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Author Topic: Bitcoin Value  (Read 1985 times)
redwraith
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April 09, 2012, 07:30:49 AM
 #21

How so?  It's programmed to stop at 21 million, right?
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payb.tc
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April 09, 2012, 07:36:46 AM
 #22

How so?  It's programmed to stop at 21 million, right?

the number of bitcoins yes, not the number of bitcoin-denominated money supply.

let say the cap is 1 bitcoin, and the coin belongs to A. then A decides to lend it to B and so on until it's in the hands of E:

A->B->C->D->E

person E holds 1 bitcoin (can be used as money)
A, B, C & D each hold a note that says "IOU 1 bitcoin" which can also be used as money.[1]

total bitcoins: 1
total bitcoin economy: 5 btc

the fact that B, C, D & E also have debt is irrelevant. if i am $1 in debt and have $1 in my pocket my net worth may be $0, but i can still physically spend that $1 wherever i want. both the debt and the dollar are part of the total economy.

[1] https://bitcointalk.org/index.php?topic=74926
redwraith
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April 09, 2012, 08:00:17 AM
 #23

How so?  It's programmed to stop at 21 million, right?

the number of bitcoins yes, not the number of bitcoin-denominated money supply.

let say the cap is 1 bitcoin, and the coin belongs to A. then A decides to lend it to B and so on until it's in the hands of E:

A->B->C->D->E

person E holds 1 bitcoin (can be used as money)
A, B, C & D each hold a note that says "IOU 1 bitcoin" which can also be used as money.[1]

total bitcoins: 1
total bitcoin economy: 5 btc

the fact that B, C, D & E also have debt is irrelevant. if i am $1 in debt and have $1 in my pocket my net worth may be $0, but i can still physically spend that $1 wherever i want. both the debt and the dollar are part of the total economy.

[1] https://bitcointalk.org/index.php?topic=74926

That is true, only if it's possible to "lend" bitcoin.  What you are describing is fractional reserve banking and is completely counter-productive to what bitcoin represents.
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April 09, 2012, 08:06:12 AM
 #24

How so?  It's programmed to stop at 21 million, right?

the number of bitcoins yes, not the number of bitcoin-denominated money supply.

let say the cap is 1 bitcoin, and the coin belongs to A. then A decides to lend it to B and so on until it's in the hands of E:

A->B->C->D->E

person E holds 1 bitcoin (can be used as money)
A, B, C & D each hold a note that says "IOU 1 bitcoin" which can also be used as money.[1]

total bitcoins: 1
total bitcoin economy: 5 btc

the fact that B, C, D & E also have debt is irrelevant. if i am $1 in debt and have $1 in my pocket my net worth may be $0, but i can still physically spend that $1 wherever i want. both the debt and the dollar are part of the total economy.

[1] https://bitcointalk.org/index.php?topic=74926

That is true, only if it's possible to "lend" bitcoin.  What you are describing is fractional reserve banking and is completely counter-productive to what bitcoin represents.

read this forum. it's definitely possible to lend bitcoins, and the above has nothing to do with fractional reserve banking.

fractional reserve would be if A lent his bitcoin to B and then B somehow lent a whole bitcoin to 3 different people:

A->B

B->C
B->D
B->E

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April 09, 2012, 08:51:53 AM
 #25

That is true, only if it's possible to "lend" bitcoin.  What you are describing is fractional reserve banking and is completely counter-productive to what bitcoin represents.
Of course it's possible to lend bitcoins. It's also possible to have fractional reserve banking with bitcoins. Neither of these is any way against what bitcoin represents. Bitcoin represents a currency, nothing more.

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
FreeMoney
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April 10, 2012, 02:02:55 PM
 #26

To varying degrees "bitcoin denominated money" is not a complete substitute for real bitcoins. The amount and quality of BDM will be determined by the market. If people somehow value BDM that will obviously never be repaid "deposit 1BTC and get 10 happy coins fully redeemable for bitcoins!" then there may well be tons of it, but that crap won't affect me much.

A major difference from what we're used to is that when people get burned by bad BDM it is on them and the whole of users don't have to pay via bailouts. This will give very strong incentive for people to hold their own real coins or thoroughly vet providers of BDM.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
payb.tc
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April 10, 2012, 03:05:51 PM
 #27

To varying degrees "bitcoin denominated money" is not a complete substitute for real bitcoins. The amount and quality of BDM will be determined by the market. If people somehow value BDM that will obviously never be repaid "deposit 1BTC and get 10 happy coins fully redeemable for bitcoins!" then there may well be tons of it, but that crap won't affect me much.

A major difference from what we're used to is that when people get burned by bad BDM it is on them and the whole of users don't have to pay via bailouts. This will give very strong incentive for people to hold their own real coins or thoroughly vet providers of BDM.

yeah of course... even in the example linked to, ~1800 of bdm only had a market value of 100 btc.
blrrgh
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April 13, 2012, 05:00:23 AM
 #28

What bothers me is that the arbitrary total of 21 million BTC is far less than the total number of human beings alive today.  This is far less then 1 BTC per person, at a certain point any transaction in BTC will be completed in fractional values so small as to make the currency completely unwieldy.  This is despite my belief that an alternate currency by choice sounds like a great idea.
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April 13, 2012, 05:54:30 AM
 #29

What bothers me is that the arbitrary total of 21 million BTC is far less than the total number of human beings alive today.  This is far less then 1 BTC per person, at a certain point any transaction in BTC will be completed in fractional values so small as to make the currency completely unwieldy.  This is despite my belief that an alternate currency by choice sounds like a great idea.
Each bitcoin is divisible down to 8 decimal places. There is nothing "unwieldy" about using these fractional values, you just use different units, eg 1 mBTC = 0.001 BTC, 1 µBTC = 0.000001 BTC, etc. It's not like we have to actually mint really tiny coins or anything. Cheesy

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
Dan The Man
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April 13, 2012, 01:22:14 PM
 #30

What bothers me is that the arbitrary total of 21 million BTC is far less than the total number of human beings alive today.  This is far less then 1 BTC per person, at a certain point any transaction in BTC will be completed in fractional values so small as to make the currency completely unwieldy.  This is despite my belief that an alternate currency by choice sounds like a great idea.
Each bitcoin is divisible down to 8 decimal places. There is nothing "unwieldy" about using these fractional values, you just use different units, eg 1 mBTC = 0.001 BTC, 1 µBTC = 0.000001 BTC, etc. It's not like we have to actually mint really tiny coins or anything. Cheesy

Every see a silver penny? It's pretty unwieldy.

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April 13, 2012, 01:40:57 PM
 #31

What bothers me is that the arbitrary total of 21 million BTC is far less than the total number of human beings alive today.  This is far less then 1 BTC per person, at a certain point any transaction in BTC will be completed in fractional values so small as to make the currency completely unwieldy.  This is despite my belief that an alternate currency by choice sounds like a great idea.
Each bitcoin is divisible down to 8 decimal places. There is nothing "unwieldy" about using these fractional values, you just use different units, eg 1 mBTC = 0.001 BTC, 1 µBTC = 0.000001 BTC, etc. It's not like we have to actually mint really tiny coins or anything. Cheesy

Every see a silver penny? It's pretty unwieldy.

You think that's unwieldy? My wallet contains the equivalent of thousands of pennies. It's a real nuisance when I'm trying to pay the grocery bill. But that's nothing compared to my savings account. It contains millions of pennies. How do you suppose the bank keeps track of them all? It boggles the mind! Shocked

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
kokjo
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April 13, 2012, 01:47:49 PM
 #32

the real awesomeness of bitcoin is that 1000BTC takes the amount of space to store, as 0,00000001BTC.

thats the real deal.

"The whole problem with the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts." -Bertrand Russell
elendir
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April 16, 2012, 11:05:10 AM
 #33

The REAL awsomnes of btc is that you don't get scammed by government printers.

Coinee = First cash-to-cash money transfer backed by bitcoin.
jack daniels
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April 18, 2012, 02:26:18 PM
 #34

So what happens if a government steps in and buys a bunch of btc. If they were to hold on to all their coins. How would that affect the value of btc for the average consumer. Would people start using smaller btc so they don't have to pay the value that said government wants for their coins? I like the idea that it's very hard for one person to control all the btc. Am i correct about this?
Foxpup
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April 18, 2012, 03:05:17 PM
 #35

So what happens if a government steps in and buys a bunch of btc. If they were to hold on to all their coins. How would that affect the value of btc for the average consumer.
The value would go up, the same as if anyone else bought a lot of bitcoins.

Would people start using smaller btc so they don't have to pay the value that said government wants for their coins?
I'm not sure what you mean. The government can't sell bitcoins for more than what people would be willing to pay on the open market (and can't buy bitcoins for less than what people are will to sell for). This is true of any currency, not just Bitcoin.

I like the idea that it's very hard for one person to control all the btc. Am i correct about this?
Yes, in a way, because the more you want to buy, the higher the price per bitcoin becomes, since you can only buy bitcoins if you can find people willing to sell them, and some people are not willing to sell unless an extremely high price is offered (and some people might be unwilling to sell at any price). However, the same is true of any limited commodity.

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
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