Bitcoin crashes when those investing realise 2 things

[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.

[1715320121]

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[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.