Topic: Bitcoin can never become a currency. Part 1: scarce supply. - page 2. (Read 833 times)

Over time, the change will definitely happen. Here's why: if Bitcoin's demand will be on a healthy level 30 years from now, imagine how much BTC will be lost/dormant and how rare of an asset it'll become. At that point, if one Bitcoin will be worth $500k, it'd mean that 200 satoshis will be equal to $1. Without a modified supply, it'll become too unaffordable because the fees will become too high.

Changing from 21M to 2.1B total supply would only make a Bitcoin 100x less worth while you have 100x more Bitcoins at the same time. It's the exact same thing and I really think this change is going to happen when transactions will become unaffordable. Or.. another option is just adding more decimals to it. That would not change the supply but make it possible to spend a 10th of a satoshi instead of an entire one. Some kind of satoshi cents

Bitcoin's supply rule doesn't affect it's functionality in any way, so unlike other parameters, it can be easily changed theoretically. I wouldn't be so sure that the users wouldn't want it, public opinions do change over long periods of time.


Satoshi wanted it to become a global currency, he named it "a peer-to-peer electronic cash", not "digital gold". He believed that deflation is not a problem from a monetary point of view. You could say that Satoshi was wrong here, but you can't say that it wasn't designed to be a currency.

I know that most see this as impossible to happen, but I believe it will happen. But not before 20 years from now. Reward will become very small and fees will not be enough to secure network. Fork with small additional  emission will happen and everyone will start using it. 20 years is not something to worry about now.

Good luck achieving consensus to increase the BTC supply. Likely impossible. It's the single most inviolable principle BTC holders have. The more years that go by, the more entrenched and difficult to change the protocol becomes.


Like gold, BTC's network effect is built upon its monetary properties. It wasn't designed to be a global reserve currency. If we start destroying its monetary integrity to make it one, it will likely lose its network effect.

Like the OP, I also view BTC's fixed money supply as a huge impediment to becoming a reserve currency. History also proved that gold can't be a reserve currency either. A reserve asset yes, but a reserve currency no. There isn't enough transaction liquidity, especially in a future with much lower inflation and much higher transaction fees.

Full nodes are nothing against hashing power. Miners run their own nodes and there won’t be any problem with redundant blockchain instances if a thousand miners work on the same chain.
You don’t get it – value is supported by the hash rate. It's an intrinsic downside of PoW. A fork with a high hash rate is never a shitcoin, because it is protected from the scenario I described above and thus is more valuable. Even if a million users support a fork without a substantial hash rate behind, no one will bet on it. When it comes to your lifetime savings, it won’t be your personal feelings that will determine the decision. Some people with a few satoshis may rebel, of course, but it will be whales who will determine the value and they will bet on a higher hashrate.

We run full nodes, if they try to change the rules, their blocks become invalid and they are no longer mining Bitcoin, instead they are mining a shitcoin with zero users. You could say that "but then there's no new blocks in Bitcoin", but guess what, us users can wait for a long time, most people are hodling anyway and do transactions maybe a few times per month or less. But miners are losing a ton of money for every second that they spend their electricity on mining this hypotethical shitcoin. Which is why they could never strongarm the Bitcoin community, and will never be able to.

This entire wall of text fits into just three words-simplicity, reliability, and accessibility.
BTC unfortunately can not provide any of this and only this is enough to forget about becoming them on a par with Fiat. Even for a blue dream, this is too naive with current TPS lvl and adoption around the world

Its not the matter of the issuance rate intself but more of its influence on prices and the perception of Bitcoin by the population.


As long as most of the developed countries stick with the inflation targeting policy, things do not get cheaper. They become better, so you can by a more powerful phone for the same price, but not cheaper. That's the main idea behind inflation targeting: we expand the money supply at the same rate as the output grows and add a bit extra to secure 1-2% inflation. In developing countries, inflation can be targeted at higher rates (4-7%) as long as business can absorb it.


Yeah, but you cannot stuff these milliSatoshis back to the blockchain when the channel closes.

Not even close to part 2 )

I personally believe that the hype over payment channels is exaggerated. They won’t solve the scalability issue and they will unlikely be in high demand.

This topic has been discussed many times before.
There's enough satoshis to handle all the transaction volume in case of a massive global Bitcoin adoption.
Do you think that scarcity is a problem?In the middle ages and up until the twentieth century,gold was scarce
and it still is,but it was successfully used as the global medium of exchange and store of value.
Your thread is a chore to read and there's no point of pointing out old and invalid arguments to prove some theory that has already been proven to be wrong.

Scarce supply is one of the right reason, imagine all the bitcoin supply constantly circulating the global economy, it is not enough and there will be a huge jack up in prices. The decentralization can be compromised by government but this will in turn cause some favorable and unfavorable compromises, I can agree that it can be an alternative currency. The frightening thing about bitcoin is its inherent volatility that could crash anytime and the chances are never zero.

Thanks for pointing that out.

Anyway, for OP, you don't have to worry much about a Bitcoin-powered economy not working out because there might never ever be even a single sovereign state adopting Bitcoin as its sovereign currency.

For now, Bitcoin is actually growing in supply. That will only stop 120 years from now. So while there is indeed deflation in its emission, there is actually inflation in its supply. And, overall, there is actually no deflation because the supply is not diminishing but rather fixed, save perhaps for some lost coins.  

As to the hoarding rather than spending due to its increasing value, that is true and somehow contrary to what the traditional economy prefers. In our current economic paradigm, people are induced to spend and buy now and today rather than later or tomorrow because the prices are supposed to be increasing and the purchasing power of money is decreasing. And that will suppose to fuel economic growth.

However, that dreaded deflationary cycle is not a thing of the future. It is happening right now. Thanks to the quick shifting of trends and fads and the very fast technological advancements which cause efficiency in the production of goods things are actually not getting expensive. On the contrary, they are getting cheaper and cheaper each day. But that does not stop people from spending today rather than tomorrow.

People are still lining up for that car, mobile phone, computer, shoes, and so on and so forth even if they know that the same stuff will be cheaper tomorrow than today.


Not even a possibility anymore but already a reality somehow.

Right now, Lightning Network features milliSatoshi (mSat). That's 11 decimals all in all.

Not OP, but I have no idea why people cite this as an argument. Deflation, in this context, happens when supply can no longer keep up with demand. Keeping that in mind, subdividing satoshis into however many units does not affect the supply at all and shouldn't have any direct impact in Bitcoin's value.

This would be akin to central banks breaking down cents into smaller denominations instead of printing money for the purpose of injecting more supply into circulation.

Actually there are many factors that make bitcoin unable to become a global currency, especially to replace fiat currency seems impossible.
Maybe scarce supply is not the right reason bitcoin cannot become a global currency, because bitcoin can be divided into small parts. In my
opinion because bitcoin is decentralized, the government will never agree that bitcoin becomes a global currency, which the government won't
can ever control bitcoin. It is more realistic if bitcoin is an alternative currency.

I don't see how these two issues are related. The question of denomination as absolutely abstract and doesn't influence any particular features of the system.

Backed or claimed to be backed? )

Mining pools and hardware manufacturers has been claiming to support the increase of a block size for many years, yet we are still at the same spot. I do not believe that they actually desire it so hard, because it seems more profitable to keep the size intact. The thing is that transaction fees grow higher in the presence of competition. When blocks are small and cannot fit the entire mem pool, transaction issuers have to compete for the privilege of being chosen by raising fees substantially. If 8 MB blocks fit all pending transactions, there will be no need in fees at all. I suppose that the increased amount of transactions processed will not outbalance the drop in fees, which is why miners play a hypocritical game claiming that they want to increase the block size but someone always puts a spoke in their wheel.

As for the true power of miners, consider the following scenario:

Say miners want to eliminate an undesired fork. Say it's actually the second largest fork, which currently is BCH. The hashrate of BTC is about 110 EH/s, while the hashrate of BCH is 2.5 EH/s. We can see that only a tiny fraction of BTC’s mining power is sufficient to outpace BCH miners. A major BTC miner downloads the BCH blockchain and executes the selfish mining strategy to replace large parts of the main chain (say 10 blocks long), thus reverting blocks that are considered a part of the consistent common prefix.

The miner can repeat this trick as long as he wishes and it will be impossible to identify who actually does this. There is no counter to this except changing the protocol, but that’s basically equal to creating a different blockchain platform.

We are all in the miners’ pockets; they just want to make the community believe in the opposite.

Why are we talking about scarcity about bitcoin when theres are a lot of it and it is even divided into parts. Maybe they are thinking that the price will be stagnant while the demand is increasing and users are blowing up? As users blow up, obviously the value goes up. That also means that the value of bitcoin with its every devidend will blow up too.

Bitcoin can be divided into further as well and the minimum size of a bitcoin could be a satoshi so we have enough satoshis for bitcoin to be operated and can be used by the whole world even if the only crypto which exists.Now we have more cryptos as well so different cryptos for different kind of usage so its completely possible for the whole world to switch into decentralised payment system.

I know a smurf account when I see one, lol. I did a few tests as well, and no plagiarism was detected.
Anyways, OP, what do you think about the argument that Bitcoin can be further divided beyond one satoshi, perhaps 0.1 or 0.01 satoshi? Will the deflationary cycle still happen?

By zero-some I meant the total output per capita. Money supply is irrelevant since in pre industrial economies the total amount of produced value depended merely on the population and the distribution of wealth was a zero-sum game. No matter how you play with the money supply, one carpenter can only make one chair per day.


Well, I have deliberately chosen a chart that shows GDP adjusted to inflation, which is as real as it can get. A fact: an average person nowadays possesses roughly 7 times more real wealth than in 1930s, when the US abandoned the hard gold standard.

You can argue that the most part of this wealth is concentrated in the hands of the minority, but that is the problem equally relevant to any period in history. I bet you wouldn’t claim that an average peasant in feudal Europe was a hustla riding a fancy chariot with a glass of fine cognac in a hand. Material inequality in the commodity money era was even harsher than nowadays. At least we have a substantial middle class now, while back then you could be either a filthy rich aristocrat or a low-life commoner.

In fact, fiat has nothing to do with material inequality. With regard to modern monetary system, I believe it’s mostly the fractional reserve banking and the methods of expansionary policy that should be criticized. This is the point where I agree with you and this is what I will cover in later posts.


Cheapened in comparison to what? During the age of industrial revolutions, an average worker would have been lucky to gain enough not to starve. You seem to sugar coat the good old days, like the grass was greener and stuff )



Well, isn't that because the rich doctor has been studying hard through his entire life and is now capable of doing things that only a few can repeat, while those poor people have been seating on their asses doning nothing except procreating a bunch of kids whom they are now unable to feed? BTW, what you are talking about is actually a zero-sum economy that i meant. The thing is that with the current growth of real GDP per capita the economy is not nearly zero-sum and the doctor doesn't have to drag anyone into misery to become rich.


I think you need to relax a bit with these thoughts. There is too much conspiracy on your mind )