Bitcoin crashes when those investing realise 2 things

[revans]

1. The fact that only 21 million coins can be mined (assuming that does not get altered) is irrelevant when they can be sliced up into 100,000,000 sub units.

2. That there have already been discussions about increasing the divisibility.


When exchanges start working in sub units it may dawn on people that the scarcity argument used to promote Bitcoin is disingenuous rubbish.

[Zangelbert Bingledack]

Peter, is that you?

[N12]

Gold is divisible down to atoms.

[Melbustus]

Where's that "not sure if trolling or just stupid pic"?

Divisibility doesn't reduce anyone's holdings. Control of 1 BTC is currently control off 100m satoshis. Increase divisibility by a million, and that same 1 BTC represents control of 100 trillion satoshis. It's all about percentages.

FYI, rational people quickly realize that extreme divisibility is a huge plus and a core property of ideal money.

[crazy_rabbit]

1. The fact that only 21 million coins can be mined (assuming that does not get altered) is irrelevant when they can be sliced up into 100,000,000 sub units.

2. That there have already been discussions about increasing the divisibility.


When exchanges start working in sub units it may dawn on people that the scarcity argument used to promote Bitcoin is disingenuous rubbish.

The fact that you own 1 BTC and that is equivalent to owning 100,000,000 sub-units is EXACTLY why people are so excited. Because those subunits are limited, and all the bitcoin in existence is owned by someone.

It would be a totally different story if the BTC's were in the wild and we had no idea how many there were out there. Then yes, we would freak out about the divisibility. But instead we realise that we can own a crazy high percentage of the future of money. When people are buying things with Satoshis owning 1BTC will be like owning a space station. So yeah, get in now bro. It's a cool story only if you buy and hold.

[Comodore]

troll of the day always saves the day.

[Rygon]

1 dollar =2.5 mBTC
1 cent = 25 uBTC

[revans]

Where's that "not sure if trolling or just stupid pic"?

Divisibility doesn't reduce anyone's holdings. Control of 1 BTC is currently control off 100m satoshis. Increase divisibility by a million, and that same 1 BTC represents control of 100 trillion satoshis. It's all about percentages.

FYI, rational people quickly realize that extreme divisibility is a huge plus and a core property of ideal money.

Right, and you don't think some people might have issue with the value if an individual Bitcoin is sudden altered to be worth 100x or 1000x as many sub units? How is this any different from the currency debasement you bemoan in state fiat?

[RodeoX]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

[wobber]

Gold is divisible down to atoms.

I actually tend to find a divisibility a good argument. However, one can find very difficult to own an atom of gold, whereas you can own 0.0000001 btc.

So, I do believe can crash because of this. I just hope it will return to a niche.

[revans]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

[BTCtrader71]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

Dividing a dollar into 1000 (or even 1,000,000) is not the same thing as debasement. Not the same thing at all. Just think about it for a while.

[briguy37]

I actually tend to find a divisibility a good argument. However, one can find very difficult to own an atom of gold, whereas you can own 0.0000001 btc.

So, I do believe can crash because of this. I just hope it will return to a niche.

Let's compare apples to apples.  There are about 10 billion ounces of gold in the world.  Divide that by 21 million and you get that the final supply of each bitcoin equals about 476 ounces of gold today.  A Satoshi is 0.000 000 01 bitcoin, so it is equivalent in supply to .000 004 76 ounces of gold. 

.000 004 76 ounces of gold might sound small, but the equivalent value of that amount of gold at current prices ($1276/ounce) is .6 cents.  That seems oddly close to a reasonable base unit for a currency to me.

Coincidence?  I think not.  Satoshi knew what he was doing and probably based the final supply and initial divisibility off of similar calculations. 

[BitCloud]

I actually tend to find a divisibility a good argument. However, one can find very difficult to own an atom of gold, whereas you can own 0.0000001 btc.

So, I do believe can crash because of this. I just hope it will return to a niche.

Let's compare apples to apples.  There are about 10 billion ounces of gold in the world.  Divide that by 21 million and you get that the final supply of each bitcoin equals about 476 ounces of gold today.  A Satoshi is 0.000 000 01 bitcoin, so it is equivalent in supply to .000 004 76 ounces of gold. 

.000 004 76 ounces of gold might sound small, but the equivalent value of that amount of gold at current prices ($1276/ounce) is .6 cents.  That seems oddly close to a reasonable base unit for a currency to me.

Coincidence?  I think not.  Satoshi knew what he was doing and probably based the final supply and initial divisibility off of similar calculations. 

excellent analysis, thanks.

[RodeoX]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

I don't see the problem with that, other than the lack of things to buy for $0.001

[SgtSpike]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

Why would that matter?  $1.00 is still worth $1.00 whether it is a dollar bill, 100 pennies, or 1,000 subunits.  It's still $1.00 the whole time, and nothing changes by making it more divisible.

Are you arguing that getting rid of pennies would make $1.00 more valuable, because it is less divisible?  Because if not, your argument makes no sense.

[Melbustus]

Where's that "not sure if trolling or just stupid pic"?

Divisibility doesn't reduce anyone's holdings. Control of 1 BTC is currently control off 100m satoshis. Increase divisibility by a million, and that same 1 BTC represents control of 100 trillion satoshis. It's all about percentages.

FYI, rational people quickly realize that extreme divisibility is a huge plus and a core property of ideal money.

Right, and you don't think some people might have issue with the value if an individual Bitcoin is sudden altered to be worth 100x or 1000x as many sub units? How is this any different from the currency debasement you bemoan in state fiat?

Because the percentage you control is the same!

Ah, here it is:

[ElectricMucus]

Bitcoin crashes on the next big bad news, it's that easy.

That could be, for instance that it comes out that the dollars in the mtgoxUSD order book aren't there anymore.

[Syke]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

LOL. Thanks for the brilliant comedy! Are you a professional comedian IRL?

[Wilhelm]

1 dollar =2.5 mBTC
1 cent = 25 uBTC

I think it will become

1 dollar = 10,000 satoshi

Sounds like more money

[BittBurger]

The fact that you own 1 BTC and that is equivalent to owning 100,000,000 sub-units is EXACTLY why people are so excited.

Exactly.  Because right now people are buying WHOLE bitcoins.  
When the masses get inolved, they will only be able to afford 0.0001 BTC ....
Making mister smartypants with 50 whole BTC's insanely rich.
Why would he cash out and cause the system to crash?   He is mister smartypants now.
He will be that much more rich because of the divisibility and the insane cost for just 1.0 BTC ...  of which he has several.

As with *every* person who trash talks BTC, the OP hasn't understood BTC at all.

[revans]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

Dividing a dollar into 1000 (or even 1,000,000) is not the same thing as debasement. Not the same thing at all. Just think about it for a while.

No, but for the sake of argument we are assuming that the dollar is like Bitcoin and limited to a certain number of dollar units.

[revans]

Where's that "not sure if trolling or just stupid pic"?

Divisibility doesn't reduce anyone's holdings. Control of 1 BTC is currently control off 100m satoshis. Increase divisibility by a million, and that same 1 BTC represents control of 100 trillion satoshis. It's all about percentages.

FYI, rational people quickly realize that extreme divisibility is a huge plus and a core property of ideal money.

Right, and you don't think some people might have issue with the value if an individual Bitcoin is sudden altered to be worth 100x or 1000x as many sub units? How is this any different from the currency debasement you bemoan in state fiat?

Because the percentage you control is the same!

Ah, here it is:

The dumbness is strong with this one.

Let me explain, as you clearly aren't smart enogh to grasp the idea yourself.

Bitcoin cultists talk of individual Bitcoins being worth hundreds of thousands of dollars eventually,  which would mean very few people would ever own a whole Bitcoin and so would see their Bitcoin wealth expressed as sub units of a Bitcoin. Now let's say that it is decided that instead of 100M, that a bitcoin can now be divided into 1 billion sub units. As a result those people who hold any number of whole Bitcoins can buy 10x as much Bitcoin wealth from those who only have Bitcoin fractions. Goods priced in Bitcoins would obviously adjust, but there would be a period in which the imbalance would leave those with whole Bitcoins with a massive increase in purchasing power.

[MaxBTC1]

Thanks for the chuckle OP

[Missionary]

Just trolling. Nothing to see here.

[notme]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

Dividing a dollar into 1000 (or even 1,000,000) is not the same thing as debasement. Not the same thing at all. Just think about it for a while.

No, but for the sake of argument we are assuming that the dollar is like Bitcoin and limited to a certain number of dollar units.

So dollars are limited to a certain number of dollar units?  That makes this hard to explain:

[revans]

The dumbness is strong with this one.

Let me explain, as you clearly aren't smart enogh to grasp the idea yourself.

Bitcoin cultists talk of individual Bitcoins being worth hundreds of thousands of dollars eventually,  which would mean very few people would ever own a whole Bitcoin and so would see their Bitcoin wealth expressed as sub units of a Bitcoin. Now let's say that it is decided that instead of 100M, that a bitcoin can now be divided into 1 billion sub units. As a result those people who hold any number of whole Bitcoins can buy 10x as much Bitcoin wealth from those who only have Bitcoin fractions.

You have a whole pie. It's cut into 4 slices.

I have half a pie. It's cut the same as yours, so I have 2 slices.

We decide that instead of 4 slices per pie, we are going to cut them smaller and make 8 slices per pie.

You have a whole pie. It's cut into 8 slices.

I have half a pie. It's cut the same as yours, so I have 4 slices.

What are you on about? We both still have the same fucking amount of pie!

Excellent.


Now explain to me how the US Dollar is debased compared to Bitcoin on this basis.

[revans]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

Dividing a dollar into 1000 (or even 1,000,000) is not the same thing as debasement. Not the same thing at all. Just think about it for a while.

No, but for the sake of argument we are assuming that the dollar is like Bitcoin and limited to a certain number of dollar units.

So dollars are limited to a certain number of dollar units?  That makes this hard to explain:

So, would your criticism of the dollar be made moot if a superdollar was created which was worth say 1 million normal dollars?

[alincoln]

The problem is, everyone agrees that half a pie will satisfy only half of your hunger.

Bitcoin, however, is totally abstract, it's mathematics. The division is, thus, arbitrary. In the long term, adding more decimals will really make people wonder how many "accounting units" are in the system: if the original 21 million or the actual number of satoshis.

Please note I am all bullish on Bitcoin but the thesis that adding more decimals can lead to a flash crash should not be rapidly dismissed.

[Bitcopia]

revans,

Thanks for all the laughs  

Take a few days to reflect on your argument before you keep posting...

[revans]

revans,

Thanks for all the laughs  

Take a few days to reflect on your argument before you keep posting...

My argument as now revealed is solid, I await a reply from anyone brave enough to take it on.

[revans]

The dumbness is strong with this one.

Let me explain, as you clearly aren't smart enogh to grasp the idea yourself.

Bitcoin cultists talk of individual Bitcoins being worth hundreds of thousands of dollars eventually,  which would mean very few people would ever own a whole Bitcoin and so would see their Bitcoin wealth expressed as sub units of a Bitcoin. Now let's say that it is decided that instead of 100M, that a bitcoin can now be divided into 1 billion sub units. As a result those people who hold any number of whole Bitcoins can buy 10x as much Bitcoin wealth from those who only have Bitcoin fractions.

You have a whole pie. It's cut into 4 slices.

I have half a pie. It's cut the same as yours, so I have 2 slices.

We decide that instead of 4 slices per pie, we are going to cut them smaller and make 8 slices per pie.

You have a whole pie. It's cut into 8 slices.

I have half a pie. It's cut the same as yours, so I have 4 slices.

What are you on about? We both still have the same fucking amount of pie!

Excellent.


Now explain to me how the US Dollar is debased compared to Bitcoin on this basis.

I already did earlier in this thread. The Fed is making new pies out of thin air and selling them to the market for full price. After they've sold, there is more pie available and your pie is worth less.

With the bitcoin example, we both have the same amount of pie relative to the total amount of pie. We can just use smaller slices.

With the dollar example, we both have less pie relative to the total amount of pie. It doesn't much matter how we slice it, we lost value.

But that isn't true at all is it? Bitcoin is heavily marketed on the basis of 21 million total units, how do you think the market will react one trades start taking place in fractions of a Bitcoin? Or how about when the number sub units allowed is increased? Like I said if the Fed invented a superdollar worth 1  million or 1 billion dollars, would that allay the criticism? If not, why not?

[alincoln]

The dumbness is strong with this one.

Let me explain, as you clearly aren't smart enogh to grasp the idea yourself.

Bitcoin cultists talk of individual Bitcoins being worth hundreds of thousands of dollars eventually,  which would mean very few people would ever own a whole Bitcoin and so would see their Bitcoin wealth expressed as sub units of a Bitcoin. Now let's say that it is decided that instead of 100M, that a bitcoin can now be divided into 1 billion sub units. As a result those people who hold any number of whole Bitcoins can buy 10x as much Bitcoin wealth from those who only have Bitcoin fractions.

You have a whole pie. It's cut into 4 slices.

I have half a pie. It's cut the same as yours, so I have 2 slices.

We decide that instead of 4 slices per pie, we are going to cut them smaller and make 8 slices per pie.

You have a whole pie. It's cut into 8 slices.

I have half a pie. It's cut the same as yours, so I have 4 slices.

What are you on about? We both still have the same fucking amount of pie!

Excellent.


Now explain to me how the US Dollar is debased compared to Bitcoin on this basis.

I already did earlier in this thread. The Fed is making new pies out of thin air and selling them to the market for full price. After they've sold, there is more pie available and your pie is worth less.

With the bitcoin example, we both have the same amount of pie relative to the total amount of pie. We can just use smaller slices.

With the dollar example, we both have less pie relative to the total amount of pie. It doesn't much matter how we slice it, we lost value.

But that isn't true at all is it? Bitcoin is heavily marketed on the basis of 21 million total units, how do you think the market will react one trades start taking place in fractions of a Bitcoin? Or how about when the number sub units allowed is increased? Like I said if the Fed invented a superdollar worth 1  million or 1 billion dollars, would that allay the criticism? If not, why not?

Yes, but I am wondering if we aren't gradually migrating to a world where the satoshi is the common accounting unit, with "one Bitcoin" becoming less and less relevant for real operations. If Bitcoin really skyrockets, it'll make much more sense to think day to day operations in terms of the smallest available division, whose values will be comparable to the dollar. From that atomic unit, one could understand the network as being composed of 21x10^N of such units. In this sense, creating further divisions and increasing N has the same effect of devaluing the currency.

It's a matter of point of view, and points of view can change over time.

[djalexr]

I hope he's winding everyone up...sadly though there are people that stupid in the world!

[Melbustus]

Where's that "not sure if trolling or just stupid pic"?

Divisibility doesn't reduce anyone's holdings. Control of 1 BTC is currently control off 100m satoshis. Increase divisibility by a million, and that same 1 BTC represents control of 100 trillion satoshis. It's all about percentages.

FYI, rational people quickly realize that extreme divisibility is a huge plus and a core property of ideal money.

Right, and you don't think some people might have issue with the value if an individual Bitcoin is sudden altered to be worth 100x or 1000x as many sub units? How is this any different from the currency debasement you bemoan in state fiat?

Because the percentage you control is the same!

Ah, here it is:

The dumbness is strong with this one.

Let me explain, as you clearly aren't smart enogh to grasp the idea yourself.

Bitcoin cultists talk of individual Bitcoins being worth hundreds of thousands of dollars eventually,  which would mean very few people would ever own a whole Bitcoin and so would see their Bitcoin wealth expressed as sub units of a Bitcoin. Now let's say that it is decided that instead of 100M, that a bitcoin can now be divided into 1 billion sub units. As a result those people who hold any number of whole Bitcoins can buy 10x as much Bitcoin wealth from those who only have Bitcoin fractions. Goods priced in Bitcoins would obviously adjust, but there would be a period in which the imbalance would leave those with whole Bitcoins with a massive increase in purchasing power.

Why is it so hard for you to think in percentages? Are you Maria Bartiromo?

Increasing bitcoin's divisibility would not change the percentage ownership of the money base represented by anyone's existing holdings (as basically everyone in this thread has painstakingly tried to point out to you, even with examples). Prices would not have to adjust! Everything stays exactly the same, except that more *precision* in pricing is now possible for really cheap goods.

[BittBurger]

revans trolls anti-bitcoin gibberish on this forum all the time.  Just look at his posting history.

Revans I'd like to call attention to your fabulous prediction in May 2013 regarding the price of bitcoin:

"Some people are working really hard to push the price back up to $90. I expect a bloodbath when MtGox resumes trading, could be down to sub $5 this time tomorrow."



Your pearls of wisdom

[Spaceman_Spiff]

Because the percentage you control is the same!

The dumbness is strong with this one.
Let me explain, as you clearly aren't smart enogh to grasp the idea yourself.

Actually Melbustus is one of the smarter chaps around here.  You on the other hand seem to be a self-righteous twat.
Normally if somebody didn't understand a concept, I would try to explain it to them.  However, others have already tried to do that (see excellently written out pie example by holliday), but you just call them idiots and insist that you are right.  Therefore, you have earned my "douchebag of the day" award, which comes with a life-time of ignore.

[rampantparanoia]

Because the percentage you control is the same!

The dumbness is strong with this one.
Let me explain, as you clearly aren't smart enogh to grasp the idea yourself.

Actually Melbustus is one of the smarter chaps around here.  You on the other hand seem to be a self-righteous twat.
Normally if somebody didn't understand a concept, I would try to explain it to them.  However, others have already tried to do that (see excellently written out pie example by holliday), but you just call them idiots and insist that you are right.  Therefore, you have earned my "douchebag of the day" award, which comes with a life-time of ignore.

lol, i knew this thread would be full of pwnys and wins.

[deadweasel]

Because the percentage you control is the same!

The dumbness is strong with this one.
Let me explain, as you clearly aren't smart enogh to grasp the idea yourself.

Actually Melbustus is one of the smarter chaps around here.  You on the other hand seem to be a self-righteous twat.
Normally if somebody didn't understand a concept, I would try to explain it to them.  However, others have already tried to do that (see excellently written out pie example by holliday), but you just call them idiots and insist that you are right.  Therefore, you have earned my "douchebag of the day" award, which comes with a life-time of ignore.

+1

[revans]

The dumbness is strong with this one.

Let me explain, as you clearly aren't smart enogh to grasp the idea yourself.

Bitcoin cultists talk of individual Bitcoins being worth hundreds of thousands of dollars eventually,  which would mean very few people would ever own a whole Bitcoin and so would see their Bitcoin wealth expressed as sub units of a Bitcoin. Now let's say that it is decided that instead of 100M, that a bitcoin can now be divided into 1 billion sub units. As a result those people who hold any number of whole Bitcoins can buy 10x as much Bitcoin wealth from those who only have Bitcoin fractions.

You have a whole pie. It's cut into 4 slices.

I have half a pie. It's cut the same as yours, so I have 2 slices.

We decide that instead of 4 slices per pie, we are going to cut them smaller and make 8 slices per pie.

You have a whole pie. It's cut into 8 slices.

I have half a pie. It's cut the same as yours, so I have 4 slices.

What are you on about? We both still have the same fucking amount of pie!

Excellent.


Now explain to me how the US Dollar is debased compared to Bitcoin on this basis.

I already did earlier in this thread. The Fed is making new pies out of thin air and selling them to the market for full price. After they've sold, there is more pie available and your pie is worth less.

With the bitcoin example, we both have the same amount of pie relative to the total amount of pie. We can just use smaller slices.

With the dollar example, we both have less pie relative to the total amount of pie. It doesn't much matter how we slice it, we lost value.

But that isn't true at all is it? Bitcoin is heavily marketed on the basis of 21 million total units, how do you think the market will react one trades start taking place in fractions of a Bitcoin? Or how about when the number sub units allowed is increased? Like I said if the Fed invented a superdollar worth 1  million or 1 billion dollars, would that allay the criticism? If not, why not?

There are 21 million bitcoins. There are 2.1 quadrillion satoshis. If we divide it further, those numbers will not change. There will be new units worth less than a satoshi.

The market already trades in fractions of a bitcoin.

If the fed invents a superdollar, who cares as long as they remove a corresponding number of regular dollars? Yet, they won't. They will create a super dollar on top of all the already existing dollars and spend it at the value of the previously existing dollars. This inflation (monetary) will dilute the value of all the previous existing dollars! Only the initial spender (the Fed) gets full value, everyone else just gets screwed.

I'm starting to think your ignorance is willful.

Bitcoins are just ledger values. For clarity i will ask again as I want to be sure you are a stupid as I suspect.

You see no issue with more potential ledger values being created on the basis of a Russian doll style fractionisation of existing Bitcoin subunits?

[BittBurger]

Maybe we are not understanding his point.

revans could you possibly rephrase, and be more vebose about it, giving more examples ....

you are a fairly short writer.  Lends itself to misunderstanding.  Maybe everyone here is missing your point.  

Could you take a moment and re-present your case with more detailed explanation?  

[alincoln]

From that atomic unit, one could understand the network as being composed of 21x10^N of such units. In this sense, creating further divisions and increasing N has the same effect of devaluing the currency.

It's a matter of point of view, and points of view can change over time.

No, no it doesn't. It makes it more divisible. It doesn't devalue it what-so-ever. You will have more, less valuable pieces, but the whole is the same value.

It's not a matter of point of view, it's a misunderstanding. Making something more divisible does not dilute it, it simply allows you to possess smaller pieces. It does not increase the total amount.

Your theory applies to things made of atoms. The real use of a pie is serving as food. Half a pie is 50% as useful as a whole pie, so half a pie is worth half a whole pie and this is an immutable fact.

I am not so sure about that with mathematical abstractions such as Bitcoins, because here what really matters isn't the value of a single coin, but how much monetary value can be represented by the whole network. The value of a single coin is a consequence. Whether we have 21, 21 million or 21 gazillion coins is irrelevant. The value of a single unit will be how the market values the whole network, divided by the number of units. What I am tending to agree here is that our real accounting unit is not the Bitcoin, but the satoshi. Adding further decimals will probably have the same effect as creating more coins.

Maybe this is not an immediate effect, but the market could adjust itself.

[revans]

Maybe we are not understanding his point.

revans could you possibly rephrase, and be more vebose about it, giving more examples ....

you are a fairly short writer.  Lends itself to misunderstanding.  Maybe everyone here is missing your point.  

Could you take a moment and re-present your case with more detailed explanation?  

Bitcoins are just ledger values. You see no issue with more potential ledger values being created on the basis of a Russian doll style fractionisation of existing Bitcoin subunits? This allow for an infinity of potential ledger values.

[DeathAndTaxes]

You see no issue with more potential ledger values being created on the basis of a Russian doll style fractionisation of existing Bitcoin subunits?

None.  Absolutely none.

It is no different than taking some 1 oz gold coins and cutting (more realistically melting) them into new 1/100th oz gold coins.  The amount of gold hasn't changed.  The value of an ounce of gold hasn't changed.

You seem to think subdividing EXISTING UNITS debases like adding ADDITIONAL NEW UNITS so lets look at it in reverse.   The US has ~3T in currency.  The smallest subdivision is the penny thus there are 300T atomic units in the US.   If the US removed the penny and nickle from circulation (which they likely will do eventually) the number of atomic units would drop to ~30T.   Do you honestly think simply removing pennies and nickles will increase the purcashing power of a dollar by ten?  Really?   

If it works one way it works the other way. 

THERE WILL NEVER BE MORE THAN 21M BTC.  IF YOU HAVE 2.1 BTC you have one millionth of all the bitcoins.  We could go to 100,000 units of precision and guess what your 2.1M BTC will STILL be one millionth of all the bitcoins.

[revans]

From that atomic unit, one could understand the network as being composed of 21x10^N of such units. In this sense, creating further divisions and increasing N has the same effect of devaluing the currency.

It's a matter of point of view, and points of view can change over time.

No, no it doesn't. It makes it more divisible. It doesn't devalue it what-so-ever. You will have more, less valuable pieces, but the whole is the same value.

It's not a matter of point of view, it's a misunderstanding. Making something more divisible does not dilute it, it simply allows you to possess smaller pieces. It does not increase the total amount.

Your theory applies to things made of atoms. The real use of a pie is serving as food. Half a pie is 50% as useful as a whole pie, so half a pie is worth half a whole pie and this is an immutable fact.

I am not so sure about that with mathematical abstractions such as Bitcoins, because here what really matters isn't the value of a single coin, but how much monetary value can be represented by the whole network. The value of a single coin is a consequence. Whether we have 21, 21 million or 21 gazillion coins is irrelevant. The value of a single unit will be how the market values the whole network, divided by the number of units. What I am tending to agree here is that our real accounting unit is not the Bitcoin, but the satoshi. Adding further decimals will probably have the same effect as creating more coins.

Maybe this is not an immediate effect, but the market could adjust itself.

My point exactly.

Bitcoins are a conceit for the sake of marketing Bitcoin. It isn't 21 million ledger units, it's 2.1 quadrillion with the already discussed possibility of expanding that.

[Syke]

Bitcoins are just ledger values. You see no issue with more potential ledger values being created on the basis of a Russian doll style fractionisation of existing Bitcoin subunits? This allow for an infinity of potential ledger values.

ROFLMAO. Which is more?

A) $1
B) $1.00
C) $1.0000

[DeathAndTaxes]

Bitcoins are a conceit for the sake of marketing Bitcoin. It's 21 million ledger units, its 2.1 quadrillion with the already discussed possibility of expanding that.

Nobody has ever marketed Bitcoin as only 21 million ledger units. 

There are 21M bitcoins.  There will always be 21M bitcoins.   No amount of subdivision will increase the number of bitcoins.
Melting a 1 KG gold bar into thousands of 1/100 oz gold coins doesn't magically increase the amount of gold.  You still have 1 KG of gold in one unit or thousands.

[alincoln]

From that atomic unit, one could understand the network as being composed of 21x10^N of such units. In this sense, creating further divisions and increasing N has the same effect of devaluing the currency.

It's a matter of point of view, and points of view can change over time.

No, no it doesn't. It makes it more divisible. It doesn't devalue it what-so-ever. You will have more, less valuable pieces, but the whole is the same value.

It's not a matter of point of view, it's a misunderstanding. Making something more divisible does not dilute it, it simply allows you to possess smaller pieces. It does not increase the total amount.

Your theory applies to things made of atoms. The real use of a pie is serving as food. Half a pie is 50% as useful as a whole pie, so half a pie is worth half a whole pie and this is an immutable fact.

I am not so sure about that with mathematical abstractions such as Bitcoins, because here what really matters isn't the value of a single coin, but how much monetary value can be represented by the whole network. The value of a single coin is a consequence. Whether we have 21, 21 million or 21 gazillion coins is irrelevant. The value of a single unit will be how the market values the whole network, divided by the number of units. What I am tending to agree here is that our real accounting unit is not the Bitcoin, but the satoshi. Adding further decimals will probably have the same effect as creating more coins.

Maybe this is not an immediate effect, but the market could adjust itself.

My point exactly.

Bitcoins are a conceit for the sake of marketing Bitcoin. It's 21 million ledger units, its 2.1 quadrillion with the already discussed possibility of expanding that.

Revans, if everyone is screaming stupid at you for bringing a disruptive idea, odds are you are damn right. I agree that adding further decimals will likely have unexpected results. People shouldn't take the gold vs Bitcoin comparison too far.

[BittBurger]

When exchanges start working in sub units it may dawn on people that the scarcity argument used to promote Bitcoin is disingenuous rubbish.

Let me try to tackle this - admittedly not being an economist.
revans - if the Fed is able to print unlimited amounts of US Dollars.
Bitcoin won't be made in unlimited amounts.
Your argument is moreso how the pyschology of the investors will hold up when they realize 21 million is a false number.

My response to that is this:   21 million is a false number, but the concept of scarcity is still intact.

If one stops at a certain point, isn't it, by default, still supporting the scarcity argument?
There is still going to be a limited supply.
As opposed to the US Govt printing unlimited US Dollars.

In 10, 20, 30 years, no matter what happens ... more BTC won't be made.
So wouldn't investors realize that and still feel good about scarcity?

Sure, some uneducated investors (who would pour thousands into something they know nothing about?) may have an initial "What?!" to the news that 21 million isn't the smallest subunit.
But a quick 14 second education on the fact that Bitcoin is still going to be limited, should resolve that.

I think your entire argument here is that when they realize 21 million isnt the number, everyone will run for the hills, with their ears plugged and eyes closed, while screaming.

I on the other hand believe human beings are a little smarter than that, and the 14 second chat about BTC being in limited supply, will resolve their concerns.
In fact I think most investors already realize that BTC is divisible.
The entire reason BTC is going up in value is because people are starting to *UNDERSTAND* it, and realize its potential.

Im interested in your response to this.

[DeathAndTaxes]

Revans, if everyone is screaming stupid at you for bringing a disruptive idea, odds are you are damn right. I agree that adding further decimals will likely have unexpected results. People shouldn't take the gold vs Bitcoin comparison too far.

So when the US removes the penny from circulation and the number of sub units decreases by a factor of 5x that will suddenly cause a massive 400% spike in the value of a dollar.

Who knew?  We could solve all the economic problems in the US by simply changing the number of sub units.  Write to your Congressman today. 

[alincoln]

Also, to add further to the discussion, one satoshi is as good for representing information as one Bitcoin. It can be sent from an address to another in the same way, if you disregard fees for one moment. There's no fair value for one satoshi or one Bitcoin, the value is in the network, and the network is a composition of all its smallest accounting units: the satoshis.

Truth is some parallel projects use satoshis to represent colored coins, conveying a new value, possibly 1 euro or 1 ounce of gold or 1 share of a company, to something otherwise (almost) without value.

People, think out of the box for a moment and realize we have a ledger of satohis as accounting units, not Bitcoins.

[TTBit]

If you pay me 6% per year in interest on $100, I wind up with $106 at year's end. But if you allow me to compound that twice a year - 3% every six months, I make $106.09. But if you let me compound it monthly, my final balance is $106.1678. Daily $106.183. Each time is more and more.

(wrong) Conclusion: If you allow me to infinitely compound at 6%, I can make infinite amount of money in a year?

[mccorvic]

I just have to post in a thread with such an epically bad OP.

[Tirapon]

revans, go and do a basic maths/numeracy course before getting involved in any more discussions about numbers.

[Chalkbot]

Also, to add further to the discussion, one satoshi is as good for representing information as one Bitcoin. It can be sent from an address to another in the same way, if you disregard fees for one moment. There's no fair value for one satoshi or one Bitcoin, the value is in the network, and the network is a composition of all its smallest accounting units: the satoshis.

Truth is some parallel projects use satoshis to represent colored coins, conveying a new value, possibly 1 euro or 1 ounce of gold or 1 share of a company, to something otherwise (almost) without value.

People, think out of the box for a moment and realize we have a ledger of satohis as accounting units, not Bitcoins.

Yep, you're almost there. Now remember that 1BTC = 10,000,000 Satoshi, and you will start to see why it would be more valuable. If we invent new sub units, microsatoshis, 1 BTC is worth even MORE of those.

You can subdivide to infinity, and never change the value of the original unit, only the new unit's value changes.

[revans]

Look at it this way for a moment. Forget about labels within the ledger: Bitcoins, satoshis and whatever other sub divisions labels may exist in the future, just look at it in terms of units.


Right now the prevailing mindset is that Bitcoin is limited to 21 million units. As we move along people will have to adapt to the reality of 2.1 quadrillion, and then maybe amounts even larger than that.


Talking about the divisibility of the dollar is specious as it is a fiat currency now, it does not now derive it value from any sense of scarcity or a promise of supply constraint.

[alincoln]

Look at it this way for a moment. Forget about labels within the ledger: Bitcoins, satoshis and whatever other sub divisions labels may exist in the future, just look at it in terms of units.


Right now the prevailing mindset is that Bitcoin is limited to 21 million units. As we move along people will have to adapt to the reality of 2.1 quadrillion, and then maybe amounts even larger than that.


Talking about the divisibility of the dollar is specious as it is a fiat currency now, it does not now derive it value from any sense of scarcity or a promise of supply constraint.

Revans is right. I am sorry for those who can't see it, because they are comparing apple to oranges. Bitcoin is not gold, such a comparison of finite supply is clearly broken here.

Just so that I put my money where my mouth is, I'd be willing to bet with anyone that Bitcoin will crash shortly after new decimals are added. Just PM me if interested.

[Ozymandias]

I feel like I'm taking crazy pills here, there is NO valid argument in the OP or subsequent attempts to justify/explain the lack of argument. Maybe the pie example was too complicated?

[Tirapon]

Bitcoin is already divisible to an infinite number of sub units. For now, only 8 decimal places are displayed because we simply don't need any more than that. In the future, we may add more decimal places for convenience.

You can't increase the total amount of something by dividing it into lots of pieces. You still have the same overall amount, but there are more pieces of it, and each piece is smaller

It is not possible that anyone can be too stupid to understand this, and yet capable of turning on a computer and typing words. These people are trolls. Congratulations, you have successfully trolled for four pages now.

Can we all just ignore these guys now please.

[alincoln]

You can't increase the total amount of something by dividing it into lots of pieces. You still have the same overall amount, but there are more pieces of it, and each piece is smaller

Yes you can if this something is a mathematical abstraction not pegged nor backed by anything and whose 1/10th of a unit is as good for conveying information as the whole unit.

Right now we have 21 million coins being marketed, but this notion is wrong. We have 21 quadrillion "coins" capable of representing information, and creating more decimals has the same effect as augmenting the number of coins. It will, at some point, crash the market.

BTW I'm not trolling.

[Chalkbot]

Okay, for simplicity's sake, lets assume that there are only 10 bitcoins, and they are each divisible into 10 sub units, for a total of 100 possible units.

When it was just me and you, I bought your bicycle for 2 Bitcoins, and you bought my stereo for 1.5 bitcoins. People took notice of our seamless trade system, and wanted some bitcoin for themselves, so we sold them each a few of our bitcoins at bicycle/stereo rates. Pretty soon, we have 50 people using bitcoin to trade. This means that on average, each person has only 0.2 bitcoins, and thus the value of all bitcoins needs to go up to accomodate trade, as nobody can afford to buy that bicycle at 2 BTC.

Bicycles are being traded for 0.1 BTC now, and it's impossible to make BTC trades for items worth less than that. How do I buy a candy bar for BTC, when the smallest sub-unit is worth a bicycle? Do I need to buy 100 candy bars at a time? That's not very convenient.

So we subdivide the currency to another decimal point. Now a bicycle is still 0.1 bitcoin, and a candy bar is 0.001 bitcoins. Everyone is much happier with this.

It's important to note that the relative value of our bitcoins didn't change by adding another level of subdivision. All the coins in existence were owned by someone, and the value established. By saying that we can now break them into smaller pieces doesn't change the fact that a bicycle is trading for 0.1 bitcoin.

But let's pretend that it did. We add the ability to subdivide our bitcoins to another decimal, and you declare to the others that this redudes the value of all BTC, and that you now want 0.4 BTC for your bicycle. But guess what? Nobody can afford your bicycle at 0.4, and other people are still selling them for 0.1, so it doesn't make sense to buy yours anyways.

 

[Tirapon]

You can't increase the total amount of something by dividing it into lots of pieces. You still have the same overall amount, but there are more pieces of it, and each piece is smaller

Yes you can if this something is a mathematical abstraction not pegged nor backed by anything and whose 1/10th of a unit is as good for conveying information as the whole unit.

Right now we have 21 million coins being marketed, but this notion is wrong. We have 21 quadrillion "coins" capable of representing information, and creating more decimals has the same effect as augmenting the number of coins. It will, at some point, crash the market.

BTW I'm not trolling.

So you're telling me that if I want to sell something for 1 BTC, you're gonna come along and say, 'Yeah, I have 1 BTC but I'm gonna divide it into 10 pieces first and give you one of those, because 1/10th is just as good at conveying the information as 1 whole BTC'. And then I'm gonna be like, 'Yeah sure, just give me 0.1 BTC because that conveys the information just as well...'

No, I'm gonna say, 'Sure you can divide it into 10 pieces, but you'll still have to pay me 10 of those smaller pieces because I'm not a fucking retard'

Fuck me I hope you are trolling.

[Odrec]

I find this topic interesting. I think both sides are right and wrong in a way. I mean yes dividing the coin will have some similar effects to some o the problems we have now. For example rich people getting richer, a bigger wealth gap and the social problems that entails but also I don't think dividing the coin will lower its value on the contrary it will increase it precisely because the divsion is necessary. I don't know I think there's still much place to analysis but I would hope people could argue this more respectfully since that is a better way to find new solutions... and new problems to solve!

[piramida]

Right now the prevailing mindset is that Bitcoin is limited to 21 million units.

No, it's not. The prevailing mindset is that Bitcoin is limited to 21 million bitcoins. Which may be composed of any arbitrary number of units. Mostly everybody who already possesses the knowledge of fractions get it. I understand that it may be hard for pre-school kids, but tough luck, maybe bitcoin would become easier for them too, once all calculations would be carried out in satoshis.

[Kluge]

OP has not yet died of embarrassment, is troll.

"I have 1 pie."

"But you can divide that into small-enough slivers where it's 1.00 pie! Now there are 100 pie units and your pie is worthless."

"Well, shit. I never thought of it like that. Guess you're right."

[rampantparanoia]

You can already send "subunits" of a bitcoin today. If I wanted to send you 0.0002 of 1 BTC, you would have 2 mBTC. Point of this thread?

[freebird]

I think the mBTC will become the standard unit sometime next year, after 1 BTC = $1000+

Switching to mBTC will help people use the currency more easily and intuitively (since 1 mBTC will be worth something much closer to a dollar).

It will also help to drive up the price more, since a lot of people have a psychological barrier to buying something that's priced so high. That's why stocks split. It's all about psychology and making things comfortable for the "average Joe" to invest.

[proudhon]

This reminds me of those Verizon reps that were unable to grasp the difference between .002 dollars and .002 cents.  All the way up to the managers at the call center.  They all had such a poor education of basic math, that they simply were unable to grasp the difference.

[briguy37]

Look at it this way for a moment. Forget about labels within the ledger: Bitcoins, satoshis and whatever other sub divisions labels may exist in the future, just look at it in terms of units.

Right now the prevailing mindset is that Bitcoin is limited to 21 million units. As we move along people will have to adapt to the reality of 2.1 quadrillion, and then maybe amounts even larger than that.

Talking about the divisibility of the dollar is specious as it is a fiat currency now, it does not now derive it value from any sense of scarcity or a promise of supply constraint.

When I found out that the bitcoin economy could be divisible into 2.1 quadrillion units, it clicked for me that everyone in the world could use it.  Before that point, I was confused because it appeared that only .3% of the population could ever own even a single one, and what good is that for a currency?  

That realization skyrocketed the value of the bitcoin ecosystem as a whole in my mind, and with it the value of a bitcoin.  Did that realization devalue it in yours?  If not, why would further subdivisions devalue it for you?

[revans]

Look at it this way for a moment. Forget about labels within the ledger: Bitcoins, satoshis and whatever other sub divisions labels may exist in the future, just look at it in terms of units.

Right now the prevailing mindset is that Bitcoin is limited to 21 million units. As we move along people will have to adapt to the reality of 2.1 quadrillion, and then maybe amounts even larger than that.

Talking about the divisibility of the dollar is specious as it is a fiat currency now, it does not now derive it value from any sense of scarcity or a promise of supply constraint.

When I found out that the bitcoin economy could be divisible into 2.1 quadrillion units, it clicked for me that everyone in the world could use it.  Before that point, I was confused because it appeared that only .3% of the population could ever own even a single one, and what good is that for a currency?  

That realization skyrocketed the value of the bitcoin ecosystem as a whole in my mind, and with it the value of a bitcoin.  Did that realization devalue it in yours?  If not, why would further subdivisions devalue it for you?

The community is broken. It's riven with wild eyed speculators who are so desperate to get rich they lose to power of logical argument; this thread is a case in point.

[briguy37]

Look at it this way for a moment. Forget about labels within the ledger: Bitcoins, satoshis and whatever other sub divisions labels may exist in the future, just look at it in terms of units.

Right now the prevailing mindset is that Bitcoin is limited to 21 million units. As we move along people will have to adapt to the reality of 2.1 quadrillion, and then maybe amounts even larger than that.

Talking about the divisibility of the dollar is specious as it is a fiat currency now, it does not now derive it value from any sense of scarcity or a promise of supply constraint.

When I found out that the bitcoin economy could be divisible into 2.1 quadrillion units, it clicked for me that everyone in the world could use it.  Before that point, I was confused because it appeared that only .3% of the population could ever own even a single one, and what good is that for a currency?  

That realization skyrocketed the value of the bitcoin ecosystem as a whole in my mind, and with it the value of a bitcoin.  Did that realization devalue it in yours?  If not, why would further subdivisions devalue it for you?

The community is broken. It's riven with wild eyed speculators who are sop desperate to get rick they lose to power of logical argument; this thread is a case in point.

Logically speaking, how does being able to subdivide a currency into smaller portions devalue the total net worth of that currency? 

[BittBurger]

Right now the prevailing mindset is that Bitcoin is limited to 21 million units. As we move along people will have to adapt to the reality of 2.1 quadrillion, and then maybe amounts even larger than that.

Okay so like I said:

Your entire argument is the psychology of investors "learning its more than 21 million".

Lets look at your logic for a second:

You think people will run for the hills in fear, and the market will crash, because people who have poured millions of dollars into Bitcoin, know nothing about it.

-----------------

I will repeat:  Even if 21 million is erroneous, Bitcoin is still "scarce" and its production will always have a "limit".  As opposed to the US Dollar.

I will repeat:  It takes all of 14 seconds to educate those who might be surprised by this news, that even the divided subunits are limited, and therefore scarce.

More importantly, I highly doubt the majority of Bitcoin investers aren't already aware of its divisability.   Whereas you believe the majority of Bitcoin investors (enough to make it crash!) don't even understand basic properties of Bitcoin. Only a fool would pour tens of thousands of dollars into something and not know the basics behind it.  Therefore your premise is likely incorrect and your conclusion as well.

-----------------

Bitcoins value is in its application, and what it can do for merchants and consumers alike.    
I don't believe bitcoins value is influenced by a bunch of idiots who don't know how it works. 
Therefore a sudden revelation to a bunch of idiots is a scenario that I don't think will ever happen.

-Burger-

[RodeoX]

Maybe think of it this way. Dollars (mostly) accommodate more value by increasing the number of dollars in circulation. Bitcoins accommodate more value by increasing the value stored in each unit.   

[BitcoinAshley]

So much math fail on the part of OP & Friends. So many examples were given, you guys have tried your best, and he Just Doesn't Get It. I call troll.

Rather than feeding the troll, sometimes the best thing to do is put it on your ignore list.

Then it may respond with something along the lines of "Lol, see that person is blinded with investor greed and ignores basic mathematics and my irrefutable logical argument, because they are part of the bitcoin cult, so they just ignore everyone who dares question their cult logic."

But it is no worry, since a convenient script built into this website will hide the post and all others made using that particular username.

What a joyous concept!

 

Valiant efforts:

Bitcoin is already divisible to an infinite number of sub units. For now, only 8 decimal places are displayed because we simply don't need any more than that. In the future, we may add more decimal places for convenience.

You can't increase the total amount of something by dividing it into lots of pieces. You still have the same overall amount, but there are more pieces of it, and each piece is smaller

It is not possible that anyone can be too stupid to understand this, and yet capable of turning on a computer and typing words. These people are trolls. Congratulations, you have successfully trolled for four pages now.

Can we all just ignore these guys now please.

Okay, for simplicity's sake, lets assume that there are only 10 bitcoins, and they are each divisible into 10 sub units, for a total of 100 possible units.

When it was just me and you, I bought your bicycle for 2 Bitcoins, and you bought my stereo for 1.5 bitcoins. People took notice of our seamless trade system, and wanted some bitcoin for themselves, so we sold them each a few of our bitcoins at bicycle/stereo rates. Pretty soon, we have 50 people using bitcoin to trade. This means that on average, each person has only 0.2 bitcoins, and thus the value of all bitcoins needs to go up to accomodate trade, as nobody can afford to buy that bicycle at 2 BTC.

Bicycles are being traded for 0.1 BTC now, and it's impossible to make BTC trades for items worth less than that. How do I buy a candy bar for BTC, when the smallest sub-unit is worth a bicycle? Do I need to buy 100 candy bars at a time? That's not very convenient.

So we subdivide the currency to another decimal point. Now a bicycle is still 0.1 bitcoin, and a candy bar is 0.001 bitcoins. Everyone is much happier with this.

It's important to note that the relative value of our bitcoins didn't change by adding another level of subdivision. All the coins in existence were owned by someone, and the value established. By saying that we can now break them into smaller pieces doesn't change the fact that a bicycle is trading for 0.1 bitcoin.

But let's pretend that it did. We add the ability to subdivide our bitcoins to another decimal, and you declare to the others that this redudes the value of all BTC, and that you now want 0.4 BTC for your bicycle. But guess what? Nobody can afford your bicycle at 0.4, and other people are still selling them for 0.1, so it doesn't make sense to buy yours anyways.

So you're telling me that if I want to sell something for 1 BTC, you're gonna come along and say, 'Yeah, I have 1 BTC but I'm gonna divide it into 10 pieces first and give you one of those, because 1/10th is just as good at conveying the information as 1 whole BTC'. And then I'm gonna be like, 'Yeah sure, just give me 0.1 BTC because that conveys the information just as well...'

No, I'm gonna say, 'Sure you can divide it into 10 pieces, but you'll still have to pay me 10 of those smaller pieces because I'm not a fucking retard'

Fuck me I hope you are trolling.

[challen]

And what if...

My argument as now revealed is solid...

Using a "what if" statement to define a "solid argument" is completely non-sequitor. In reality, it's ok to be upset cos you blew your load early, but you don't have to turn into a troll over it. We'll even let you buy back in whenever you want. 

[antimattercrusader]

1. The fact that only 21 million coins can be mined (assuming that does not get altered) is irrelevant when they can be sliced up into 100,000,000 sub units.

2. That there have already been discussions about increasing the divisibility.


When exchanges start working in sub units it may dawn on people that the scarcity argument used to promote Bitcoin is disingenuous rubbish.

I don't see how any of this is of any consequence.

[Chalkbot]

Let's say we're stranded on a desert island. I have a cheeseburger and you and 3 other guys are very hungry.


After negotiating for some time, it becomes clear that you all want the cheeseburger, and you're willing to trade every possession on your person for it. I, being the generous guy that I am, decide to cut it into 4 equal pieces and trade one to each of you, for 1/4 of your original offer.

The 3 other guys immediately agree to these terms and begin scarfing down their share of the burger. You, however, insist that I now have 4 burgers, so the burger as a whole is worth less, and refuse to pay the price (which you just a moment ago agreed to).

I sell the remaining piece of the burger to one of the other guys and you die of starvation.


The end.

[Kluge]

Let's say we're stranded on a desert island. I have a cheeseburger and you and 3 other guys are very hungry.


After negotiating for some time, it becomes clear that you all want the cheeseburger, and you're willing to trade every possession on your person for it. I, being the generous guy that I am, decide to cut it into 4 equal pieces and trade one to each of you, for 1/4 of your original offer.

The 3 other guys immediately agree to these terms and begin scarfing down their share of the burger. You, however, insist that I now have 4 burgers, so the burger as a whole is worth less, and refuse to pay the price (which you just a moment ago agreed to).

I sell the remaining piece of the burger to one of the other guys and you die of starvation.


The end.

Um... You'd starve, too. 

[DeathAndTaxes]

Let's say we're stranded on a desert island. I have a cheeseburger and you and 3 other guys are very hungry.


After negotiating for some time, it becomes clear that you all want the cheeseburger, and you're willing to trade every possession on your person for it. I, being the generous guy that I am, decide to cut it into 4 equal pieces and trade one to each of you, for 1/4 of your original offer.

The 3 other guys immediately agree to these terms and begin scarfing down their share of the burger. You, however, insist that I now have 4 burgers, so the burger as a whole is worth less, and refuse to pay the price (which you just a moment ago agreed to).

I sell the remaining piece of the burger to one of the other guys and you die of starvation.


The end.

Um... You'd starve, too.  

He didn't tell the others the island wasn't uninhabited and on the other side there was a burger stand.  Actually it wasn't a very good metaphor and OP will likely use that as "proof" he is right.  That is what trolls do.

[Chalkbot]

Um... You'd starve, too. 

The desert island is a metaphor for being ignorant. I can leave any time I want.

[Melbustus]

Ok... If OP is actually not trolling, I think what he/she is failing to understand (or failing to intuit) is that the private key controlling 1 BTC, currently 100,000,000 base units (satoshis), will always control those base units and any they're divided up into down the road. Divide the current base unit by a million, and the private key to 1 BTC now controls 100,000,000,000,000 base units. Since that's happening for everybody at the same time, the system retains the *exact* balance between all holders of bitcoin that it had before; ie, no price changes, no scarcity change.

My percentage of the whole doesn't change. Neither does anyone else's.

OP, are you saying that you think people would still demand the same number of base units for a good after a divisibility change is made? Imagine that for a sec... Say I'm selling a GPU for 1 BTC = 100,000,000 base units. We increase divisibility by a million. Are you saying I'd sell that GPU for 100,000,000 of the new base units, ie: 0.000001 BTC? Despite the fact that everyone still holds the same quantity of BTC as before the split, and despite the fact that there are the same quantity of resources in the economy?

It's all about percentages.

PS: If you're trolling, nice work... But that's the last you're getting out of me. I'm done here.

[Kluge]

Um... You'd starve, too. 

The desert island is a metaphor for being ignorant. I can leave any time I want.

Oh. So in this metaphor, you're willfully ignorant?  

[Chalkbot]

Um... You'd starve, too. 

The desert island is a metaphor for being ignorant. I can leave any time I want.

Oh. So in this metaphor, you're willfully ignorant?  

Yes, the same reason I'm even posting in this thread, lol.

[antimattercrusader]

Let's say we're stranded on a desert island. I have a cheeseburger and you and 3 other guys are very hungry.


After negotiating for some time, it becomes clear that you all want the cheeseburger, and you're willing to trade every possession on your person for it. I, being the generous guy that I am, decide to cut it into 4 equal pieces and trade one to each of you, for 1/4 of your original offer.

The 3 other guys immediately agree to these terms and begin scarfing down their share of the burger. You, however, insist that I now have 4 burgers, so the burger as a whole is worth less, and refuse to pay the price (which you just a moment ago agreed to).

I sell the remaining piece of the burger to one of the other guys and you die of starvation.


The end.

+1

[BitchicksHusband]

Bitcoin cultists talk of individual Bitcoins being worth hundreds of thousands of dollars eventually,  which would mean very few people would ever own a whole Bitcoin and so would see their Bitcoin wealth expressed as sub units of a Bitcoin. Now let's say that it is decided that instead of 100M, that a bitcoin can now be divided into 1 billion sub units. As a result those people who hold any number of whole Bitcoins can buy 10x as much Bitcoin wealth from those who only have Bitcoin fractions. Goods priced in Bitcoins would obviously adjust, but there would be a period in which the imbalance would leave those with whole Bitcoins with a massive increase in purchasing power.

Dollar cultists talk of individual "Million-dollars" being worth millions of dollars eventually,  which would mean very few people would ever own a whole "Million-dollars" and so would see their "Million-dollar" wealth expressed as sub units of a "Million-dollars". Now let's say that it is decided that instead of 100M, that a "Million-dollars" can now be divided into "Cents". As a result those people who hold any number of whole "Million-dollars" can buy 10x as much "Million-dollar" wealth from those who only have "Dollars". Goods priced in "Million-dollars" would obviously adjust, but there would be a period in which the imbalance would leave those with whole "Million-dollars" with a massive increase in purchasing power.

Yeah, dude, millionaires and billionaires can buy more stuff than me.  No duh.

[Syke]

Which statement is true:

A) 1 btc < (.5 btc + .5 btc)
B) 1 btc = (.5 btc + .5 btc)
C) 1 btc > (.5 btc + .5 btc)

[Sage]

1. The fact that only 21 million coins can be mined (assuming that does not get altered) is irrelevant when they can be sliced up into 100,000,000 sub units.

2. That there have already been discussions about increasing the divisibility.


When exchanges start working in sub units it may dawn on people that the scarcity argument used to promote Bitcoin is disingenuous rubbish.

I'm not one to criticize anyone... but damn, this has gotta be the stupidest statement I've ever heard from I hope an otherwise intelligent individual.

[SgtSpike]

1. The fact that only 21 million coins can be mined (assuming that does not get altered) is irrelevant when they can be sliced up into 100,000,000 sub units.

2. That there have already been discussions about increasing the divisibility.


When exchanges start working in sub units it may dawn on people that the scarcity argument used to promote Bitcoin is disingenuous rubbish.

I'm not one to criticize anyone... but damn, this has gotta be the stupidest statement I've ever heard from I hope an otherwise intelligent individual.

I think the statement itself negates the possibility of intelligence.

[notthematrix]

oil sheik who hate the US dollar , and will trade oil in btc if it has Enough mass.
just a matter of time.

[sgbett]

All this talk of integer math... seems so redundant.

The decimal number system quite happily has no problem with the concept of there being 21m BTC, the software at the moment only shows 9 digits of precision past the decimal point. In future it may need to show more. Nothing changes.

The idea that there are suddenly more units is just a red herring.

[DeathAndTaxes]

The idea that there are suddenly more units is just a red herring.

Of course that was the intent of the OP.  He has jumped from one reason why Bitcoin will fail to another.  Strange how much time he spends on a forum devoted to the thing he "knows" will fail.

A troll is as a troll does.

[oda.krell]

First: OP is possibly trolling.

Second: I'm nonetheless surprised by the response in here, which universally seems to say that increasing divisibility cannot possibly alter the valuation of each "individual" bitcoin.

I'm not sure it's that simple. Time for a thought experiment.

Let's assume, instead of a fixed number of decimal places, i.e. a fixed degree of divisibility, divisibility is permanently growing, say: 1 additional decimal place per day; each day, the number of sub-units increases by factor 10.

Does this still not influence the valuation of the base unit?

From a formal point of view, it shouldn't make a difference, I suppose (although I suspect calculating future values of the base unit, which necessarily equals the sum of the subunits, might become more difficult). However, keep in mind that the valuation of any object is determined by the market, and I am not at all sure if the idea of the number of subunits tending towards infinity will not affect the valuation of the base unit.

Thought experiment over.

Nobody proposed that divisibility should increase constantly, of course. But I propose that, if the market had reason to believe that divisibility could be increased at will, it might after all have a similar reaction as in my 'infinite divisibility' scenario above.

Very interested to hear your thoughts on this.

[DeathAndTaxes]

First: OP is possibly trolling.

Second: I'm nonetheless surprised by the response in here, which universally seems to say that increasing divisibility cannot possibly alter the valuation of each "individual" bitcoin.

I'm not sure it's that simple. Time for a thought experiment.

Let's assume, instead of a fixed number of decimal places, i.e. a fixed degree of divisibility, divisibility is permanently growing, say: 1 additional decimal place per day; each day, the number of sub-units increases by factor 10.

Does this still not influence the valuation of the base unit?

From a formal point of view, it shouldn't make a difference, I suppose (although I suspect calculating future values of the base unit, which necessarily equals the sum of the subunits, might become more difficult). However, keep in mind that the valuation of any object is determined by the market, and I am not at all sure if the idea of the number of subunits tending towards infinity will not affect the valuation of the base unit.

Thought experiment over.

Nobody proposed that divisibility should increase constantly, of course. But I propose that, if the market had reason to believe that divisibility could be increased at will, it might after all have a similar reaction as in my 'infinite divisibility' scenario above.

Very interested to hear your thoughts on this.

No.  Bitcoin could support infinite digits using floating point numbers.  This would probably be bad for a lot of technical reasons but it doesn't change the value of the whole units.
1.0 = 1.00000000000000000000000000000000000000000000000000000000000000000000000000000 00

Most gold coins are minted in 1 oz down to 1/10 oz denominations.  With improved technology it would be possible to mint smaller coins say 1/50 oz or 1/200 oz coins.   Would a 1/200 oz coin on the market make the price of gold fall? 

The US government currently issues pennies as the smallest sub unit of the dollar. As a cost saving measure say they ended the penny (as other countries have already done).  The divisbility of a dollar would be reduced by a factor of 5x from 1/100th of a dollar to 1/20th of a dollar.  Do you think that would increase the purchasing power of a dollar? Would you expect prices on the shelves fall to 1/5th their current price?

[derpinheimer]

1. The fact that only 21 million coins can be mined (assuming that does not get altered) is irrelevant when they can be sliced up into 100,000,000 sub units.

2. That there have already been discussions about increasing the divisibility.


When exchanges start working in sub units it may dawn on people that the scarcity argument used to promote Bitcoin is disingenuous rubbish.

Lol. Divisibility doesnt mean the price wont go to the same price. If it werent ultra-divisible, the price would be like $10 because no one would want a coin that can only divide down to, say, $1 of buying power.

[lerelerele]

In the real world selling sonmething that is not gold when you want to sell more you will receive less, but gold, if you have 1.000.000$ in gold you will receive the real price of gold and if you want to sell less you will receive less money percentually.

Which statement is true:

A) 1 btc < (.5 btc + .5 btc)
B) 1 btc = (.5 btc + .5 btc)
C) 1 btc > (.5 btc + .5 btc)

[notme]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

Dividing a dollar into 1000 (or even 1,000,000) is not the same thing as debasement. Not the same thing at all. Just think about it for a while.

No, but for the sake of argument we are assuming that the dollar is like Bitcoin and limited to a certain number of dollar units.

So dollars are limited to a certain number of dollar units?  That makes this hard to explain:

So, would your criticism of the dollar be made moot if a superdollar was created which was worth say 1 million normal dollars?

Where did I criticize the dollar?  I only showed a graph that indicates the number of dollar units has been drastically increasing, which directly contradicted your claim.

But, let's assume I did.  Making a 1 million dollar bill would not be any different from 1 million $1 bills other than it is slightly cheaper to produce and move around.

[oda.krell]

No.  Bitcoin could support infinite digits using floating point numbers.  This would probably be bad for a lot of technical reasons but it doesn't change the value of the whole units.
1.0 = 1.00000000000000000000000000000000000000000000000000000000000000000000000000000 00

Most gold coins are minted in 1 oz down to 1/10 oz denominations.  With improved technology it would be possible to mint smaller coins say 1/50 oz or 1/200 oz coins.   Would a 1/200 oz coin on the market make the price of gold fall? 

The US government currently issues pennies as the smallest sub unit of the dollar. As a cost saving measure say they ended the penny (as other countries have already done).  The divisbility of a dollar would be reduced by a factor of 5x from 1/100th of a dollar to 1/20th of a dollar.  Do you think that would increase the purchasing power of a dollar? Would you expect prices on the shelves fall to 1/5th their current price?

Is reading semi-carefully really that much effort?

How does

No.  Bitcoin could support infinite digits using floating point numbers.  This would probably be bad for a lot of technical reasons but it doesn't change the value of the whole units.

address the point I made here

From a formal point of view, it shouldn't make a difference, [...]. However, keep in mind that the valuation of any object is determined by the market, and I am not at all sure if the idea of the number of subunits tending towards infinity will not affect the valuation of the base unit.

[impulse]

From a formal point of view, it shouldn't make a difference, [...]. However, keep in mind that the valuation of any object is determined by the market, and I am not at all sure if the idea of the number of subunits tending towards infinity will not affect the valuation of the base unit.

I am 100% sure. The precision will only change if the smallest unit becomes worth an impractically large amount of money, ie. the smallest unit is too large to make small purchases. This will in no way alter the value of larger sub-units/units.

Edit: Let me also say that I DO live in a country that has removed the penny from circulation and it in no way impacted the value of my money. If the smallest unit of bitcoin becomes impractical, people will welcome the change and it will only increase the value of the system.

[DeathAndTaxes]

address the point I made here

From a formal point of view, it shouldn't make a difference, [...]. However, keep in mind that the valuation of any object is determined by the market, and I am not at all sure if the idea of the number of subunits tending towards infinity will not affect the valuation of the base unit.

Simple.  It doesn't.  People ALREADY spend fractional Bitcoins.  Do you believe that making smaller gold coins will devalue gold?  Do you believe that eliminating the penny will raise the purchasing power of the dollar?  

Of course you already know the later two examples are utterly stupid.  Nobody would think that.   Nobody watching the news and hearing the penny is going to be taken out of circulation will for a second think that makes their $1 bill worth more.   However you believe that the reverse is true and those people will exist in such numbers and with such purchasing power to effect the market to a significant degree.  Well if it does happen I will welcome it as it would be a flash crash which transfers billions of dollars of wealth from the stupid to the at least marginally intelligent.  I am not going to hold my breath being able to get cheap coins though.

Still if you believe that fine but you haven't shown any proof that this "dubious thinking" has affected any other markets ever, however somehow (because you want it to be?) Bitcoin will be different.  Still if you are really worried, the good news is I seriously doubt Bitcoin will need to expand the precision in our lifetime (if ever).   It would require a hard fork and if enough people believe the nonsense in this thread then there will be enough resistance that no consensus and thus hard fork will occur.   Even under a "one coin to rule them all" scenario it is dubious if 8 digits will prove insufficient, under any other scenario a satoshi will have such little purchasing power there will be no need for further subdivision.

[Buffer Overflow]

He has jumped from one reason why Bitcoin will fail to another.  Strange how much time he spends on a forum devoted to the thing he "knows" will fail.

Yeah, the other day he was banging on about this 'Bitcoin's defacto central bank' idea. I think he gave up on that one, and tried something new today.

Though I must say I'm surprised OP has appeared today on a bull price day. Usually he only pops up on correction days to say 'told you so', then when it goings up again promptly disappears. 

[rampantparanoia]

He has jumped from one reason why Bitcoin will fail to another.  Strange how much time he spends on a forum devoted to the thing he "knows" will fail.

Yeah, the other day he was banging on about this 'Bitcoin's defacto central bank' idea. I think he gave up on that one, and tried something new today.

Though I must say I'm surprised OP has appeared today on a bull price day. Usually he only pops up on correction days to say 'told you so', then when it goings up again promptly disappears. 

perhaps a warning of things to come tonight?

[molecular]

Look at it this way for a moment. Forget about labels within the ledger: Bitcoins, satoshis and whatever other sub divisions labels may exist in the future, just look at it in terms of units.


Right now the prevailing mindset is that Bitcoin is limited to 21 million units. As we move along people will have to adapt to the reality of 2.1 quadrillion, and then maybe amounts even larger than that.


Talking about the divisibility of the dollar is specious as it is a fiat currency now, it does not now derive it value from any sense of scarcity or a promise of supply constraint.

Just changing the unit doesn't mean scarcity vanishes.

You know: 16/16th of one Pizza are still worth one Pizza if you do the incredibly complex math necessary.

Also: 2 half ounce gold coins are probably worth just about as much as 1 one counce gold coin.

EDIT: revans, do you by any chance have any relation to Peter Schiff? (http://www.cnbc.com/id/101192216#comment-1121795418) I'm asking because he makes the same argument.

If you are: I suggest you don't use this argument on air: I doubt the audience will be dumb enough to buy it.

[NUFCrichard]

We need to decide if bitcoin is scarce, or if it is almost unlimited!
Right now bitcoin is basically a commodity, therefore it's scarcity is an advantage.  If it wants to be a currency, then it becomes a disadvantage..

[Kluge]

We need to decide if bitcoin is scarce, or if it is almost unlimited!
Right now bitcoin is basically a commodity, therefore it's scarcity is an advantage.  If it wants to be a currency, then it becomes a disadvantage..

Scarcity and divisibility are not related...

[amencon]

You can't increase the total amount of something by dividing it into lots of pieces. You still have the same overall amount, but there are more pieces of it, and each piece is smaller

Yes you can if this something is a mathematical abstraction not pegged nor backed by anything and whose 1/10th of a unit is as good for conveying information as the whole unit.

Right now we have 21 million coins being marketed, but this notion is wrong. We have 21 quadrillion "coins" capable of representing information, and creating more decimals has the same effect as augmenting the number of coins. It will, at some point, crash the market.

BTW I'm not trolling.

My condolences then. 

This is one of those arguments that is so stupid right on it's face that it doesn't have to be had.  The only argument you could make regarding this issue is that the market might crash because others are stupid and can't see that further division of a unit doesn't change the original unit value.  I have little faith left in humanity but even I don't think that lowly of my fellow man yet.  I haven't met many people that thought the 4 quarters in their hand had purchasing power any different than the 1 dollar bill in the other.

I commend the others in the thread that took the time to point out the plainly obvious for those that apparently need it, though predictably it doesn't appear to have done much good.  "You can't reason someone out of a position they didn't reason themselves into."

Really good troll thread though.

[Wilhelm]

From a formal point of view, it shouldn't make a difference, [...]. However, keep in mind that the valuation of any object is determined by the market, and I am not at all sure if the idea of the number of subunits tending towards infinity will not affect the valuation of the base unit.

I am 100% sure. The precision will only change if the smallest unit becomes worth an impractically large amount of money, ie. the smallest unit is too large to make small purchases. This will in no way alter the value of larger sub-units/units.

Edit: Let me also say that I DO live in a country that has removed the penny from circulation and it in no way impacted the value of my money. If the smallest unit of bitcoin becomes impractical, people will welcome the change and it will only increase the value of the system.

Stocks split two for one all the time that dosen't change the stock. As does dividing bitcoins.
If bitcoins weren't divisable then theoretically bitcoin could hit a point where it would be too big to be used as a currency.
Like trying to buy gas at a gas station with a pound of gold bullion for which there is no change.
Divisability is a good thing.

[alexeft]

1. The fact that only 21 million coins can be mined (assuming that does not get altered) is irrelevant when they can be sliced up into 100,000,000 sub units.

2. That there have already been discussions about increasing the divisibility.


When exchanges start working in sub units it may dawn on people that the scarcity argument used to promote Bitcoin is disingenuous rubbish.

Soooooooooooooooooooo, you are saying that adding zeroes to the left of the decimal point is the same as adding digits to the right end of a number!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Interesting view! I'll ask a mathematician! 

PS: It's no wonder why some people are poor! 

[molecular]

1. The fact that only 21 million coins can be mined (assuming that does not get altered) is irrelevant when they can be sliced up into 100,000,000 sub units.

2. That there have already been discussions about increasing the divisibility.


When exchanges start working in sub units it may dawn on people that the scarcity argument used to promote Bitcoin is disingenuous rubbish.

It is truly beyond me how someone can believe this. I've tried, but there's just no rational train of thought that allows me to arrive at that conclusion, except maybe "Bitcoin is SCARE, it will eat gold and gold is number one, therefore something must be wrong with bitcoin. It's probably something about the scarcity not working, because I just can't imagine that with NO BACKING. Yeah, that's it, they can just double the amount of BTC available by splitting each of them in half".

[stillfire]

In related news the price of $100 bills is falling hard due to increased competition from pairs of $50 bills.


I think it's interesting to think about how to deal with posts like this one. The OP is clearly both wrong and opposed to being set straight, even by the simplest and clearest of reasoning. Should such posts be systematically ignored, or will we be required to always try to respond?

If we do systematically ignore wilfully ignorant OPs, we save our time and sanity, and in the case where the OP is just trying to pick a fight/spread FUD/manipulate the market we have denied his attempt.

But the drawback of ignoring such OPs is that a malicious OP can try to use it as "evidence" that he's right, that there's no answer to his FUD or that the community is rotten, a cult and so forth. Also there will be some rare cases where OP is honestly confused and can actually be set straight by extreme repetition.

Maybe if posts could be down-voted into invisibility at the top level we could gain the benefits of the the ignore, while avoiding the costs (the posting isn't much 'evidence' if no-one can see it). As it stands now it's enough for the OP to post another response for the posting to jump back to the top of the forum even that the overwhelming consensus is that it's noise.

[Zangelbert Bingledack]

How has this gone on for 6 pages?! How many hours of human life were wasted by this thread? There are a lot more important things going on in the Bitcoin world right now.

Just ignore. No one with two halves of a brain will ever take this argument seriously.

[Kluge]

tl;dr

Personally, I think it'd be best if G.Max would just tranzizzle the OP post in cases like this.

Bitcoin crashes when dem investin realise 2 thangs
1. Da fact dat only 21 mazillion coins can be mined (assumin dat do not git altered) is irrelevant when they can be sliced up tha fuck into 100,000,000 sub units.

2. That there have already been raps bout increasin tha divisibility.


When exchanges start hustlin up in sub units it may dawn on playas dat tha scarcitizzle argument used ta promote Bitcoin is disingenuous rubbish. Yo ass know how tha fuck dey phat asses do dat shit.

[porcupine87]

Peter, is that you?

maybe Peter Schiff brings exactly the same fallacy.
http://www.youtube.com/watch?v=0VrB1Ae3xqs

Hm Peter Schiff is normaly not stupid, but this time he is wrong. But he could be right, that the price will crash down one day and many people lose money.

[Tirapon]

Just ignore. No one with two halves of a brain will ever take this argument seriously.

Two halves of a brain? They would be like, a genius or something! Much more intelligent than a mere mortal with only one single brain anyway...

[Zangelbert Bingledack]

Just ignore. No one with two halves of a brain will ever take this argument seriously.

Two halves of a brain? They would be like, a genius or something! Much more intelligent than a mere mortal with only one single brain anyway...

I'm glad someone saw what I did there.

[revans]

Once more, and then I'll just have to accept that having a vested interest means you lot will never get it.


The 21 million units that are labelled Bitcoin are just an abstraction, the Bitcoin system is actually comprised of 2.1 quadrillion subunits, which can be inflated to infinity. Now you all cry that making a currency more divisible isn't the same as inflating the supply, but the comparison is being made to long established currencies which are well defined in the market. Of course the sleight of hand here is to fix the supply of the highest denomination unit to 21 million, thus ensuring that those holding whole Bitcoins will get relatively richer and richer as more and more Bitcoin subunits are required to buy a single Bitcoin.


And why 21 million Bitcoins, why not just 1? With infinite divisibility why do you need more than 1? Or perhaps that would make it a little too easy for people to see that in a system where one tiny part of the whole and the whole can perform the same function , and that whole can be broken up to infinity, that the claims of supply constraint are meaningless.

[paratox]

And why 21 million Bitcoins, why not just 1? With infinite divisibility why do you need more than 1? Or perhaps that would make it a little too easy for people to see that in a system where one tiny part of the whole and the whole can perform the same function , and that whole can be broken up to infinity, that the claims of supply constraint are meaningless.

Do you mind pointing to a system where this statement is true? I am really curious.

[Bennmann]

Once more, and then I'll just have to accept that having a vested interest means you lot will never get it.


The 21 million units that are labelled Bitcoin are just an abstraction, the Bitcoin system is actually comprised of 2.1 quadrillion subunits, which can be inflated to infinity. Now you all cry that making a currency more divisible isn't the same as inflating the supply, but the comparison is being made to long established currencies which are well defined in the market. Of course the sleight of hand here is to fix the supply of the highest denomination unit to 21 million, thus ensuring that those holding whole Bitcoins will get relatively richer and richer as more and more Bitcoin subunits are required to buy a single Bitcoin.


And why 21 million Bitcoins, why not just 1? With infinite divisibility why do you need more than 1? Or perhaps that would make it a little too easy for people to see that in a system where one tiny part of the whole and the whole can perform the same function , and that whole can be broken up to infinity, that the claims of supply constraint are meaningless.

Someone has already mentioned stocks, but hell, I'll do it too.

stocks are infinitely divisible, just like your example. stocks are also virtual, like bitcoin and not like gold. stocks split all the time in a manner that should easily display your theory. find us ONE historical example to support your point.

** show me the data to support your view. **

i am wroth that you have spent 7 pages of forum time to not present DATA. i want to cut those seven pages into a million pieces and hand them to you. you gotta carry that weight.

[shmadz]

And why 21 million Bitcoins, why not just 1? With infinite divisibility why do you need more than 1? Or perhaps that would make it a little too easy for people to see that in a system where one tiny part of the whole and the whole can perform the same function , and that whole can be broken up to infinity, that the claims of supply constraint are meaningless.

Do you mind pointing to a system where this statement is true? I am really curious.

The only thing that comes immediately to mind would be a hologram. Apparently you can cut a hologram in half and it will still project the full image.. though you may lose some resolution. So even in this case it's not entirely true. Even though one tiny part of the whole would technically perform the same function, (showing the image) the image would not retain the same quality.

[Syke]

And why 21 million Bitcoins, why not just 1? With infinite divisibility why do you need more than 1?

It would make absolutely no difference.

[davidgdg]

Actually the OP is a clever guy and has made some interesting posts in the past. It's a good thing to have critics. They sharpen our thinking.

So it's a bit disappointing to see him coming out with this guff.

[RodeoX]

Actually the OP is a clever guy and has made some interesting posts in the past. It's a good thing to have critics. They sharpen our thinking.

So it's a bit disappointing to see him coming out with this guff.

Good point. Skeptical thinking is a virtue. And no one should be beaten up for not understanding.

[theecoinomist]

I actually tend to find a divisibility a good argument. However, one can find very difficult to own an atom of gold, whereas you can own 0.0000001 btc.

So, I do believe can crash because of this. I just hope it will return to a niche.

Let's compare apples to apples.  There are about 10 billion ounces of gold in the world.  Divide that by 21 million and you get that the final supply of each bitcoin equals about 476 ounces of gold today.  A Satoshi is 0.000 000 01 bitcoin, so it is equivalent in supply to .000 004 76 ounces of gold. 

.000 004 76 ounces of gold might sound small, but the equivalent value of that amount of gold at current prices ($1276/ounce) is .6 cents.  That seems oddly close to a reasonable base unit for a currency to me.

Coincidence?  I think not.  Satoshi knew what he was doing and probably based the final supply and initial divisibility off of similar calculations. 

+1

[OleOle]

Because the percentage you control is the same!

The dumbness is strong with this one.
Let me explain, as you clearly aren't smart enogh to grasp the idea yourself.

Actually Melbustus is one of the smarter chaps around here.  You on the other hand seem to be a self-righteous twat.
Normally if somebody didn't understand a concept, I would try to explain it to them.  However, others have already tried to do that (see excellently written out pie example by holliday), but you just call them idiots and insist that you are right.  Therefore, you have earned my "douchebag of the day" award, which comes with a life-time of ignore.

lol, i knew this thread would be full of pwnys and wins.

Yeah, I'm only here for the lulz ...and the pie

[terman45x]

The 21 million units that are labelled Bitcoin are just an abstraction, the Bitcoin system is actually comprised of 2.1 quadrillion subunits, which can be inflated to infinity. Now you all cry that making a currency more divisible isn't the same as inflating the supply, but the comparison is being made to long established currencies which are well defined in the market. Of course the sleight of hand here is to fix the supply of the highest denomination unit to 21 million, thus ensuring that those holding whole Bitcoins will get relatively richer and richer as more and more Bitcoin subunits are required to buy a single Bitcoin.


And why 21 million Bitcoins, why not just 1? With infinite divisibility why do you need more than 1? Or perhaps that would make it a little too easy for people to see that in a system where one tiny part of the whole and the whole can perform the same function , and that whole can be broken up to infinity, that the claims of supply constraint are meaningless.

1 BTC = 100.000.000 Satoshis is arbitrary. You may use whatever metric you want, but 1 Satoshi is lowest amount you can have in blockchain.

[Mirsad]

Someone thought about the mining after all coins are mined?
The Hashpower is needed to confirm transaction.
But why mining, if there are no coins left to mine?

Looks like a perpetum mobile.

Just cash out (not yet, but in a few years) when nearly all coins are mined.

[Buffer Overflow]

Someone thought about the mining after all coins are mined?
The Hashpower is needed to confirm transaction.
But why mining, if there are no coins left to mine?

Looks like a perpetum mobile.

Just cash out (not yet, but in a few years) when nearly all coins are mined.

Yes, it has been discussed countless times.

[Spaceman_Spiff]

Someone thought about the mining after all coins are mined?
The Hashpower is needed to confirm transaction.
But why mining, if there are no coins left to mine?

The miners would live off the transaction fees.

[davidgdg]

Again this stupid thread where dividing a potato can feed the world 

"LOL" as the young people say

[TwinWinNerD]

The 21 million units that are labelled Bitcoin are just an abstraction, the Bitcoin system is actually comprised of 2.1 quadrillion subunits, which can be inflated to infinity. Now you all cry that making a currency more divisible isn't the same as inflating the supply, but the comparison is being made to long established currencies which are well defined in the market. Of course the sleight of hand here is to fix the supply of the highest denomination unit to 21 million, thus ensuring that those holding whole Bitcoins will get relatively richer and richer as more and more Bitcoin subunits are required to buy a single Bitcoin.


And why 21 million Bitcoins, why not just 1? With infinite divisibility why do you need more than 1? Or perhaps that would make it a little too easy for people to see that in a system where one tiny part of the whole and the whole can perform the same function , and that whole can be broken up to infinity, that the claims of supply constraint are meaningless.

1 BTC = 100.000.000 Satoshis is arbitrary. You may use whatever metric you want, but 1 Satoshi is lowest amount you can have in blockchain.

well at this moment. But changes can be made to the source, so that it can be infinite!

[DeathAndTaxes]

The 21 million units that are labelled Bitcoin are just an abstraction, the Bitcoin system is actually comprised of 2.1 quadrillion subunits, which can be inflated to infinity. Now you all cry that making a currency more divisible isn't the same as inflating the supply, but the comparison is being made to long established currencies which are well defined in the market. Of course the sleight of hand here is to fix the supply of the highest denomination unit to 21 million, thus ensuring that those holding whole Bitcoins will get relatively richer and richer as more and more Bitcoin subunits are required to buy a single Bitcoin.


And why 21 million Bitcoins, why not just 1? With infinite divisibility why do you need more than 1? Or perhaps that would make it a little too easy for people to see that in a system where one tiny part of the whole and the whole can perform the same function , and that whole can be broken up to infinity, that the claims of supply constraint are meaningless.

1 BTC = 100.000.000 Satoshis is arbitrary. You may use whatever metric you want, but 1 Satoshi is lowest amount you can have in blockchain.

well at this moment. But changes can be made to the source, so that it can be infinite!

In a hard fork which would be a new protocol.  If anyone supports the old one it will also still exist.   It won't be happening in our lifetime anyways.

[nanobtc]

Bittburger, it looks like it's already taken longer than 14 seconds...

[BitchicksHusband]

Actually the OP is a clever guy and has made some interesting posts in the past. It's a good thing to have critics. They sharpen our thinking.

So it's a bit disappointing to see him coming out with this guff.

Good point. Skeptical thinking is a virtue. And no one should be beaten up for not understanding.

No, but when you stubbornly insist you are right when EVERYONE is telling you you are wrong, you'll start to take abuse.

[2_Thumbs_Up]

Once more, and then I'll just have to accept that having a vested interest means you lot will never get it.


The 21 million units that are labelled Bitcoin are just an abstraction, the Bitcoin system is actually comprised of 2.1 quadrillion subunits, which can be inflated to infinity. Now you all cry that making a currency more divisible isn't the same as inflating the supply, but the comparison is being made to long established currencies which are well defined in the market. Of course the sleight of hand here is to fix the supply of the highest denomination unit to 21 million, thus ensuring that those holding whole Bitcoins will get relatively richer and richer as more and more Bitcoin subunits are required to buy a single Bitcoin.


And why 21 million Bitcoins, why not just 1? With infinite divisibility why do you need more than 1? Or perhaps that would make it a little too easy for people to see that in a system where one tiny part of the whole and the whole can perform the same function , and that whole can be broken up to infinity, that the claims of supply constraint are meaningless.

I think you are misunderstanding inflation.

Thought experiment, imagine every dollar bill in existence magically had an extra 0 printed on them (lets suppose there are no fractions of dollars for simplicities sake). Every 1 dollar bill becomes a 10 dollar bill, every 10 dollar bill would become a 100 dollar bill etc. What would happen? As soon as everyone has figured this out, the only thing that would happen is that everyone ads a 0 on all their price tags as well, so that a good that previously cost 3 dollars would now cost 30 dollars. You could argue that the dollar supply, in terms of the "base unit", increased tenfold, but this wouldn't matter as everones wealth in dollars did as well.

This is the kind of "inflation" of base units bitcoins may experience. It is irrellevant. Inflation doesn't have bad consequences of itself. It is bad because it usually comes with a redistributive effect of wealth. If newly created money is spent into the economy from a fixed point, those who get it early benefit at the expense of those that get it late. As long as new money is distributed based on what you already own, the only effect will be new prices in terms of what you seem to call the "base unit".

[RodeoX]

Actually the OP is a clever guy and has made some interesting posts in the past. It's a good thing to have critics. They sharpen our thinking.

So it's a bit disappointing to see him coming out with this guff.

Good point. Skeptical thinking is a virtue. And no one should be beaten up for not understanding.

No, but when you stubbornly insist you are right when EVERYONE is telling you you are wrong, you'll start to take abuse.

Let him think what he wants. It doesn't change the truth.  

[noedaRDH]

The OP is stupid.

[Odalv]

The OP is stupid.

+21M

[rampantparanoia]

The OP is stupid.

+21M

+ 2.1 quadrillion

[oda.krell]

OP seems pretty trollish to me... Keeps spouting the same vague, nonsensical bullshit for 8 pages.

If I have 1 bitcoin (100,000,000 satoshis) and the divisibility is increased by a factor of 10, so I now have 1,000,000,000 of the smallest unit (which is 1/10 a satoshi), then how is my wealth changed? Clear simple sentences, using logical arguments, please.

As I wrote in a comment above (which was torn to pieces immediately), since the value of a traded item (like btc) is determined by an (often irrational) market, it is not the end of the argument to say that increasing divisibility formally doesn't change the value of the base unit.

Here's an (abbreviated) version of my argument for why increasing divisibility could potentially drive down price. (Note: I'm saying "could", not "necessarily will").

(1) Markets, including the btc market, act irrational all the time. Example 1: "round number" (10$, 100$, etc) are major points of resistance and support, for no deeper reason than that our little monkey brains seems to like such numbers. Example 2: Most of us don't feel like that, but I've seen several newcomers complain that "price per coin is too high now, to still enter the market". The answer by us is always: price per 1 btc is irrelevant, but on the other hand, many of us are willing to entertain the idea to "switch" to mBTC to make the entrance level appear lower.

(2) The above are just general examples of markets being "irrational". You could say they prove nothing yet about divsibility and btc evaluation. Obviously, I don't have any proof anyway, hence my cautiousness "it *could* conceivably drive price down". But here's one slightly more concrete argument for *why* it might actually affect the market's valuation of the base unit if divisibility increases. We need three assumptions (which you might or might not share, but they're at least conceivably true): (i) price is determined "bottom up", instead of "top down", i.e. each market participant runs some (unconscious, probably) calculation that determines the value of the base unit based on the sum of all sub-units. (ii) there is a "smallest possible value" our brains can conceive. (iii) an item is never valued at 0 (if it has any worth at all). With those three assumptions in place (REMINDER! I didn't say they're necessarily true. Just that they're not completely implausible to me!), the argument is: Let N be the total number of sub-units of a bitcoin. Assume that for some market participant, each subunit already is valued at the smallest possible value X he can conceive/assign to an item. Now increase the number of subunits by any factor > 1. From (iii) we know that each subunit needs to be assigned a value, and by (ii) we know that X is already the smallest item. So each new subunit is valued at X. So the value of the base unit, for this market participant, increased by the factor we increased divisibility with.

BIG FAT HONKING DISCLAIMER, because I'm getting tired of the respectless atmosphere in so many discussions in here:

I'm not saying "increasing divisibility drives down price to 0".

And I do actually think OP was trolling with his original claim, which is much bigger than what I'm saying.

And if you read my argument carefully, it doesn't say anywhere that I am sure that price would drop, just that I could clearly see the possibility that it happens, based on the intuitive understanding (and lack of formal understanding) of the average market participant.

IF, AFTER ALL OF THE ABOVE, you still feel the need to tell me that I'm an idiot for "not knowing that increasing divisibility doesn't change anything about the value of a coin", then... well, go fuck yourself :/

[DeathAndTaxes]

@oda.krell

So you believe in an appeal to stupidity?  Paraphrased it is "I am smart and won't be fooled by this utter nonsense, but the masses are stupid and can't educated themselves so it will fail".

This also assumes there is a massive amount of very rich but also very stupid people.   The good news is free markets are self correcting.  If these hypothetical very rich but very stupid people sell off in masses there will be a transfer of wealth to marginally smarter but less rich people.  Tada.  Problem is self correcting.

However anecdotally we have seen this is just nonsense.  Canada recently eliminated their penny.  The sub division of the Canadian dollar was reduced by a factor of 5x.  By your logic we should have seen the Canadian dollar skyrocket 500% against other currencies as the ultra rich but ultra stupid people in the world suddenly believed in mass the scarcity of the Canadian dollar was greatly increased and dump other assets to buy the more "valuable" Canadian dollar.  Of course we saw no such change in exchange rates or prices.

[oda.krell]

@oda.krell

So you believe in an appeal to stupidity.  Paraphrased I am smart and won't be fooled by this but the masses are stupid and can't educated themselves so it will fail.

This also assumes there is a massive amount of very rich but also insanely stupid people.   The good news is free markets are self correcting.  If these hypothetical very rich but very stupid people sell off in masses there will be a transfer of wealth to marginally smarter but less rich people.  Tada.  problem is self correcting.

However anecdotally we have seen this is just nonsense.  Canada recently eliminated their penny.  The sub division of the Canadian dollar was reduced by a factor of 5x.  By your logic we should have seen the Canadian dollar skyrocket 500% against other currencies as the ultra rich but ultra stupid people in the world suddenly believed in mass the scarcity of the Canadian dollar was greatly increased.  Of course we saw no such change in exchange rates or prices.

@D&T

Had you actually read my (very handwavy, very speculative) argument why a price drop could be the result of the way humans compute value, you would see that your  Canadian dollar example is still compatible with my (handwavy, speculative) hypothesis.

[Tirapon]

@oda.krell

You are obviously quite smart, I don't think any of the 'idiot' comments were directed at you.

[Siegfried]

you are right, because all stupid people thinking like OP will think it will divide value of Bitcoin, if they are enough, this will happen.

and guess what, a lot of people bring this argument to me when I discuss about bitcoin IRL, and not so stupid people. I have to bring the pie lots of times.

and I pretty agree the market have a lot of irrational influence  

People so stupid will be late adopters and so will not be able to acquire enough bitcoins to significantly damage the value if they then decide to panic sell when smaller units start to be used.

[eclipse81]

wow this thread has been great....read  a few pages earlier in the day,got some laughs.Decided to check it later got some more laughs.The only thing I can think of is that the op is either

A.Troll

B.A bear who sold early and possibly dissuaded others from investing and is now trying to justify those positions

C.Incapable of understanding even the most basic concepts of mathematics

D.An Idiot

E.All of the above



Maybe he thinks they are like diamonds-wherein often 10 1/10th carat diamonds are not worth the same as one 1 carat diamond of the dame quality....Either way it frightens me people like this exist and can operate a computer.

[BittBurger]

I've noticed one very common trait among trolls:

They never get riled up.  They never get emotionally involved.  They never act irritated when 45 people don't see their point.

They just calmly keep typing shit that drives everyone else crazy.

They do this because they are doing it on purpose.  To get a rise out of others.

They aren't emotionally or intellectually vested in what they are saying at all.

revans fits this description.

[smoothie]

I honestly think the OP is Peter Schiff. I could be wrong, but it sure sounds like him.

[hieroglyph]

The second I finished reading the OP I laughed to myself.  How can someone make such illogical claims is beyond me but I'm glad to see people are on the same page and aren't agreeing with such insane logic.  the fact the BTC is easily divisible is a plus...
I mean c'mon man!

[DeathAndTaxes]

Your late to the party.  The resident troll tired of this (reason #287 on why Bitcoin will fail) and is now on to the next reason.  Generally speaking a short attention span so you got to be quick.

[hieroglyph]

Your late to the party.  The resident troll tired of this (reason #287 on why Bitcoin will fail) and is now on to the next reason.  Generally speaking a short attention span so you got to be quick.

haha yeah, I find I'm doing a hole lot of catching up on the boards these days and in general.  but it seems the more things change the more things stay the same especially when trolling is involved.   

[rampantparanoia]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

Really dude? I mean, really? I can't get my $1 chicken sandwich for 1000 of whatever those units are of my dollar? That's bullshit.

[trepper]

Divisibility doesn't reduce anyone's holdings. Control of 1 BTC is currently control off 100m satoshis. Increase divisibility by a million, and that same 1 BTC represents control of 100 trillion satoshis. It's all about percentages.

You may be right about divisibility, but you don't adress another issue: if the transaction fee remains at its actual value, bitcoin transaction will become more and more expensive (Paypal could become cheaper, for example)...

[trepper]

The "a" has been corrected, but the issue remains

[fiddelingones]

Divisibility doesn't reduce anyone's holdings. Control of 1 BTC is currently control off 100m satoshis. Increase divisibility by a million, and that same 1 BTC represents control of 100 trillion satoshis. It's all about percentages.

You may be right about divisibility, but you don't adress another issue: if the transaction fee remains at its actual value, bitcoin transaction will become more and more expensive (Paypal could become cheaper, for example)...

The transaction fee is adjusted as the price increases

0.01 -> 0.0005 -> 0.0001

[coinpr0n]

Divisibility doesn't reduce anyone's holdings. Control of 1 BTC is currently control off 100m satoshis. Increase divisibility by a million, and that same 1 BTC represents control of 100 trillion satoshis. It's all about percentages.

You may be right about divisibility, but you don't adress another issue: if the transaction fee remains at its actual value, bitcoin transaction will become more and more expensive (Paypal could become cheaper, for example)...

The transaction fee is adjusted as the price increases

0.01 -> 0.0005 -> 0.0001

I'd hope so. Or maybe by then off-chain transactions could do the trick.

[Kluge]

Knowing that a dollar bill can be divided into 100 pennies does not change my opinion of dollars.

And what if it was decided one day that it could be divided into 1000?

Really dude? I mean, really? I can't get my $1 chicken sandwich for 1000 of whatever those units are of my dollar? That's bullshit.

Actually... that argument would have merit. Coins aren't legal tender, and it's considered rude as fuck to pay for something in pennies (if the store will even tolerate it).

If there were sub-pennies, which'd be utterly worthless by any definition (really, a penny is worthless), and you tried using them to pay for something, a cashier would probably throw the coins in your face. It costs the store more money to have the cashier wait for you to count, and then to double-check than the profit from the transaction is worth.

Bitcoin kind of has this problem, in a way. In calculating fees, 1BTC is way more valuable than a hundred-million satoshis, which I don't think would even be spendable. Because of the cost to store that shit in the blockchain, it will probably never be spendable unless a bitcoin costs something like $1B each. In a way, bitcoins become less fundamentally valuable as they increase in price, because your average transaction amount is going to decrease, while fees for smaller transactions is more harsh than with larger transactions (or at the least, static). We need more scalability solutions in place (even if it is just a bunch of universities hosting the full blockchain as a public service in exchange for donations) before Bitcoin starts increasing the number of digits after the radix point and decreasing fees.

[DeathAndTaxes]

I'd hope so. Or maybe by then off-chain transactions could do the trick.

What do you mean you "hope so" he is telling you what has ALREADY happened.

Tx fees have already been reduced from 10 mBTC to 1 mBTC to 0.5mBTC to 0.1mBTC just in the last four years.