11 ms·

It will keep splitting as long as each split magically multiplies the notional value.

by dogruck 9y ago

brentis 9y ago
In layman’s terms?
- empath75 9y ago
  Every time there’s a split, everyone who had coins on one fork has the same number of coins on the other fork for free.
  - deleted 9y ago
    [deleted]
- moufestaphio 9y ago
  I think what he means is, when bitcoin / cash split, everyone 'doubled' their coins. Since they share the same previous blockchain, after they 'split' in effect you have two coins for every one coin you had before the split. You can spend your Bitcoin cash, while you still own the same coin in Bitcoin.
- raesene6 9y ago
  In the last split people who held bitcoins got an equal quantity of "Bitcoin cash", so if you had 1 BTC, after the split you had 1 BTC and 1 BCH. Looking at https://coinmarketcap.com/ https://coinmarketcap.com/ you can see that each BCH is worth ~$500 (at the time of this comment) and the value of BTC is higher after the split. so in essence $8,154,513,572 of new value was created from nothing with the split. If the next split follow the same pattern, more money appears...
  - lost_name 9y ago
    It's interesting to say that $8B of new value was created, since no one could supply that money if anyone asked for it. How did the cryptocurrency markets handle that, anyway?
    - cloakandswagger 9y ago
      >since no one could supply that money if anyone asked for it What does this mean? BCH can be sold for USD, and there are people willing to buy BCH. Therefore BCH created $8B in new value.
      - barkingcat 9y ago
        exactly, if no one wanted to pay for it BCH would be priced at $0. Since it's being priced at an amount above 0, people are willing to pay the amount - thus supplying the money for it.
      - SeoxyS 9y ago
        That's not exactly right. You have to consider the depth of the market and the size of the demand. However many BCH are in existence, there's no way that the market will support liquidating them all for USD. An order of that size would crash the markets instantly. The $8B in value created is entirely nominal, because of the size of the pre-existing supply. In reply the real value created could well be negative or at most in the millions and not billions.
        cloakandswagger 9y ago
        So what you're saying is that the value of any asset that is not USD (stocks, bonds, commodities, real estate) is completely unknown, and the real "value" would be what that asset would sell for if every portion of it was instantly liquidated tomorrow? That's not how economics work. edit: I suppose all these stocks I'm holding are worth $0, since if every person selling them sold tomorrow the value would drop to that price.
        stanmancan 9y ago
        actually you’re right, your stocks are worth $0, until you sell them. If the company went bankrupt tomorrow what would happen to the value of those stocks? If there are 100 shares available and someone is willing to pay $500 for a share, but nobody else is willing to pay more than $5, is the company really worth $500*100? Same idea goes for bitcoin cash. Just because there are a few people willing to pay $X00 doesn’t mean every single bitcoin is worth that much.
  - StavrosK 9y ago
    Maybe Bitcoin would be worth $500 more without the split, though.
    - raesene6 9y ago
      Maybe although from a passing look at the markets their price swings (after a couple of days after the initial split) don't seem to correlate...
  - runeks 9y ago
    > so in essence $8,154,513,572 of new value was created from nothing with the split. No. The market depth of the various Bitcoin Cash markets is tiny. You couldn’t offload even $10M without crashing the price close to zero. Just because the highest bid is ~$500 doesn’t mean all 16 million Bitcoin Cash coins can be sold for ~$500, thus ~$500*16m hasn’t been created at all — only a tiny fraction of that.
    - paulpauper 9y ago
      A common misconception is that coins must be sold on an exchange. If someone has a large amount they could sell it on a secondary market to a private buyer
      - runeks 9y ago
        Sure, if such a private buyer exists. Please put me in contact with the private buyer willing to pay ~$500 for the remaining 15,980,000 Bitcoin Cash coins that the markets of the public exchanges can’t handle. The public exchanges are a gauge of liquidity. A magic private buyer might exist, willing to buy everything you hold, but I see no evidence that one exists for Bitcoin Cash.
    - raesene6 9y ago
      I don't doubt that if you tried to convert all BCH to Fiat it wouldn't fly, but surely a lot of people have made money by transferring BCH at one nominal value to other crypto currencies. Now it probably is all a shell game ultimately, but the longer it persists the more hopeful speculators will use fiat cash to buy into crypto currencies, letting crypto currency holders "cash out"...
- Y_Y 9y ago
  Unless you split the value so that BTC = BTCa + BTCb, there will be a change in the amount of "money" that exists, without any change in the amount of "value". When Bitcoin Cash came along the price of one of that plus a Bitcoin Vanilla was more than the price of a pre-split BTC, so everyone "made money". "quotes" indicate that you may argue that this isn't real.
imaginenore 9y ago
Don't think of it as a split. A fork is a new creation with new properties and new value, made to solve certain problems. It doesn't multiply anything, it's a new entity. Just because they both have "bitcoin" in the name, doesn't make it the same. Quite the opposite, actually, they are competing.
- cornedor 9y ago
  I think his idea comes from the fact that Bitcoin Cash had quite some value and Bitcoin's value was also increasing.
marcosdumay 9y ago
- So, we created a naturally deflating currency, now what? - I have an idea, why don't we inflate it like crazy? It does not make a lot of sense.
tboyd47 9y ago
Please excuse me if I've misunderstood. Are you suggesting the primary motive of the split is to make money off of selling side chain coins? That would be ignoring the political war taking place between core developers and miners that is actually the cause of every fork in Bitcoin's history. Also - why assume that the ones who initiated the fork are the same ones selling? Wouldn't it be equally plausible to assume that they are the ones buying the tokens?

It will keep splitting as long as each split magically multiplies the notional value.

brentis 9y ago

In layman’s terms?

empath75 9y ago
Every time there’s a split, everyone who had coins on one fork has the same number of coins on the other fork for free.
- deleted 9y ago
  [deleted]
moufestaphio 9y ago
I think what he means is, when bitcoin / cash split, everyone 'doubled' their coins. Since they share the same previous blockchain, after they 'split' in effect you have two coins for every one coin you had before the split. You can spend your Bitcoin cash, while you still own the same coin in Bitcoin.
raesene6 9y ago
In the last split people who held bitcoins got an equal quantity of "Bitcoin cash", so if you had 1 BTC, after the split you had 1 BTC and 1 BCH. Looking at https://coinmarketcap.com/ https://coinmarketcap.com/ you can see that each BCH is worth ~$500 (at the time of this comment) and the value of BTC is higher after the split. so in essence $8,154,513,572 of new value was created from nothing with the split. If the next split follow the same pattern, more money appears...
- lost_name 9y ago
  It's interesting to say that $8B of new value was created, since no one could supply that money if anyone asked for it. How did the cryptocurrency markets handle that, anyway?
  - cloakandswagger 9y ago
    >since no one could supply that money if anyone asked for it What does this mean? BCH can be sold for USD, and there are people willing to buy BCH. Therefore BCH created $8B in new value.
    - barkingcat 9y ago
      exactly, if no one wanted to pay for it BCH would be priced at $0. Since it's being priced at an amount above 0, people are willing to pay the amount - thus supplying the money for it.
    - SeoxyS 9y ago
      That's not exactly right. You have to consider the depth of the market and the size of the demand. However many BCH are in existence, there's no way that the market will support liquidating them all for USD. An order of that size would crash the markets instantly. The $8B in value created is entirely nominal, because of the size of the pre-existing supply. In reply the real value created could well be negative or at most in the millions and not billions.
      - cloakandswagger 9y ago
        So what you're saying is that the value of any asset that is not USD (stocks, bonds, commodities, real estate) is completely unknown, and the real "value" would be what that asset would sell for if every portion of it was instantly liquidated tomorrow? That's not how economics work. edit: I suppose all these stocks I'm holding are worth $0, since if every person selling them sold tomorrow the value would drop to that price.
        stanmancan 9y ago
        actually you’re right, your stocks are worth $0, until you sell them. If the company went bankrupt tomorrow what would happen to the value of those stocks? If there are 100 shares available and someone is willing to pay $500 for a share, but nobody else is willing to pay more than $5, is the company really worth $500*100? Same idea goes for bitcoin cash. Just because there are a few people willing to pay $X00 doesn’t mean every single bitcoin is worth that much.
- StavrosK 9y ago
  Maybe Bitcoin would be worth $500 more without the split, though.
  - raesene6 9y ago
    Maybe although from a passing look at the markets their price swings (after a couple of days after the initial split) don't seem to correlate...
- runeks 9y ago
  > so in essence $8,154,513,572 of new value was created from nothing with the split. No. The market depth of the various Bitcoin Cash markets is tiny. You couldn’t offload even $10M without crashing the price close to zero. Just because the highest bid is ~$500 doesn’t mean all 16 million Bitcoin Cash coins can be sold for ~$500, thus ~$500*16m hasn’t been created at all — only a tiny fraction of that.
  - paulpauper 9y ago
    A common misconception is that coins must be sold on an exchange. If someone has a large amount they could sell it on a secondary market to a private buyer
    - runeks 9y ago
      Sure, if such a private buyer exists. Please put me in contact with the private buyer willing to pay ~$500 for the remaining 15,980,000 Bitcoin Cash coins that the markets of the public exchanges can’t handle. The public exchanges are a gauge of liquidity. A magic private buyer might exist, willing to buy everything you hold, but I see no evidence that one exists for Bitcoin Cash.
  - raesene6 9y ago
    I don't doubt that if you tried to convert all BCH to Fiat it wouldn't fly, but surely a lot of people have made money by transferring BCH at one nominal value to other crypto currencies. Now it probably is all a shell game ultimately, but the longer it persists the more hopeful speculators will use fiat cash to buy into crypto currencies, letting crypto currency holders "cash out"...
Y_Y 9y ago
Unless you split the value so that BTC = BTCa + BTCb, there will be a change in the amount of "money" that exists, without any change in the amount of "value". When Bitcoin Cash came along the price of one of that plus a Bitcoin Vanilla was more than the price of a pre-split BTC, so everyone "made money". "quotes" indicate that you may argue that this isn't real.

imaginenore 9y ago

Don't think of it as a split. A fork is a new creation with new properties and new value, made to solve certain problems. It doesn't multiply anything, it's a new entity. Just because they both have "bitcoin" in the name, doesn't make it the same. Quite the opposite, actually, they are competing.

cornedor 9y ago
I think his idea comes from the fact that Bitcoin Cash had quite some value and Bitcoin's value was also increasing.

marcosdumay 9y ago

- So, we created a naturally deflating currency, now what? - I have an idea, why don't we inflate it like crazy? It does not make a lot of sense.

tboyd47 9y ago

Please excuse me if I've misunderstood. Are you suggesting the primary motive of the split is to make money off of selling side chain coins? That would be ignoring the political war taking place between core developers and miners that is actually the cause of every fork in Bitcoin's history. Also - why assume that the ones who initiated the fork are the same ones selling? Wouldn't it be equally plausible to assume that they are the ones buying the tokens?