Why Limit Total BTC?

[felix_]

I don't understand why the supply of BTC has been engineered to approach a set value at a set (varying) rate. Surely you'd want the number of BTC in circulation to rise and fall in response to value changes in order to stabilize the currency. The current system is likely to lead to massive deflation, which will only serve to enrich the early adopters at the expense of latecomers. Its a classic pyramid selling scheme.

Can anyone help me understand the thinking behind the 21M limit?

Cheers
felix

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[silversurfer]

Who will write the algorithm for changing the supply of BTC in response to some arbitrary value changes?  I like how the supply of currency is totally predictable.

[felix_]

So the supply limit is a technical limitation of the algorithm and the massive deflation, pyramid scheme, etc is just something users will have to put up with?

[kiba]

I don't understand why the supply of BTC has been engineered to approach a set value at a set (varying) rate. Surely you'd want the number of BTC in circulation to rise and fall in response to value changes in order to stabilize the currency. The current system is likely to lead to massive deflation, which will only serve to enrich the early adopters at the expense of latecomers. Its a classic pyramid selling scheme.

It just mean that early adopters have higher purchasing power. Latecomers can save too and earn from the deflationary economy.

[kiba]

So the supply limit is a technical limitation of the algorithm and the massive deflation, pyramid scheme, etc is just something users will have to put up with?

The pyramid scheme have nothing to do with a deflationary economy.

[barbarousrelic]

Microsoft stock is designed to go up in value. Early adopters were greatly enriched at the expense of late adopters. Is Microsoft (or any successful stock-issuing business) a pyramid scheme?  

"Increasing value" is not a sufficient requirement to classify anything as a pyramid scam or Ponzi scheme.

[caveden]

Monetary stability (which normally implies in price deflation) is good for the economy.

And besides that, who would want bitcoins if they inflate constantly? If you have the choice of storing your wealth in something that is constantly created or in something which offer is stable, which would you prefer?

[felix_]

It just annoys me that when I buy my first 1000GBP of bitcoins, I'm buying what probably cost the seller a few dollars several months ago. That's 1000GBP of real money they've got from me and in return for what? Basically nothing. Certainly nothing of any inherent value (unlike stock which produces dividends).

[caveden]

Nothing has inherent value. Value is subjective, it's an opinion people have on stuff, not an inherent attribute of stuff themselves.

And if you think BTC have no value, why would you buy them? Keep your pounds in such case...

[barbarousrelic]

Many stocks pay no dividends.

[N12]

So the supply limit is a technical limitation of the algorithm and the massive deflation, pyramid scheme, etc is just something users will have to put up with?

Yes, the same as gold, Google stocks etc. are pyramid schemes. You’re on top of the pyramid btw.

[myrkul]

It just annoys me that when I buy my first 1000GBP of bitcoins, I'm buying what probably cost the seller a few dollars several months ago. That's 1000GBP of real money they've got from me and in return for what? Basically nothing. Certainly nothing of any inherent value (unlike stock which produces dividends).

Then do what I did: Bootstrap your way in by providing services or products in exchange for Bitcoins. Save said Bitcoins until the value raises.

[Ian Maxwell]

It just annoys me that when I buy my first 1000GBP of bitcoins, I'm buying what probably cost the seller a few dollars several months ago. That's 1000GBP of real money they've got from me and in return for what? Basically nothing. Certainly nothing of any inherent value (unlike stock which produces dividends).

I agree that the scenario you've outlined is basically what's happening. Why does it annoy you?

If you think bitcoins are too expensive now, don't buy them. But refusing to buy them because the seller will profit too much is just spiteful.

[tomcollins]

It just annoys me that when I buy my first 1000GBP of bitcoins, I'm buying what probably cost the seller a few dollars several months ago. That's 1000GBP of real money they've got from me and in return for what? Basically nothing. Certainly nothing of any inherent value (unlike stock which produces dividends).

Oh noes, someone else makes money!

[tomcollins]

It just annoys me that when I buy my first 1000GBP of bitcoins, I'm buying what probably cost the seller a few dollars several months ago. That's 1000GBP of real money they've got from me and in return for what? Basically nothing. Certainly nothing of any inherent value (unlike stock which produces dividends).

I agree that the scenario you've outlined is basically what's happening. Why does it annoy you?

If you think bitcoins are too expensive now, don't buy them. But refusing to buy them because the seller will profit too much is just spiteful.

According to a lot of people on the forum, being spiteful is good.  I think early adopters should sell me Bitcoins at $1/each since otherwise would be anti-social.