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LUNA minted trillions of brand new tokens within the span of a day or so rendering the token worthless. This is due to the way LUNA was tied to the algorithmic

LUNA minted trillions of brand new tokens within the span of a day or so rendering the token worthless. This is due to the way LUNA was tied to the algorithmic stablecoin UST. It was a true ponzi. BTC's max supply is capped and the release schedule of new coins is fixed and predictable. There is no possible way that trillions of new bitcoins could suddenly be created.

jtaft 4y ago
Do you think the value of Bitcoin will go to zero due to lost private keys?
- eric_cc 4y ago
  I think it would sooner be rendered obsolete for another reason before this scenario. It would take a long, long time for this to play out.
- wallacoloo 4y ago
  one usually hears the opposite argument: Bitcoin becomes more scarce as users lose their private keys. lost keys => smaller supply => higher price per unit. i can see the opposite argument though: lost keys => less desire to interact with bitcoin => lower demand => lower price per unit. so it might just be a wash.
  - ImPostingOnHN 4y ago
    The former relationship wouldn't play out IRL, since there's no authoritative "lost bitcoin registry" to signal to buyers that the supply has effectively decreased
    - netheril96 4y ago
      The buyers do not need to know about that. The effect of supply and demand on price doesn’t depend on anyone knowing supply and demand.
      - ImPostingOnHN 4y ago
        the effect of supply on demand does indeed require that buyers know something about the supply I mean, just think about it for a moment: how many bitcoins were "lost" today? Was it 0 or 100,000? Perhaps it's -100,000, because somebody gained access to 100,000 that were previously lost. If it doesn't make a difference, then the supply isn't affecting demand If it DOES make a difference, then demand can't be affected, because nobody knows whether it was 0 or 100,000 or -100,000
        netheril96 4y ago
        The effect of supply and demand on price come from people bidding on the free market, not from anyone on the market knowing the global supply and demand. If people have to know supply and demand to determine prices, how can free market work for thousands of years before the basic principle of economics is established?
        wallacoloo 4y ago
        say BTC rises from $30,000 to $300,000. two scenarios: 1. 10% of all BTC holders want to cash out. nobody lost their keys, so 2M BTC hit the “supply side” of the market. 2. 10% of all BTC holders want to cash out. half of them lost their keys, so only 1M BTC hit the supply side of the market. this is the way it makes a difference. in the latter scenario, BTC spot price would likely reach a higher value.
matheusmoreira 4y ago
> There is no possible way that trillions of new bitcoins could suddenly be created. There absolutely is: fractional reserve banking. Exchanges are already operating that way. They offer loans, savings accounts and everything.
- eric_cc 4y ago
  > There absolutely is Banks and/or exchanges cannot create more bitcoin.
  - matheusmoreira 4y ago
    Sure they can. You deposit 1 BTC, they loan it out to someone else. Boom, 2 BTC.
    - eric_cc 4y ago
      No. There is still 1 BTC in this scenerio. When you choose to deposit your 1 BTC you've lost custody of it and somebody else has gained possession of it. All you have is a promise that you'll get it back - which is not === BTC.
      - NovemberWhiskey 4y ago
        You'll have to explain how that's usefully different from the fiat context.
        eric_cc 4y ago
        First you'll have to explain to me why you would give somebody your bitcoin and allow them to give it to somebody else!
        NovemberWhiskey 4y ago
        ... because they promise to give you back one BTC plus something else of value?
snovv_crash 4y ago
Luna crashed because people lost trust in it. The only reason people have trust in BTC is because other people have trust in it. If that ever changed, there is no actual use for a BTC, and they are thus intrinsically worthless. Fiat currency has the backing of a government. The government demands certain payments of this currency in order to own land, and also for some extra rights like mineral extraction, fishing licenses etc. Thus, as long as the government is viable and can confiscate the land of those who don't pay, there will be demand for the currency, and it will be proportional to the value the government assigns to the property and the rate of tax. Thus, the currency is stable, because you know at the end of the day, there will always be a buyer who needs to pay their taxes.
- eric_cc 4y ago
  > Luna crashed because people lost trust in it. No. It crashed because trillions of tokens were created rendering each token worthless.
  - snovv_crash 4y ago
    Then why did the total Luna market cap go down? Surely if people still had trust it should have just diluted the token values?
    - orangepurple 4y ago
      Both can be true
      - kristopolous 4y ago
        That's not the point here. It's behaviorist. Prices stay changed because the beliefs change. If people had thought this was a sane and reasonable move that didn't really affect things the price would quickly return despite the quantity increasing. The believed durability of the token changed No matter what strategy is to be used to try to repeg it, it will only work if there's faith in the price. Price isn't a thing it's a relationship between people about a thing
pirate787 4y ago
No assets though-- the only thing backing bitcoin are "greater fools"
- eric_cc 4y ago
  Same fiat paper currency.
  - snovv_crash 4y ago
    As I said on the other thread, there is a government with a police force backing fiat. They also guarantee they will buy the fiat currency and in exchange give you the continued use of the land you own. This is why it is called 'fiat', which means backed by law or authority.
    - deleted 4y ago
      [deleted]
    - vageli 4y ago
      Governments have demonstrated that they do not have to accept their own currency [0] and have demonstrated a willingness to drive the value of their currency down. [1] [0]: https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetisation https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis... [1]: https://en.wikipedia.org/wiki/2018%E2%80%932022_Turkish_currency_and_debt_crisis#Presidential_interference_with_the_central_bank https://en.wikipedia.org/wiki/2018%E2%80%932022_Turkish_curr...
      - throwanem 4y ago
        Fortunately, one side effect of being long BTC is that the owner of the position becomes immune to bullets, batons, laws, liens, and civil actions.
  - thehappypm 4y ago
    Not really. You get to keep your property if you pay fiat to your local government every year. That is backstopping its value.
overtonwhy 4y ago
If a majority of the miner pool decides to make a change the change is made. That's how decentralized concensus works right?
- meowkit 4y ago
  Well, not quite. If a majority of miners fork their clients away from the bitcoin code repo by removing the coin cap, they would be creating a "new bitcoin". If the inter-subjective consensus of users also decide to use this new bitcoin it will be the defacto. Otherwise it will just be another fork (call it Bitcoin NoCap) like bitcoin cash, bitcoin diamond, bitcoin gold, etc. The original "bitcoin" network (before the cap removal) would still propagate by whoever has the chain history. The reality is that any attempts to split the chain to a state without a cap, at least with the current cultural consensus at this time, will result in a dead chain after a short period as people sell off the coins on the new fork. https://www.investopedia.com/tech/history-bitcoin-hard-forks/ https://www.investopedia.com/tech/history-bitcoin-hard-forks...
  - lottin 4y ago
    It does seem to me that bitcoin holders are highly impressionable by a small number of influencers. They could easily be convinced of anything.
romeros 4y ago
Polycat finance only had 3 Million Tokens. That's the max supply. There will never be more than 3 Million Tokens. And yet the price tanked and will never ever recover. It traded at $60 a piece. Now it is trading in cents. Quant has only 12 Million Tokens. No new tokens will ever be created. It topped at $400 a piece. Now it is trading at $72. It could go down all the way to fractions of cents. Reality doesn't matter. Perception of reality is all that matters. Likewise, Bitcoin could only ever have a 21 M supply cap and it could end up trading in fractions of cents just like the above two coins in the future.
tw600040 4y ago
//BTC's max supply is capped and the release schedule of new coins is fixed and predictable That doesn't mean it's not a Ponzi. One can run Ponzis with a cap and fixed/predictable supply increases..

jtaft 4y ago

Do you think the value of Bitcoin will go to zero due to lost private keys?

eric_cc 4y ago
I think it would sooner be rendered obsolete for another reason before this scenario. It would take a long, long time for this to play out.
wallacoloo 4y ago
one usually hears the opposite argument: Bitcoin becomes more scarce as users lose their private keys. lost keys => smaller supply => higher price per unit. i can see the opposite argument though: lost keys => less desire to interact with bitcoin => lower demand => lower price per unit. so it might just be a wash.
- ImPostingOnHN 4y ago
  The former relationship wouldn't play out IRL, since there's no authoritative "lost bitcoin registry" to signal to buyers that the supply has effectively decreased
  - netheril96 4y ago
    The buyers do not need to know about that. The effect of supply and demand on price doesn’t depend on anyone knowing supply and demand.
    - ImPostingOnHN 4y ago
      the effect of supply on demand does indeed require that buyers know something about the supply I mean, just think about it for a moment: how many bitcoins were "lost" today? Was it 0 or 100,000? Perhaps it's -100,000, because somebody gained access to 100,000 that were previously lost. If it doesn't make a difference, then the supply isn't affecting demand If it DOES make a difference, then demand can't be affected, because nobody knows whether it was 0 or 100,000 or -100,000
      - netheril96 4y ago
        The effect of supply and demand on price come from people bidding on the free market, not from anyone on the market knowing the global supply and demand. If people have to know supply and demand to determine prices, how can free market work for thousands of years before the basic principle of economics is established?
      - wallacoloo 4y ago
        say BTC rises from $30,000 to $300,000. two scenarios: 1. 10% of all BTC holders want to cash out. nobody lost their keys, so 2M BTC hit the “supply side” of the market. 2. 10% of all BTC holders want to cash out. half of them lost their keys, so only 1M BTC hit the supply side of the market. this is the way it makes a difference. in the latter scenario, BTC spot price would likely reach a higher value.

matheusmoreira 4y ago

> There is no possible way that trillions of new bitcoins could suddenly be created. There absolutely is: fractional reserve banking. Exchanges are already operating that way. They offer loans, savings accounts and everything.

eric_cc 4y ago
> There absolutely is Banks and/or exchanges cannot create more bitcoin.
- matheusmoreira 4y ago
  Sure they can. You deposit 1 BTC, they loan it out to someone else. Boom, 2 BTC.
  - eric_cc 4y ago
    No. There is still 1 BTC in this scenerio. When you choose to deposit your 1 BTC you've lost custody of it and somebody else has gained possession of it. All you have is a promise that you'll get it back - which is not === BTC.
    - NovemberWhiskey 4y ago
      You'll have to explain how that's usefully different from the fiat context.
      - eric_cc 4y ago
        First you'll have to explain to me why you would give somebody your bitcoin and allow them to give it to somebody else!
        NovemberWhiskey 4y ago
        ... because they promise to give you back one BTC plus something else of value?

snovv_crash 4y ago

Luna crashed because people lost trust in it. The only reason people have trust in BTC is because other people have trust in it. If that ever changed, there is no actual use for a BTC, and they are thus intrinsically worthless. Fiat currency has the backing of a government. The government demands certain payments of this currency in order to own land, and also for some extra rights like mineral extraction, fishing licenses etc. Thus, as long as the government is viable and can confiscate the land of those who don't pay, there will be demand for the currency, and it will be proportional to the value the government assigns to the property and the rate of tax. Thus, the currency is stable, because you know at the end of the day, there will always be a buyer who needs to pay their taxes.

eric_cc 4y ago
> Luna crashed because people lost trust in it. No. It crashed because trillions of tokens were created rendering each token worthless.
- snovv_crash 4y ago
  Then why did the total Luna market cap go down? Surely if people still had trust it should have just diluted the token values?
  - orangepurple 4y ago
    Both can be true
    - kristopolous 4y ago
      That's not the point here. It's behaviorist. Prices stay changed because the beliefs change. If people had thought this was a sane and reasonable move that didn't really affect things the price would quickly return despite the quantity increasing. The believed durability of the token changed No matter what strategy is to be used to try to repeg it, it will only work if there's faith in the price. Price isn't a thing it's a relationship between people about a thing

pirate787 4y ago

No assets though-- the only thing backing bitcoin are "greater fools"

eric_cc 4y ago
Same fiat paper currency.
- snovv_crash 4y ago
  As I said on the other thread, there is a government with a police force backing fiat. They also guarantee they will buy the fiat currency and in exchange give you the continued use of the land you own. This is why it is called 'fiat', which means backed by law or authority.
  - deleted 4y ago
    [deleted]
  - vageli 4y ago
    Governments have demonstrated that they do not have to accept their own currency [0] and have demonstrated a willingness to drive the value of their currency down. [1] [0]: https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetisation https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis... [1]: https://en.wikipedia.org/wiki/2018%E2%80%932022_Turkish_currency_and_debt_crisis#Presidential_interference_with_the_central_bank https://en.wikipedia.org/wiki/2018%E2%80%932022_Turkish_curr...
    - throwanem 4y ago
      Fortunately, one side effect of being long BTC is that the owner of the position becomes immune to bullets, batons, laws, liens, and civil actions.
- thehappypm 4y ago
  Not really. You get to keep your property if you pay fiat to your local government every year. That is backstopping its value.

overtonwhy 4y ago

If a majority of the miner pool decides to make a change the change is made. That's how decentralized concensus works right?

meowkit 4y ago
Well, not quite. If a majority of miners fork their clients away from the bitcoin code repo by removing the coin cap, they would be creating a "new bitcoin". If the inter-subjective consensus of users also decide to use this new bitcoin it will be the defacto. Otherwise it will just be another fork (call it Bitcoin NoCap) like bitcoin cash, bitcoin diamond, bitcoin gold, etc. The original "bitcoin" network (before the cap removal) would still propagate by whoever has the chain history. The reality is that any attempts to split the chain to a state without a cap, at least with the current cultural consensus at this time, will result in a dead chain after a short period as people sell off the coins on the new fork. https://www.investopedia.com/tech/history-bitcoin-hard-forks/ https://www.investopedia.com/tech/history-bitcoin-hard-forks...
- lottin 4y ago
  It does seem to me that bitcoin holders are highly impressionable by a small number of influencers. They could easily be convinced of anything.

romeros 4y ago

Polycat finance only had 3 Million Tokens. That's the max supply. There will never be more than 3 Million Tokens. And yet the price tanked and will never ever recover. It traded at $60 a piece. Now it is trading in cents. Quant has only 12 Million Tokens. No new tokens will ever be created. It topped at $400 a piece. Now it is trading at $72. It could go down all the way to fractions of cents. Reality doesn't matter. Perception of reality is all that matters. Likewise, Bitcoin could only ever have a 21 M supply cap and it could end up trading in fractions of cents just like the above two coins in the future.

tw600040 4y ago

//BTC's max supply is capped and the release schedule of new coins is fixed and predictable That doesn't mean it's not a Ponzi. One can run Ponzis with a cap and fixed/predictable supply increases..