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Author Topic: How many bitcoins is "enough"?  (Read 7442 times)
ribuck
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November 24, 2010, 10:22:24 PM
 #21

i did the loan math

Thanks for working that out. It sounds like a plan!

No, actually, I wouldn't have the guts to borrow $300,000 to speculate. I'll stick to hoarding a few thousand BTC, and spending any others I get.
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November 25, 2010, 02:25:27 AM
 #22

It's very interesting. If nobody ever spends a Bitcoin there is no economy and no value, only scarcity which makes people think there is value.

The smartest strategy is indeed to hoard all and wait for the _others_ to spend, but if everyone keeps a few thousand, you basically end up with a very small community of cryptogeeks and still low value.

At least that's my amateur economics opinion. It could even be the case that there are simply 100 criminals on the forum trying to make people believe there is actual value in these things, drive the price up and then quietly exit the market. Next year they could be telling stories on tv saying how they made millions off a bunch of idiots from the Internet.

I understand that creating bitcoins was pretty easy in the beginnning. In fact it seemed like it was really easy to find bitcoins considering there are already so many, at least when I look at my generation speed (CPU only, 2k hash/s). Is that impression wrong? How can I be convinced that the starters of this network didn't do a big precomputation before starting the network? I suppose it must be possible to see the balance of everyone in the network considering there is a global history. Is that correct?

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November 25, 2010, 02:58:02 AM
 #23

If bitcoin is based on computer power shouldn't it follow moores law?


Moores law doesn't say anything about "computer power", only the amount of transistors on a chip.
ribuck
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November 25, 2010, 10:59:05 AM
 #24

Moores law doesn't say anything about "computer power", only the amount of transistors on a chip.
True, but Moore's Law (if it holds) does set a lower bound on the growth of computer power.

If you can increase the number of transistors, you can do more things in parallel. Any other improvements (such as increases in clock speed) will increase computer power beyond the growth in the number of transistors.
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November 25, 2010, 11:02:20 AM
 #25

Ever since about 2006 (and even before that), the clock speeds have flatlined due to physical limits. The only way processors are still getting faster is by adding more parallelism (and thus more transistors).

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ribuck
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November 25, 2010, 11:07:05 AM
 #26

Ever since about 2006 (and even before that), the clock speeds have flatlined due to physical limits.
Only for a given size of transistor. Every time they find a way to make the transistors smaller again, a further clock speed increment becomes possible.
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November 25, 2010, 12:41:37 PM
 #27

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Obviously there's an optimum value somewhere between those two extremes. How many BTC should one aspire to hold, before freely trading the rest?

over 9000

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November 25, 2010, 12:58:28 PM
 #28

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Obviously there's an optimum value somewhere between those two extremes. How many BTC should one aspire to hold, before freely trading the rest?

over 9000

the answer is obvious.  Cheesy
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November 25, 2010, 10:01:24 PM
 #29

all of them...
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November 25, 2010, 10:15:53 PM
 #30

all of them...

Yes, that would be enough for me, and additionally I would want the same number for each of my family members.
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December 03, 2010, 07:38:47 PM
 #31

If bitcoin is based on computer power shouldn't it follow moores law?



No, from economical perspective the computing power is irrelevant. It merely acts as 'clock', each block is analogous to at tick. The difficult computations are to prevent the people from making the clock tick faster than it should (if it does the system autocorrects). People can turn back the clock (by building on an old block), but they cannot make it go forward fast, because you would have to generate more ticks and that need lots of computing power (more than the network if you want to overtake it).

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December 29, 2010, 12:11:21 AM
 #32

The hard part is maintaining momentum until we get to the growth spurt.

I don't think it'll be hard, btc is already a valued commodity. This forum represents a hardcore of bitcoin fanatics, many of which are skilled developers or have various other talents and are into the idea, I think alot of people here are also wealthy and have alot of disposable income to spend on their hobby. Effectively the community is like... incubating tthis money, filling it with value while it steadilfy matures. There's a lot of sunk time, effort and personally interested money in bitcoin already, it's not going away.

This kernel of interest could keep bitcoin alive and developing in terms of human talent, services and infrastructure for years.

Then there's the QQ-factor, and the slashdot effect and the persistance of bitcoin fanatics asking for payments in bitcoin. When it takes off in somewhere like India or finally get's (attempts at) shut down in China, well.

Think pandora's box, but good.

I don't even think there'll be competitors. It's a digital commodity, not a company and not an app. Supernormal profits will bring participants to bitccoin, not to compete with it. It's not like you can invent a decentralised un-controlled competitor to bitcoin and then somehow make a profit from going up against the established open-sourced alternative.

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December 29, 2010, 12:58:04 PM
 #33

I don't even think there'll be competitors. It's a digital commodity, not a company and not an app. Supernormal profits will bring participants to bitccoin, not to compete with it. It's not like you can invent a decentralised un-controlled competitor to bitcoin and then somehow make a profit from going up against the established open-sourced alternative.

Good point.
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January 04, 2011, 10:14:27 PM
 #34

I don't even think there'll be competitors. It's a digital commodity, not a company and not an app. Supernormal profits will bring participants to bitccoin, not to compete with it. It's not like you can invent a decentralised un-controlled competitor to bitcoin and then somehow make a profit from going up against the established open-sourced alternative.

I don't see any reason why a similar cryptocurrency, or even another blockchain (am I talking out of my ass here?) couldn't compete against the current Bitcoin blockchain. Back before legal tender laws and the creation of the central bank, private mints were in competition with each other. Perhaps another system has some features Bitcoin doesn't, or for whatever reason gains hold of a niche. This is not a bad thing in any case. Especially if any competing currencies have decentralized transactions and non reversibility like Bitcoin, trading would be extremely simple. Perhaps even completely transparent. They could easily exist side by side.
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January 07, 2011, 12:36:57 AM
 #35

I don't see any reason why a similar cryptocurrency, or even another blockchain (am I talking out of my ass here?) couldn't compete against the current Bitcoin blockchain. Back before legal tender laws and the creation of the central bank, private mints were in competition with each other. Perhaps another system has some features Bitcoin doesn't, or for whatever reason gains hold of a niche. This is not a bad thing in any case. Especially if any competing currencies have decentralized transactions and non reversibility like Bitcoin, trading would be extremely simple. Perhaps even completely transparent. They could easily exist side by side.
My opinion: adding another blockchain (if it was possible) would lower the total value of BTC IMHO.
There are going to be 21 Million BTC in total, since we have a "fixed" quantity of money, inflation is kept under control. As other said, it's just like gold, there's a scarce quantity out there.
Then someone comes in and opens another blockchain/cryptocurrency. Since for the end user paying with BTC or "new bitcoin" (hereafter NBC) will be absolutely indifferent, this will mean that suddently a huge mine of gold is found somewhere. Newcomers and old miners will start harvesting the NBC and when enough NBC will be around, BTC value will drop. If the end user is given the opportunity to use both NBC or BTC, it will take time for both of them to lever, but the ones already owning some BTC will probably suffer a lot from this situation.

Speaking of scarce resource, I guess that at worst, 0.0000001 bitcoins (7nth decimal point) are gonna be worth one candy. Since I can buy candies at 5€cents, I expect 1BTC not to rise at more than 500'000$ in value Tongue
This reminds me of a story on a comix, with the main characted being sent to a parallel dimension in which 1£ was worth so much they had to pay a coffee with μ£s (micropounds).

Let's speak also a bit about psychology: normal people tend to think at a small number as a small value. For this reason I don't actually expect people to accept buying bitcoins if their price gets too high. I guess a show stopper will be when 1 BTC will be worth more or less a dinner at the restaurant. This realistically means we are never going to see people get bitcoins for more than 20/30$ each: the only way out is to give 0.001 BTC a brand new name, maybe "SBC", small bit coins. Tongue

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February 12, 2011, 05:01:28 PM
 #36

What will hoarding do?  It will drive up the exchange value of BitCoin...that will cause more people to desire bitcoin as they see the price rise.  As a consequence, more people will start to turn in their currencies and gold in exchange for BTC.  People will also start offering more and more products and services in exchange for BTC.  They'll even offer those products and services at a big discount compared to traditional currencies because they'll be mindful of the rising value of BTC.  This is all good for the viability of BTC.  If everyone is trying to spend it, then that's basically pushing *down* the value of BTC and that is not good for BTC.  The key is to offer more and cheaper ways of exchanging BTC for other currencies and metals.  If people can readily see a deep and liquid exchange market, they'll have no problem holding a portion of their savings in BTC.  So, hoard away people!!!

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February 12, 2011, 05:04:46 PM
 #37


I don't see any reason why a similar cryptocurrency, or even another blockchain (am I talking out of my ass here?) couldn't compete against the current Bitcoin blockchain. Back before legal tender laws and the creation of the central bank, private mints were in competition with each other. Perhaps another system has some features Bitcoin doesn't, or for whatever reason gains hold of a niche. This is not a bad thing in any case. Especially if any competing currencies have decentralized transactions and non reversibility like Bitcoin, trading would be extremely simple. Perhaps even completely transparent. They could easily exist side by side.

Unless the inventor is yet another Satoshi, bitcoin is going to win by pure momentum.

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February 12, 2011, 05:13:35 PM
 #38


I don't see any reason why a similar cryptocurrency, or even another blockchain (am I talking out of my ass here?) couldn't compete against the current Bitcoin blockchain. Back before legal tender laws and the creation of the central bank, private mints were in competition with each other. Perhaps another system has some features Bitcoin doesn't, or for whatever reason gains hold of a niche. This is not a bad thing in any case. Especially if any competing currencies have decentralized transactions and non reversibility like Bitcoin, trading would be extremely simple. Perhaps even completely transparent. They could easily exist side by side.

Unless the inventor is yet another Satoshi, bitcoin is going to win by pure momentum.

Indeed.  The first-to-market advantage is a tough one to overcome.  Betamax was certainly superior to VHS, but not by a large enough of a margin to matter.

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February 12, 2011, 07:16:23 PM
 #39


To me, enough Bitcoins is an amount sufficient for a rainy day fund, and enough to pay my daily expenses when i will be too old for anyone to hire me...

Besides that, if i can earn as many bitcoins as i spend, it will be enough for me...


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February 12, 2011, 11:29:18 PM
 #40


My opinion: adding another blockchain (if it was possible) would lower the total value of BTC IMHO.
There are going to be 21 Million BTC in total, since we have a "fixed" quantity of money, inflation is kept under control. As other said, it's just like gold, there's a scarce quantity out there.
Then someone comes in and opens another blockchain/cryptocurrency. Since for the end user paying with BTC or "new bitcoin" (hereafter NBC) will be absolutely indifferent, this will mean that suddently a huge mine of gold is found somewhere. Newcomers and old miners will start harvesting the NBC and when enough NBC will be around, BTC value will drop. If the end user is given the opportunity to use both NBC or BTC, it will take time for both of them to lever, but the ones already owning some BTC will probably suffer a lot from this situation.
 

So at least 100 people offer goods and services for BTC right now. Is a new user really going to be indifferent between accepting Bitcoin and Newcoin when no one accepts Newcoin yet? Who starts taking it first?
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