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A balanced view is that all the articles hold some substance. But the technology is more at threat through its own community than any external force. One quest

A balanced view is that all the articles hold some substance. But the technology is more at threat through its own community than any external force. One question that I don't really understand is how can the total supply of BTC serve its own growth. If the market cap reaches the same value as gold for example - how long before one Satoshi becomes too large a divisible unit to be useful? Can you divide Satoshi?

colordrops 9y ago
With a hard fork you can, yes.
lokedhs 9y ago
Isn't the greater problem that the total market cap of bitcoin is always going to be 22 million? In other words, the single bitcoin I own will always be worth 1/22M of the entire market cap, regardless of how much it's used. And I only own one. There are lost of people out there who owns thousands of bitcoins. 1000 bitcoins is 1/22k of the entire market cap. How could this be sustainable?
- zdkl 9y ago
  I don't understand how the issue you're describing is specific to bitcoin. Consider that wealth in the real world also accumulates in a non gaussian distribution.
  - Nition 9y ago
    I think the comment is saying that in other currencies, if your currency's total value increases, usually more money is printed to keep the value reasonable. Even with other cryptocurrencies, Ripple for instance has a large unallocated holding of coins that they're meant to siphon out into the market to keep the value per coin under control. Whereas with bitcoin you can hold onto the same amount of money and if more and more people buy in, it becomes more and more valuable. I'd add that I almost feel like there could be a bit of a paradox there in regards to Bitcoin's actual usefulness for real purchases. Let’s say Bitcoin takes off and various merchants start accepting it. Since Bitcoin is useful now, more people buy in. But since more people are always buying in and the total pool is limited, the value continues to go up. The more merchants support Bitcoin, the more people adopt Bitcoin, and the more valuable it becomes. The more the value continues to increase, the better it seems as an investment, and the more people lean towards holding instead of spending. The more useful it becomes, the better it is to not spend it.
    - deleted 9y ago
      [deleted]
    - speedplane 9y ago
      > The more the value continues to increase, the better it seems as an investment, and the more people lean towards holding instead of spending. This is called currency "deflation" (the opposite of inflation), and it's one of the key things that central banks try to control. If a currency is gaining value rapidly, then it makes more sense for people to hold onto it, no one buys anything, and the economy drives to a halt. In these cases, central banks may print money to lower the value of the currency. The effects of how it would play out with Bitcoin are probably different, as it isn't close to being universal, it travels across political borders, no single economy relies on it, and it's under no control. Sounds like an Econ PhD thesis.
- tete 9y ago
  Compare this with the global economy. The number of Bitcoin users is still increasing, so the wealth is distributing. If you compare that with the global economy, the wealth is accumulating at a single point. https://upload.wikimedia.org/wikipedia/en/b/b8/Share_of_wealth_globally.png https://upload.wikimedia.org/wikipedia/en/b/b8/Share_of_weal... I do however agree that's a problem. I also think that gold and precious metals are doing good, despite being (currently, essentially) limited.
  - ianai 9y ago
    You actually can’t compare bitcoin to gold and silver. The stock of gold and silver may appear constant,but th supply does actually grow. The supply grows in relation to their demand and current market factors. Bitco8n does have a hard limit. They’re not alike.
  - lokedhs 9y ago
    In the global economy, resources are not constant. Every time you do some work, you add value to the system. The problem is that with bitcoin, the total amount of currency is fixed, which means that when value is added to the system, you the value of the bitcoin has to increase. You might think that not having inflation sounds like a great idea, but the problem is that unless the total amount of currency increases to match the value of the system you will not end up with zero inflation, you'll end up with deflation. Deflation is really bad, because it encourages people to sit on their cash instead of spending it, and an economy without spending means that more value is not added to the system. Of course, I am arguing against people who I have heard who suggests that bitcoin is all we need and it can take over all currencies in the world. That seems more or less impossible based on what I just said. Perhaps cryptocurrency is the future of finance, I have no opinion on that, but if it is, I don't see that it would be bitcoin.
- krzat 9y ago
  Exactly. It looks like a Ponzi scheme for early miners to get rich.
  - speedplane 9y ago
    I was an early miner, got a few, started when it was less than a dollar, and cashed in when it was low hundreds. I don't think anyone knew it was gonna explode 5000X or more. Every early miner or bitcoin developer regrets they didn't buy more, mine more, or hold on to it for longer. But the truth is that at this point, it's still mostly gambling. The use-cases for BitCoin are numerous, but I don't see many in place just yet. Right now, the value is based solely on speculation.
- drcross 9y ago
  If you had 1000 coins in 2010 that cost you 100 dollars, you don't think you're already going to sell out? People can only sell their coins once, and then they are distributed to many, many people.
  - lokedhs 9y ago
    As another commenter said, the problem is that bitcoin can't devalue. Inflation is what drives people to spend their money rather than sitting on it, waiting for it to increase in value. I certainly have no intention of spending my bitcoin. Not because I don't have anything to spend it on, but because if it becomes more popular, then by definition it will have to increase in value by a huge number. Unless of course it collapses before then.
Tepix 9y ago
The market cap of gold is around 122 times today's market cap of BTC. If BTC were to reach that market cap, one BTC would be worth $363,636 yet one Satoshi would still be worth less than 4/10 of a cent. It is not an imminent problem.
deleted 9y ago
[deleted]

colordrops 9y ago

With a hard fork you can, yes.

lokedhs 9y ago

Isn't the greater problem that the total market cap of bitcoin is always going to be 22 million? In other words, the single bitcoin I own will always be worth 1/22M of the entire market cap, regardless of how much it's used. And I only own one. There are lost of people out there who owns thousands of bitcoins. 1000 bitcoins is 1/22k of the entire market cap. How could this be sustainable?

zdkl 9y ago
I don't understand how the issue you're describing is specific to bitcoin. Consider that wealth in the real world also accumulates in a non gaussian distribution.
- Nition 9y ago
  I think the comment is saying that in other currencies, if your currency's total value increases, usually more money is printed to keep the value reasonable. Even with other cryptocurrencies, Ripple for instance has a large unallocated holding of coins that they're meant to siphon out into the market to keep the value per coin under control. Whereas with bitcoin you can hold onto the same amount of money and if more and more people buy in, it becomes more and more valuable. I'd add that I almost feel like there could be a bit of a paradox there in regards to Bitcoin's actual usefulness for real purchases. Let’s say Bitcoin takes off and various merchants start accepting it. Since Bitcoin is useful now, more people buy in. But since more people are always buying in and the total pool is limited, the value continues to go up. The more merchants support Bitcoin, the more people adopt Bitcoin, and the more valuable it becomes. The more the value continues to increase, the better it seems as an investment, and the more people lean towards holding instead of spending. The more useful it becomes, the better it is to not spend it.
  - deleted 9y ago
    [deleted]
  - speedplane 9y ago
    > The more the value continues to increase, the better it seems as an investment, and the more people lean towards holding instead of spending. This is called currency "deflation" (the opposite of inflation), and it's one of the key things that central banks try to control. If a currency is gaining value rapidly, then it makes more sense for people to hold onto it, no one buys anything, and the economy drives to a halt. In these cases, central banks may print money to lower the value of the currency. The effects of how it would play out with Bitcoin are probably different, as it isn't close to being universal, it travels across political borders, no single economy relies on it, and it's under no control. Sounds like an Econ PhD thesis.
tete 9y ago
Compare this with the global economy. The number of Bitcoin users is still increasing, so the wealth is distributing. If you compare that with the global economy, the wealth is accumulating at a single point. https://upload.wikimedia.org/wikipedia/en/b/b8/Share_of_wealth_globally.png https://upload.wikimedia.org/wikipedia/en/b/b8/Share_of_weal... I do however agree that's a problem. I also think that gold and precious metals are doing good, despite being (currently, essentially) limited.
- ianai 9y ago
  You actually can’t compare bitcoin to gold and silver. The stock of gold and silver may appear constant,but th supply does actually grow. The supply grows in relation to their demand and current market factors. Bitco8n does have a hard limit. They’re not alike.
- lokedhs 9y ago
  In the global economy, resources are not constant. Every time you do some work, you add value to the system. The problem is that with bitcoin, the total amount of currency is fixed, which means that when value is added to the system, you the value of the bitcoin has to increase. You might think that not having inflation sounds like a great idea, but the problem is that unless the total amount of currency increases to match the value of the system you will not end up with zero inflation, you'll end up with deflation. Deflation is really bad, because it encourages people to sit on their cash instead of spending it, and an economy without spending means that more value is not added to the system. Of course, I am arguing against people who I have heard who suggests that bitcoin is all we need and it can take over all currencies in the world. That seems more or less impossible based on what I just said. Perhaps cryptocurrency is the future of finance, I have no opinion on that, but if it is, I don't see that it would be bitcoin.
krzat 9y ago
Exactly. It looks like a Ponzi scheme for early miners to get rich.
- speedplane 9y ago
  I was an early miner, got a few, started when it was less than a dollar, and cashed in when it was low hundreds. I don't think anyone knew it was gonna explode 5000X or more. Every early miner or bitcoin developer regrets they didn't buy more, mine more, or hold on to it for longer. But the truth is that at this point, it's still mostly gambling. The use-cases for BitCoin are numerous, but I don't see many in place just yet. Right now, the value is based solely on speculation.
drcross 9y ago
If you had 1000 coins in 2010 that cost you 100 dollars, you don't think you're already going to sell out? People can only sell their coins once, and then they are distributed to many, many people.
- lokedhs 9y ago
  As another commenter said, the problem is that bitcoin can't devalue. Inflation is what drives people to spend their money rather than sitting on it, waiting for it to increase in value. I certainly have no intention of spending my bitcoin. Not because I don't have anything to spend it on, but because if it becomes more popular, then by definition it will have to increase in value by a huge number. Unless of course it collapses before then.

Tepix 9y ago

The market cap of gold is around 122 times today's market cap of BTC. If BTC were to reach that market cap, one BTC would be worth $363,636 yet one Satoshi would still be worth less than 4/10 of a cent. It is not an imminent problem.

deleted 9y ago

[deleted]