a flaw in the 21 million BTC?

[MJGrae]

It helps to think of Bitcoin more as a commodity than a currency. As was pointed out previously, gold is a great "store of one's wealth" but that doesn't mean that all of the gold in existence is worth as much or more than the worlds money supply, and it likely never will. Bitcoin will scale in value to the amount of people that want it, and the amount of it there is in circulation.

Another good point that someone brought up is that the annual transaction value is more important than the market capitalization of Bitcoin. Should the Bitcoin "economy" be a 20 trillion economy, it's actually very possible that the total market capitalization could end up being less than 10billion, etc. (These were arbitrary numbers)

It all depends on what people want/use bitcoins for. If it were to become a common currency for digital purchases of all shapes and sizes, the market capitalization would not matter so much, because the "economy" would be an outstanding transfer of dollar value and fuel the market by momentum.

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[Phinnaeus Gage]

Perhaps bitcoin's destiny is to be the gold standard for some other money.

I predict another digital currency at some point (perhaps with reversible transactions, or with the possibility for fractional-reserve lending) that uses bitcoin as its backing (pegged to the value of, and always exchangeable for, bitcoins)

Say it's called a NEUBUX, and 10,000 NEUBUX = 1 BTC. If a bank has 10,000 BTC on deposit, and maintains a 10% reserve on loans, it could lend out 1,000,000,000 NEUBUX to borrowers. The bank could issue a NEUBUX credit card, with reversible charges built into the system.

After all, GOLD transactions are not reversible. Nor is GOLD suitable for fractional reserve lending. But the currencies based on gold are.

People claim that Bitcoin is backed by nothing. Imagine a future world where all crypto-currencies are backed by Bitcoin.

[Elwar]

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.

A 1,000 increase in the value of a "shave and a haircut" (with regard to the dollar).

[Piper67]

. . . if in any future, a 0,00000001 BTC = 1 cent, that would make the 1 BTC = $1 million and I don't see that possible . . .

And yet if bitcoin ever reaches mainstream use, this is exactly the sort of thing that will happen.  Why don't you see it as possible?

When I was a boy, it seemed impossible to me for a postage stamp to cost one million units of the currency I was living with. Just 10 years later, it turned out you had to shell out one billion units to buy a stamp.

Impossible? That's just a failure of the imagination.

[Vandroiy]

Please, give up comparing backing currency to >M2 currency.

We already have BTC banking, and there will be more of it. Bill Gates does not hold a mountain of dollars! Even if he were to do that, those would be dollars on a bank, which this bank does not actually have -- it has ownership on investments on that scale.

A raw BTC is not the equivalent to a FIAT unit on your bank account, let alone a stock. If Bill Gates wanted to get ten billion USD in cash, do you think a bank would spit out the 100 tons of 100 USD bills? That's just not how it works.

That aside, the OP is still true -- for a mainstream Bitcoin usage, even just for selected purposes, the value of 100 current USD per Bitcoin would be insufficient. The world is pretty big after all.

[justusranvier]

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.

A 1,000 increase in the value of a "shave and a haircut" (with regard to the dollar).

Sure, you can look at it from both perspectives but it's better to stay consistent within the conversation. If Bitcoins increases in value as a currency by 1000 times, that the opposite of what the dollar has done in your example.

[Peter Lambert]

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.

A 1,000 increase in the value of a "shave and a haircut" (with regard to the dollar).

Am I the only one here who sees the math mistake which keeps getting repeated over and over? You are all talking about a factor of 1000 when it is actually a factor of 100!

[Piper67]

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.

A 1,000 increase in the value of a "shave and a haircut" (with regard to the dollar).

Am I the only one here who sees the math mistake which keeps getting repeated over and over? You are all talking about a factor of 1000 when it is actually a factor of 100!

Yeah, he probably meant 1000 percent 

[Peter Lambert]

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.

A 1,000 increase in the value of a "shave and a haircut" (with regard to the dollar).

Am I the only one here who sees the math mistake which keeps getting repeated over and over? You are all talking about a factor of 1000 when it is actually a factor of 100!

Yeah, he probably meant 1000 percent 

But that is even more wrong, since it would be a 9900 percent increase.

[MJGrae]

Impossible? That's just a failure of the imagination.

+1

[Elwar]

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.

A 1,000 increase in the value of a "shave and a haircut" (with regard to the dollar).

Am I the only one here who sees the math mistake which keeps getting repeated over and over? You are all talking about a factor of 1000 when it is actually a factor of 100!

lol...oops

[Rygon]

Perhaps bitcoin's destiny is to be the gold standard for some other money.

I predict another digital currency at some point (perhaps with reversible transactions, or with the possibility for fractional-reserve lending) that uses bitcoin as its backing (pegged to the value of, and always exchangeable for, bitcoins)

Say it's called a NEUBUX, and 10,000 NEUBUX = 1 BTC. If a bank has 10,000 BTC on deposit, and maintains a 10% reserve on loans, it could lend out 1,000,000,000 NEUBUX to borrowers. The bank could issue a NEUBUX credit card, with reversible charges built into the system.

After all, GOLD transactions are not reversible. Nor is GOLD suitable for fractional reserve lending. But the currencies based on gold are.

People claim that Bitcoin is backed by nothing. Imagine a future world where all crypto-currencies are backed by Bitcoin.

But what is gold backed by?  LOL. I'll have  ask that to the next goldbug I see.

[MJGrae]

But what is gold backed by?  LOL. I'll have  ask that to the next goldbug I see.

Gold isn't backed by anything. Gold has value under the assumption that if global economies were to implode tomorrow, that people would still be willing to accept gold as "payment" for goods/services.

The reason they would be willing to accept it, (or at least why this was originally the case) was because ... Are you ready for it? .. It was pretty, and it was rare. And that was why gold had value. People wanted it, and it was controlled. In this case, gold is controlled by natural forces whereas arguably bitcoin is not. However, bitcoin is as close as it gets nowadays to being controlled by natural forces as far as currencies go.

Which is kind of a funny oxy moron, because it's an artificial natural constraint of the algorithm.

[odolvlobo]

I predict another digital currency at some point (perhaps with reversible transactions, or with the possibility for fractional-reserve lending) that uses bitcoin as its backing (pegged to the value of, and always exchangeable for, bitcoins)

Say it's called a NEUBUX, and 10,000 NEUBUX = 1 BTC. If a bank has 10,000 BTC on deposit, and maintains a 10% reserve on loans, it could lend out 1,000,000,000 NEUBUX to borrowers. The bank could issue a NEUBUX credit card, with reversible charges built into the system.

There is no need to have another currency in order to support reversible transactions or fractional reserve banking. Both are easily done with Bitcoin.

Escrow is already a simple way to do reversible transactions. There is no reason you couldn't have a Bitcoin credit card that does chargebacks. Chargebacks are part of the agreement between the CC company and the merchant that accepts the card.

Fractional reserve banking is simply the process in which a bank loans out money that has been deposited. There is no reason it can't be done with Bitcoin. Bitcoin banks would offer an interest rate to encourage people to deposit bitcoins, and then they would loan out the bitcoins at a higher rate.

[furrycoat]

Bitcoin has 8 decimal points, thats plenty to go around for plenty of time

[payb.tc]

Bitcoin has 8 decimal points, thats plenty to go around for plenty of time

i think you meant to say it "ought to be enough for anybody".