When there are 2,100 trillion Satoshis why the talk of scarcity?

leopard2

legendary

Activity: 1372

Merit: 1014

The assumption is wrong, you cannot spend single satoshis, at least not on-chain (dust limit)

In order to get round numbers when converting fiat currency (e.g. 1 cent = xxxx satoshis) you also need several digits.

The smallest practical denomination is maybe 1000-10000 satoshis

There is not even enough BTC for each millionaire to own one, so they are pretty rare - especially compared to other cryptos. Wink

Look at it like this: Gold is rare. Yes there are trillions of atoms per gram, there is enough gold on the planet for each person to own a little gold dust. But it is still rare compared to iron, or silicon. Grin

Marbelli

jr. member

Activity: 182

Merit: 1

EndChain - Complete Logistical Solution

As I understand it, it’s about the number of coins and there are really 21 million, plus the number of coins themselves is limited, unlike dollars, which regularly print as much as they need

xuan87

legendary

Activity: 1666

Merit: 1001

It's understandable that people complain about the scarcity, people just afraid that they won't get a part of Bitcoin, for me it's just a psychology thing, when something is valuable they will afraid that it won't be enough, if compare Bitcoin and world population then it will seem not enough, but we got alt coin that people can buy, and not all people are into Bitcoin

kwakgyimah

jr. member

Activity: 98

Merit: 1

The simplest explanation would be based on the principle of demand and supply. It is always surprising to see people complaining about the scarcity of bitcoin on the crypto market. Personally, I think the amount of circulating satoshies is too much, maybe a lesser amount could even suffice. People confuse themselves whenever there is a less amount of circulating bitcoin on the crypto market.

talkbitcoin

legendary

Activity: 1372

Merit: 1032

All I know is that I know nothing.

the same simple reason why we say something like gold is scarce while there is seemingly a lot of it (tons of gold) in existence and more is mined. it is not about how much the number looks to you, it is about how much demand is for that available supply.

for example there are altcoins with much small supplies (eg 42 coin which has 42 coins!) but you can not call them "scarce" because they are useless.

Janation

hero member

Activity: 1722

Merit: 528

Quote from: ?? on ??

A significant amount of Bitcoin is lost in circulation. It is speculated that more bitcoins can be lost in the future if something is not done to prevent it.

Isn't that a good thing? Since people and investors wants their investment to give them great profit in time, the less the total supply of Bitcoin is that means the more the demand or price will increase.

I don't know how will these Bitcoins will be lost as you've said it but I don't think it will happen that easily. In the past a lot of Bitcoins are lost, with the total supply being deducted by that, as the OP says that the price increases at that height, it will be really great but don't forget the transactions fees here. Even the price goes that high, the transaction fees will still be there.

Pursuer

legendary

Activity: 1638

Merit: 1163

Where is my ring of blades...

Quote from: Herbys on October 05, 2018, 09:42:58 AM

Quote from: drmilind2004 on October 04, 2018, 10:32:29 PM

This is the one thing I don't quite understand about the talk of Bitcoin's "scarcity value". Sure, "21 million coins only" does give the impression of scarcity prima facie. But then, each coin is divisible to the tune of one hundred million Satoshis. While currently, there's no way to transact a single Satoshi without paying significantly more transaction fees, if 1 BTC reaches US$ 200K as some analysts speculate, then even that won't remain a miniscule transaction anymore.

Thus, in effect, rather than there being 21 million Bitcoins in circulation, the effective value would qualify as: there being 2,100 trillion Satoshis in circulation. This is way beyond the wildest, furthest estimates of total global money supply.

Why then the talk about Bitcoin being in scarce supply?

The result of a recent study of the company Chainalysis on the state of the Bitcoin network, says that 36% of BTC is lost in circulation, 22% is used by speculators and investors' assets are 30%.

Therefore, the number of Bitcoin is much smaller and will be even smaller over the years.

since their "analysis" is only based on whether the coins have moved for a certain amount of time or not it is obvious that the amount of bitcoins lost is far less than the amount that they came up with. the reason is obviously the coins that are not moving only mean that someone has purchased and stored them for long term. and we all know in bitcoin many people do this.

Herbys

jr. member

Activity: 238

Merit: 6

Quote from: drmilind2004 on October 04, 2018, 10:32:29 PM

This is the one thing I don't quite understand about the talk of Bitcoin's "scarcity value". Sure, "21 million coins only" does give the impression of scarcity prima facie. But then, each coin is divisible to the tune of one hundred million Satoshis. While currently, there's no way to transact a single Satoshi without paying significantly more transaction fees, if 1 BTC reaches US$ 200K as some analysts speculate, then even that won't remain a miniscule transaction anymore.

Thus, in effect, rather than there being 21 million Bitcoins in circulation, the effective value would qualify as: there being 2,100 trillion Satoshis in circulation. This is way beyond the wildest, furthest estimates of total global money supply.

Why then the talk about Bitcoin being in scarce supply?

The result of a recent study of the company Chainalysis on the state of the Bitcoin network, says that 36% of BTC is lost in circulation, 22% is used by speculators and investors' assets are 30%.

Therefore, the number of Bitcoin is much smaller and will be even smaller over the years.

ralle14

legendary

Activity: 3136

Merit: 1870

Metawin.com

Quote from: jrrsparkles on October 05, 2018, 02:00:28 AM

we have thousands of altcoins as well so there is no problem with crypto currency to be used as alternative to fiat money.

The problem with using altcoins is that not all of them are accepted by merchants who currently accept Bitcoin. Having alts is not the same as having Bitcoin. I would rather have 1 Bitcoin than have one of each altcoins because most of them are only used for trading purposes.

Quote from: armarsterling7 on October 05, 2018, 08:58:31 AM

People use only satoshi to calculate small amounts but we will still use Bitcoin to trade. We can not use satoshi to trade so Bitcoin is still in short supply.

For now we don't use satoshi because it's not worth anything. Currently satoshi is mainly used for faucets and to calculate transaction fees.

armarsterling7

member

Activity: 420

Merit: 10

If it is 2,100 thousand billion satellites, then it is 21 million Bitcoins. People use only satoshi to calculate small amounts but we will still use Bitcoin to trade. We can not use satoshi to trade so Bitcoin is still in short supply.

FedorIzmailov

jr. member

Activity: 238

Merit: 1

This deficit is created artificially so that the price of Bitcoin increases, but there is no deficit because the Pocaitcoin is not used so widely among the masses that there is a shortage

dothebeats

legendary

Activity: 3542

Merit: 1352

Cashback 15%

IMO this is not only about the 21-M hard cap of bitcoin but also the fact that day by day, more and more bitcoins are being lost into oblivion, thus a factor added towards scarcity. True that bitcoin can be sent in minute amounts, though only at a certain extent since the network only allows a certain number of satoshis to be sent, otherwise it would be considered as 'dust' by most wallets.

It's easy to say that bitcoins are divisible into satoshis thus there should be no problems for 'scarcity', but that excludes the idea of dust outputs, minimum amount to be sent allowed by the network (CMIIW) and the number of lost coins due to carelessness and forgetfulness.

davis196

hero member

Activity: 2968

Merit: 913

Last year,during the major bitcoin forks,some forum member was asking a similar question.
"If bitcoin/blockchain can be divided into two separate coins/blockchains,why do we keep talking about scarcity and limited supply?"The Bitcoin Core supporters have an easy answer to this:"The fork just creates another altcoin out of bitcoin.It's not creating new bitcoins for free."
I'm not sure that this answer helps newbies to better understand btc.

NeuroticFish

legendary

Activity: 3668

Merit: 6382

Looking for campaign manager? Contact icopress!

Quote from: drmilind2004 on October 04, 2018, 10:32:29 PM

Thus, in effect, rather than there being 21 million Bitcoins in circulation, the effective value would qualify as: there being 2,100 trillion Satoshis in circulation. This is way beyond the wildest, furthest estimates of total global money supply.

Why then the talk about Bitcoin being in scarce supply?

1. People think in Bitcoins. This is not good at this price, but that's the reality.
2. There's already a minimum amount of Bitcoin you can send through the network. It was 5500 satoshi some years ago, I don't know if it has change. Smaller amounts than that don't really matter, so your 2.1 trillion satoshi needs to be somehow redefined by that amount.
3. No matter how big it is, it's a finite number. The results are:
i. As more people put some Bitcoins away for long time (HODL) some will not get to get a slice of the pie as big as they'd like.
ii. As there are plenty of ways to lose Bitcoin, from death to losing the private key/seed. Those will never get replaced.
The result is that the amount of Bitcoin in circulation/available to buy is not great (and the number is declining over time), causing people call it "scarce".

figmentofmyass

legendary

Activity: 1652

Merit: 1483

Quote from: drmilind2004 on October 04, 2018, 10:32:29 PM

This is the one thing I don't quite understand about the talk of Bitcoin's "scarcity value". Sure, "21 million coins only" does give the impression of scarcity prima facie. But then, each coin is divisible to the tune of one hundred million Satoshis. While currently, there's no way to transact a single Satoshi without paying significantly more transaction fees, if 1 BTC reaches US$ 200K as some analysts speculate, then even that won't remain a miniscule transaction anymore.

Thus, in effect, rather than there being 21 million Bitcoins in circulation, the effective value would qualify as: there being 2,100 trillion Satoshis in circulation. This is way beyond the wildest, furthest estimates of total global money supply.

Why then the talk about Bitcoin being in scarce supply?

because it doesn't matter what unit you use: 21 million bitcoins or 2100 trillion satoshis are both a limited supply, and both have the same value at the protocol level. scarcity means having a ceiling on the monetary supply, not a ceiling on the number of decimal places you can use!

if people want to start transacting in satoshis rather than BTC, it doesn't increase the number of coins in circulation.

MainIbem

sr. member

Activity: 1316

Merit: 379

#SWGT PRE-SALE IS LIVE

There are two view points to the bitcoin scarcity you are referring. One is from the business men who are trading. In their own view, it is scarse because the volume is limited. And much of the bitcoin is not in trading circulation therefore it is scarse.

On the other hand, the mass adopters, it is abundant because at every time, there is bitcoin in the market. You sure look at the availability from this view point.

Marcel666

jr. member

Activity: 266

Merit: 2

The Premier Digital Asset Management Ecosystem

Quote from: drmilind2004 on October 04, 2018, 10:32:29 PM

This is the one thing I don't quite understand about the talk of Bitcoin's "scarcity value". Sure, "21 million coins only" does give the impression of scarcity prima facie.

The idea of scarcity is bore from the fact that Tue supply is limited, and with increased adoption and circulation, it would be a more vital fact.

Quote from: drmilind2004 on October 04, 2018, 10:32:29 PM

But then, each coin is divisible to the tune of one hundred million Satoshis. While currently, there's no way to transact a single Satoshi without paying significantly more transaction fees, if 1 BTC reaches US$ 200K as some analysts speculate, then even that won't remain a miniscule transaction anymore.

On the basis that the currency gets so huge that most of the transactions are made in satoshis and each becomes more valuable. Buy majority of this is hoarded up already by a fee people, if the bitcoin market truly gains mass adoption, the early holders could create scarcity by hodling unto their assets. This would of course be for more profit. In the long run I believe there would be an even distribution.

Satoshi made his creation to support wide growth.

jrrsparkles

sr. member

Activity: 2380

Merit: 251

Eloncoin.org - Mars, here we come!

Quote from: drmilind2004 on October 04, 2018, 10:32:29 PM

This is the one thing I don't quite understand about the talk of Bitcoin's "scarcity value". Sure, "21 million coins only" does give the impression of scarcity prima facie. But then, each coin is divisible to the tune of one hundred million Satoshis. While currently, there's no way to transact a single Satoshi without paying significantly more transaction fees, if 1 BTC reaches US$ 200K as some analysts speculate, then even that won't remain a miniscule transaction anymore.

Thus, in effect, rather than there being 21 million Bitcoins in circulation, the effective value would qualify as: there being 2,100 trillion Satoshis in circulation. This is way beyond the wildest, furthest estimates of total global money supply.

Why then the talk about Bitcoin being in scarce supply?

Its just haters thing that spreading bitcoin will not be enough when compared with world's total population but when we see it in terms of satoshi we have abundant source for usig it and moreover we have thousands of altcoins as well so there is no problem with crypto currency to be used as alternative to fiat money.

Kakmakr

legendary

Activity: 3430

Merit: 1957

Leading Crypto Sports Betting & Casino Platform

You have to remember that millions of bitcoins are not in circulation. Satoshi himself has more than 1 000 000 coins that has not moved since it was mined. A lot of coins has been burnt by some owners to increase scarcity and a lot of people are hoarding coins and not making them available for trade or commerce. Roll Eyes

Also, not all of the 21 000 000 bitcoins will be mined in our life time, so we cannot use the whole 21 000 000 as a total capped total. Wink

Last thought... A Satoshi can be divided into a smaller measure of unit. Cool

pooya87

legendary

Activity: 3444

Merit: 10558

when speaking of scarcity it is mostly about bitcoin being capped. meaning the production can not go on forever unlike the fiat printing which has no cap. and usually scarcity is used in the context of speculation about the price of bitcoin. in other words they say there is only 21 million coins max so 1 coin could be worth a lot eventually.

Quote from: drmilind2004 on October 04, 2018, 10:32:29 PM

While currently, there's no way to transact a single Satoshi without paying significantly more transaction fees,

you can not transact a single satoshi NOWADAYS because it doesn't make sense NOW. if in the future it made sense then it will also become possible to do it. it is like saying you want to pay 0.00001 dollar! well you can't because that much dollar doesn't make any sense.

Quote

Thus, in effect, rather than there being 21 million Bitcoins in circulation, the effective value would qualify as: there being 2,100 trillion Satoshis in circulation. This is way beyond the wildest, furthest estimates of total global money supply.

well if you want to take the smallest unit of bitcoin and compare it with the total supply then you also have to take the smallest unit of each currency (ie. 1 USD = 100 cents?) and compare it that way. and you can see it is the same.

Topic: When there are 2,100 trillion Satoshis why the talk of scarcity? (Read 272 times)