BitCoin: is it really finite?

[SwankyGoat]

Hello all,

I am new to this forum, so I hope you will not take my question wrongly.

I have been discussing Bitcoin with friends and people who have some substantial amounts.

I hear the claim that Bitcoin is finite, with a total of 21 million over and over again. However, this all seems like mind games to me and the people involved are not realising that in actual fact Bitcoin is infinite (or at least it's supply is!).

Before you jump on me, please allow me to explain.

The Bitcoin TOTAL is indeed fixed at 21 million. OK, that makes it finite right? Very Wrong!

The thing is Bitcoin is infinitely divisible, it can go as small as it needs to go, you can own 0.1% or 0.0000000000001% or even less...

This means that while the TOTAL is finite, the number of denominations / fractions / divisions has no limit.

Isn't everything like that? Isn't it the TOTAL that counts? NO.... and here is where the trick lies:

Let's make a thought experiment and take 21 million Bitcoin vs 21 Million litres of Water. Are both infinitely divisible? NO!

The Bitcoin is, you simply go smaller and smaller....... but you cannot do this with water, once you reach 1 molecule of water (H20), you cannot divide it further whilst keeping it as water...... if you break up the H20 Molecule it is not water anymore.

Therefore, 21 Million litres of Water actually has a limit, both in TOTAL and in DIVISIONS and is therefore a FINITE resource.

Bitcoin on the other hand has a limit in TOTAL, but not in DIVISIONS and is therefore an INFINITE resource.

None of the people heavily involved in Bitcoin have accepted or admitted this, on the other hand people with less or no investment, especially from Scientific and economic backgrounds, have agreed with me.

What would you make of this?

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[ranochigo]

It is finite.

Bitcoin's block rewards follows a geometric progression where the rewards halves every 210,000 blocks. If you were to take the sum of the geometric progression, it would be 21 million. This means that in a scenario whereby you have infinite number of blocks, the total supply cannot exceed 21 million no matter how divisible it gets. Making something more divisible doesn't change the fact that the total supply is the same. The value of each denomination is still proportionally smaller.

[DireWolfM14]

~

You're question has nothing to do with bitcoin, it's simple math.  1 is 1.  It's fixed at 1, no matter how many times you divide it, it's still 1.  1 doesn't' become worth more when you divide it, the value of the sum of it's denominations is is still 1.

[TryNinja]

In simple terms...

Let's imagine I have 1 BTC right now. In a few years, all 21 million BTC will be mined and I'll have 1/21,000,000 of the total BTC supply. Does that proportion change if people start saying that there are now 21,000,000,000 BTC (100x smaller unit)? Nah, I'll have 100/21,000,000,000... my share of the total BTC supply hasn't been diluted, and that's all that matters.

[pooya87]

The thing is Bitcoin is infinitely divisible, it can go as small as it needs to go, you can own 0.1% or 0.0000000000001% or even less...

No it is not. To divide the smallest unit (1 Satoshi) into smaller parts you would have to change the consensus rules using a hard fork.
In simple terms you can send 0 satoshi, you can send 1 satoshi but you can't send 0.1 or 1.1 satoshis.

By strict rules the amount field of each transaction is of a 64-bit integer type and the values it can contain is between 0 and 2100000000000000 (21 million bitcoin in satoshis). If you want to divide this to smaller values you'll have to first convince the entire bitcoin network to accept a hard fork where it changes this field into another integer type that supports smaller units and allows values outside of the mentioned range.

Not to mention that in math 1 = 1.0 = 1.00 = 1.000 = ...

P.S. It is "bitcoin" not "BitCoin".

[Charles-Tim]

<...>

Finite is a supply people can achieve over a certain time period. Like gold as an example, no gold miner or any other person can predict when all gold will be mined, even if estimated, it will take millions or billions of yeras, this makes gold infinite, unlike Bitcoin that almost 19 million are mined already. The total Bitcoin supply is 21 million in which over 98% would have been mined by 2050, this makes the supply finite. What some people argue is that the Bitcoin community can agree one day to increase the supply, but this can not happen because people would even prefer if the supply is reduced which will help in Bitcoin price valuation.

[o_e_l_e_o]

No it is not. To divide the smallest unit (1 Satoshi) into smaller parts you would have to change the consensus rules using a hard fork.

I think this is the wrong argument to make here. Even if it would require a hard fork, such a hard fork is not impossible. If in 100 years bitcoin is being used around the world and is worth $10 million per coin, then we can't have the scenario of the smallest spendable amount being ~$20, and so a hard fork to add more decimals may well take place. Further, Lightning network already goes to 11 decimal places and milli-satoshi, so already provides a 1000x increase in divisibility over the main chain. However, neither of these things change the fact that there a finite number of bitcoin which can ever exist.

If doesn't matter how much you divide up 21 million, there will still only ever be (slightly fewer than) 21 million bitcoin. There are infinite numbers between 0 and 1. That doesn't make 1 = infinity.

As for OP's water analogy, given the molecular weight of water is 18, in one liter of water there are 3.35*10²⁵ molecules. To apply the same degree of divisibility to bitcoin, the smallest unit would be somewhere around 0.00000000000000000000000001, or one milli-milli-milli-milli-milli-milli-satoshi. If that was equivalent to 1 US cent, a single bitcoin would be worth 1 trillion trillion dollars.

[LoyceV]

What would you make of this?

You're making a fundamental mistake: Bitcoin is based on math, while your comparison reminds me of ancient philosophy:

In a race, the quickest runner can never over­take the slowest, since the pursuer must first reach the point whence the pursued started, so that the slower must always hold a lead.
    — as recounted by Aristotle, Physics VI:9, 239b15

Or just look at the graph:

(source)

Obviously it won't ever cross (or even reach) 21 million.

[khaled0111]

The smallest unit in bitcoin is Satoshi and if the need to add more decimals arises then we will be simply creating a smaller unit but this doesn't make the bitcoin supply infinite.
Take the lightning network as an example. It allows sending fractions of Satoshis but this does not change the total supply of bitcoins.

If we want the supply to become infinite then we should remove the block reward halving rule as it's it what ensures we can't mine more than 21 million btc.

[BlackHatCoiner]

I am new to this forum

Welcome.

The Bitcoin TOTAL is indeed fixed at 21 million. OK, that makes it finite right? Very Wrong!

No, that makes you very wrong, because you're comparing finiteness with divisibility. If you pictured bitcoins as actual coins, there wouldn't be more than 21 million, which makes the supply limited. It doesn't matter if in the next decade we propose the Nakamotos (= 0.001 sats); Bitcoins will remain the same.

You should think about it. If gold could be caught in infinite pieces, would it make my gram infinite?

[pooya87]

I think this is the wrong argument to make here. Even if it would require a hard fork, such a hard fork is not impossible. If in 100 years bitcoin is being used around the world and is worth $10 million per coin, then we can't have the scenario of the smallest spendable amount being ~$20, and so a hard fork to add more decimals may well take place. Further, Lightning network already goes to 11 decimal places and milli-satoshi, so already provides a 1000x increase in divisibility over the main chain. However, neither of these things change the fact that there a finite number of bitcoin which can ever exist.

Well OP wasn't arguing about what may or may not happen in the future but what is true right now (which obviously is false).
As for Lightning Network, what the second layer does is not going to change the bitcoin protocol. So bitcoin is still not divisible to any smaller units than a satoshi. Another second layer could give you 1 bitcoin for every 2 bitcoin you lock in a channel and that still wouldn't change anything about bitcoin protocol.

[NeuroticFish]

Therefore, 21 Million litres of Water actually has a limit, both in TOTAL and in DIVISIONS and is therefore a FINITE resource.

First of all, while 21M litres of water you can also split into very very small droplets (of water), it's still 21m litres.
Then, while 21M litres of water you can split into much more very small droplets, with Bitcoin you cannot do the same just like that.

Now, Bitcoin. Indeed, the 21M Bitcoin you can see as 2 100 000 000 000 000 satoshi, but that's still 21M bitcoin.
Now, the problem is that without changes deep in the code, changes which arguably will make it not be the "original bitcoin" anymore (!), we cannot go (on bitcoin blockchain) "deeper" than the satoshi unit, while with water you can go as low as the H2O molecule (much lower than the visible droplet).

[o_e_l_e_o]

changes which arguably will make it not be the "original bitcoin" anymore (!)

I don't think that's true. We have made plenty of changes to the original bitcoin code, and yet what we have is still the only true bitcoin. Satoshi even touched on the possibility of adding more decimals or even moving the decimal point to make the numbers easier to deal with:

Eventually at most only 21 million coins for 6.8 billion people in the world if it really gets huge.

But don't worry, there are another 6 decimal places that aren't shown, for a total of 8 decimal places internally.  It shows 1.00 but internally it's 1.00000000.  If there's massive deflation in the future, the software could show more decimal places.

If it gets tiresome working with small numbers, we could change where the display shows the decimal point.  Same amount of money, just different convention for where the ","'s and "."'s go.  e.g. moving the decimal place 3 places would mean if you had 1.00000 before, now it shows it as 1,000.00.

And as Satoshi says, relevant to OP's question, regardless of how many decimal places you use, or even where you put the decimal point, it is always the "same amount of money".

[NeuroticFish]

Satoshi even touched on the possibility of adding more decimals or even moving the decimal point to make the numbers easier to deal with:

I didn't know that. Thank you.
However, it doesn't change that such change will allow... some... have more ammo to claim that this is not the original Bitcoin (hence my use for the word  "arguably").

[tranthidung]

Why is Bitcoin’s supply limit set to 21 million?

According to an email purportedly shared between Nakamoto and Bitcoin Core contributor Mike Hearn, Satoshi reasoned that if 21 million coins were to be used by some fraction of the world economy, 0.001 BTC (1 mBTC) could be worth around €1. This prediction came true back in 2013, when Bitcoin first broke through the €1,000 price point; today, each mBTC is currently worth closer to €8.25.

Although Satoshi compares the price of Bitcoin to the Euro in his email, some simple mathematics indicates he may have had a much grander vision for Bitcoin—better explaining why the 21 million maximum figure was chosen.

At the time of Bitcoin's creation, the entire world's money supply stood at approximately $21 trillion. This figure, known as the M1 money supply, is made up of the total value of all the physical money in the world, including cash, coins, travelers' checks, and more.

If Bitcoin were to grow to become the single world currency—replacing all those that the M1 figure is comprised of—then each BTC would be worth $1 million. Because there are 100 million satoshi in each Bitcoin, this would place the value of each satoshi at $0.01.

Another explanation is simply math

• Here’s why Satoshi Nakamoto set Bitcoin’s supply limit to 21 million

Calculate the number of blocks per four year cycle:

6 blocks per hour
* 24 hours per day
* 365 days per year
* 4 years per cycle
= 210,240
~= 210,000

Sum all the block reward sizes:

50 + 25 + 12.5 + 6.25 + 3.125 + … = 100

Multiply the two:

210,000 * 100 = 21 million.

Or just look at the graph:
...

(source)

Obviously it won't ever cross (or even reach) 21 million.

A different chart from Bitcoin Wiki - Controlled supply and a different visual presentation from @fillippone with Equivalent Network Time
👉 Bitcoin will become more precious with time and with more amount of lost Bitcoin.

[kxwhalexk]

I want to share my views as a novice.

One block every ten minutes will be rewarded at the beginning of the packaged 50 bitcoins.
Four years later, each package will be rewarded with 25 bitcoins.
After four years, it will be 12.5, which means it will be reduced by half every four years.
Let’s first calculate how many bitcoins there are.First, you will calculate a block every ten minutes. One block has a reward of 50 bitcoins, an hour and 60 minutes, 6 times of calculating opportunities, 24 hours a day, 365 days a year.


This is the case for the first four years：365*24*6*50*4=10512000 btc

Since it is halved every four years, you can use the following formula to calculate：10512000*（1+1/2+1/2²+.....+1/2ⁿ）=21000000btc

（A key limiting factor is that the smallest unit of Bitcoin is 8 digits after the decimal point.So 1/2ⁿ must be greater than 0.00000001）

edit：Sorry i made a few small mistakes.
This is the case for the first four years：In fact, the time is calculated based on 210,000 blocks, each block is 10 minutes，
so it should be 210000*10/60/24=1458.333..days
The number of bitcoins you get in first 1458.33..days is 210,000*50=10500000
Since it is halved every 1458.33..days , you can use the following formula to calculate：10500000*（1+1/2+1/2²+.....+1/2ⁿ）

[BlackHatCoiner]

This is the case for the first four years：365*24*6*25*4=10512000 btc

If you want to be precise, that's wrong, because within 4 years, there's a 29th of February. I don't know why you want to calculate it that way, but it'd be like this for the first halving: 50*144*x = 10500000 => x = 4375/3 = 1,458.3 days.

Since it is halved every four years, you can use the following formula to calculate：10512000*（1+1/2+1/2²+.....+1/2ⁿ）=21000000btc

Yes, you can. In the 34th halving the reward won't be greater than 0.00000001.

[kxwhalexk]

This is the case for the first four years：365*24*6*25*4=10512000 btc

If you want to be precise, that's wrong, because within 4 years, there's a 29th of February. I don't know why you want to calculate it that way, but it'd be like this for the first halving: 50*144*x = 10500000 => x 4375/3 = 1,458.3 days.

Since it is halved every four years, you can use the following formula to calculate：10512000*（1+1/2+1/2²+.....+1/2ⁿ）=21000000btc

Yes, you can. In the 34th halving the reward won't be greater than 0.00000001.

lol, yes, thank you for your reminder, for the convenience of calculation，I did not consider this particular situation.

[LoyceV]

This is the case for the first four years：365*24*6*25*4=10512000 btc

If you want to be precise, that's wrong, because within 4 years, there's a 29th of February. I don't know why you want to calculate it that way, but it'd be like this for the first halving: 50*144*x = 10500000 => x = 4375/3 = 1,458.3 days.

Even better: "years" have nothing to do with it, Bitcoin halvings happen every 210,000 blocks.

It seems OP left Bitcointalk 14 minutes after he created his account. Maybe he's learning math, maybe he's still adding nines to 0.999999999999999999999 to proof it's infinite and will become larger than 1 if he is persistent enough.

[kxwhalexk]

This is the case for the first four years：365*24*6*25*4=10512000 btc

If you want to be precise, that's wrong, because within 4 years, there's a 29th of February. I don't know why you want to calculate it that way, but it'd be like this for the first halving: 50*144*x = 10500000 => x = 4375/3 = 1,458.3 days.

Even better: "years" have nothing to do with it, Bitcoin halvings happen every 210,000 blocks.

It seems OP left Bitcointalk 14 minutes after he created his account. Maybe he's learning math, maybe he's still adding nines to 0.999999999999999999999 to proof it's infinite and will become larger than 1 if he is persistent enough.

yes，it's right.

I edited my reply：Sorry i made a few small mistakes.
This is the case for the first four years：In fact, the time is calculated based on 210,000 blocks, each block is 10 minutes，
so it should be 210000*10/60/24=1458.333..days
The number of bitcoins you get in first 1458.33..days is 210,000*50=10500000
Since it is halved every 1458.33..days , you can use the following formula to calculate：10500000*（1+1/2+1/22+.....+1/2n）