If you think inflationary fiat is so much better, then just stick to that.
The topics you're mentioning have been discussed to death. Please do a little reading before rehashing something for the 10,000th time.
Welcome to the board.
Topic: why only 21M bitcoins? edit: or more precise "why is there a limit?" - page 2. (Read 1440 times)
March 25, 2013, 05:06:43 PM
March 25, 2013, 05:03:50 PM
Bitcoin's only method of money supply contraction is through destroyed coins, which are proportional to holdings. Holding coins effectively carries a risk and storage fee, so people will not have incentive to hoard.
sure, as long as the costs and risks outweight the deflation, hoarding makes no sense. but providing appropriate technical know how, these risks and costs are pretty low. so the only significant risk is inflation which is not going to be expected, as long as BTC doesn't fail.
and isn't hoarding, growing acceptans, speculation, economic growth, etc some kind of money supply contraction too?!
March 25, 2013, 04:31:50 PM
The exact number of 21M is arbitrary and could be any number.
The limited supply mimicks gold which has worked as a money for human societies for many years. Economists disagree whether limited supply and deflation is good for society - on one side you have the neoclassics, keynesians, and the monetarists that believe some inflation creates more economic growth, on the other hand you have the Austrian school that argues market participants will anticipate inflation and it therefore doesn't help. They also argue that deflation doesn't hurt.
The limited supply mimicks gold which has worked as a money for human societies for many years. Economists disagree whether limited supply and deflation is good for society - on one side you have the neoclassics, keynesians, and the monetarists that believe some inflation creates more economic growth, on the other hand you have the Austrian school that argues market participants will anticipate inflation and it therefore doesn't help. They also argue that deflation doesn't hurt.
March 25, 2013, 04:30:03 PM
hi everybody!
i've been reading here for a while and by now i think i understand most of the aspects of bitcoin. but i really don't get, why the total amount of BTC is limited to 21M? as far as i know, there is no limited fiat currency out there!
if bitcoin refuses to fail and gets more and more accepted a limited amount means ever increasing deflation which rewards hoarding over spending?! sounds more like a bug than a feature to me. at least in the long run!
xx
viajero
i've been reading here for a while and by now i think i understand most of the aspects of bitcoin. but i really don't get, why the total amount of BTC is limited to 21M? as far as i know, there is no limited fiat currency out there!
if bitcoin refuses to fail and gets more and more accepted a limited amount means ever increasing deflation which rewards hoarding over spending?! sounds more like a bug than a feature to me. at least in the long run!
xx
viajero
Bitcoin's only method of money supply contraction is through destroyed coins, which are proportional to holdings. Holding coins effectively carries a risk and storage fee, so people will not have incentive to hoard.
March 25, 2013, 04:27:54 PM
i don't see, how it would "balance out naturally"!
either the bitcoin economy grows and we have ever increasing deflation or it decreases and BTC will fail eventually.
even without growing we'll have a slight deflation due to every day losses (hardware failure, lost private keys, etc) that happens to every currency and thats why central banks print money every day!
i understand, that mining for ever is problematic too.
but what i'm actually asking myself is this: has the limited amount of BTC any strong theoretical reason/explanation or is it only because there is no better solution for a decentraliced (crypto-) currency?
either the bitcoin economy grows and we have ever increasing deflation or it decreases and BTC will fail eventually.
even without growing we'll have a slight deflation due to every day losses (hardware failure, lost private keys, etc) that happens to every currency and thats why central banks print money every day!
i understand, that mining for ever is problematic too.
but what i'm actually asking myself is this: has the limited amount of BTC any strong theoretical reason/explanation or is it only because there is no better solution for a decentraliced (crypto-) currency?
March 25, 2013, 04:02:58 PM
I think one theory is that a shrinking Bitcoin economy will also cause the value per Bitcoin to decrease (prices for goods increase), which would give hoarders an incentive to spend at least part of their savings. As the economy grows, the value increases (prices for goods decrease), giving a bigger incentive to save. There's a balance between saving and spending which an economy will find naturally.
March 25, 2013, 03:55:31 PM
hi everybody!
i've been reading here for a while and by now i think i understand most of the aspects of bitcoin. but i really don't get, why the total amount of BTC is limited to 21M? as far as i know, there is no limited fiat currency out there!
if bitcoin refuses to fail and gets more and more accepted a limited amount means ever increasing deflation which rewards hoarding over spending?! sounds more like a bug than a feature to me. at least in the long run!
xx
viajero
i've been reading here for a while and by now i think i understand most of the aspects of bitcoin. but i really don't get, why the total amount of BTC is limited to 21M? as far as i know, there is no limited fiat currency out there!
if bitcoin refuses to fail and gets more and more accepted a limited amount means ever increasing deflation which rewards hoarding over spending?! sounds more like a bug than a feature to me. at least in the long run!
xx
viajero
Jump to: