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> There is no fundamental reason why Bitcoin is rising so fast Sure there is. The goal of BitCoin is to be as popular as USD and EUR. There are maximum of 21,0

by rmc 13y ago

> There is no fundamental reason why Bitcoin is rising so fast Sure there is. The goal of BitCoin is to be as popular as USD and EUR. There are maximum of 21,000,000 bitcoin. Imagine owning 1/21,000,000th of all the USD!

petercooper 13y ago
Imagine owning 1/21,000,000th of all the USD! Based on M0, you'd have about $148,090.
- pdog 13y ago
  It probably makes more sense to compare it to the broader M2 and M3 money supply.
  - meric 13y ago
    Why do you say that? If and when bitcoins become borrowed and deposited at banks, there can potentially be a lot more supply of bitcoins.
  - petercooper 13y ago
    A genuine 'why?' I'm reasonably naive on these issues, but there's no fractional reserve banking of Bitcoin yet, is there? M2 and M3 include savings, all of which couldn't be converted directly into underlying currency, whereas every Bitcoin is clearly traceable and exists as a unit of currency. Disclaimer: I am no economist or financier.
- rmc 13y ago
  But you can buy 1 bitcoin for ~ $300 today. That means in a few years, it'll be worth $148,090!!! No wonder the price is going up! (presume bitcoin takes off this way)
grey-area 13y ago
There are maximum of 21,000,000 bitcoin. I find this limit a really interesting part of the bitcoin experiment. What sets the limit though? Is it technically possible for the developers to revise this limit at a later date, thus causing a drop in value for existing holders?
- gibybo 13y ago
  This limit is set by miners and the reference client (and the various clients that copy the reference client's limit). I'm not sure of the exact minimums necessary to change the limit, but roughly speaking if you could convince more than half of active bitcoin users and enough miners to control more than half of the network hash rate, you could change the limit. However even this wouldn't necessarily change the limit in the way you expect. It would create a hard fork where you would have two versions of bitcoin. All coins made before the fork would exist in both versions, but coins made after would only exist in their respective version. So you'd have A-bitcoins with a limit of say, 1 billion, and B-bitcoins with the old limit of 21 million. Whether anyone would still use B-bitcoins depends on how many clients/miners decide to stay on the B-bitcoin branch.
  - grey-area 13y ago
    Thanks, that's fascinating - this idea of a currency by consensus is one of the most interesting features.
- rmc 13y ago
  The limit was set as part of the bitcoin protocol. You can change it by basically making a replacement to bitcoin. It won't exactly be easy to convince people to use your new replacement (because massive social change is hard). There are many bitcoin fans who think the hard limit is a very good thing.

by rmc 13y ago

petercooper 13y ago

Imagine owning 1/21,000,000th of all the USD! Based on M0, you'd have about $148,090.

pdog 13y ago
It probably makes more sense to compare it to the broader M2 and M3 money supply.
- meric 13y ago
  Why do you say that? If and when bitcoins become borrowed and deposited at banks, there can potentially be a lot more supply of bitcoins.
- petercooper 13y ago
  A genuine 'why?' I'm reasonably naive on these issues, but there's no fractional reserve banking of Bitcoin yet, is there? M2 and M3 include savings, all of which couldn't be converted directly into underlying currency, whereas every Bitcoin is clearly traceable and exists as a unit of currency. Disclaimer: I am no economist or financier.
rmc 13y ago
But you can buy 1 bitcoin for ~ $300 today. That means in a few years, it'll be worth $148,090!!! No wonder the price is going up! (presume bitcoin takes off this way)

grey-area 13y ago

There are maximum of 21,000,000 bitcoin. I find this limit a really interesting part of the bitcoin experiment. What sets the limit though? Is it technically possible for the developers to revise this limit at a later date, thus causing a drop in value for existing holders?

gibybo 13y ago
This limit is set by miners and the reference client (and the various clients that copy the reference client's limit). I'm not sure of the exact minimums necessary to change the limit, but roughly speaking if you could convince more than half of active bitcoin users and enough miners to control more than half of the network hash rate, you could change the limit. However even this wouldn't necessarily change the limit in the way you expect. It would create a hard fork where you would have two versions of bitcoin. All coins made before the fork would exist in both versions, but coins made after would only exist in their respective version. So you'd have A-bitcoins with a limit of say, 1 billion, and B-bitcoins with the old limit of 21 million. Whether anyone would still use B-bitcoins depends on how many clients/miners decide to stay on the B-bitcoin branch.
- grey-area 13y ago
  Thanks, that's fascinating - this idea of a currency by consensus is one of the most interesting features.
rmc 13y ago
The limit was set as part of the bitcoin protocol. You can change it by basically making a replacement to bitcoin. It won't exactly be easy to convince people to use your new replacement (because massive social change is hard). There are many bitcoin fans who think the hard limit is a very good thing.