Discussing Bitcoin's future, and increasing its total supply

[jaywaka2713]

I have been thinking extensively about Bitcoin's future and have proposed a few questions to discuss.

1) In 2140 when all of the Bitcoins have been mined, what motivation will miners have to continue mining?
2) After the Bitcoins run out, will the experiment be over? Will we just all move to a brand new Bitcoin 2.0?
3) Will testnet Bitcoins ever have any value?
4) Do you think modifying Bitcoin so that it indefinitely inflates over time would be a good idea?

I personally believe that Bitcoin should not stop inflating. Miners will have almost NO incentive when mining after the block reward is gone. Mining fees aren't high enough and people will have to pay a premium to get their transactions completed. Even if we doubled block halving to 8 years instead of 4, it would help.

Also, do you think a shorter confirmation time will help Bitcoin out as well? As adoption grows and the economy expands, confirmation time needs to change. An hour long confirmation time simply isn't acceptable for the majority of people.

[Buffer Overflow]

It's 2140 not 2040.

[jaywaka2713]

It's 2140 not 2040.

Thank you. I corrected my error.

[skilo]

In 2140 when all of the Bitcoins have been mined, what motivation will miners have to continue mining?

Not sure what will happen then but Other coins like Litecoin and Feathercoin both have more total coins that can be mined.

[Luckybit]

I have been thinking extensively about Bitcoin's future and have proposed a few questions to discuss.

1) In 2140 when all of the Bitcoins have been mined, what motivation will miners have to continue mining?
2) After the Bitcoins run out, will the experiment be over? Will we just all move to a brand new Bitcoin 2.0?
3) Will testnet Bitcoins ever have any value?
4) Do you think modifying Bitcoin so that it indefinitely inflates over time would be a good idea?

I personally believe that Bitcoin should not stop inflating. Miners will have almost NO incentive when mining after the block reward is gone. Mining fees aren't high enough and people will have to pay a premium to get their transactions completed. Even if we doubled block halving to 8 years instead of 4, it would help.

Also, do you think a shorter confirmation time will help Bitcoin out as well? As adoption grows and the economy expands, confirmation time needs to change. An hour long confirmation time simply isn't acceptable for the majority of people.

Why would anyone want to increase the supply and ruin the main feature of Bitcoin? People want Bitcoins because they are worth $100. Increase the supply and no one will want them.

[Breen2543]

There is no reason whatsoever to increase the amount of coins, we have LTC, and maybe another successful alt will step up.

[BitcoinFX]

There is currently only one correct answer to this question that was not included...

Supply Will Not Increase And It Will Be Beneficial and Damaging.

Beneficial

One of the reasons Bitcoins have any value whatsoever is because Bitcoins are a finite commodity.

Damaging

When all Bitcoins are in circulation (and no more can be created), eventually their won't be any left. This is further compounded by ones inability to trade in what I will call ever decreasing or diminishing intangibility.

Don't worry. The train has only just left the station! The bitcoin model has many many good years to run 'as is', well after the 2140 estimate and the value should sky rocket before and after that time, followed by theoretical and certain decline of the current model. Besides, something else will probably be in Bitcoins place within that time frame or the current model will adapt beyond recognition with code changes to accommodate these factors, if we get that far.

[jaywaka2713]

There is currently only one correct answer to this question that was not included...

Supply Will Not Increase And It Will Be Beneficial and Damaging.

Beneficial

One of the reasons Bitcoins have any value whatsoever is because Bitcoins are a finite commodity.

Damaging

When all Bitcoins are in circulation (and no more can be created), eventually their won't be any left. This is further compounded by ones inability to trade in what I will call ever decreasing or diminishing intangibility.

Don't worry. The train has only just left the station! The bitcoin model has many many good years to run 'as is', well after the 2140 estimate and the value should sky rocket before and after that time, followed by theoretical and certain decline of the current model. Besides, something else will probably be in Bitcoins place within that time frame or the current model will adapt beyond recognition with code changes to accommodate these factors, if we get that far.

You bring up a very good point. Bitcoin's rarity is tied directly into value. And this discussion isnt exactly directed at changing Bitcoin now. It's geared to what we will end up doing around 2138 lol. But what will happen when all of the Bitcoins are out? Will we just move to a brand new currency or continue with the diminishing supply, making it more and more valuable?

[PerfectAgent]

Bitcoin is divisible into smaller and smaller units.

[empoweoqwj]

Bitcoins (unlike FIAT currrencies) are divisible to 8 decimal places.

In the future, as more people take up bitcoin, each one is worth more, and people will start trading in smaller units.

The whole point of bitcoin was that it was *not* inflationary i.e. unlike traditional FIAT currencies where governments just print more when they get in trouble.

Transaction fees will grow as transactions grow in volume.

[empoweoqwj]

There is currently only one correct answer to this question that was not included...

Supply Will Not Increase And It Will Be Beneficial and Damaging.

Beneficial

One of the reasons Bitcoins have any value whatsoever is because Bitcoins are a finite commodity.

Damaging

When all Bitcoins are in circulation (and no more can be created), eventually their won't be any left. This is further compounded by ones inability to trade in what I will call ever decreasing or diminishing intangibility.

Don't worry. The train has only just left the station! The bitcoin model has many many good years to run 'as is', well after the 2140 estimate and the value should sky rocket before and after that time, followed by theoretical and certain decline of the current model. Besides, something else will probably be in Bitcoins place within that time frame or the current model will adapt beyond recognition with code changes to accommodate these factors, if we get that far.

You bring up a very good point. Bitcoin's rarity is tied directly into value. And this discussion isnt exactly directed at changing Bitcoin now. It's geared to what we will end up doing around 2138 lol. But what will happen when all of the Bitcoins are out? Will we just move to a brand new currency or continue with the diminishing supply, making it more and more valuable?

Nothing will happen because bitcoins won't "run out".

[Carlton Banks]

You bring up a very good point. Bitcoin's rarity is tied directly into value. And this discussion isnt exactly directed at changing Bitcoin now. It's geared to what we will end up doing around 2138 lol. But what will happen when all of the Bitcoins are out? Will we just move to a brand new currency or continue with the diminishing supply, making it more and more valuable?

It won't become more valuable at that stage, if it's the only type of money out there. It would get more valuable if you measured the value with a currency that was still inflating, and that's the assumption you're making. It brings into question what "valuable currency" actually means. It's difficult to put any kind of real, believable price on things using a money supply you know nothing about, even a money supply where you don't know the whole story (which is the situation the fiat currencies are in, we don't really know all the secret bank accounts out there, we just know that it's impossible to tell that there are no more than we are already aware of, because... they're secret to the extent that there can be zero evidence they exist until the money is used)

[DannyHamilton]

1) In 2140 when all of the Bitcoins have been mined, what motivation will miners have to continue mining?

They will mine for the transaction fees.  Long before the end of the block subsidy, the transaction fees will become the main source of income for miners.

2) After the Bitcoins run out, will the experiment be over? Will we just all move to a brand new Bitcoin 2.0?

They won't "run out".  The existing bitcoins will remain in circulation and will be used for products, services, and transaction fees.

3) Will testnet Bitcoins ever have any value?

Unknown, but unlikely to have any significant value.

4) Do you think modifying Bitcoin so that it indefinitely inflates over time would be a good idea?

No.

I personally believe that Bitcoin should not stop inflating. Miners will have almost NO incentive when mining after the block reward is gone. Mining fees aren't high enough and people will have to pay a premium to get their transactions completed.

You are attempting to predict miners incentive based off of today's transaction volume.  If bitcoin doesn't fail in the next few decades, the transaction volume will increase and the income from transaction fees will therefore increase as well.  Eventually the revenue from fees will exceed the revenue from the subsidy.  There will likely be third-party transaction processors that will exist eventually as well.  These payment processors will be able to spread out the blockchain transaction costs across many smaller off-chain transactions.

Even if we doubled block halving to 8 years instead of 4, it would help.

No thanks.

Also, do you think a shorter confirmation time will help Bitcoin out as well? As adoption grows and the economy expands, confirmation time needs to change. An hour long confirmation time simply isn't acceptable for the majority of people.

Confirmations don't typically take an hour.  Most people will find that it is sufficient to wait for just one or two confirmations for high-risk transactions.  Low rick transactions will be accepted with 0 confirmations.  Third-party transaction processors will be able to guarantee payment with 0 confirmations as well.

[BitcoinFX]

There is currently only one correct answer to this question that was not included...

Supply Will Not Increase And It Will Be Beneficial and Damaging.

Beneficial

One of the reasons Bitcoins have any value whatsoever is because Bitcoins are a finite commodity.

Damaging

When all Bitcoins are in circulation (and no more can be created), eventually their won't be any left. This is further compounded by ones inability to trade in what I will call ever decreasing or diminishing intangibility.

Don't worry. The train has only just left the station! The bitcoin model has many many good years to run 'as is', well after the 2140 estimate and the value should sky rocket before and after that time, followed by theoretical and certain decline of the current model. Besides, something else will probably be in Bitcoins place within that time frame or the current model will adapt beyond recognition with code changes to accommodate these factors, if we get that far.

You bring up a very good point. Bitcoin's rarity is tied directly into value. And this discussion isnt exactly directed at changing Bitcoin now. It's geared to what we will end up doing around 2138 lol. But what will happen when all of the Bitcoins are out? Will we just move to a brand new currency or continue with the diminishing supply, making it more and more valuable?

Nothing will happen because bitcoins won't "run out".

Please understand that I'm looking very far into the future. I'm a big crypto-currency supporter and I love Bitcoin! Here is my post...

How, Why and When the Bitcoin Model will Fail - https://bitcointalk.org/index.php?topic=172664.0

The current Bitcoin model is a fixed and finite commodity and someday their will be no Bitcoins left.

As I've stated elsewhere, when the oil eventually runs out are you still going to be putting gasoline into your car ?

[jaywaka2713]

The current Bitcoin model is a fixed and finite commodity and someday their will be no Bitcoins left.

As I've stated elsewhere, when the oil eventually runs out are you still going to be putting gasoline into your car ?

Wow, dude that is one profound statement. So Bitcoins can basically only get indefinitely more valuable over time. Great point. Changing my poll answer. I didn't realize that indefinite inflation was something Bitcoin was made to actually avoid. Very good discussion.

[BitcoinFX]

The current Bitcoin model is a fixed and finite commodity and someday their will be no Bitcoins left.

As I've stated elsewhere, when the oil eventually runs out are you still going to be putting gasoline into your car ?

Wow, dude that is one profound statement. So Bitcoins can basically only get indefinitely more valuable over time. Great point. Changing my poll answer. I didn't realize that indefinite inflation was something Bitcoin was made to actually avoid. Very good discussion.

Indeed. Thank you.

Yes and No. Bitcoins do become more valuable over time (in theory), until all 21 Million Bitcoins are in cirulation. Then rarity will cause them to become even more valuable, until scarcity causes inevitable decline.

You can't trade in diminishing intangibility. Fact. Which is currently inevitable and certain.

Definition of SCARCE. 1: deficient in quantity or number compared with the demand : not plentiful or abundant.

https://wikipedia.org/wiki/Scarcity

https://wikipedia.org/wiki/Intangibility

We have a long way to go. If Bitcoin is like a roller coaster, the we only just dropped of the first incline!   Maybe a loop-the-loop is approaching ?  

[DeathAndTaxes]

You seem to forget that Bitcoin's unlike your foolish oil analogy aren't used up and money unlike oil or other commodities is merely an accounting system.  Bitcoin works equally well with 21M active Bitcoins, 2.1M active Bitcoins, or 2 active Bitcoins.

The protocol allows perfect divisibility (something not possible with commodity money).  Currently that is limited to 8 decimal place providing 2.1 quadrillion discrete assignable units.  BTW that is roughly 4x as much as the global currency supply (~$5T) when counted in pennies (500T units).   

If that ever is not enough increased divisibility is possible.  The ptotocol stores values in a uint64 field which can handle integers up 18,446 quadrillion.
Just updating how the protocol records values without increasing the size of the field would allow us to increase divisibility to the 12th decimal place (a 10,000x fold increase).

If that isn't enough a more significant change would be moving to 128 bit integers which would allow divisibility to the 31st decimal place. If there was only 1 Bitcoin left with 31 decimal places it would provide for 16,203,922,234,330,403 quadrillion discrete units.  Enough for every man, woman and child on the planet to have more than 2 million a piece.

It is a complete and utter non-issue.

[BitcoinFX]

You seem to forget that Bitcoin's unlike your foolish oil analogy aren't used up and money unlike oil or other commodities is merely an accounting system.  Bitcoin works equally well with 21M active Bitcoins, 2.1M active Bitcoins, or 2 active Bitcoins.

The protocol allows perfect divisibility (something not possible with commodity money) to 8th decimal place and that can be extended by updating the protocol.  The 64bit used to store transaction values can support an increase to 12 decimal places and in the future expanding that field to 128 bit wouldn't be much of a hardship.  128 bit value field would allow divisibility to the 48th decimal place.

Today w/ 21M BTC and 1E-8 divisibility that provides 2.1 quadrillion discrete units.  In a hypothetical future with only 2 Bitcoins left and divisibility to the 1E-48 would allow 2 quadrillion, quadrillion, quadrillion, quadrillion units.

It is a complete and utter non-issue.

I have considered and modeled all of these factors. It does not matter how long it takes, it is a certainty with the current Bitcoin model.

Other factors include population growth vs total number of coins, hold vs spend, a realistic percentage of accidental wallet loss or theft, rarity vs scarcity, supply vs demand etc.

When there are say 0.0000004 and 0.0000002 Bitcoins left who are you going to trade them with exactly ?

[DannyHamilton]

The current Bitcoin model is a fixed and finite commodity and someday their will be no Bitcoins left.

As I've stated elsewhere, when the oil eventually runs out are you still going to be putting gasoline into your car ?

That's just silly. It doesn't even make sense.  Why don't I have you on ignore yet?

[DannyHamilton]

When there are say 0.0000 004 and 0.0000002 Bitcoins left who are you going to trade them with exactly ?

You're asking who I'll pay and accept payment from when the total bitcoins in circulation are 400,000,000,000 attobitcoins (or 200,000,000,000 attobitcoins)?

Obviously with all the people who are holding attobitcoins.  How is this even a question?