Bitcoin crashes when those investing realise 2 things

[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.