The Bitcoin decimal issue

[Jace]

I strongly believe that somewhere in near future mBTC / XBT should go mainstream.

May be I am completely wrong, but I couldn't differentiate between Bitcoin starting to use subunits and a country printing more fiat money.

Let's say Bitcoin starts to use mBTC, now there are suddenly 1000x units.

When a country prints more money then why not think it as a way of making units more fungible.

You bought a candy for a cent then you pay a dollar now. That means, your country has printed 100 times more money or something interesting happened to candy production or your country has gained much reputation or your country is manipulating global exchange rates, etc.

Everything somehow looks the same for me. I'm an average Bitcoin user, explain to me.

You couldn't differentiate? They're completely the opposite of eachother!

There are more sides to this, but I guess the key difference is this: by switching to mBTC thus effectively creating 1000x more units (which is not the case because these units were in fact already there to begin with, but for argument's sake) then who owns these new units? Now compare this to: when a country prints more fiat money, then who owns this new fiat?

Government or ECB or FED printing more fiat money = effectively stealing existing fiat money.

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[btcusr]

I strongly believe that somewhere in near future mBTC / XBT should go mainstream.

May be I am completely wrong, but I couldn't differentiate between Bitcoin starting to use subunits and a country printing more fiat money.

Let's say Bitcoin starts to use mBTC, now there are suddenly 1000x units.

When a country prints more money then why not think it as a way of making units more fungible.

You bought a candy for a cent then you pay a dollar now. That means, your country has printed 100 times more money or something interesting happened to candy production or your country has gained much reputation or your country is manipulating global exchange rates, etc.

Everything somehow looks the same for me. I'm an average Bitcoin user, explain to me.

You couldn't differentiate? They're completely the opposite of eachother!

There are more sides to this, but I guess the key difference is this: by switching to mBTC thus effectively creating 1000x more units (which is not the case because these units were in fact already there to begin with, but for argument's sake) then who owns these new units? Now compare this to: when a country prints more fiat money, then who owns this new fiat?

Government or ECB or FED printing more fiat money = effectively stealing existing fiat money.

Thanks, that was so simple.

Who owns new currency really matters.

Now, I understand the difference.

[bitcoinbear]

I strongly believe that somewhere in near future mBTC / XBT should go mainstream.

May be I am completely wrong, but I couldn't differentiate between Bitcoin starting to use subunits and a country printing more fiat money.

Let's say Bitcoin starts to use mBTC, now there are suddenly 1000x units. When a country prints more money then why not think it as a way of making units more fungible.

You bought a candy for a cent then you pay a dollar now. That means, your country has printed 100 times more money or something interesting happened to candy production or your country has gained much reputation or your country is manipulating global exchange rates, etc.

Everything somehow looks the same for me. I'm an average Bitcoin user, explain to me.

XBT is the ISO friendly version of BTC, thus 1 XBT = 1 BTC (not a millibitcoin, mB, or a microbitcoin or 0.0001 bitcion).

Switching from using BTC to mB is like a stock split as opposed to printing more currency which is like a stock sale. In a stock split, anybody who was holding 1 share of stock worth $100 now owns 10 shares of stock worth $10, so the total worth of their holdings is unchanged. So if I am holding 1.000 bitcoins which can buy me 100 loafs of bread, and I switch to using mB, now I have 1000 mB which can buy me 100 loafs of bread, the value I am holding remains constant.

Compare this to printing new currency, if my 1 GovCoin can buy me 100 loafs of bread, and then the government doubles the number of GovCoins overnight now I can only buy 50 loafs of bread.

[sidhujag]

I strongly believe that somewhere in near future mBTC / XBT should go mainstream.

May be I am completely wrong, but I couldn't differentiate between Bitcoin starting to use subunits and a country printing more fiat money.

Let's say Bitcoin starts to use mBTC, now there are suddenly 1000x units. When a country prints more money then why not think it as a way of making units more fungible.

You bought a candy for a cent then you pay a dollar now. That means, your country has printed 100 times more money or something interesting happened to candy production or your country has gained much reputation or your country is manipulating global exchange rates, etc.

Everything somehow looks the same for me. I'm an average Bitcoin user, explain to me.

XBT is the ISO friendly version of BTC, thus 1 XBT = 1 BTC (not a millibitcoin, mB, or a microbitcoin or 0.0001 bitcion).

Switching from using BTC to mB is like a stock split as opposed to printing more currency which is like a stock sale. In a stock split, anybody who was holding 1 share of stock worth $100 now owns 10 shares of stock worth $10, so the total worth of their holdings is unchanged. So if I am holding 1.000 bitcoins which can buy me 100 loafs of bread, and I switch to using mB, now I have 1000 mB which can buy me 100 loafs of bread, the value I am holding remains constant.

Compare this to printing new currency, if my 1 GovCoin can buy me 100 loafs of bread, and then the government doubles the number of GovCoins overnight now I can only buy 50 loafs of bread.

Easy explanation but surprisingly there are alot of people stuck in the notion that a stock split is the answer to deflationary pressures lol then some argue that as there is a split the price will double, how would it double? thats up to the market to decide and does not discount the fact that there is still a hyper deflationary scenario at 21 million.

[Ichthyo]

Can you please be more explicit?

What are those miraculous "realities" and "rules of economics" you are alluding all the time?

WHY ARE YOU ALLUDING TO THINGS instead of just stating what you think are the facts.

I posted on that above, trying to engage in a substantive discussion, but I'll post it again if you'd like to explain where I'm wrong.

Do you really think a unfortunate statement becomes better by repeating it literally? ;-)

Otherwise do you have any actual opinion or basis for your faith beyond prayer and evangelism, or are you instead just going to keep repeating the same defensive nonsense such as the requirement to outine any view 'in a sentence'?

OK, so lets start with the basics of human communication.
If you foist "prayer", "evangelism", "nonsense" on your interlocutor this counts as insults and thus counts against the credibility of your argument. That means: you would not need to insult other people if you were able to win by plain flat argumentation.

That being said...

You have two choices.

The first choice is to maintain the myths of Bitcoin for as long as possible

so again: what are the "myths of Bitcoin" dude??
Is it really so hard to "get" the fact that you to state what you mean in order to be understood by other people?

continue wasting good intellectual and capital investment in zero-sum endeavours where one group of techies screws over another

this again is not argumentation, but defaming of other people.
You might be right, but you would have to show this is actually the case. You should make clear what you mean with "wasting". You should make clear what you mean with "screwing". And then the difficult part is to show that the whole endeavour is indeed zero-sum. This is indeed such a difficult challenge that it is just plain unjustified to state such an accusation as being "obvious"

The second choice is to recognise that something has to change with Bitcoin because either:

1) Bitcoins are scarce in which case at some point those who do not already have any will rationally find something else to use instead of Bitcoin

2) Bitcoins are not scarce because they may be replicated (for all intents and purposes with just a name change), in which case what is the value of a replicable and replicated digital asset offering no advantage over others?

oh my god.
Don't you notice how broken this argument is?

First of, what makes you think there are just the two alternative scenarios you point out? Have you considered the possibility of an equilibrium state in-between (hint: in most free market-like constellations, a more or less fluctuating equilibrium is even the most likely state, while the clear "black" or "white" situation never happens).


Besides of that, the two "exclusive" alternatives you point out are both distorted and misconstrued:

1) is in contradiction to the very notion of supply and demand. If something is scarce, this means the demand surpasses the supply. In a market-like constellation, this causes the price to go up, until there is an equilibrium. This mechanism limits the possible scarcity, but it does not automatically destroy the usefulness of the scarce good.

2) is a merely theoretical construction and misleading, since you can't simply introduce a payment system in the blink of an eye. Have you ever considered what "network effect" means? Thus again, this presumably exclusive alternative can't even exist, but rather we get again the push towards an equilibrium (after a certain number of distinct payment networks have been created, the market for payment networks is saturated)

And, after this rather brilliant piece of argumentation, you draw your conclusions:

Falling on either side of 1 or 2 without the existence of advantages or damn good reasons to prefer Bitcoin over alternatives therefore necessitates changes or precludes its demise beyond a blinkered niche. As to what changes are required, I will leave that to application of rationality and economics.

And the last sentence is the annoying part and the reason which derailed this whole discussion right from start: you have nothing to offer, but you hide that behind the allusion of everything being "self-evident".



It is in no way clear what "needs" to be changed, since you weren't able to come up with a clear account of what presumably is "broken" with Bitcoin. Worse, you didn't even try to come up with such.

And last but not least, you should note that "economics" is not some kind of a fixed substance; rather there are several highly controversial schools of economics, especially when it comes to macro economics. If getting monetary systems "right" would be just a matter of common sense, then the global finance wouldn't be in such a desperate situation.


While all of this discussion is certainly funny and entertaining, actually we should indeed discuss and scrutinise the very things you're avoiding with all your statements: we should actually pose the question: what properties do we want to require from a payment system?

[weisoq]

Do you really think a unfortunate statement becomes better by repeating it literally? ;-)

I have nothing constructive to say here, although it will be difficult to respond to your points without being as patronsing and diversionary as you are.
 

OK, so lets start with the basics of human communication. If you foist "prayer", "evangelism", "nonsense" on your interlocutor this counts as insults and thus counts against the credibility of your argument. That means: you would not need to insult other people if you were able to win by plain flat argumentation. That being said...

No, prayer and evangelism can be the foundation of a religion. I think Bitcoin may have become similar or analogous to a religion. Some may argue that prayer, evangelism and religion are insulting and/or count against the credibility of an argument; I don't know but it's an interesting perspective.
 

so again: what are the "myths of Bitcoin" dude??
Is it really so hard to "get" the fact that you to state what you mean in order to be understood by other people?

The core myth is that it works for the purposes commonly outlined by its proponents – definable as a broadly adoptable currency of mutual benefit, able to replace or compete with state fiat.

this again is not argumentation, but defaming of other people.
You might be right, but you would have to show this is actually the case. You should make clear what you mean with "wasting". You should make clear what you mean with "screwing". And then the difficult part is to show that the whole endeavour is indeed zero-sum. This is indeed such a difficult challenge that it is just plain unjustified to state such an accusation as being "obvious"

You should investigate the meaning of defamation. It’s a matter of personal reputation and a tortious action. It’s my opinion and it’s also my opinion that if you don’t know to which of those two groups you’re in it’s the latter. I believe the words 'wasting', 'screwing' and 'zero-sum' are quite capable of being understood. Anyhow, why would I have to show this is actually the case? Until it has achieved the purposes outlined above or similar the onus is on Bitcoin to prove its continued worth, not for me to prove otherwise.

Look down - to my signature - you'll see a Bitcoin address. I have Bitcoins, I'm on Bitcointalk and I'm not a troll who fills the boards with relentless posts slating Bitcoin. I have no problem with Bitcoin per se, in the technology, perhaps as a stepping stone; my problem is in where it's going in terms of time, progress and progressive claims made. Assuming Bitcoin is more than a pyramid I don't recall claiming I had a solution to remedy all the flaws to every Bitcoin owner's preferences, and if I did or this was possible which I doubt I rationally wouldn't suggest them until I had optimised my own potential gain from what I perceive as possible misundersatndings or mispricings; that is if I was being economically rational which I concede perhaps I am not. That is certainly a matter of opinion subject to timescales.

oh my god.
Don't you notice how broken this argument is?
First of, what makes you think there are just the two alternative scenarios you point out? Have you considered the possibility of an equilibrium state in-between (hint: in most free market-like constellations, a more or less fluctuating equilibrium is even the most likely state, while the clear "black" or "white" situation never happens).
Besides of that, the two "exclusive" alternatives you point out are both distorted and misconstrued:
1) is in contradiction to the very notion of supply and demand. If something is scarce, this means the demand surpasses the supply. In a market-like constellation, this causes the price to go up, until there is an equilibrium. This mechanism limits the possible scarcity, but it does not automatically destroy the usefulness of the scarce good.
2) is a merely theoretical construction and misleading, since you can't simply introduce a payment system in the blink of an eye. Have you ever considered what "network effect" means? Thus again, this presumably exclusive alternative can't even exist, but rather we get again the push towards an equilibrium (after a certain number of distinct payment networks have been created, the market for payment networks is saturated)
And, after this rather brilliant piece of argumentation, you draw your conclusions:

Your breakdown of scenario 1 doesn’t make sense with regards to a broad fungible currency when alternatives are available. Your breakdown of scenario 2 is largely my point.
But nevertheless it comes down to two questions: is Bitcoin scarce, and then what would be the rational and likely response to that?

And the last sentence is the annoying part and the reason which derailed this whole discussion right from start: you have nothing to offer, but you hide that behind the allusion of everything being "self-evident".
It is in no way clear what "needs" to be changed, since you weren't able to come up with a clear account of what presumably is "broken" with Bitcoin. Worse, you didn't even try to come up with such.
And last but not least, you should note that "economics" is not some kind of a fixed substance; rather there are several highly controversial schools of economics, especially when it comes to macro economics. If getting monetary systems "right" would be just a matter of common sense, then the global finance wouldn't be in such a desperate situation.
While all of this discussion is certainly funny and entertaining, actually we should indeed discuss and scrutinise the very things you're avoiding with all your statements: we should actually pose the question: what properties do we want to require from a payment system?

No I do not need to offer a solution to highlight a problem. I will transact in the way that I believe best suits my interests, like everybody else. Absent Bitcoin doing something to address common complaints or questions raised, the natural course of collective realisation over Bitcoin is and will continue to evidence itself in alternatives that will exercise the function of fixes. I’m not sure what’s so difficult to understand about that. Maybe there isn’t a ‘solution’ yet, maybe it’s trial and error, maybe the array of recent alts, ripple, fiat currency volatility etc are evidence that the market is searching for something better. Perhaps it's just a game, trading numbers on a screen and hoping to wallk away with more than you started.

[Ichthyo]

You should investigate the meaning of defamation. It’s a matter of personal reputation and a tortious action. It’s my opinion and it’s also my opinion that if you don’t know to which of those two groups you’re in it’s the latter.

With your statement, you continue to show your dishonesty.
Instead of arguing, you place other people close to being zealots, believing in myths, creators of zero-sum scams, wasting economical resources.

I believe the words 'wasting', 'screwing' and 'zero-sum' are quite capable of being understood.

Exactly. That's why they work so well for slander.

so again: what are the "myths of Bitcoin"?

The core myth is that it works for the purposes commonly outlined by its proponents – definable as a broadly adoptable currency of mutual benefit, able to replace or compete with state fiat.

Now please look at your statement with some critical distance.
It is very vague ("commonly outlined by its proponents") to start with, and then it lumps together a lot of different goals, in an unprecise fashion

• Bitcoin is usable as currency
• using Bitcoin currency creates mutual benefit
• Bitcoin as a currency is broadly adoptable
• Bitcoin has the ability to compete with state fiat
• Bitcoin has the ability to replace state fiat

These are 5 different things. Its far from being the obvious Bitcoin myth.
And besides, you omit several other themes present in the Bitcoin community in a similar way (as possible goals), which could be labelled as Bitcoin myths as well.


And now, what exactly is the "decimal issue"?
Is the issue that you can divide bitcoins arbitrarily, or is it that you can not divide them arbitrarily?
Is it that the real-world value of one Bitcoin unit doesn't stay constant?
Is it that the real-world value of one Bitcoin unit likely increases over time, instead of decreasing?
Is it that no-one manages the real-world value of one Bitcoin unit through monetary politics?

[weisoq]

...

Epic bullshit. Instead of engaging in theology and semantics as would befit a zealot why don't you prove me wrong and answer the question I've asked about six times: "is Bitcoin scarce, and with regards to you answer what then would be the rational and likely response to that"

[Stampbit]

There is no issue, with a deflationary currency we will all enjoy working with billionths of a coin.

[Ichthyo]

Epic bullshit. Instead of engaging in theology and semantics as would befit a zealot

Weisoq, can you please stop spreading insults and stay on topic and clarify your critique?

It is not up to me to answer to hinsideous and confused questions ("is Bitcoin scarce?")

Rather it is up to you to point out what your critique is.


Please start with clarifying the topics I've pointed out. Where exactly do you see "the Bitcoin decimal issue"?
Is your concern that you can divide bitcoins arbitrarily, or is it that you can not divide them arbitrarily because of limitations in the network?
Is your concern that the real world buying power is volatile, or is the issue the the real world value is likely increasing?

[Ichthyo]

There is no issue, with a deflationary currency we will all enjoy working with billionths of a coin.

using small fractions of a coin does not pose any problems for payments.
But, just to pick one issue, making Bitcoin legal tender would require to denote the tax dept and salary and prices in other units of measurement. Thus it can't be a drop-in replacement for the kind of legal tender we're using today. Is there a fundamental problem with that, or is this just something which requires additional technicalities?

[btcusr]

You guys should be arguing over twitter..

Long arguments, and difficult to get the point

[weisoq]

Epic bullshit. Instead of engaging in theology and semantics as would befit a zealot why don't you prove me wrong and answer the question I've asked about six times: "is Bitcoin scarce, and with regards to you answer what then would be the rational and likely response to that"

Weisoq, can you please stop spreading insults and stay on topic and clarify your critique?

It is not up to me to answer to hinsideous and confused questions ("is Bitcoin scarce?")

Rather it is up to you to point out what your critique is.
...

No I didn’t think so. Pathetic.

In propagation of a belief structure or infrastructure it is for the believer to justify such belief to the sceptic, not the other way around. Whether my views on Bitcoin are that of atheism or agnosticism or adherence, such a sceptical starting point is that shared by those yet to take up the concept and therefore questions needs addressing (questions and views that friends and colleagues enquiring of Bitcoin and cryptos in general have, which is what makes this discussion particularly interesting).

I have to assume that your reference to an initial simple and fundamental question as insidious (rather than just answering it; and there’s nothing confused about it whatsoever, scarcity is a prime factor in assessing the value of any asset) implies that you think the answer to that question will provide a means for you to begin outlining my critique for me. Which means we’re going nowhere, and so I’m done with wasting my time on this discussion. Good luck.

[Ichthyo]

In propagation of a belief structure or infrastructure it is for the believer to justify such belief to the sceptic, not the other way around. Whether my views on Bitcoin are that of atheism or agnosticism or adherence, such a sceptical starting point is that shared by those yet to take up the concept and therefore questions needs addressing (questions and views that friends and colleagues enquiring of Bitcoin and cryptos in general have, which is what makes this discussion particularly interesting).

I have to assume that your reference to an initial simple and fundamental question as insidious (rather than just answering it; and there’s nothing confused about it whatsoever, scarcity is a prime factor in assessing the value of any asset) implies that you think the answer to that question will provide a means for you to begin outlining my critique for me. Which means we’re going nowhere, and so I’m done with wasting my time on this discussion. Good luck.

So to conclude.

User Weisoq comes to this thread.
He behaves in a partonising manner, implying that his interlocutors are zealots, proponents of a belief structure, adhering to some obvious bitcoin myths.

When prompted to make his critique explicit, he starts spreading insults and asks suggestive "teacher questions", but plain flat refuses to make a clear point.

I have to assume that your reference to an initial simple and fundamental question as insidious, rather than just answering it; and there’s nothing confused about it whatsoever, scarcity is a prime factor in assessing the value of any asset,  implies that you think.....

you should not "believe", assume, and imply what other people might intend.
Rather you should make your presuppositions clear and make your conclusions explicit. Then there is room for discussion.


The question "is Bitcoin scarce?" is rogue, since it treats scarcity as a substantial property of Bitcoin. Which it isn't. Scarcity is a result of demand and supply. Likewise value, which is in addition subject to a lot of subjective factors of judgement. Everyone participating in an unregulated market should be aware of that.


This question is akin to asking "is uncle Bob's sleeping room on the left side of the house? because then this means..." -- a classic suggestive trap-door question. Is east left, or is west left? Neither, since it depends on the coordinate system.


Thus my insistence on explicit presuppositions and clear structured thinking, when we intend to treat a subject like the effects of scaling and dividing of a currency unit. Doing so creates a lot of effects, both subtle and blatant ones.

But judging which of these currency-scaling effects must be considered as "an issue" requires to make your moral coordinate system explicit. What kinds of behaviours do we consider to be harmful? AND are we in a position to intervene and defeat those harmful aspects? Do we have a mandate for intervention, and on which foundation?

[Ichthyo]

in the western, European/american political culture framework, a democratic state is considered to have such a mandate for intervention into monetary and market aspects. But this is bound to the condition, that this intervention happens in a formalised manner and sticks to some pre determined rules.

But a vague association of people using some currency throughout the globe is in no way such an democratic state, and doesn't have a mandate for market regulation. Same is true for any business entity, company or the like.

This means, Bitcoin can not just be swapped in as a replacement for any existing legal tender (in our existing system, legal tender is backed by a relative constant value through decree).

But as far as I can see, there is no fundamental obstacle to build something on top of Bitcion, a value measurement unit, which can be used as legal tender. This is not to say this would be a trivial undertaking.

[sidhujag]

in the western, European/american political culture framework, a democratic state is considered to have such a mandate for intervention into monetary and market aspects. But this is bound to the condition, that this intervention happens in a formalised manner and sticks to some pre determined rules.

But a vague association of people using some currency throughout the globe is in no way such an democratic state, and doesn't have a mandate for market regulation. Same is true for any business entity, company or the like.

This means, Bitcoin can not just be swapped in as a replacement for any existing legal tender (in our existing system, legal tender is backed by a relative constant value through decree).

But as far as I can see, there is no fundamental obstacle to build something on top of Bitcion, a value measurement unit, which can be used as legal tender. This is not to say this would be a trivial undertaking.

Lol the formalized manor like jpm in comex? How about tarp for equities? Ooooh ooh what about snb? Boj? Almost forgot about that didnt ya? Very well conditioned we were to see that!

How about stick to the point of topic. The thread is dead op doesnt know wht he was saying.

[Ichthyo]

Lol the formalized manor like jpm in comex? How about tarp for equities? Ooooh ooh what about snb? Boj? Almost forgot about that didnt ya? Very well conditioned we were to see that!

Sounds like a childish babble. What is your point, sir?

This means, Bitcoin can not just be swapped in as a replacement for any existing legal tender.

Are you mentably capable to grasp this?
Very much on topic.

[sidhujag]

Lol the formalized manor like jpm in comex? How about tarp for equities? Ooooh ooh what about snb? Boj? Almost forgot about that didnt ya? Very well conditioned we were to see that!

Sounds like a childish babble. What is your point, sir?

This means, Bitcoin can not just be swapped in as a replacement for any existing legal tender.

Are you mentably capable to grasp this?
Very much on topic.

I didnt expect u to understand. Sorry we are not on the same wavelength. Good day

[Ichthyo]

I didnt expect u to understand. Sorry we are not on the same wavelength. Good day

How about simply saying what you want to say?
Instead of just sending some "codes" or spreading a smell?


After considering this thread, this seems to be incredibly difficult



And yes, there can be issues with scaling the decimals of an currency unit.

Posting memes and telling fairy tales won't help with such.

[btcusr]

For those who think Bitcoin benefits early adapters unfairly, it is not. I had a difficult time to convince myself. Sooner or later, you are going to accept that point; if you don't then you can also choose to stay away from the system. Even if you don't accept, still you can buy / mine bitcoins..

As usual with any other technologies, early adopters take risk, and they will be rewarded accordingly.

Bitcoin distribution is competitive process, and we don't have a company behind Bitcoin to do this distribution, like Ripple.

If you think ASIC hardware companies like BFL, mine with their units then you can choose not to buy miners from them, but complaining is not going to help.

If you think you missed $0.01 - $100 exchange rates you can blame early adapters, but if you watch prices go up to $200 from here then who you will blame?