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There only being 21 million bitcoin doesn't matter because that can be subdivided into 100M Satoshis. The whole world would have to adopt it for us to run low o

• ekianjo 6y ago
  People still hold dollars even though its inflationary.
  • reedjosh 6y ago
    For liquidity and or ignorance only.
  • dukeyukey 6y ago
    People hold dollars to 1. Have liquid cash for spending 2. Emergency money where you're willing to pay the interim exchange for security
  • Daniel_sk 6y ago
    Yes, but they don't hold it to get rich.
• Alain-lf 6y ago
  Edit: After rereading the article, I now understand that you were referring to this quote in the article : "The circulation number is not enough". You are right, the fact that it's divisible render this point moot. I thought you were saying that dividing coins somehow decreased scarcity (Yes, I've seen many people argue that, believe it or not). Original comment below : I find it really mind boggling that some people don't understand that dividing a pizza into 100M pieces does not give you more pizza.
  • eloff 6y ago
    That's the wrong way to think about it. The number only matters as long as it can subdivided sufficiently to buy the smallest priced thing. You're thinking of it as a fixed sized pie and thinking dividing it doesn't make a bigger pie. But it's not fixed, the whole pie can grow as bitcoin increases in value. It's up to one trillion dollars now.
    • 542458 6y ago
      There being a cap is relevant, because it makes your currency deflationary and therefore a poor medium for exchange and a very poor medium to base an economy around (as, among other things, it increases the real value of a debt over time and discourages investment). Small amount of deflation are dangerous - but if everybody used BTC for everything the deflation would be massive and the effects severe.
      • eloff 6y ago
        I agree with you, I'm not sure how that's related to my comment.
    • Alain-lf 6y ago
      I think you misunderstood my point. I'm not saying the price can't increase, I'm saying that dividing coins does not reduce scarcity. Edit: Updated my original comment, turns out I'm the one who misunderstood your point. We actually agree.
      • SunlightEdge 6y ago
        Does it not? Is there a bounded limit to the amount bit-coin can be subdivided? If 0.0000000000001 of a bitcoin is valid for purchases etc. then doesn't the limited supply become meaningless? Yes, technically you are not increasing the size but it feels like word play.
        • panarky 6y ago
• netcraft 6y ago
  I wish all the major trading networks would switch to satoshis right now. The psychology of it, not to mention the ease of just talking about how much you have, would be much easier and would encourage people to try to spend it instead of just invest with it.
  • viraptor 6y ago
    There's already a lot of services / wallets taking about mBTC which is a more reasonable number to show.
  • globular-toast 6y ago
    Bitcoinity.org switched to mBTC years ago. It's so weird to me to see other places still using BTC.
• wmf 6y ago
  "Though Dogecoin has an unlimited supply, the actual inflation rate goes down, making this coin deflationary. So, those who criticize Dogecoin for having an endless supply are wrong. They are missing the bigger picture."
  • adam_arthur 6y ago
    How is that deflationary? If the supply increases in perpetuity, that is inflationary, just at an increasingly lesser rate.
    • rodiger 6y ago
      In theory there is some point in which the amount minted is lower than the amount lost (through losing keys/bad transactions/etc). In that case the inflationary currency is, in practice, deflationary.
• Andaith 6y ago
  I've seen this mentioned before, but what I don't know(and am genuinely asking) is, aren't the transfer fees for bitcoin really high? like, 23 bitcoin? What happens when the transfer fees are orders of magnitude more than the value being transferred?
  • hervature 6y ago
    What if it cost you $100 to buy bananas worth $1? You’d trade using something else.
  • gruez 6y ago
    > What happens when the transfer fees are orders of magnitude more than the value being transferred? you're missing the demand curve. As fees increase, transaction volumes go down, until there's an equilibrium. The opposite occurs as well: if transaction volume dries up, the demand for block space will decrease and eventually the fees will drop.
    • mijamo 6y ago
      And you are forgetting the whole "securing bitcoin" part. If bitcoin was to be the dominant currency, it needs a lot of mining to secure the network, otherwise attacks would be very appealing. But a lot of mining means a high transaction fee.
  • anonporridge 6y ago
    No. Fees are currently about 10% of total block reward, https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.h...
• skohan 6y ago
  One thing I never understood about bitcoin: doesn't it require mining a block to transact bitcoin? It seems as though even if it's infinitely divisible, once you mine the 21-millionth block all the bitcoin is rendered worthless, since you can't trade it anymore
  • viraptor 6y ago
    You can keep mining forever. The only change after 21th million is that nobody gets the extra BTC reward. They'll still get all the mining fees for the block though.
• Salgat 6y ago
  This is a huge advantage of dogecoin. The inflation is basically a wealth tax on holders that goes towards miners, achieving both encouraging spending and ensuring a well funded mining infrastructure and low transaction fees.
• runeks 6y ago
  > A currency needs to be inflationary or people hoard it instead of spending it [...] No, not at all. All you need is a sufficiently high rate of interest. The higher the rate of interest, the more you miss out on if you hoard instead of lend.
  • bildung 6y ago
    Technically true, but outside of crises interest and inflation are heavily correlated. Have a look at e.g. the historical federal funds rate: https://tradingeconomics.com/united-states/interest-rate https://tradingeconomics.com/united-states/interest-rate and historical inflation: https://tradingeconomics.com/united-states/inflation-cpi https://tradingeconomics.com/united-states/inflation-cpi (you have to set both to "max" manually). In other words: You won't get high interest without high inflation.
    • runeks 6y ago
      I don't think you’re including enough data in your analysis. I agree that there’s been a correlation between the inflation rate and the rate of interest for the past century, but before that there was no such correlation. It seems to be a feature of our current monetary system. Also, the correlation between a rising rate of interest and rising prices is much better than high interest/high inflation [1]. For example, from 1990 to 2000 we had relatively little inflation but the rate of interest was 5-8%. [1] https://fred.stlouisfed.org/graph/?g=DCxk https://fred.stlouisfed.org/graph/?g=DCxk
      • bildung 6y ago
        Well before that period the federal funds rate didn't exist, so one can't compare it to the wild swings from inflation to deflation in the 19th century. (There are a bunch of studies for stock and property returns, or for treasuries like you linked, but that's something quite different).
        • runeks 6y ago
          Bill of Exchange discounting goes back many centuries. It should be possible to compare this historic discount rate to inflation. I think it would be interesting to see the result, but I don’t have the data unfortunately.
• young_unixer 6y ago
  > A currency needs to be inflationary or people hoard it instead of spending it At some point people will spend it, it just won't be the artificially early spending that fiat forces us into.
  • imtringued 6y ago
    If that point is sufficiently far into the future then by the time you decide to spend, your money may paradoxically become worthless, because all businesses shutdown because of a lack of spending.
    • ObserverNeutral 6y ago
      That's true, but , hear me out...the fact that there are people who are sufficiently equipped to realize this scenario...might compel them to spend their BTC before the BTC induced economic collapse. That would cause the aforementioned economic collapse not to happen at all... In such scenario the smart person is not the one who postpones gratification by storing the marshmallow, but the one who eats it now because there is no future It's really interesting, BTC moves the analysis from balance sheets to people's psyche.
• globular-toast 6y ago
  > A currency needs to be inflationary or people hoard it instead of spending it, see bitcoin for an excellent example. I don't think people are going to starve to death because they know their coins will buy more food next week. But if it stops people spending on unnecessary things, is that such a bad thing?
• hansvm 6y ago
  > There only being 21 million bitcoin doesn't matter because that can be subdivided into 100M Satoshis It matters a little in some hypothetical world where we're actually using crypto instead of fiat currency. If you replaced all USD cash reserves with bitcoin, a Satoshi would have the same spending power of around 1.3 present day dollars. That's a kind of course unit, especially if we want to subdivide it into transaction fees and whatnot.
• noxer 6y ago
  >There only being 21 million bitcoin doesn't matter because that can be subdivided into 100M Satoshis. Correct, although also incorrect because both of these limits are arbitrary and human made and can be changed any time. Its an absurd belief that this is somehow "set in stone" its not, its written in code, code that humans can update whenever they want. Absolutely nothing stops people form making something smaller than a satoshi. We just dont know if the majority of the miners will accept the change to the code. If not it can only be applied to a fork which the majority then will declare as "not the real bitcoin". But every time bitcoin forks, the number of "bitcoins" grow whether an individual declares the forks as not real doesn't really matter.