Hacker News Reader

Comment by Jabanga | Hacker News Reader

I don't understand what you're suggesting would be different if it were regulated.

When you unbound the supply of a currency, it naturally inflates. Inflation being relative to the value derived from any given indicator. Speculation drives confidence drives speculation, forever.

That's the exact opposite of bitcoin. The supply is very clearly bounded to 21 million coins total, with a predefined distribution rate that can't be changed.

Not to belabor the obvious, but it is not the opposite. It's a case study, of the effect.

The number is not 21 million. It's currently 21*10^8 via fractional transactions and expandable (meaning practically and theoretically infinite).

Do you think that increasing the number of decimal places actually increases the supply?

If everyone started talking about cents instead of dollars that wouldn't mean there's 100x as much money... 1 cent would still be worth 1/100 of a dollar.

Likewise, if you started dividing down to 1/1000 of a dollar it wouldn't be inflation. Each 1/1000 of a dollar would still be worth 1/1000 of a dollar.

Edit: and if you suddenly replaced every dollar with 1000 newdollars, those newdollars are also worth 1/1000 of what they were before.

So, if I divide a pizza into 2e8 pieces I have more pizza than if I only split it in half?

Pizza has intrinsic properties, like physics that constrain it. You have more pizza pieces numerically, yes. I'm wondering why you think this is a compelling analogy.

When people say they expand the money supply it means diluting the existing holders. The actual unit of accounting doesn't really matter. Subdividing bitcoin units does not dilute existing holders.

    It's currently 21*10^8 via fractional transactions

First, if by fractional transactions you meant satoshis, the math is 21 * 10^14 (21 million bitcoins * 10^8 satoshis per bitcoin).

Second, there is no question that Bitcoin is deflationary in the long term. The fact that it can be split in smaller units doesn't change that at all.

Reply on news.ycombinator.com