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It’s deflationary by design so if you can keep hold of them safely and people think they have value it will increase. Raw economic demand seems to come from th

by chgs 2y ago

It’s deflationary by design so if you can keep hold of them safely and people think they have value it will increase. Raw economic demand seems to come from things like paying for ransomware and avoiding currency controls. The fluctuations however are gambling, but one could argue the value of most shares in the US are the same.

Gettingolderev 2y ago
The deflationary by design is a fallacy. It will lead to old investors becoming richer and richer but also for new investors to stop investing because the spread is going to become to big. And deflationary by design doesn't protect bitcoin by collapsing and it will happen alone through the reward halfing in no time.
- kjksf 2y ago
  Bitcoin is deflationary in the sense that the supply is fixed at 21 million. And because people also loose access to their Bitcoin wallet, the actual supply will slowly decrease. That's just a fact of how technology works. It's better phrased as "supply of Bitcoin is fixed". As to your other arguments: I don't really get the connecting logic or even the point your making. What is the "spread" that will stop new people from buying Bitcoin? Can you explain the "Tom got very rich on Bitcoin and therefore I won't buy it today even though the price goes up because reasons..." logic? Also what does reward halving have to do with the price of Bitcoin? The mining business will eventually end but as long as Bitcoin price goes 2x by each halving, the mining is is just as profitable. Of course Bitcoin price can collapse. It already did a couple of times. But it also recovered and then some each time. Given that prices of anything are driven by supply and demand, supply is fixed, the only question worth asking about Bitcoin is: will the demand go up? If demand goes up, the price goes up. And vice versa.
  - Gettingolderev 2y ago
    Bitcoin supply is fixed, the denominator is not. If i invested into bitcoin 10 years ago, my $1000 are now worth (i don't want to calculate it) like $1000000. So if someone else now wants to invest into bitcoin today, they have to accept that the old people have a tremendes financial advantage to this. The spread is a lot. And no its not the same as investing into a company. This will lead to rich people not investing into bitcoins because their return value is getting smaller and smaller. Because the new bitcoin numbers are getting less and less through halfing, this effect gets stronger and stronger. Bitcoin is hard limited on how much bitcoin exists while the normal fiat world creates new money based on humans and work capacity we have through a complex system. Bitcoin has not solved this problem. You can't lent bitcoins, create value and return this amount as an addition to the whole amount of bitcoins to represent this value.
    - chgs 2y ago
      The supply is not fixed, it reduces every day when people lose their keys, hence its deflationary
      - Gettingolderev 2y ago
        Sure if we want to account for that, but that makes the effect, i mentioned, even stronger and faster.
Etheryte 2y ago
This is a common trope people like to throw around, but for all practical intents and purposes it's not actually true. Each Bitcoin is divided into 100 million Satoshis. At current market price, this means you can divide each Bitcoin up into slices 0.05 cents thin. There is no scarcity, at least not for any reasonable time frame in our lifetime. Add to that the fact that many brokers today offer fractional shares on a lot of securities already and you can probably see where I'm going with this. You will always be able to buy however small of a fraction of a Bitcoin that you want.
- kjksf 2y ago
  I can "divide" a single $100 bill into 100 $1 bills. By your "logic" $1 is just as valuable as $100.
  - Etheryte 2y ago
    This misses the point. There is a scarce amount of Microsoft shares, but we don't talk about the scarcity of the shares driving the price, because that's not the reason that the stock has traded upwards. You can have scarcity on all kinds of resources - hell, this comment is scarce, it's one of a kind - but that doesn't mean it drives any kind of demand. All of this is econ 101.
    - throw0101d 2y ago
      > There is a scarce amount of Microsoft shares […] New shares can be issued at any time.
      - irthomasthomas 2y ago
        And a bitcoin can be divided at any time to create a transaction. The limit on total coins is irrelevant when they can be divided almost infinitely.
        justaj 2y ago
misja111 2y ago
> It’s deflationary by design How is that so? I know that the maximum nr of BitCoins is limited and that generating new ones is designed to become more difficult over time. But how does that make them deflationary? I would say that as long as the supply of BitCoins will increase, however slightly, BitCoins are in principle inflationary? The only reason for its value going up would be that demand increases more than BitCoin supply, but increasing demand is in no way guaranteed by design.
- chgs 2y ago
  Lose a key and the coin is removed from circulation. We don’t even know how many coins actually exist at the moment, for example this guy’s — https://www.bbc.com/news/uk-wales-55658942 https://www.bbc.com/news/uk-wales-55658942 Or with the wiping of the keys shown in big bang theory for example. While there continues to be steady demand powering things like ransomware, and we know the supply of bitcoin reduces every day, we don’t know the current size of supply or the rate of reduction.

by chgs 2y ago

Gettingolderev 2y ago

The deflationary by design is a fallacy. It will lead to old investors becoming richer and richer but also for new investors to stop investing because the spread is going to become to big. And deflationary by design doesn't protect bitcoin by collapsing and it will happen alone through the reward halfing in no time.

kjksf 2y ago
Bitcoin is deflationary in the sense that the supply is fixed at 21 million. And because people also loose access to their Bitcoin wallet, the actual supply will slowly decrease. That's just a fact of how technology works. It's better phrased as "supply of Bitcoin is fixed". As to your other arguments: I don't really get the connecting logic or even the point your making. What is the "spread" that will stop new people from buying Bitcoin? Can you explain the "Tom got very rich on Bitcoin and therefore I won't buy it today even though the price goes up because reasons..." logic? Also what does reward halving have to do with the price of Bitcoin? The mining business will eventually end but as long as Bitcoin price goes 2x by each halving, the mining is is just as profitable. Of course Bitcoin price can collapse. It already did a couple of times. But it also recovered and then some each time. Given that prices of anything are driven by supply and demand, supply is fixed, the only question worth asking about Bitcoin is: will the demand go up? If demand goes up, the price goes up. And vice versa.
- Gettingolderev 2y ago
  Bitcoin supply is fixed, the denominator is not. If i invested into bitcoin 10 years ago, my $1000 are now worth (i don't want to calculate it) like $1000000. So if someone else now wants to invest into bitcoin today, they have to accept that the old people have a tremendes financial advantage to this. The spread is a lot. And no its not the same as investing into a company. This will lead to rich people not investing into bitcoins because their return value is getting smaller and smaller. Because the new bitcoin numbers are getting less and less through halfing, this effect gets stronger and stronger. Bitcoin is hard limited on how much bitcoin exists while the normal fiat world creates new money based on humans and work capacity we have through a complex system. Bitcoin has not solved this problem. You can't lent bitcoins, create value and return this amount as an addition to the whole amount of bitcoins to represent this value.
  - chgs 2y ago
    The supply is not fixed, it reduces every day when people lose their keys, hence its deflationary
    - Gettingolderev 2y ago
      Sure if we want to account for that, but that makes the effect, i mentioned, even stronger and faster.

Etheryte 2y ago

This is a common trope people like to throw around, but for all practical intents and purposes it's not actually true. Each Bitcoin is divided into 100 million Satoshis. At current market price, this means you can divide each Bitcoin up into slices 0.05 cents thin. There is no scarcity, at least not for any reasonable time frame in our lifetime. Add to that the fact that many brokers today offer fractional shares on a lot of securities already and you can probably see where I'm going with this. You will always be able to buy however small of a fraction of a Bitcoin that you want.

kjksf 2y ago
I can "divide" a single $100 bill into 100 $1 bills. By your "logic" $1 is just as valuable as $100.
- Etheryte 2y ago
  This misses the point. There is a scarce amount of Microsoft shares, but we don't talk about the scarcity of the shares driving the price, because that's not the reason that the stock has traded upwards. You can have scarcity on all kinds of resources - hell, this comment is scarce, it's one of a kind - but that doesn't mean it drives any kind of demand. All of this is econ 101.
  - throw0101d 2y ago
    > There is a scarce amount of Microsoft shares […] New shares can be issued at any time.
    - irthomasthomas 2y ago
      And a bitcoin can be divided at any time to create a transaction. The limit on total coins is irrelevant when they can be divided almost infinitely.
      - justaj 2y ago

misja111 2y ago

> It’s deflationary by design How is that so? I know that the maximum nr of BitCoins is limited and that generating new ones is designed to become more difficult over time. But how does that make them deflationary? I would say that as long as the supply of BitCoins will increase, however slightly, BitCoins are in principle inflationary? The only reason for its value going up would be that demand increases more than BitCoin supply, but increasing demand is in no way guaranteed by design.

chgs 2y ago
Lose a key and the coin is removed from circulation. We don’t even know how many coins actually exist at the moment, for example this guy’s — https://www.bbc.com/news/uk-wales-55658942 https://www.bbc.com/news/uk-wales-55658942 Or with the wiping of the keys shown in big bang theory for example. While there continues to be steady demand powering things like ransomware, and we know the supply of bitcoin reduces every day, we don’t know the current size of supply or the rate of reduction.