The myth of 21 million coins

[melvster]

I keep hearing that there will only ever be 21 million bitcoins.

I think it's a myth for the 3 following reasons.

1) The 21 million figure could change if developer consensus did, and people downloaded the software

2) The base money supply can be easily inflated with off block systems, IOUs and CFDs for example, but there would be many more instruments to expand the money supply

3) Alt coins could become very similar to BTC, and can be easily created

This is important because if we estimate the long term % of bitcoin in world markets, you need to include these other factors, and it will also impact the price.

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[nobbynobbynoob]

Re 2) above: promises for gold, say, aren't as good as actual gold. Which would you prefer? The only reason the fiat and promissory systems have been able to develop as they have is that gold and silver are a pain to carry about.

I can start my own cryptocurrency with its own genesis block at any time - let's call it Spitcoin, say - but that doesn't make it an expansion to the bitcoin money supply, any more than if you take rocks from your back yard, paint them yellow and call them "gald"...

[melvster]

Re 2) above: promises for gold, say, aren't as good as actual gold. Which would you prefer? The only reason the fiat and promissory systems have been able to develop as they have is that gold and silver are a pain to carry about.

I can start my own cryptocurrency with its own genesis block at any time - let's call it Spitcoin, say - but that doesn't make it an expansion to the bitcoin money supply, any more than if you take rocks from your back yard, paint them yellow and call them "gald"...

This is true, but look how gold is traded.  Promises for gold are 10+ times more numerous than the actual physical gold supply.

[empoweoqwj]

I keep hearing that there will only ever be 21 million bitcoins.

I think it's a myth for the 3 following reasons.

1) The 21 million figure could change if developer consensus did, and people downloaded the software

2) The base money supply can be easily inflated with off block systems, IOUs and CFDs for example, but there would be many more instruments to expand the money supply

3) Alt coins could become very similar to BTC, and can be easily created

This is important because if we estimate the long term % of bitcoin in world markets, you need to include these other factors, and it will also impact the price.

Your point 3 is completely facetious ...

You say "I keep hearing that there will only ever be 21 million bitcoins."

Point 3 says: "Alt coins could become very similar to BTC, and can be easily created"

The two have nothing to do with each other. You have to make a point related to your original premise. Apples and oranges, or in this case, bitcoins and ... whatever.

As for (1), that will not be changed, as it will kill the credibility of bitcoin. It is fixed.

[legitnick]

Wont it be in the year 2150 that we reach the 21 million mark? We will all likely be dead, so who cares?

[Bitcollector]

I keep hearing that there will only ever be 21 million bitcoins.

I think it's a myth for the 3 following reasons.

1) The 21 million figure could change if developer consensus did, and people downloaded the software

2) The base money supply can be easily inflated with off block systems, IOUs and CFDs for example, but there would be many more instruments to expand the money supply

3) Alt coins could become very similar to BTC, and can be easily created

This is important because if we estimate the long term % of bitcoin in world markets, you need to include these other factors, and it will also impact the price.

1) have you ever tried to get a bunch of people to agree on anything never mind the fact that your valuables are going down in price if you change the supply? More supply means it going down in price.

3) alt coins ARE similar to BTC and are needed too. You already know about Gold, Silver, Platinum, Palladium, Iridium, and Copper. These are all used for money and / or are collected for the value that they hold. Putting all of these together is millions and millions of tons and still the price of gold is going up. You just have to look at the long term perspective.

But you are right, though, about lots of things affecting the price, just last night I was watching an article about the total value of all the money in the world and if 2% of this money was invested into BTC the price should be $700,000 per Bitcoin. Well we all know that it probably won't happen but personally I don't care if its 2% or much less, because it still seems to me that that we have a long way to go before we reach close to this number. If it was 90 times less than that the price would still reach $7000.

I think that the same basic rules apply to investing that they always have.

1)don't put all your eggs in one basket.

2)Figure out what the risk is. This means if its new, it has huge risk. This doesn't mean you don't get into it, it means you could make a lot and it could also be a flop. For me, we are in a computer age. We need to think about transferring money over the internet a lot easier than we have been doing and it needs to cost less to do it.  I remember when DOS came out and then Windows. I was just starting to learn about investing at the time. Well it's no surprise now where Windows and Microsoft have gone, but on the other side, who would have known?

3)Have patience. If you want to make a million dollars over night, you will never have anything.

[Abdussamad]

I think the OP has made some good points.

[tysat]

I think the OP has made some good points.

I think OP makes stupid points that other have made a million times already.

1 - It could change, but that seems to be pretty unlikely.  It would cause a hard fork and I wouldn't called it bitcoin at that point anymore.

2 - That's fractional reserve banking basically, doesn't mean there are more than 21 million bitcoins out there.  It just means people could spend more than 21 million, but no more would be created.

3 - Alt-coins =\= BTC

[threeip]

I think OP makes stupid points that other have made a million times already.

1 - It could change, but that seems to be pretty unlikely.  It would cause a hard fork and I wouldn't called it bitcoin at that point anymore.

2 - That's fractional reserve banking basically, doesn't mean there are more than 21 million bitcoins out there.  It just means people could spend more than 21 million, but no more would be created.

3 - Alt-coins =\= BTC

All of the above. 2 will probably happen more, and is happening now to an extent. (more trade vols than btc generated)
3 - how long has it taken for BTC to get to where it is? Alt-coins have even further to go.

Wont it be in the year 2150 that we reach the 21 million mark? We will all likely be dead, so who cares?

This is what's wrong with the world...? 

[grue]

1) The 21 million figure could change if developer consensus did, and people downloaded the software

then it would be the equivalent of an alt-coin.

2) The base money supply can be easily inflated with off block systems, IOUs and CFDs for example, but there would be many more instruments to expand the money supply

>implying fractional reserve banking will work with bitcoin
>implying bitcoin users will use fractional reserve banking
>implying "off block systems" will be more than just "first bitcoin savings and trust credits".

3) Alt coins could become very similar to BTC, and can be easily created

are you that dense?

[foggyb]

Dear OP:


I think in the future, wheels will be made square, even though it is obvious that round wheels are best.

Also, you refute yuour own premise:

2) The base money supply can be easily inflated with off block systems, IOUs and CFDs for example, but there would be many more instruments to expand the money supply

Why expand the coin supply if its redundant?

[melvster]

I think OP makes stupid points that other have made a million times already.

1 - It could change, but that seems to be pretty unlikely.  It would cause a hard fork and I wouldn't called it bitcoin at that point anymore.

I agree that this seems an unlikely scenario at this point.  But if you had asked someone 10 years ago whether the united states would start printing money, that would have also seemed unlikely.  My point is that the theoretical maximum is based on consensus.

2 - That's fractional reserve banking basically, doesn't mean there are more than 21 million bitcoins out there.  It just means people could spend more than 21 million, but no more would be created.

This sort of comes down to how you define the money supply.  I think it's more than just a theoretical point because lets say there's a 1 trillion USD is bitcoin assets.

Scenario 1: People only use on block btc.  Value would be c. $50,000 per coin

Scenario 2: 90% of assets are held in bitcoin certificates with a trusted party (e.g. mt gox IOUs are an example) ... and 10% are in the block chain.  The bitcoin price value is now 10 times lower ie $5000

3 - Alt-coins =\= BTC

Yes I agree, again.  But you can make coins that are very similar in nature to bitcoin. 

What I'm getting at is that there are ways to increase crypt coin creation and usage as part of the overall economy, and whichever route taken will impact the prices significantly.

[tysat]

Change your title and OP then, because you're not arguing that there will be more than 21 million bitcoins anymore.

[grue]

3 - Alt-coins =\= BTC

Yes I agree, again.  But you can make coins that are very similar in nature to bitcoin.  

What I'm getting at is that there are ways to increase crypt coin creation and usage as part of the overall economy, and whichever route taken will impact the prices significantly.

This is what you're doing:

1. Make sensationalist claim ("all dogs are birds")
2. Attempt vaguely to try to defend it ("b-b-but dogs breathe and eat too, just like birds!")
3. Once people attack your claim, backtrack to trivial claim ("fine, all dogs are animals")


...and everyone fell for the bait. bravo.

[Welsh]

The OP hasn't really thought about it much, and made a wild guess. Has the above points state. You are wrong. Alt-coins =\= BTC <--- That is a brilliant answer. Just think about it.

So, I guess my apple is the same as my orange.

[starsoccer9]

I disagree with point 3, I can go and start printing pieces of paper tommarow and make it a new currency if I wanted to. Obvisually it wont be a secure one but that isnt the point

[zero3112]

I dont think more bitcoin can just be printed out of thin air as long as majority of people run the version with the 21 million figure hard coded in.

[Abdussamad]

By the time we hit the limit of 21 million the world could be a very different place. For example:

- Mining is done by a few large corporations or governments. They are the ones who control the currency.
- When the limit is reached these large organizations get together and decide to increase the limit because they feel there is more money to be made in mining than in hoarding coins.
- Maybe this results in a hard fork but because these organizations have so much power people have to go with it.
- End result is that the previous limit of 21 million is breached!

[adpinbr]

surpsised that the OP is a senior member yet delivers a noob idea. No offense but if we go that route why dont you send me your dollars and I will send you my IOU. the reason is that this only happens becuase banks dont give you a choice, while you would tell me to go fuck myself. Same principle applies to BTC.

LTC doesnt affect BTC money supply. Silver does not produce more gold.

[legitnick]

Its not a myth, its wrote in the script of bitcoin only 21 million can ever be created. The devs arent just going to raise the limit when they feel like it, it would have to be a consensus from the majority of Bitcoin users.