market.  There are huge threats arrayed against it.  It is more profitable to cooperate rather than to compete.

That's like saying "come on and join us, that will make you closer to the top of the pyramid".
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June 07, 2011, 08:37:48 AM
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Well, if that is the only thing it relies on then that is not much actually, because Bitcoin has no demand, no ventors, etc, compared to gold or traditional currencies. What is Bitcoin then more than a Ponzi scheme?

It's always a Ponzi scheme to people who heard about it last week.  Bitcoin will hit critical mass whether you or whatever "humor" forum you came from think it's a scam or not.

No currency had demand or usefulness before it existed, and to most people in the world, bitcoin simply does not exist yet.  We will remedy that situation shortly.
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June 07, 2011, 08:49:56 AM
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You should probably read the Ponzi FAQ.

tl;dr version: Bitcoin is a revolutionary currency. Because of its rapid adoption, its value increases and some people invest in it anticipating such increase. Bitcoin has so little in common with either pyramid or ponzi that I feel silly talking about the "differences", but the main difference is that Bitcoin is sustainable even after this growth spurt.

And for the original question, as was mentioned, any Bitcoin fork is highly unlikely to be adopted because anyone wishing to adopt a decentralized cryptocurrency will just adopt the more usable Bitcoin instead (and because everyone expects others to do this, there is no reason to anticipate future adoption).

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June 07, 2011, 08:54:16 AM
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And what I said then was that Bitcoin (the original one) have no demand and no vendors compared to traditional currencies. Yes I know that there is a list of places where you can use Bitsoins on this site, and I agree that the list is getting impressive. However, just in comparison there are several thousand places in the city where I live where they accept traditional currency but I haven't seen any accepting Bitcoin.
Why do you think that less demand is the same as no demand? It is so obviously wrong to claim that Bitcoin has no demand, all you have to do is check mtgox.

What difference does bitcoin do?
Bitcoin was first with a new technology with several advantages of the the existing ones, and got kickstarted by the unwavering support of a bunch of libertarian hippies. If you try to start Bitcoin2 you won't have any of those advantages.
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June 07, 2011, 09:10:11 AM
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What is Bitcoin then more than a Ponzi scheme?

Not this again!
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June 07, 2011, 09:16:31 AM
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Why do you think that less demand is the same as no demand?

This is an extremely common type of fallacy on internet forums. I am no closer to understanding it now than 8 years ago when I first observed it.

Bitcoin was first with a new technology with several advantages of the the existing ones, and got kickstarted by the unwavering support of a bunch of libertarian hippies

Bingo.

Bitcoin gets the kickstart + novelty value. All bitcoin2 has is "Hai guise! We're a clone of bitcoin but with (more coins/faster generation/less fees/more fees/insert other parameter that was changed)! Plz come and mine."

If you want to compete with bitcoin you need something completely new with its own novelty value.
limikael
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June 07, 2011, 09:20:48 AM
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What difference does bitcoin do?
Bitcoin was first with a new technology with several advantages of the the existing ones, and got kickstarted by the unwavering support of a bunch of libertarian hippies. If you try to start Bitcoin2 you won't have any of those advantages.
[/quote]

Yes I know. But say that Bitcoin2 gets kickstarted by the IMF who uses trillions of dollars to promote it. I love libertarian hippies, I could even go as far as calling myself one. But so far the masses have listened more to paid advertising than libertarian hippies unfortunately. I felt that Bitcoin was different in a way, you couldn't argue with it since there was just a limited supply. But if you take away the "limited supply" argument from Bitcoin, I wounder what's left.

Then you have the "it was first" argument, and the "built up trust" argument. But I'm afraid those arguments will not be so strong if someone comes along with a "trillions of US dollars" argument, and this will happen as soon as Bitcoin gets widespread recognition. And if Bitcoin does not get widespread recognition, it will not be useful.

I have to say that this is my feeling about Bitcoin at the moment. I would love for that feeling to change because I would love the libertarian hippies to win.
limikael
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June 07, 2011, 09:27:22 AM
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Why do you think that less demand is the same as no demand?

This is an extremely common type of fallacy on internet forums. I am no closer to understanding it now than 8 years ago when I first observed it.

Bitcoin was first with a new technology with several advantages of the the existing ones, and got kickstarted by the unwavering support of a bunch of libertarian hippies

Bingo.

Bitcoin gets the kickstart + novelty value. All bitcoin2 has is "Hai guise! We're a clone of bitcoin but with (more coins/faster generation/less fees/more fees/insert other parameter that was changed)! Plz come and mine."

If you want to compete with bitcoin you need something completely new with its own novelty value.

If _I_ said "Hai guise! We're a clone of bitcoin..." I don't think that anyone would listen, that's not what I'm saying. But what if someone with a gold reserve said it? It will be an argument between hippies and large corporations, nations and bankers. And hippies have only love, no one listens to that. Unfortunately.
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June 07, 2011, 09:38:12 AM
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If _I_ said "Hai guise! We're a clone of bitcoin..." I don't think that anyone would listen, that's not what I'm saying. But what if someone with a gold reserve said it? It will be an argument between hippies and large corporations, nations and bankers. And hippies have only love, no one listens to that. Unfortunately.

If someone with a gold reserve starts a currency they would probably want to get something out of that deal. If it's somebody private they probably want to get revenue out of it and if it's a government they'll want control/regulatory powers.

In either case, it'll be a very different currency than Bitcoin.

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June 07, 2011, 09:40:30 AM
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Yes I know. But say that Bitcoin2 gets kickstarted by the IMF who uses trillions of dollars to promote it.
And what would the value of gold be if it suddenly started raining from the sky? The odds of these things happening are probably fairly similar.
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June 07, 2011, 09:53:03 AM
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But say that Bitcoin2 gets kickstarted by the IMF who uses trillions of dollars to promote it.
Yes, if a new decentralized cryptocurrency is introduced with similar nature to Bitcoin, and billions of dollars are spent kickstarting it, it could supersede Bitcoin. But this doesn't seem a likely scenario. The backer will want to profit out of it (if he did it for charitable motives, he would just support Bitcoin instead) and it will be a very difficult balance of making it attractive enough to be adopted, giving a big enough cut to the backer to be worthwhile, doing it late enough to be sure cryptocurrency has a future, doing it early enough to be able to compete with Bitcoin, while all in all being a more lucrative investment in cryptocurrency than simply buying lots of bitcoins.

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