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Author Topic: Isn't it a bad thing to never have more than 21 million coins?  (Read 3048 times)
JViz
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September 20, 2011, 08:07:25 AM
 #1

What if it's super popular and such? I know it can be divided, and a single Satoshi is 10^-8, but capping out make it seem more like real estate to me than currency.
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Iseree22
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September 20, 2011, 08:24:37 AM
 #2

My opinion is yes.

Ultimately when all the bitcoins are created, a deflation will occur. Deflation creates an incentive to reduce the number of financial transactions. Holders of the currency have an incentive to hoard. This will lead to sub-optimal use of the productive capacity of the bitcoin economy. Eventually, people will be forced to sell their productive assets to survive and consequently cause a misalignment of productive capacity within the Bitcoin Community.

However, that point is a long-time away. I also think that their will be a bitcoin credit boom, which will have cause inflation, and economic growth in the future.

Just my 2 cents.

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September 20, 2011, 08:27:06 AM
 #3

Its more like gold than traditional currency. Whether thats good or bad for a currency depends on your economic views. Keynesians think no, goldbugs think yes.

penix
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September 20, 2011, 03:48:37 PM
 #4

I don't see deflation as a bad thing. It will strengthen the currency against weakening fiat currencies over time. This provides a reason to buy into Bitcoin over other currencies; as a store of value. Those who hold Bitcoins will slowly gain more purchasing power over time. I do not see hoarding as a becoming a problem. After all, currency is useless if you never spend anything, so there is no reason to hoard forever. Healthy savings is beneficial. Look at the USA with our massive debt problems. On the other hand, China, has a super heated economy, and a huge savings rate.

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September 22, 2011, 04:32:34 PM
 #5

I would think it would be a bad thing. My thoughts are that once all the bitcoins are distributed the system would see some stagnation. If the user base is large enough to keep transactions going then this wouldn't be a problem but maybe there will be a retooling of the whole concept by that point. Some type of bitcoin v2.

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September 22, 2011, 11:13:45 PM
 #6

Isn't it possible to add some more bitcoins to the network in the far future? Imagine what will happen in a few hundred years. People "lose" some bitcoins every now and then and they will never get these bitcoins back. So in several hundred years, we may have a problem to use bitcoins, because there aren't enough in the network.

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ThePiachu
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September 22, 2011, 11:49:48 PM
 #7

There will never be a shortage of bitcoins. You can add more precision to the transactions and run world's economy on one coin.

Before all bitcoins will be generated the generation rate will gradually slow down. Before then the economy should start to move more and more and people should be trading enough to make transaction fees the dominant part of bitcoin economy, not block rewards.

Inflation is leading the world into economical crysis. Lets give deflation a go and see what happens. Just because sometihng is different doesn't mean it's bad. Even the economists, people that spend most of their lives studying and debating this aren't really sure which answer is the best. This is just one of the approaches. If you want to have an inflation economy, go ahead, make InflationCoins chain and start giving out 50 InflationCoins every 10 minutes until the end of the world or Internet and see what will happen. It might be the right solution, it might be the wrong solution. Try doing some science and experiment.

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September 23, 2011, 02:24:39 AM
 #8

I like the idea of using something like bitcoins as an economic experiment. See how a deflationary economy pans out and use the lessons learned on future endeavors.

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Explodicle
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September 23, 2011, 02:42:43 AM
 #9

In theory, once a population relies on a fixed-quantity cryptocurrency, that currency will appreciate in value relative to the economic growth rate. So there would still be some investment, but it would be more conservative than with inflationary currency.

In opinion, this might be stagnation, or less bubbly-bursty, or more "fair" to poor people. Apply your economic school as desired.
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September 23, 2011, 03:13:52 AM
 #10

Personally, when the last coin is minted, I think the whole thing is going to crash, I'll tell you why...

There are only 3 ways to get coins, mine them, buy them (including trading for good/services), and earning transaction fees.  This in itself is not a problem.  But if you look at the the fact that the majority of coins are held by hoarders because there is nothing to force the exchange of coins problems arise.

Right now, the majority of the network that allows BitCoin to run is supplied by miners, either solo, or in a pool.  So when the last coin is minted, all the miners go away.  So the majority of the network goes away. BitCoin will survive, but will be on life support.  It also leaves the network open to brute force attacks, such a chain takeovers at 51%, but that's a whole separate problem.

Mining is gone, so that leaves buying/trading, and transaction fees.  These two are linked, transactions fees are awarded when BitCoins are exchanged (bought/sold/etc.).  As it stands right now the majority of the polls out there keep the transaction fees for themselves, so the end user never even sees them.  But the fact is, transaction fees by themselves are not enough to pay to keep hardware running, either for a pool, or the end user.  So all the pools go away along with the few people still running BitCoin to keep the network going.  End of Bitcoin.


It's a bit more complex than this, but this is a general idea.

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payb.tc
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September 23, 2011, 05:25:01 AM
 #11

So when the last coin is minted, all the miners go away.

Mining is gone, so that leaves buying/trading, and transaction fees.  These two are linked, transactions fees are awarded when BitCoins are exchanged (bought/sold/etc.).  

no, you're confused.

transaction fees are earned by miners who will gradually earn more and more transaction fees as they gradually earn less and less for block rewards.

miners are here to stay.
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September 23, 2011, 05:45:02 AM
 #12

Well Considering all the bitcoins wont be found until our grand childrens, children wont see that day. I think that everyone would come into the agreement to happen what ever may need be.

That being said by that time some other alien currency will come out.
Maybe Perfect Coin!?!?!?

Oh wait wasent that soliccoins purpose?
P4man
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September 23, 2011, 07:30:21 AM
 #13

Quote from: payb.tc link=topic=44832.msg540855#msg540855

no, you're confused.

transaction fees are earned by miners who will gradually earn more and more transaction fees as they gradually earn less and less for block rewards.

miners are here to stay.

Exactly. Although the volume of transaction fees depends on the number of transactions. So if bitcoin doesnt become more popular as payment method in the next few years, there wont be enough incentive to keep lots of miners around and the network could become vulnerable. Either that, or transactions would have to become rather expensive, limiting bitcoins adoption. It has potential for a catch 22.

Personally, I dont think it will become a problem. Mining for blocks will be around for long enough to give bitcoin time to expand. If it doesnt happen in the next 5 or so years, its probably not going to happen. Also Im pretty sure a fairly large crowd will continue mining even if its not profitable.

Xenland
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September 23, 2011, 08:07:56 AM
 #14

I can honestly say ill be here when everyone else drops off even when everyone else has no imcentive.
Bitcoin has saved me from debt when mining was profitable and i think i would owe it to bitcoin to get back into debt to keep it going.
*knock on wood
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September 23, 2011, 08:52:06 AM
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I can honestly say ill be here when everyone else drops off even when everyone else has no imcentive.

Dont say such a thing!!  Shocked

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September 23, 2011, 09:32:05 AM
 #16

Oh bagezus.... I hope your tonka truck isnt for trolling Tongue
Tonka Branded Truck
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September 23, 2011, 10:11:19 AM
 #17

Oh bagezus.... I hope your tonka truck isnt for trolling Tongue
hahahaha no way. It's for driving. Smiley

It'd be cool if it was full of BTC tho

ThePiachu
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September 23, 2011, 12:37:36 PM
 #18

"...when the last coin is mined..."
It`s interesting when people use that phrase. I wonder if they know the process of halving the mined Bitcoins. If so, do they consider the last coin mined to be the time when the fraction goes below 1BTC, even though there will be some coins to mine still, or until it is so hard to divide that people will see it as noise in their accounts?Wink

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idontknow
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September 24, 2011, 03:01:37 AM
 #19

Oh bagezus.... I hope your tonka truck isnt for trolling Tongue
hahahaha no way. It's for driving. Smiley

It'd be cool if it was full of BTC tho

Maybe on a USB stick?

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Gabi
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September 24, 2011, 05:37:43 PM
 #20

What if it's super popular and such? I know it can be divided, and a single Satoshi is 10^-8, but capping out make it seem more like real estate to me than currency.
It can be divided more than 10^-8, so, don't worry
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