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Author Topic: Is this a paradox?  (Read 3955 times)
MrCrabs
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July 07, 2011, 10:31:47 AM
 #1

I was thinking. With the 21million limit to Bitcoin and its deflationary nature.

If one person owned all the Bitcoins in existence they would be Worthless.
But  if all people on the planet  had a share of Bitcoins.
What would they be worth then. 

Numbers People Numbers.

Thanks Smiley
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CNMOH
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July 07, 2011, 10:34:27 AM
 #2

Why would they be worthless if one person owned all of them?

Sorry, I'm not big on economics.

joepie91
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July 07, 2011, 10:37:22 AM
 #3

Why would they be worthless if one person owned all of them?

Sorry, I'm not big on economics.
I think he meant they would be worthless if only one person wanted to use Bitcoins.

You could then of course not trade with anyone, thus making them worthless.

Like my post(s)? 12TSXLa5Tu6ag4PNYCwKKSiZsaSCpAjzpu Smiley
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MrCrabs
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July 07, 2011, 10:40:03 AM
 #4

If one person owned them all. They would not be in circulation and they would be useless. Their real value is in the way that they can be used.
bcearl
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July 07, 2011, 10:41:30 AM
 #5

If you look at the number of US Dollars in circulation, and you imagine that those are replaced by Bitcoins, you get a value in the order of $50k per BTC.





EDIT: Some hard numbers added:


New York FED says: $829 billion in circulation.

There will be 20999999.9769 BTC (if the decimal point does not change - else it may be a little closer to 21M).

This makes $39,476.19 per BTC. And this means current USD! As the USD will inflate, the value per Bitcoin will rise alike.

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MrCrabs
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July 07, 2011, 10:57:07 AM
 #6

If you look at the number of US Dollars in circulation, and you imagine that those are replaced by Bitcoins, you get a value in the order of $50k per BTC.





EDIT: Some hard numbers added:


New York FED says: $829 billion in circulation.

There will be 20999999.9769 BTC (if the decimal point does not change - else it may be a little closer to 21M).

This makes $39,476.19 per BTC. And this means current USD! As the USD will inflate, the value per Bitcoin will rise alike.


I Like the sound of that. It looks a bit small to me though. The figure I have come across is, if just 1% of online trade in the US were to shift to Bitcoin each coin would be worth $10,000
CNMOH
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July 07, 2011, 10:57:28 AM
 #7

If one person owned them all. They would not be in circulation and they would be useless. Their real value is in the way that they can be used.
One person owning all the coins does not mean there is not any demand for them. One person may own them all, but everyone in the world could want some of those coins, meaning they are willing to buy them, giving them value.

But if no one wanted them, then yes, they would be worthless.

Dobrodav
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July 07, 2011, 11:04:50 AM
 #8

Actually,  - there was some period when all of bitcoins was owned by one man.  But there is difference, - not all of possible bitcoins.

We will  meet in not-so-distant future.
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July 07, 2011, 11:09:53 AM
 #9

If one person owned them all. They would not be in circulation and they would be useless. Their real value is in the way that they can be used.
One person owning all the coins does not mean there is not any demand for them. One person may own them all, but everyone in the world could want some of those coins, meaning they are willing to buy them, giving them value.

But if no one wanted them, then yes, they would be worthless.

Why would you try to buy all the bitcoins from one person, when you can start a new chain?
MrCrabs
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July 07, 2011, 11:11:27 AM
 #10

If one person owned them all. They would not be in circulation and they would be useless. Their real value is in the way that they can be used.
One person owning all the coins does not mean there is not any demand for them. One person may own them all, but everyone in the world could want some of those coins, meaning they are willing to buy them, giving them value.

But if no one wanted them, then yes, they would be worthless.

As I said there real value is in the way that they can be used. If one person owned them all. Then they would effectively be useless to everyone else. Because everybody else would have  no use for them.

I know I know I'm on thin Ice...
CNMOH
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July 07, 2011, 11:14:18 AM
 #11

Why would you try to buy all the bitcoins from one person, when you can start a new chain?
You may not have the required knowledge.

The_JMiner
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July 07, 2011, 11:23:12 AM
 #12

I understand what he means. If one person some how was able to get all the coins the bitcoin economy would grind to a halt because no one would be trading.

But that person with all the coins probably would not want that to happen because now all the money he spent buying those coins are now worthless.  So - Myth Plausible? lol

bcearl
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July 07, 2011, 11:27:32 AM
 #13

If you look at the number of US Dollars in circulation, and you imagine that those are replaced by Bitcoins, you get a value in the order of $50k per BTC.





EDIT: Some hard numbers added:


New York FED says: $829 billion in circulation.

There will be 20999999.9769 BTC (if the decimal point does not change - else it may be a little closer to 21M).

This makes $39,476.19 per BTC. And this means current USD! As the USD will inflate, the value per Bitcoin will rise alike.


I Like the sound of that. It looks a bit small to me though. The figure I have come across is, if just 1% of online trade in the US were to shift to Bitcoin each coin would be worth $10,000

I think your figure is unrealistic. It is higher if you combine currencies, there are a lot of worthy Euros out there. But it won't be much more than 10 times the figure I calculated.

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joepie91
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July 07, 2011, 11:42:32 AM
 #14

If you look at the number of US Dollars in circulation, and you imagine that those are replaced by Bitcoins, you get a value in the order of $50k per BTC.





EDIT: Some hard numbers added:


New York FED says: $829 billion in circulation.

There will be 20999999.9769 BTC (if the decimal point does not change - else it may be a little closer to 21M).

This makes $39,476.19 per BTC. And this means current USD! As the USD will inflate, the value per Bitcoin will rise alike.
You seem to be forgetting that while the USD is only divisible up to 2 decimals (in hard currency, not talking about representations in databases), a BTC is divisible up to 8 decimals. A number is just a number. If you compared the amount of satoshis to the amount of dollar cents, it would suddenly look a lot different - while these satoshis would still be parts of Bitcoins.

Like my post(s)? 12TSXLa5Tu6ag4PNYCwKKSiZsaSCpAjzpu Smiley
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I just can't wait for fall/winter. My furnace never generated money for me before. I'll keep mining until my furnace is more profitable.
bcearl
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July 07, 2011, 11:48:08 AM
 #15

If you look at the number of US Dollars in circulation, and you imagine that those are replaced by Bitcoins, you get a value in the order of $50k per BTC.





EDIT: Some hard numbers added:


New York FED says: $829 billion in circulation.

There will be 20999999.9769 BTC (if the decimal point does not change - else it may be a little closer to 21M).

This makes $39,476.19 per BTC. And this means current USD! As the USD will inflate, the value per Bitcoin will rise alike.
You seem to be forgetting that while the USD is only divisible up to 2 decimals (in hard currency, not talking about representations in databases), a BTC is divisible up to 8 decimals. A number is just a number. If you compared the amount of satoshis to the amount of dollar cents, it would suddenly look a lot different - while these satoshis would still be parts of Bitcoins.

What do you want to say?

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hashcoin
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July 07, 2011, 11:51:58 AM
 #16

Why would you try to buy all the bitcoins from one person, when you can start a new chain?
You may not have the required knowledge.

certainly it would be cheaper to hire someone who has it.

IMO this is a great thread to illustrate the fundamental problem with fiat currency whose only demand is some kind of Keynesian beauty contest.

Note a currency backed by something people actually want does not have this logic problem; if one person had all the corn/oil/rice in the world, people would still be willing to pay for it at a reasonable price.  But if somehow, someone collected all of the USD in circulation... people would just say "um no thanks, we'll just make our own money".
w1R903
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July 07, 2011, 12:30:16 PM
 #17

IMHO, this is a great thread to show the problems of the early adopters hoarding the coins.  And you see, it has nothing to do with "stimulating the economy".  It has everything to do with making more people aware of Bitcoins.  In a way, each coin is its own marketing campaign.  The first time I actually used one to buy something was a feeling of intense liberation.  But if most of the coins are being kept off-market because a few people have the delusion that they´ll be multibillionaires one day, then many fewer people will have that experience, and so it's unlikely that the word will continue to spread.  Actually, that's the true paradox.  In order for the hoarders money to be worth something in the long run, they have to at least spend some of it.

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MrCrabs
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July 07, 2011, 08:07:45 PM
 #18

Actually,  - there was some period when all of bitcoins was owned by one man.  But there is difference, - not all of possible bitcoins.

True. But that man did knew if he held onto them all they would end up being a waste of electricity and files on his computer waiting to be deleted.  Wink
 
MrCrabs
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July 09, 2011, 10:07:24 AM
 #19

IMHO, this is a great thread to show the problems of the early adopters hoarding the coins.  And you see, it has nothing to do with "stimulating the economy".  It has everything to do with making more people aware of Bitcoins.  In a way, each coin is its own marketing campaign.  The first time I actually used one to buy something was a feeling of intense liberation.  But if most of the coins are being kept off-market because a few people have the delusion that they´ll be multibillionaires one day, then many fewer people will have that experience, and so it's unlikely that the word will continue to spread.  Actually, that's the true paradox.  In order for the hoarders money to be worth something in the long run, they have to at least spend some of it.

I agree completely.
Bitcoins need to be used.. Daily
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July 09, 2011, 11:49:42 AM
 #20

Owners of bitcoin, or "hoarders", as some people call them, have to consume to exist. They must eat and support themselves. They cannot eat, wear, drive or live inside of bitcoin. Therefore, they will spend them when they need to. All this worrying about people "hoarding" is unnecessary and a waste of resources when one could spend that time, energy and talent creating and offering products and services that bitcoin owners would actually want to buy.  People can continue asking for handouts but I wouldn't expect that to be a very profitable venture.
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