Topic: Is this a paradox? - page 2. (Read 4604 times)

if you're going to compare all the Bitcoin there will ever be to gold, you should compare that number to all the gold there will ever be.

the oceans of the world are about 310 M cubic miles.  at 25 tons of gold (in suspension) per cubic mile of seawater, that's 7 3/4 billion tons of gold.  we'll get it someday, too.

but what'll it be worth?

n.b. - that's just the gold in the ocean.  how much is in the crust of the earth, and likewise not yet economically extractable?

also note that there are astronomical bodies - especially in the Oort Cloud, but also meteorites - with known massive, high and easily extractable precious metal content.  PMs tend to bunch up with each other, in space or on the earth.  here's an interesting wager:  how will we first destroy the 'store of value' aspect of PMs?  by mining the oceans or by mining space?  tough call...

+1

This thread reminds me of Francisco's Money Speech by Ayn Rand:

“So you think that money is the root of all evil?” said Francisco d’Anconia. “Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?

“When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor–your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money, Is this what you consider evil?"

Continued:
http://freedomschool.org/2010/01/17/franciscos-money-speech-by-ayn-rand/

I'm no big fan of Gresham's law but it has some merit. As long as you can pay with fiat currency for everything, you don't have a high incentive to pay with BTC. On the other hand, I really like spending BTC because its so easy and secure compared to other forms of online payment.
I regularly buy a few BTC and spend them on things I would have bought anyway or make some donations.

I know that many merchants who accept BTC today instantly convert them back to fiat again, so one could say it is not really worth the hassle but you have to keep in mind that we're bootstrapping a decentralized global currency here - that's not an easy task! It is a bit like voting for a politician who you think won't win the election - some could say your vote was lost but it is very important for a democracy that everybody votes for the one he believes to be the best.

The good thing with Bitcoin is, that it has enough advantages on its own to flourish regardless of everyone acting for its greater good. Bitcoin's value (ie the demand for them) can come from at least two sources: Bitcoin as a medium of exchange and Bitcoin as a store of value. If they are perceived more as a good store of value then there will be more hoarders and their demand will raise the price. At the same time, less BTC in circulation will limit their usefulness as a medium of exchange which lowers the demand from merchants hence lowering the price again. This in turn will make some hoarders part with some of their coins because they fear that they are not so good a store of value after all -> more BTC in circulation, more attractive to exchange them... Rinse, repeat.

I really see such positive feedback loops built into the foundation of Bitcoin as its greatest quality. Despite all the flaws, imbalances and imperfections of human society and people's motives - they just work!

You probably can tell that I'm in an optimistic mood today

"...fiat currency whose only demand is some kind of Keynesian beauty contest."

I found a country that needs a new currency.

Today's Headlines: South Sudan Becomes World's Newest Nation http://news.yahoo.com/south-sudan-becomes-worlds-newest-nation-210254919.html

Here's a fun calculation: There are 166,000 tonnes of gold in the world (source: World Gold Council). Each tonne consists of 32,150 troy ounces for a total of 5,336,900,000 ounces. Divide that amount by the eventual total number of bitcoin (21,000,000) and you get 254 ounces of gold per bitcoin. With gold at a US dollar value of $1,600 that would equate to $406,400 per bitcoin.

32150 x 166000 = 5,336,900,000 oz / 21,000,000 = 254 oz per 1 BTC or 254 x $1,600 gold = $406,400 per BTC

Owners of bitcoin, or "hoarders", as some people call them, have to consume to exist. They must eat and support themselves. They cannot eat, wear, drive or live inside of bitcoin. Therefore, they will spend them when they need to. All this worrying about people "hoarding" is unnecessary and a waste of resources when one could spend that time, energy and talent creating and offering products and services that bitcoin owners would actually want to buy.  People can continue asking for handouts but I wouldn't expect that to be a very profitable venture.

I agree completely.
Bitcoins need to be used.. Daily

True. But that man did knew if he held onto them all they would end up being a waste of electricity and files on his computer waiting to be deleted. 
 

IMHO, this is a great thread to show the problems of the early adopters hoarding the coins.  And you see, it has nothing to do with "stimulating the economy".  It has everything to do with making more people aware of Bitcoins.  In a way, each coin is its own marketing campaign.  The first time I actually used one to buy something was a feeling of intense liberation.  But if most of the coins are being kept off-market because a few people have the delusion that they´ll be multibillionaires one day, then many fewer people will have that experience, and so it's unlikely that the word will continue to spread.  Actually, that's the true paradox.  In order for the hoarders money to be worth something in the long run, they have to at least spend some of it.

certainly it would be cheaper to hire someone who has it.

IMO this is a great thread to illustrate the fundamental problem with fiat currency whose only demand is some kind of Keynesian beauty contest.

Note a currency backed by something people actually want does not have this logic problem; if one person had all the corn/oil/rice in the world, people would still be willing to pay for it at a reasonable price.  But if somehow, someone collected all of the USD in circulation... people would just say "um no thanks, we'll just make our own money".

What do you want to say?

You seem to be forgetting that while the USD is only divisible up to 2 decimals (in hard currency, not talking about representations in databases), a BTC is divisible up to 8 decimals. A number is just a number. If you compared the amount of satoshis to the amount of dollar cents, it would suddenly look a lot different - while these satoshis would still be parts of Bitcoins.

I think your figure is unrealistic. It is higher if you combine currencies, there are a lot of worthy Euros out there. But it won't be much more than 10 times the figure I calculated.

I understand what he means. If one person some how was able to get all the coins the bitcoin economy would grind to a halt because no one would be trading.

But that person with all the coins probably would not want that to happen because now all the money he spent buying those coins are now worthless.  So - Myth Plausible? lol

You may not have the required knowledge.

As I said there real value is in the way that they can be used. If one person owned them all. Then they would effectively be useless to everyone else. Because everybody else would have  no use for them.

I know I know I'm on thin Ice...

Why would you try to buy all the bitcoins from one person, when you can start a new chain?

Actually,  - there was some period when all of bitcoins was owned by one man.  But there is difference, - not all of possible bitcoins.

One person owning all the coins does not mean there is not any demand for them. One person may own them all, but everyone in the world could want some of those coins, meaning they are willing to buy them, giving them value.

But if no one wanted them, then yes, they would be worthless.