Do altcoins effectivrly "dilute" the 21 million BTC limit?

[frontdenplastic]

We all know that there is a hard limit to the number of bitcoins that could ever be minted. That limit is almost 21 million BTC (minus a few Satoshis). Long term holders hope that this limit will cause the values of their coins to go up considerably due to increasing demand.

However, there is no limit to the number of shit coins that can be invented. In fact the ETH shit coin now has a market cap that is of the same order of magnitude as BTC. Furthermore it is an inflationary coin.

If many people move their capital to these alts won't this negate the benefits of the 21 million BTC limit for Bitcoin holders?

[jtipt]

No, it won't. BTC is BTC and all other altcoins are well "alt"-coins, they are essentially a different currency. It's the same thing as there are USD and GBP, but neither of them dilutes either of them.

That limit is almost 21 million BTC (minus a few Satoshis).

Why minus few satoshis? Isn't the limit exact 21 Million BTC?

[mocacinno]

No, it won't. BTC is BTC and all other altcoins are well "alt"-coins, they are essentially a different currency. It's the same thing as there are USD and GBP, but neither of them dilutes either of them.

That limit is almost 21 million BTC (minus a few Satoshis).

Why minus few satoshis? Isn't the limit exact 21 Million BTC?

As far as i know, a miner is not forced to add 12.5 BTC reward as coinbase transaction (at current block reward), only blocks where the reward + fees exceed 12.5 + sum of the fees of all tx's in the block are rejected.


here you go, one satoshi lost forever:
https://blockchain.info/block-index/139574

This block alone limits the total BTC ever in circulation to 20.999.999,99999999 satoshi's

[krishnapramod]

We all know that there is a hard limit to the number of bitcoins that could ever be minted. That limit is almost 21 million BTC (minus a few Satoshis). Long term holders hope that this limit will cause the values of their coins to go up considerably due to increasing demand.

However, there is no limit to the number of shit coins that can be invented. In fact the ETH shit coin now has a market cap that is of the same order of magnitude as BTC. Furthermore it is an inflationary coin.

If many people move their capital to these alts won't this negate the benefits of the 21 million BTC limit for Bitcoin holders?

Scarcity value is the economic factor that increases an item's relative price based more upon its relatively low supply.

Bitcoins are divisible so fixed supply or a huge increase is not going to be a big issue.

Right now bitcoin is a speculative asset. A few economists have predicted that bitcoin price would reach up to $100,000 in the next 10 years, now this is backed just by speculation.

Cornering the market

In finance, to corner the market is to get sufficient control of a particular stock, commodity, or other asset to allow the price to be manipulated. Another definition: "To have the greatest market share in a particular industry without having a monopoly".

Speculative attack

A speculative attack has much in common with cornering the market, as it involves building up a large directional position in the hope of exiting at a better price. As such, it runs the same risk: a speculative attack relies entirely on the market reacting to the attack by continuing the move that has been engineered for profits to be made by the attackers. In a market that is not susceptible, the reaction of the market may instead be to take advantage of the price change, by taking opposing positions and reversing the engineered move.

Now a currency or asset backed only by speculation is prone to cornering the market and speculative attacks, pumps and dumps and in the long-term events like these has the possibility to negatively impact bitcoins market.

Like I said, fixed supply would never be a hindrance to bitcoins growth, but driven only by speculation will be, technical and price stability is a necessity if bitcoin needs to stay on top.

[DannyHamilton]

Isn't the limit exact 21 Million BTC?

No.

Anyone that told you that has misled you.

The correct phrase is "There will never be MORE THAN 21 million."

Saying, "There will be exactly 21 million" or "Bitcoin is limited to 21 million" is inaccurate.

Why minus few satoshis?

The original designed maximum possible bitcoins to be created is:
20,999,999.9769

That's 2,310,000 satoshis LESS than 21 million. (which in my opinion is more than just "a few").

Then, due to a bug in some miners early on, some of those 20,999,999.9769 bitcoins were not mined (and therefore can never be mined). Which reduces the total bitcoins that will ever be mined even more.

[cellard]

We all know that there is a hard limit to the number of bitcoins that could ever be minted. That limit is almost 21 million BTC (minus a few Satoshis). Long term holders hope that this limit will cause the values of their coins to go up considerably due to increasing demand.

However, there is no limit to the number of shit coins that can be invented. In fact the ETH shit coin now has a market cap that is of the same order of magnitude as BTC. Furthermore it is an inflationary coin.

If many people move their capital to these alts won't this negate the benefits of the 21 million BTC limit for Bitcoin holders?

Not really. Shitcoins are just used to increment BTC holdings, so the marketcaps on shitcoisn is just temporal and eventually goes back to bitcoin.

Even the biggest projects like Ethereum are just eventually going to fail and this wealth will go back to the original blockchain.

When sidechains kick in it's pretty much over for altcoins even tho I think they will exist because people love speculation.

[bouren]

We all know that there is a hard limit to the number of bitcoins that could ever be minted. That limit is almost 21 million BTC (minus a few Satoshis). Long term holders hope that this limit will cause the values of their coins to go up considerably due to increasing demand.

However, there is no limit to the number of shit coins that can be invented. In fact the ETH shit coin now has a market cap that is of the same order of magnitude as BTC. Furthermore it is an inflationary coin.

If many people move their capital to these alts won't this negate the benefits of the 21 million BTC limit for Bitcoin holders?

So you mean to say if we have unlimited supply of other metals like iron, copper, etc then gold prices will never increase!
No, things don't work like this. Other altcoins can give competition to bitcoin demand but can't dilute the bitcoin market. All other coins are subsidiary to bitcoin and it is still dominating market with 42% dominance.

[OROBTC]

...

Well, two comments:

1)  Some BTC has already been lost (due to forgetting wallets & passwords), so the total of "active" BTC will be, what, maybe something like 20,000,000?  I would bet that far fewer BTC will get lost NOW and going forward...

2)  If the BTC Elders (miners and core) are able to resolve the scaling problem(s), and no other "Alt" comes along that is CLEARLY BETTER than BTC, then I would agree with those who say that the Alts will not be viable, at least in almost every case.

[Iranus]

No, it won't. BTC is BTC and all other altcoins are well "alt"-coins, they are essentially a different currency. It's the same thing as there are USD and GBP, but neither of them dilutes either of them.

USD and GBP are both currencies created by their countries' respective governments and banks.  They are only supposed to be used in the country that created them, or other places whose governments decide to make them legal tender.

BTC and altcoins are entirely free and can be spent or accepted by anyone in the world for anything. 

BTC was created for a specific purpose - to be a "Peer-to-peer Electronic Cash System".  I would argue that the status of Bitcoin makes it almost impossible to be displaced or threatened by a clone.

Because doing better than Bitcoin with a clone is extremely difficult, it requires coins which have different purposes or people believe to do the purpose of Bitcoin better.  Therefore, these alts can never "dilute" the limit, because they are not the same thing.

[frontdenplastic]

So you mean to say if we have unlimited supply of other metals like iron, copper, etc then gold prices will never increase!
No, things don't work like this.

Well let's not consider iron or copper which are not precious metals. What about platinum and silver? If all the platinum and silver in the world disappeared would the price of gold likely increase or decrease?

Even if Bitcoin remains #1 I can't help thinking that these alts are keeping the price down. I know a few guys at work who recently got into crypto currencies and they mostly started by buying ETH.

[Yuuto]

We all know that there is a hard limit to the number of bitcoins that could ever be minted. That limit is almost 21 million BTC (minus a few Satoshis). Long term holders hope that this limit will cause the values of their coins to go up considerably due to increasing demand.

However, there is no limit to the number of shit coins that can be invented. In fact the ETH shit coin now has a market cap that is of the same order of magnitude as BTC. Furthermore it is an inflationary coin.

If many people move their capital to these alts won't this negate the benefits of the 21 million BTC limit for Bitcoin holders?

No. Altcoins will be altcoins. Bitcoin is bitcoin.

When you are investing in bitcoin then you're basically guaranteed to have a minimum percentage of the total amount of bitcoin that can ever exist. Altcoins and bitcoin together make up the cryptocurrency market. The more people that are investing in altcoins then the entire cryptocurrency market cap goes up, but bitcoin market cap does not go up.

There can be many instances where altcoins go down but bitcoin goes up. They are two different investments that differ on many levels, and thus the issuance of new altcoins do not dilute your bitcoin holdings at all.

[piloder]

It is true that bitcoin have less than 50% dominance on total crypto marketcap. Talking about eth, it is centralized coin with non zero inflation so we can expect a dump everytime it will be pupmed like we have right now. Also eth foundation controls all the devlopment related stuffs which make it completely shit coin. I dont think such coins can give any challange to bitcoin.

[pooya87]

If many people move their capital to these alts won't this negate the benefits of the 21 million BTC limit for Bitcoin holders?

your question is like asking if the market was filled with more apples would people stop buying oranges and only consume apples?!

as far as usage as a currency goes, none of the altcoins have that so far. if any of them succeed in that task then it has nothing to do with their cap. people will go there and use it.

as far as investment goes, the altcoins with no cap or huge number of coins will never have a decent price and will always have a declining one because of the bigger supply than the demand. so they become worthless as an investment. in other words people will stick to bitcoin for investment.

[ebliever]

Not really. If someone claims they are diluting Bitcoin, you can point out that by that logic any currency is diluting every other currency, in which case those altcoins are also diluting the dollar/yen/euro/whatever.

[jtipt]

The original designed maximum possible bitcoins to be created is:
20,999,999.9769

That's 2,310,000 satoshis LESS than 21 million. (which in my opinion is more than just "a few").

Then, due to a bug in some miners early on, some of those 20,999,999.9769 bitcoins were not mined (and therefore can never be mined). Which reduces the total bitcoins that will ever be mined even more.

Oh, didn't knew about this. But, well 2,310,000 satoshis shouldn't make a much of a difference anyways.

[Anegg]

We all know that there is a hard limit to the number of bitcoins that could ever be minted. That limit is almost 21 million BTC (minus a few Satoshis). Long term holders hope that this limit will cause the values of their coins to go up considerably due to increasing demand.

However, there is no limit to the number of shit coins that can be invented. In fact the ETH shit coin now has a market cap that is of the same order of magnitude as BTC. Furthermore it is an inflationary coin.

If many people move their capital to these alts won't this negate the benefits of the 21 million BTC limit for Bitcoin holders?

No, i don't think so since the people have already invested into bitcoin. That is kinda like comparing 2 different currencies. Don't quote me here but I am pretty sure there are 21 million bitcoin available and 4-5 million available to be mined. Bitcoin also has the most merchant acceptance and uses compared with other alt coins, so it is pretty impossible that people will just start pouring over to other alt coins instead of bitcoin. Right now, all the other alt coins are no challenge to bitcoin, and the biggest competitor, ETH, doesn't have as many advantages as bitcoin, such as decentralisation.

[btcbug]

Well it is true that anyone can fire up a new Shitcoin on a whim, but just because you can easily create a new currency doesn't guarantee it will have value or take market share from Bitcoin.

I think a reasonable analogy would be to ask if creating a new corporation and listing it on a stock exchange would hurt other publicly traded companies. To a certain degree, yes some investors may choose to buy your stock over another stock, but the reason they buy it is because they believe the company is providing value or will provide value in the future.

In the case of Cryptos, they are going to need to be innovative or provide a unique use case in order for people to value them in the long term. Short term we really have no way of knowing outside of pure speculation and we may not know if something has a long term purpose for years. ETH at this point is still pretty much 100% hype and promises. At least BTC has an 8 year history of being a rock solid, immutable store of value.

I would also add that if we had 10,000 alt-coins right now, it's doubtful the other 9000 would have much, if any MCap. There are simply not enough use cases and having 10,000 potential options is just spreading way too thin. Chances are that most of the wealth would remain in the top 100 with everything else just being excessively illiquid.

[Amph]

no because first of all you need bitcoin to buy most of the shitcoin out there, and therefore those altcoin are actually helping bitcoin to grow and not the opposite

the strongest coins can be bought directly with fiat but they are limited in numbers, also the money of that many shitcoin always return to bitcoin after the pump and dump end

[Kakmakr]

This is the same as saying that there are just too many precious metals out there that are diluting the value for instance Gold. We do not have control over the investors and their decision making on where they will be investing their coins. Most of the Crypto Currency investors will buy some Alt coin and then eventually trade it for Bitcoin and a lot of these Pump&Dump coins goes nowhere after the dump has occurred. ^grrrrrrrrr^

[hv_]

Any asset dilutes all others. There is limited resources to be shared across. Simple as that.