The conversation about Bitcoin's PoS future is totally glossed over, and nobody seems to be able to answer my question bout the meaning of 21 million coins when mining is complete - it seems meaningless to distinguish a coin at the point. It then just becomes hundreds of millions (of millions) of tradable units. I'll be researching this.
I'm not clear on the use of intermediaries here. If I have a Bitcoin wallet and sell some gold for Bitcoin is the buyer able to send from their wallet to mine or 'must' it go through an exchange with all the KYC and links to fiat bank accounts. I have not participated yet but was assuming I could make a wallet and transfer to other wallet and that the exchanges were only for converting fiat to crypto.
I'm not sure i understand what you're asking, can you please elaborate? A Bitcoin or a Satoshi is just a unit of accounting, just like a Dollar or Cent. What is your question regarding PoS in relation to it?
No, you don't need to set up anything more than your own wallet. When i was talking about an intermediary, i was referring to the miners. So when you submit a transaction, that transaction goes into a limbo pool until the miners process it. That's why i was saying i don't think of it as true P2P. So imagine that the only way i can give you a $50 note was to go into a bank first and have them confirm the $50 was real. Now that doesn't happen, as i can give the $50 note directly to you (P2P) with nothing inbetween. But that's an analogy on what's happening with a crypto or digital bank payment, where a middle interaction is always needed to complete the transaction.
Hence my depressing conundrum that it sounds like I’m not articulating the point properly or just being a straight up moron. And I know I’m closer on the spectrum to moron than genius, but I’ve also been exposed to bitcoin for so long it feels like there’s no excuse to be that dumb either. How frustrating !
Are you asking why we would assign value to BTC 's finite supply level of 21 million whole coins when there will be 21 million x 100 million Satoshis in existence once mining has been complete? Or another way of putting it, would the argument around the limited supply of BTC be less than compelling if one unit of BTC never existed and everyone just used the Satoshi as the accepted whole unit of accounting for those blockchain transactions?
An apt anecdote, perhaps... " Johan Palmstruch was a Latvian-born Dutch entrepreneur who once opened a bank in Sweden. After two unsuccessful attempts, Palmstruch finally convinced King Charles X Gustav to grant his permission to the venture, and Stockholms Banco swung its doors open for business in 1657. History would have long ago forgotten Palmstruch had he not introduced two innovations to the European banking sector: the use of customer deposits to make loans and the issuance of banknotes. The latter innovation was made necessary by the former, as Palmstruch was soon confronted with the classic problem of maturity mismatch: his deposits were short-term liabilities while his loans were long-term assets. Since they effectively replaced awkward-to-use copper and silver coins, Palmstruch’s banknotes became quite popular with the public, demonstrating the role of simple utility in the evolution of money. Once Palmstruch realized he could create money from nothing he pretty much did. Small shortfalls were “papered over” until they festered into big ones, and eventually the gangrenous rot began to stink. When word got out that his bank might not be money good, a stampede of panicked depositors rushed to redeem their paper. The bank collapsed and Palmstruch spent most of his remaining life in prison. The remnants of Stockholms Banco were reincarnated as Sveriges Riksbank, the namesake of Sweden’s current central bank. Not much has changed in the 365 years since Palmstruch’s bank collapsed, except for the whole “jailing bankers” thing. As long as there have been custodians of money, maturity mismatches, and varying degrees of liquidity among asset classes, there have been confidence losses that catalyze runs. Fraud is almost always found in the ashes of collapse (although history shows that outright fraud is usually a mid- to late-stage event). At some point in the boom-bust cycle, enterprises engaging in a little bit of chicanery to skirt through an otherwise manageable crisis find that once the culture accepts having stolen a penny, ethical incrementalism makes stealing nickels, dimes, and quarters all but inevitable. " https://doomberg.substack.com/p/poof-of-work For those so inclined, a long-read for the weekend: https://www.myrmikan.com/pub/Myrmikan_Research_2022_11_15.pdf
Pretty much. So maybe it would be worth me comparing gold for an easier thought experiment. If tomorrow we could trade gold down to the atom, would it retain its value or would it no longer be considered scarce? I'm happy to concede that its value would remain unchanged (or even more attractive). The fact that (btc) mining results in defined distribution and coin size gives the impression of scarcity (true during mining) but when the coins are no longer mined then what use is the 'coin' as a measurement when it's digital? It's not analogous to a physical ounce in this way.. And gold is only practically traded for 99.9% of people from about a gram to a kilo (a factor of 1000 for gold vs 100 000 000 for btc). And gold at the gram has insanely high premiums whereas transacting digital currency incurs 'network fees' which become significantly proportional in the low dollars & cents range but vanishingly small with larger sums - similar to gold but for different reasons. It looks like if I study the network fee structure and block size of digital currencies properly it could also help answer the question - the network fees must play a major role in preserving the scarcity by putting a floor on the minimum transactable units before the user is penalised (where it costs users more to transact than the value of the transaction itself e.g. 5c or 50c). This scales with the value of bitcoin I would presume. All that aside, ultimately the question (and not just about BTC) is - does divisibility impact scarcity over the long term? Or is value maintained no matter how small you can chop something up?? I mentioned shares in an earlier post because traders don't like to see companies with billions of shares on issue. It causes 'overhang' and increases the likelihood of manipulation, especially when demand dries up in bear markets - you can always flood the books with cheap sell orders when there are no buyers and drive price in an exaggerated way to the downside. I suppose for BTC there will always be multiple exchanges and arbitrage to prevent this as well. All signs do point to stability of BTC despite the massive divisibility of coins, but I did want to stop and think about it. -------------------- One of the first articles that came up on google. I can see the conclusion is clear, but did they really do a good job of drawing that conclusion?? https://bitcoinmagazine.com/markets/understanding-bitcoins-scarcity Teasing out the relationship between divisibility and scarcity for bitcoin — or really any other resource — can be a bit complicated. In any case, while we can acknowledge that the current level of Bitcoin’s divisibility impacts the degree of scarcity compared to alternatives, it is surely inaccurate to claim that the current level of divisibility negates its scarcity entirely. CONCLUSION Bitcoin is scarce. That fact is not changed by its divisibility.
Yeah, wait 'till we hit rock bottom below 10 k. 6 k next stop. Prolly 3.5 k next... It'll be like when submarines submerge. But will it resurface? Collect all the coins from the bottom of the ocean, then in 10 years time when it'll be past 200 k, you'll be able to spend it on hookers and luxury cars. Better rent 'em all
The crypto market was created to make a few people very rich and a very large number of people poor - I'm paraphrasing Marc Faber. Indeed! The crypto market is a pyramidal tulip mania casino. Where's permabull Michael Saylor now? Peter Schiff still has strong points. Gold is great. If this "barbaric relic" were like Bitcoin, it would go down to 200 $ and then up to 10 k $ 3 years later.
Saylor is a has been and old news, probably is busy counting his losses while Schiff is rockin the "Greatest Hits". Funny thing is people hate Schiff but he hasnt been wrong yet! I cant listen to Schiff anymore and he annoys me but i have to admit hes the man of the decade. I do listen rarely.
Opportunity cost is Schiff’s problem. Hard to hear what he says when people are rolling in cash capitalising on products he endlessly criticises. He forgets that he’s talking to the 1% but his audience is the 99
Will it resurface with regulation, tax and beefed-up government surveillance is how I frame it from here. I really enjoyed this one:
Francis makes great points all the time. Everyone take note about "digital scarcity" being by decree because some secret satoshi guy says so. Scarcity of nothing is still nothing.
