Is there really a limited supply of bitcoins?

[markm]

There already are a whole bunch of alternates based on bitcoin code, it is not a problem so far.

If anything they just help bitcoin by showing that the concept is appealing enough that others have adopted the same system for their various alternative currencies.

I do not even see them as competing with bitcoin really, they are mostly co-operating, each of them is in effect yet another thing you can spend bitcoins on.

-MarkM-

[giszmo]

For me the biggest down sides of BTC are
1. I envy the *real* early adopters that mined throughout 2009 with a combined power like my HD6970 and are maybe mainly one person.
2. I fear the system to collapse through regulation.

If governments put together starting a second chain with one additional rule:
Everybody may register one citizen account plus an unlimited number of anonymous accounts and per block a certain percentage of all the coins of all the accounts get redistributed evenly to all citizen accounts I would definitely switch to that as it would not be a speculators currency but rather designed to be used to pay stuff and it would have the backing of governments.

In that sense: Yes I see an option for a competing BTC2 (2 for 2%/month), ...

Why should governments do that? Well it would be one way bring the good of BTC to everybody while at the same time making big style money laundry less attractive due to the cut that goes to every citizen.

(Some consider the deflation of the BTC also a good aspect of it but it renders BTC into a good nobody is willing to give away easily.)

[Vladimir]

...
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.
...

While you are at it why don't you also start ebay 2.0 google 2.0 twitter 2.0 and facebook 2.0 ...

[jerfelix]

For me the biggest down sides of BTC are
1. I envy the *real* early adopters that mined throughout 2009 with a combined power like my HD6970 and are maybe mainly one person.

I think you are looking at this all wrong.  In 2009, there were only about 2.6 million BTC generated ALL YEAR.  Say those are evenly spread over 100 early adopters.  So 100 people got 26,000 BTC each (current value about a half million dollars).  A half million dollars is hardly enough to "retire rich" these days.  Not even close.

Furthermore, most of those people gave away or spent thousands of BTC already.  They would currently be worthless had they NOT thrown them around like candy.  

Even if it's only ONE guy who mined all of 2009, and has $50M in BTC/paper wealth (no where near Bill Gates' wealth), I don't see a reason to be envious.  B.F.D.  Congratulate him on his genius, and move on.



You're envious of some supposed wealth that just really isn't there.  Totalling every bitcoin that has ever been mined, you are only up to $130M.  And with 250,000 users currently*, even using the 80/20 rule, there's really not that many "really rich" Bitcoin early adopters.

Furthermore, they're probably kicking themselves because they paid 10,000 BTC for a pizza, (currently valued at about $200,000 - that's a darn expensive pizza!)   We can all be envious of them, and they can be mad at spending BTC foolishly, or we can look to the future where we have a decent decentralized currency.



* I estimated 250,000 users yesterday in another thread.

Edit:  Here's the list of the 100 richest Bitcoin owners.  B.F.D.   Ranges from $134K  (rich???) to about $6M  (ok, that's some serious money, but that is ONE person.   Congratulate him on his success, and move on.)

[giszmo]

I'm all with you that some guys getting rich is no reason to stop this experiment as this applies to any currency. Still I dream of my version that simply has a strong incentive to give away coins rather than to hoard them.
This also prevents the exchange rate from fluctuating like crazy as it evenly distributes coins to all citizens on the long run rather than having the potential to see all coins accumulate in 5% of the accounts.

[Meni Rosenfeld]

Edit:  Here's the list of the 100 richest Bitcoin owners.  B.F.D.   Ranges from $134K  (rich???) to about $6M  (ok, that's some serious money, but that is ONE person.   Congratulate him on his success, and move on.)

That's a list of addresses, not people. In all likelihood, the one who owns the 297K address also owns some more addresses on this list (doesn't detract much from your point though).

[chiropteran]

While you are at it why don't you also start ebay 2.0 google 2.0 twitter 2.0 and facebook 2.0 ...

While I agree with your general point, facebook is a bad example because it could be argued to be myspace 2.0 itself.

[bittersweet]

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.

If it's that simple, simply create this Bitcoin 2. The cost to start a new chain is almost 0. You will be rich!

[rebuilder]

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.

I don't understand your argument. If I start a different currency, it is a different currency. Bitcoin clients would not accept Bitcoin2 spends. You'd have to convince people to trade their BTC (or other currency) for BTC2, and then the question is what exchange rate they are willing to do so at. This in no way means Bitcoins are no longer limited in supply.

As for whether some competitor could supercede Bitcoin, certainly. It will be interesting to see what it takes to do that. For much of the crowd here, that currency would have to be decentralized and free (libre), but somehow significantly better than Bitcoin. Others might not care about the libertarian aspects so much, and they may end up using some kind of centralized version, although I don't see the benefits over the government-issued currencies we already have.

[Meni Rosenfeld]

I'm all with you that some guys getting rich is no reason to stop this experiment as this applies to any currency. Still I dream of my version that simply has a strong incentive to give away coins rather than to hoard them.
This also prevents the exchange rate from fluctuating like crazy as it evenly distributes coins to all citizens on the long run rather than having the potential to see all coins accumulate in 5% of the accounts.

Surely you know that such redistribution plans generally destroy productivity (to the detriment of everyone, including the poor) because people prefer to enjoy the free money rather than working hard and/or innovating?

The BTC exchange rate will fluctuate less when it becomes more established.

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.

I don't understand your argument. If I start a different currency, it is a different currency. Bitcoin clients would not accept Bitcoin2 spends. You'd have to convince people to trade their BTC (or other currency) for BTC2, and then the question is what exchange rate they are willing to do so at. This in no way means Bitcoins are no longer limited in supply.

His argument is: Someone will create BitcoinB and use billions of $$$ to promote it, offer incentives to shops to accept it, hire a development team for a full-featured client, and back it by USD. This can help it grow faster than Bitcoin, to the point where Bitcoin vs BitcoinB will be like Bitcoin2 (unsupported) vs Bitcoin.

Like I said, nothing wrong with this scenario, except I don't believe anyone will do it.

[giszmo]

I'm all with you that some guys getting rich is no reason to stop this experiment as this applies to any currency. Still I dream of my version that simply has a strong incentive to give away coins rather than to hoard them.
This also prevents the exchange rate from fluctuating like crazy as it evenly distributes coins to all citizens on the long run rather than having the potential to see all coins accumulate in 5% of the accounts.

Surely you know that such redistribution plans generally destroy productivity (to the detriment of everyone, including the poor) because people prefer to enjoy the free money rather than working hard and/or innovating?

No. Do you? If so, please enlighten me.
Actually BTC mining payed off big deal so far. People had their hardware payed for in a month. ATM this is even getting shorter than longer. Still BTC is not doomed over that "free money".
In 2011 the total BTC will grow from 6M to 8M. That is 30% inflation and equivalent to keeping it at 6M and redistributing 30% based on CPU in a way similar to what I suggested based on heads. 30% inflation does no harm to bitcoinat all. It is vastly overcompensated by the BTC economy growth.
On the long run I would not redistribute 30% but rather 10% based on heads and rely on fees paying for the block creation but I strongly believe it would work with 30%, too.

If you accept citizen accounts for all the world's citizen you could consider this currency a mean to fight poverty in the world. I would very much love to put $$ into such a currency.

If again envy is your concern, make it less % and limit the citizen accounts to your country. Any foreigner may open anonymous accounts but would not profit from the redistribution.

[limikael]

Thank you for the interesting discussion guys about what would happen if someone started a Bitcoin2 backed with traditional currency...

Here was another thing that popped up in the discussion that I found interesting:

Surely you know that such redistribution plans generally destroy productivity (to the detriment of everyone, including the poor) because people prefer to enjoy the free money rather than working hard and/or innovating?

To that I would say, yes, but is destroying productivity actually a problem? I think the following quote from the Wikipedia page on "Basic income guarantee" is interesting:

...The connection between more and better has been broken; our needs for many products and services are already more than adequately met, and many of our as-yet-unsatisfied needs will be met not by producing more, but by producing differently, producing other things, or even producing less. This is especially true as regards our needs for air, water, space, silence, beauty, time and human contact...

[giszmo]

Thank you for the interesting discussion guys about what would happen if someone started a Bitcoin2 backed with traditional currency...

Here was another thing that popped up in the discussion that I found interesting:

Surely you know that such redistribution plans generally destroy productivity (to the detriment of everyone, including the poor) because people prefer to enjoy the free money rather than working hard and/or innovating?

To that I would say, yes, but is destroying productivity actually a problem? I think the following quote from the Wikipedia page on "Basic income guarantee" is interesting:

...The connection between more and better has been broken; our needs for many products and services are already more than adequately met, and many of our as-yet-unsatisfied needs will be met not by producing more, but by producing differently, producing other things, or even producing less. This is especially true as regards our needs for air, water, space, silence, beauty, time and human contact...

I would not consider a 30% redistribution of BTC a "basic income guarantee" in the sense basic income guarantee is discussed elsewhere.
6M BTC are worth now no more than 40M$ (try selling 6M BTC)
30% that of are 12M$
per month that would be 1M $
How many are we? Are there numbers on MtGox accounts? 50k enthusiasts with some $ left to spend? That would be 1M/50k per capita and month. 20$ per month hardly is worth being called a basic income guarantee. For a Sri Lanka citizen things would be different though. He might open such a citizen account without putting $$ in. But through spending locally he would also solidify the currency in the overall economy. Taking our BTC would not be possible. As citizen accounts would need to also be subject to redistribution, the only way to profit would be by spending the coins. Accepting them would only make sense if the intention is to spend them again. A currency for paying, not for hoarding.