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Author Topic: a flaw in the 21 million BTC?  (Read 7432 times)
DannyHamilton
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January 16, 2013, 05:18:00 AM
 #21

Remember the 8 decimals is not set in stone we could easily make it 16 decimals . . .
That really depends on your definition of "easily".  The 8 decimals may not be set in stone, but they are set in the blockchain and the protocol.

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January 16, 2013, 05:25:24 AM
 #22

Remember the 8 decimals is not set in stone we could easily make it 16 decimals . . .
That really depends on your definition of "easily".  The 8 decimals may not be set in stone, but they are set in the blockchain and the protocol.

I don't think it would be hard to get everyone to agree to 16 decimals, if it becomes necessary.
adding decimals doesn't really effect bitcoin in any negative way, its not like talking about changing the 21million coin limit.

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January 16, 2013, 05:38:36 AM
 #23

I don't think it would be hard to get everyone to agree to 16 decimals, if it becomes necessary.

Would the entire community have to agree in getting the new client/protocol or only something like 51% of the clients?

Would be great there was a torrent file of all referenced materials of the paper: "How to Build Time-Lock Encryption" by Tibor Jager. And having its magnet link published on bitcoin blockchain!
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January 16, 2013, 05:41:40 AM
 #24

I don't think it would be hard to get everyone to agree to 16 decimals, if it becomes necessary.

Would the entire community have to agree in getting the new client/protocol or only something like 51% of the clients?

all who agree will move their coins to the new system ( by upgrading the software ) or be left behind in a "dead fork."



anyway, in the far future, i suspect their will be no need for money, humans will have every one of there needs provided for by busty android slave girls. Grin

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January 16, 2013, 05:51:32 AM
 #25

I'll just repeat myself:

There will be a total of 21 million coins. With eight decimals on top of it, we have a total of 2.1E15 indivisible units of account. This is a big number, you know. To put it in perspective, the total of all gold ever mined in the history of humankind is about 150,000 tonnes, or 1.5E11 grams, or 1.5E14 mg of gold. Ever mined. There are fourteen times more bitcoin units than milligrams of gold ever mined. In current prices, one mg of gold is worth about four US cents.

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January 16, 2013, 06:03:15 AM
 #26

I'll just repeat myself:

There will be a total of 21 million coins. With eight decimals on top of it, we have a total of 2.1E15 indivisible units of account. This is a big number, you know. To put it in perspective, the total of all gold ever mined in the history of humankind is about 150,000 tonnes, or 1.5E11 grams, or 1.5E14 mg of gold. Ever mined. There are fourteen times more bitcoin units than milligrams of gold ever mined. In current prices, one mg of gold is worth about four US cents.

wait a min.

their 21 million coins
each coin can be divied into 8 decimals
so each coins actually represents  100,000,000 units
100,000,000 * 21,000,000 = 2,100,000,000,000,000
IF we want 0.00000001 BTC to be worth no more then 0.001$
this means we can only ever accommodate  2.1 Trillion dollars?

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January 16, 2013, 06:17:07 AM
 #27

IF we want 0.00000001 BTC to be worth no more then 0.001$
this means we can only ever accommodate  2.1 Trillion dollars?

I agree that there are not enough bitcoins to represent all the money in the world with precision of $0.001, and that is a deficiency. However, the precision of $0.001 may not be necessary. There are no $0.001 coins and nobody (as far as I know) does transactions with that precision. Furthermore, even $0.01 coins are becoming outmoded. I think Bitcoin can get by with a $21 to $210 trillion value.

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January 16, 2013, 06:29:40 AM
 #28

IF we want 0.00000001 BTC to be worth no more then 0.001$
this means we can only ever accommodate  2.1 Trillion dollars?

I agree that there are not enough bitcoins to represent all the money in the world with precision of $0.001, and that is a deficiency. However, the precision of $0.001 may not be necessary. There are no $0.001 coins and nobody (as far as I know) does transactions with that precision. Furthermore, even $0.01 coins are becoming outmoded. I think Bitcoin can get by with a $21 to $210 trillion value.

I don't want bitcoin to "get by"
if it ever come down to pushing these limits
we will just agree to have 16 decimals.

I (for lack of a better word) pray every night that this actually becomes a issue  Wink

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January 16, 2013, 06:29:43 AM
 #29

I'll just repeat myself:

There will be a total of 21 million coins. With eight decimals on top of it, we have a total of 2.1E15 indivisible units of account. This is a big number, you know. To put it in perspective, the total of all gold ever mined in the history of humankind is about 150,000 tonnes, or 1.5E11 grams, or 1.5E14 mg of gold. Ever mined. There are fourteen times more bitcoin units than milligrams of gold ever mined. In current prices, one mg of gold is worth about four US cents.

wait a min.

their 21 million coins
each coin can be divied into 8 decimals
so each coins actually represents  100,000,000 units
100,000,000 * 21,000,000 = 2,100,000,000,000,000
IF we want 0.00000001 BTC to be worth no more then 0.001$
this means we can only ever accommodate  2.1 Trillion dollars?

Sure however name a global payment network that allows you to make payments with 0.1 cent precision.  Can you western union $123.001?  ACH? Bank Wire?  Credit Card?  Is there even a need?  I mean 1 cent has a negligible purchasing power (in todays dollars).  Most countries are getting rid of coins with purchasing power around 1 US cent (circa 2012 purchasing power).  The smallest subdivision of the Euro is about 2 US cents in purchasing power, and the smallest subdivision of the Yuan is about 6 US cents in purchasing power.  If 1 satoshi rose to be worth ~$0.05 (in 2012 dollars) that would put the money supply at ~$100 Trillion.  The global money supply (all currencies, all forms) is estimated at ~$80T.    Now all this is academic I don't think Bitcoin will replace all global currencies, but it would be possible and still have $0.05 precision.  Not bad and that is without a fork to add additional units.  It is essentially a non-problem.   Now lets figure out how to grow the economy to $1B before we worry about the second $100T.
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January 16, 2013, 07:06:14 AM
 #30

I know, but that doesn't solve the problem of the value, even if we start using satoshis. If the value of the total 21 millions is around 2 billions, that's not enough money for rich or banks to move their money over this currency, because there is not enough BTC to do that.
As noted previously, the there are 2.1 quadrillion satoshis, not 2 billion. That is plenty. Also, remember that it is not necessary to have enough currency to represent all the wealth in the world. There only needs to be enough to facilitate transactions. In other words, my house is worth $100,000, but there isn't $100,000 stored somewhere that represents my house.

Why do you? Honestly, I'd like to know. I just don't think is that possible because it has never happened with any other currency in the world (1 currency = $100,000), why would it happen to BTC? (I hope you are right Smiley
You don't think it will happen because 1 BTC = $1 million is a lot and it hasn't happened before, but that doesn't mean it won't or that it can't. But the more important answer is that even if it never reaches $1 million, it doesn't mean that Bitcoin has a flaw. It just means that Bitcoin doesn't become the only currency in the world.

The value of gold has gone up by a factor of 50 in only 30 years. Give it another 30 years and it could go up by another factor of 50 to 2500 in 60 years. Another 30 years could be another factor of 50. In your lifetime gold could go up by a factor of 125,000. So, perhaps it is possible that BTC could go up by 100,000 in your lifetime.

How can you come up with $100B? is the 21 millions btc = $10B, why is $100B in annual transactions? Sorry, but I have no idea how that works.
It's just an example, the $10B and $100B numbers are not related. BTW, the ratio of the two is called the "velocity of money".

so, are you guessing that bitcoins can reach the ratio 1 BTC = $100,000?
Any prediction on the value of BTC (in any time frame) is just speculation. Nobody knows with any certainty.

But it seems more believable to see that a  $0.014/BTC can reach a $10/BTC in the future than a $14/BTC becoming a $14000/BTC.
Again, it's just "hard" to believe that if you have a wallet of 10 BTC ($140 today), that can become (in the future) a $1,000,000

Does it seem more believable that  1 yen/BTC could reach 1000 yen/BTC ? If you say no, then you are falling victim to your dollar-based bias. The numbers truly are arbitrary. There is no difference between $0.014 becoming $14 and  $14 becoming $14000.

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January 16, 2013, 07:46:14 AM
 #31

The numbers truly are arbitrary. There is no difference between $0.014 becoming $14 and  $14 becoming $14000.

yep, similarly, there is no difference (as of this moment) bitcoin becoming $100 USD or $94.70 AUD.

one is more psychologically significant for a specific set of people, while another set of people would find $105.58 USD / $100 AUD a more significant milestone.
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January 16, 2013, 09:09:27 AM
 #32

their 21 million coins
each coin can be divied into 8 decimals
so each coins actually represents  100,000,000 units
100,000,000 * 21,000,000 = 2,100,000,000,000,000
IF we want 0.00000001 BTC to be worth no more then 0.001$
this means we can only ever accommodate  2.1 Trillion dollars?
You don't turn the steering wheel now because your car might be heading for a cliff in thirty years. Relax, if this is every a problem, the solution is well-understood.


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January 16, 2013, 09:19:05 AM
 #33

bloody stupid..... 100 BTC would have saved all the bullshit with needing ASICS so soon
There is no need for asics, people want them because the first few to get them will make a pretty decent buck.
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January 16, 2013, 09:56:38 AM
 #34

Not all of the people will use BTC, it is a high-end currency that only will be used by a few of people which have enough computer and financial knowledge

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January 16, 2013, 11:38:23 AM
 #35

Let's pretend that we already have those 21 million out there. (I know it'd be in 2033, but bear with me Smiley
There won't be 21mio BTC in 2033, and in fact, this limit will never be fully reached.
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January 16, 2013, 12:22:23 PM
 #36

IF we want 0.00000001 BTC to be worth no more then 0.001$
The value of BTC is dictated by supply and demand..

The market doesn't care about what we wantWink
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January 16, 2013, 01:32:50 PM
 #37

A shave and a hair cut used to cost 2 bits ($.25).

Now you could get the same for $25.00.

That is a 1,000 times increase.

1 BTC is currently $14/BTC.

Why is it unreasonable that it too could not have a 1,000 times increase?

You focus too much on the value of 1BTC.

They could have just as easily called 100BTC "one bitcoin". or .001 "one bitcoin".


In your scenario of the richest man buying all of the Bitcoin of the world...

What would happen if Bill Gates advertised that he was buying all of the Bitcoin of the world? Would you sell your 1 Bitcoin to him for $14/BTC or would you hold out for more? How much would you sell it for if he had all Bitcoin except for your 1 BTC? Would you still only take $14? Or would a couple of million dollars be worth it?

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January 16, 2013, 01:37:08 PM
 #38

A shave and a hair cut used to cost 2 bits ($.25).

Now you could get the same for $25.00.

That is a 1,000 times increase.

1 BTC is currently $14/BTC.

Why is it unreasonable that it too could not have a 1,000 times increase?
Your example is of a 1,000 times decrease in value.
DannyHamilton
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January 16, 2013, 02:07:38 PM
 #39

I don't think it would be hard to get everyone to agree to 16 decimals, if it becomes necessary.
Would the entire community have to agree in getting the new client/protocol or only something like 51% of the clients?
all who agree will move their coins to the new system ( by upgrading the software ) or be left behind in a "dead fork." . . .
Or, those who agree will move to the dead fork, and the ones who stay behind keep the old system running.

Since there are multiple proposals on how to increase the number of decimal places, perhaps 3 or 4 new forks are created (each subset of users moving to their preferred solution). The majority of users stay behind waiting to see which fork survives before moving.  Those who choose the wrong fork end up with a real financial mess on their hands when all transactions are rolled back to the block where the chain forked.

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January 16, 2013, 02:16:31 PM
 #40

A shave and a hair cut used to cost 2 bits ($.25).

Now you could get the same for $25.00.

That is a 1,000 times increase.

1 BTC is currently $14/BTC.

Why is it unreasonable that it too could not have a 1,000 times increase?

You focus too much on the value of 1BTC.

They could have just as easily called 100BTC "one bitcoin". or .001 "one bitcoin".


In your scenario of the richest man buying all of the Bitcoin of the world...

What would happen if Bill Gates advertised that he was buying all of the Bitcoin of the world? Would you sell your 1 Bitcoin to him for $14/BTC or would you hold out for more? How much would you sell it for if he had all Bitcoin except for your 1 BTC? Would you still only take $14? Or would a couple of million dollars be worth it?

Precisely. If anyone wants all the Bitcoin in the world, they'd have to pry mine from my cold dead hands!  Grin

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