Topic: Fixed supply, really? - page 3. (Read 3491 times)
In a world where Bitcoin is mainstream and fixed supply is a hurdle, a new, ideal and far better currency will be invented and all Bitcoins can be traded/converted to the new and infinite currency.
You are completely correct, but this is an old topic. Fractional reserve bitcoin banking is inevitable to some degree, and a bitcoin reserve bank functioning like the Federal Reserve could be created.
It already has been created. And they called it Mt. Gox
So if somebody opens up an ETF with more than that we'll know they're faking how much they have for sure, while they could still commit fraud they won't be able to do it on the same scale that they can with paper money.
FRB is an accepted practice in the world community, rage against it or not. If there is a profit opportunity to practice it, people can and will do it. Although bitcoin FRB will stand on a much slipperier slope because of its limited nature, that does not mean there aren't people smart enough to (for some time at least) get away with it. And it will probably cause the same economic problems that bitcoin is supposed to help avoid. In this instance, the problem is not the banking system itself but that bitcoin can't stop it.
The winklevoss twins already have a Bitcoin ETF in the works so you aren't wrong, what I will say though is that precisely because Bitcoin has only 21 million coins that it will be much more difficult for people to commit fraud with any kind of fractional reserve system, think about it, coinmarketcap is telling me that there are currently 12,450,125 Bitcoins in circulation at the moment thanks to the blockchain. So if somebody opens up an ETF with more than that we'll know they're faking how much they have for sure, while they could still commit fraud they won't be able to do it on the same scale that they can with paper money.
I believe there have been people who have already tried to fake their trade volume for example in regards to cryptocurrencies, there was a Chinese based exchange I think that did something like that and people though the numbers looked so strange for something that had only just opened they didn't trust it, scarcity and divisibility has many practical uses beyond just trade, you also see people dividing up Bitcoins for testing purposes and so on, I've done it myself because that way you don't end up using a large chunk of money to do testing before you even have the website up and running.
There's also something to consider in regards to the usual tactics central banks try, if they for instance, decided to try and buy out Bitcoin to try and restrict the trade completely, not only I'm sure would community members stop them but also they would be forced to buy it at a higher and higher price because of it's fixed supply, meanwhile they'd have to print more and more dollars completely devaluing their own currency.
I believe there have been people who have already tried to fake their trade volume for example in regards to cryptocurrencies, there was a Chinese based exchange I think that did something like that and people though the numbers looked so strange for something that had only just opened they didn't trust it, scarcity and divisibility has many practical uses beyond just trade, you also see people dividing up Bitcoins for testing purposes and so on, I've done it myself because that way you don't end up using a large chunk of money to do testing before you even have the website up and running.
There's also something to consider in regards to the usual tactics central banks try, if they for instance, decided to try and buy out Bitcoin to try and restrict the trade completely, not only I'm sure would community members stop them but also they would be forced to buy it at a higher and higher price because of it's fixed supply, meanwhile they'd have to print more and more dollars completely devaluing their own currency.
You know, there are various altcoins out there that do not have a fixed supply. Why don't you go with them?
My point was not "fixed supply is good or bad". My point was that even if Bitcoin is built with fixed supply hardcoded in, the -effective- supply will not by, with buisnesses operating in fractionnal reserve and governments building reserves.
One of the main feature of Bitcoin is that the supply of 21 million BTC is know and cannot be changed. Indeed it is.
But imagine a world where bitcoin is mainstream. Banks will still exist! People will have extra money on hand, and will want to lend it in exchange of interest. Banks will be an intermediate to offer that service. I know a lot of Bitcoiners hate fractionnal reserve, but if it ever gets mainstream, not everybody will be against that. So even thoug the "real" bitcoin supply is fixed, the effective supply will grow.
Also, governments could, and will, hold significant bitcoin reserves they can release, of increase, depending of the market factors, to affect economy to their liking.
I seriously believe that the purported benifit of the 21million cap are overrated.
But imagine a world where bitcoin is mainstream. Banks will still exist! People will have extra money on hand, and will want to lend it in exchange of interest. Banks will be an intermediate to offer that service. I know a lot of Bitcoiners hate fractionnal reserve, but if it ever gets mainstream, not everybody will be against that. So even thoug the "real" bitcoin supply is fixed, the effective supply will grow.
Also, governments could, and will, hold significant bitcoin reserves they can release, of increase, depending of the market factors, to affect economy to their liking.
I seriously believe that the purported benifit of the 21million cap are overrated.
You know, there are various altcoins out there that do not have a fixed supply. Why don't you go with them?
One of the main feature of Bitcoin is that the supply of 21 million BTC is know and cannot be changed. Indeed it is.
But imagine a world where bitcoin is mainstream. Banks will still exist! People will have extra money on hand, and will want to lend it in exchange of interest. Banks will be an intermediate to offer that service. I know a lot of Bitcoiners hate fractionnal reserve, but if it ever gets mainstream, not everybody will be against that. So even thoug the "real" bitcoin supply is fixed, the effective supply will grow.
Also, governments could, and will, hold significant bitcoin reserves they can release, of increase, depending of the market factors, to affect economy to their liking.
I seriously believe that the purported benifit of the 21million cap are overrated.
But imagine a world where bitcoin is mainstream. Banks will still exist! People will have extra money on hand, and will want to lend it in exchange of interest. Banks will be an intermediate to offer that service. I know a lot of Bitcoiners hate fractionnal reserve, but if it ever gets mainstream, not everybody will be against that. So even thoug the "real" bitcoin supply is fixed, the effective supply will grow.
Also, governments could, and will, hold significant bitcoin reserves they can release, of increase, depending of the market factors, to affect economy to their liking.
I seriously believe that the purported benifit of the 21million cap are overrated.
You are completely correct, but this is an old topic. Fractional reserve bitcoin banking is inevitable to some degree, and a bitcoin reserve bank functioning like the Federal Reserve could be created. Both existed in the U.S. when it was on a gold standard.
I think this most recent Goxxing is going to re-shape such practices within the bitcoin community. It is completely possible that the community will not do business with enterprises that practice fractional reserve policies.
That might seem like a stretch, but it is possible. Yes, banks will always exist who will try to use fractional reserve to glean profits from interest, regardless of the currency medium. But your own personal fears on the matter can be put to bed simply by not doing business with an enterprise that supports this.
That might seem like a stretch, but it is possible. Yes, banks will always exist who will try to use fractional reserve to glean profits from interest, regardless of the currency medium. But your own personal fears on the matter can be put to bed simply by not doing business with an enterprise that supports this.
One of the main feature of Bitcoin is that the supply of 21 million BTC is know and cannot be changed. Indeed it is.
But imagine a world where bitcoin is mainstream. Banks will still exist! People will have extra money on hand, and will want to lend it in exchange of interest. Banks will be an intermediate to offer that service. I know a lot of Bitcoiners hate fractionnal reserve, but if it ever gets mainstream, not everybody will be against that. So even thoug the "real" bitcoin supply is fixed, the effective supply will grow.
Also, governments could, and will, hold significant bitcoin reserves they can release, of increase, depending of the market factors, to affect economy to their liking.
I seriously believe that the purported benifit of the 21million cap are overrated.
But imagine a world where bitcoin is mainstream. Banks will still exist! People will have extra money on hand, and will want to lend it in exchange of interest. Banks will be an intermediate to offer that service. I know a lot of Bitcoiners hate fractionnal reserve, but if it ever gets mainstream, not everybody will be against that. So even thoug the "real" bitcoin supply is fixed, the effective supply will grow.
Also, governments could, and will, hold significant bitcoin reserves they can release, of increase, depending of the market factors, to affect economy to their liking.
I seriously believe that the purported benifit of the 21million cap are overrated.
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