Why BTC is not cash, and why cash is not infinitely divisible.

[PaulConventionWV]

It's not decided by the market tho. It's actually infinite as long as someone manipulates the huge data file either thru mining for until 2149(last block that adds to the special number used a base for the division) or making 1 transaction every 10 minutes.

I agree the market has the ability to manipulate the bitcoin how it sees fit. But the market is still deciding, is it not? I believe the market will recognize the infinite nature of bitcoin divisibility and attribute value accordingly.

Yes, it is still deciding, but you seem to have already determined that the market is going to decide in the negative in the future. You can't possibly know that.

Nothing like BTC has ever existed before, so why would you believe that the market can't place value on something just because it can be divided into infinitesimally small pieces? The fundamentals of how markets work dictates that it is not impossible to place value on a commonly agreed-upon standard, no matter what form that standard may take. If it has a use, which BTC does, then the market will agree upon a standard that is acceptable for its use. Money could be anything. Again, this whole argument you're making boils down to "does BTC have intrinsic value?" when the real question is, "Does it have to?" That is what the market is determining right now.

The only real difference between any currency is who controls it. The many is better than the few.

 

[PaulConventionWV]

You are still looking at the notional amount. That number is meaningless. It is inside of the bitcoin, not a way of counting the bitcoin.

If you want to count a more important number, count how many times the notional in the genesis block has been divided and subdivided. This is where any appreciation in your investment will be realized. It also where the more times the arbitrary number is divided the more rights are created that people will attempt to trade for.

There is infinite number of those rights. How much you pay for 1 grain of sand? How about enough grains of sand to fill up a hole 10x10 acres and 50 feet deep?

Now, take that 1 grain of sand and divide it by 21,000,000. How much you pay for that? Every fraction of a grain of sand represents the right to manipulate the data in the bitcoin.

Are you saying eventually people will stop dividing the bitcoin? Do you know the only way to make that happen is to not use bitcoin and to stop mining it?

Eventually, people will stop mining it, correct? Then the rest of the divisions beyond that are redundant, right?

 

[newbitech]

Because the market does. I'm not worried about the infinity part of it any more than I'm worried about the infinity part of the dollar. As long as people aren't worried about it, it doesn't matter. So, then, I have to ask you why you think it will matter. Do you have any evidence that people will even care about what you're talking about? The problem with your assessment is that you're looking at it from a cryptographic perspective, not a market perspective. Your understanding of the market isn't nearly as good as your understanding of computers and code.

I think the market will come to terms with what bitcoin is sooner than you realize. What I am doing is simply describing what bitcoin is. I make no prediction how the market will respond to what I am saying. Nor do I care to be honest. I think it's interesting now that I understand the technology better, that people are willing to pay for something that is as abundant as the air they breath.

I realize this has the side effect of directly challenging the scarcity claim made by the bitcoin creator. How can a number be scarce? How is the number 21 million any more scarce than the number 1337? It's not.

What makes something scare is what comes after 21 million. There is only 21 million ____? What? It's just some number that gets divided over and over and over again. You could pick any number, doesn't matter.

Did the market decide that number? No. It did not.

 

[newbitech]

Eventually, people will stop mining it, correct? Then the rest of the divisions beyond that are redundant, right?

no if people stopped mining, the bitcoin would disappear.

 

[danda]

$ calc 1/0.00000001*21000000
2100000000000000

That is the number of available units. Any further division would require code modification of widely distributed software, which requires community concensus.
thus: finite. not infinite.

 

[muh_roads]

You are still looking at the notional amount. That number is meaningless. It is inside of the bitcoin, not a way of counting the bitcoin.

If you want to count a more important number, count how many times the notional in the genesis block has been divided and subdivided. This is where any appreciation in your investment will be realized. It also where the more times the arbitrary number is divided the more rights are created that people will attempt to trade for.

There is infinite number of those rights. How much you pay for 1 grain of sand? How about enough grains of sand to fill up a hole 10x10 acres and 50 feet deep?

Now, take that 1 grain of sand and divide it by 21,000,000. How much you pay for that? Every fraction of a grain of sand represents the right to manipulate the data in the bitcoin.

Are you saying eventually people will stop dividing the bitcoin? Do you know the only way to make that happen is to not use bitcoin and to stop mining it?

Ah so your concern is the blockchain size. We'll cross that bridge when we get to it. If the lead programmers aren't worried, I'm not worried.

 

[muh_roads]

no if people stopped mining, the bitcoin would disappear.

No the theory is that transaction fees will overtake the block reward. There will always be an incentive to mine. But just how many people are mining in the future is the question. It might not be worth it even if the transaction fees go over 50 coins total per block. The difficulty will be in a unit of measure that most people are unfamiliar with by then.

 

[newbitech]

$ calc 1/0.00000001*21000000
2100000000000000

That is the number of available units. Any further division would require code modification of widely distributed software, which requires community concensus.
thus: finite. not infinite.

and how many times can you do that calculation? Cause that is what you pay for when you pay for a piece of bitcoin. It doesn't matter if you pay for the right to divide the number 1000 or the number 10 or the number 0.00001. You are still just paying for the right to divide it as many times as you want.

 

[danda]

No, that is the total amount of available atomic sub-units that make up your symbolic 1 bitcoin, representing the entire blockchain. There is no further division without community agreement. Nice try though.

 

[newbitech]

No the theory is that transaction fees will overtake the block reward. There will always be an incentive to mine.

what do you mean no? the incentive is that some miner will be given a right to divide the bitcoin. Right now it just so happens that the right the miner is given is attached to an arbitrary number that increments the root arbitrary number + some other arbitrary numbers that other people dividing bitcoin have decided to include in their division.

As long as miners value the rights to divide these arbitrary numbers, bitcoin will continue to divide. in 2149 when calculating the hash no longer increments the arbitrary number, the only way someone doing the math will get rights to divide the bitcoin will be if someone who is not calculating the hash makes a division. If there are no divisions and there are no increments in the root arbitrary number, there is nothing to hash. That is, the hash will just be the same as it was 10 minutes ago.

If bitcoin makes it to 2149, don't think the miners will have to sweat that part of it. But there will be a key question of balancing the arbitrary numbers divided by miners and the arbitrary numbers divided to users with rights to divide. This is a completely different problem tho.

 

[newbitech]

No, that is the total amount of available atomic sub-units that make up your symbolic 1 bitcoin, representing the entire blockchain. There is no further division without community agreement. Nice try though.

But there is no sub-unit of the bitcoin. Bitcoin is one unit. What you have given is the result of the math between two arbitrary numbers placed inside the code that manipulates the bitcoin. You may not divide the bitcoin unit outside of itself. All of the bitcoin must be hashed together to create the valid block. If any part of that division exists outside of the block, that division will be rejected.

 

[newbitech]

Ah so your concern is the blockchain size. We'll cross that bridge when we get to it. If the lead programmers aren't worried, I'm not worried.

That is a concern, but not what I am expressing in this thread. However, you can see the manifestation of the infinite amount of division by witnessing the expansion of the block chain. The block chain size has no constraints. While it would be possible to reencode the block chain to reduce it's size, it will be impossible to prune any of the divisions represented by the data. These divisions are pieces of the whole. The bitcoin does not exist in pieces. Only inside of the bitcoin to the divisions actually have a significance. The significance being that someone did some arbitrary math and made decisions on how many rights to create.

Those rights manipulate the block chain are what are being traded for stuff. Not the numbers, not the result of the math. There are infinite number of rights. The more rights created the larger the blockchain.

The block chain is the bitcoin. The software is tool to make scratches on its surface, quasi-metaphorically speaking.

 

[brandon]

what do you mean no? the incentive is that some miner will be given a right to divide the bitcoin. R

Dude the things you are saying are bordering on nonsensicle. There is not only one bitcoin. 25 new ones are created every 10 minutes on average. When a miner reaps the reward for solving a block they are given new bitcoins, not a division of something that previously existed.

 

[danda]

OP:

1) what do you believe are the logical outcomes of your conclusions?

2) Do you presently hold BTC, or plan to buy any?

3) Do you presently hold a precious metal, or plan to buy any?

just curious. thanks.

 

[cindyEvans]

I must agree that that's the biggest downside of bitcoin today. Anonymity doesn’t give you total assurance and protection.








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