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RE: Cryptocurrency report "Bitcoin price speculation" by Craig Grant - August 14, 2016

in #cryptocurrency8 years ago

If it is 22 million... multiply it by 10 per decimal point... if it could do two decimal points multiply 22m by 100, if it was 4 it would be 22m x 10000

I looked on bittrex and it is showing my bitcoins as having 8 decimal points... so if that is true then it could be 22,000,000 x 100,000,000

Which is a huge number(way more than a billion or trillion)... however... in reality... if you have 1 you still only have 1 BTC. If people are willing to buy part of a bitcoin from you then they determine it has value.

In your penny reference it'd be more like me being able to go shave portions of the copper (back when they still were copper) off of the penny and have 0.9 pennies, and give you 0.1 pennies. That is in reality what bitcoin is doing. Since it is digital it doesn't have to be stuck in a specific digital form.

The scaling problem isn't with the number of coins. It is actually as I understand it the blockchain for bit coins is not designed to handle the load and speed the transactions are coming at it. Can that be fixed? Probably, I don't know enough about it but I know scaling to keep up with the quantity of transactions is already an issue.

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bitcoin would be worth something if the breakdown was limited to 1/100 like the US dollar

They wouldn't have enough currency to go around due to the limit for the amount. Really this is all about mental perception. You are concerned with where the decimal point is. Since it is digital it is more flexible than that. It can be 1/100th. Yet unlike the dollar which they keep making more and more of out of thin air which devalues the dollar, there is a finite amount of bitcoin. Thus, why you can purchase with partial. If I want to buy something that costs $10 how do you propose I do that with a bitcoin that is let's say worth $600? You could do that as 0.02 bitcoins just like the dollar. That would be two pennies. The actual price should be 0.01666667 bit coins in that example, but limiting it to 1/100th you have to round up to 0.02. Which means you'd essentially lose 0.003333333 bitcoins worth of currency due to having to round. At $600 per bitcoin you have now just basically tossed $2 aside as waste.

That is on a $10 item. Try buying even less expensive items and it gets worse.

You are talking about how the dollar can be broken up into 1/100th of a dollar which is a penny.
so a dollar and 11 pennies is essentially 1.11 dollars.

The only thing different there is it only has two decimal points. That doesn't make it better or worse. It does make it so rounding errors can result in you losing more of your money. There are famous stories of when people used to funnel the rounding errors of transactions into bank accounts and become millionaires simply because of the loss due to the lack of precision in only being able to do 1/100th. Bitcoin does not have this problem. If you want the world to use it as a whole 22 million coins is not enough. With 250+ million people in the U.S. alone there would not be enough currency for even 1 out of 10 people to have a bitcoin.

However, because it can go to great precision in decimal points the actual purchase power of the bitcoin can rise and accomodate the needs of many people to have some.

It is just a decimal point. The dollar is actually far more wasteful due to having a much larger exposure to rounding errors. We just casually have conditioned ourselves to accept this.

The real problem with bitcoin as I said seems to be that it likely can't scale to keep up with the amount of transactions and the lag within transactions will likely get worse.

EDIT: Another person answered with how many possible coins you could have with satoshis.

the problem with bitcoin is it is unlimited, so it's not worth anything, only to those who believe in it like a religion, this is why we have separation of church and state

Hey Craig. The total number of bitcoins is indeed limited. True, bitcoin is highly divisible. But so is gold. Actually, gold is more divisible than bitcoin (technically it's infinitely divisible). But divisibility doesn't make gold (or bitcoin) less valuable. In fact, that property makes it more useful as money. Gold never would have caught on as money if it wasn't highly divisible. And neither would bitcoin.

Also, from a purely math standpoint, you can't say bitcoins are unlimited just because they are highly divisible. As an example, if you divide 1 bitcoin into 1000 parts, you don't have 1000 bitcoins. You have 1000 1/1000ths of a bitcoin, which is still 1 bitcoin.

Likewise, the total number of bitcoins that will ever exist is ~21 million. Each bitcoin can be divided into 100M satoshis. That doesn't mean there will be 2.1 quadrillion (i.e. 21M x 100M) bitcoins in existence. It means there will be 2.1 quadrillion satoshis in existence...which is exactly equivalent to 21M bitcoins.

Na mean? :)

Well I am not one of those. I own a whopping 0.3 BTC and that is the most I've ever owned, yet I don't see a decimal place position as being something to concern me. Fiat money isn't worth anything either. In fact since we stopped using gold to back currency worth is pretty much defined by those people that believe in any currency including steem. :(

How is it unlimited? There is a set cap, once it's been mined, no more can be minted.

You say it's not worth anything but I manage to pay ALL my bills in real life using Bitcoin, I get paid my salary in Bitcoin and make purchases with it as and when I need to. How is this worthless?