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What I'm really confused about with Bitcoin is this 21M coin cap built into it. I know it's there to keep the Bitcoin money supply finite. Emulating the proper
by databro 9y ago
What I'm really confused about with Bitcoin is this 21M coin cap built into it.
I know it's there to keep the Bitcoin money supply finite. Emulating the properties that make gold such an attractive commodity to back a currency with.
But every coin is infinitely divisible, so doesn't that defeat the purpose of the 21M cap?
When every coin is infinitely divisible, isn't Bitcoin's money supply is effectively infinite?
Why does the 21M Bitcoins cap matter if every coin is infinitely divisible?
- bhnmmhmd 9y agoAt first, I thought this 21M cap causes exponential increase in BTC price, until I saw your comment about BTC being infinitely divisible. A bit search on the internet though proves this hypothesis wrong: https://bitcoin.stackexchange.com/a/19670 https://bitcoin.stackexchange.com/a/19670 Turns out, BTC is only divisible down to 8 decimal places.
- databro 9y agoThanks for pointing that out, but on that same thread the next answer says: > If there is a need for them, additional decimal places can be added with concensus of the network. This is why some refer to "infinite" divisibility, because we can select the level that we need as time goes on. Because this 8 decimal place limit can be extended later, my hypothesis that Bitcoin's money supply is effectively infinite cannot be rejected.