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Comment by jstanley | Hacker News Reader

If I give you a jstanleytoken to go with every dollar you own, that has not increased the amount of dollars.

A Bitcoin split doesn't create more Bitcoin, it just creates another currency.

There is certainly an argument to be made that, for many of the uses that people have for "bitcoins", BTC and BCH are close substitutes. Conversely, a "jstanleytoken" is probably not a close substitute for either BTC or BCH, and is certainly not a close substitute for dollars.

Another way of looking at this is to observe the market cap of both currencies after a fork; in theory you'd expect the total market cap to remain unchanged, since the newly forked currency is presumably either worthless OR has worth only to the extent that it removes value from the original currency. In practice, this doesn't seem to be occurring.

>for many of the uses that people have for "bitcoins", BTC and BCH are close substitutes

Sounds like nonsense to me. Practically nobody accepts BCH.

Really? In my personal life I find that BCH and BTC are just as widely accepted. :)

(...which is to say, precisely 0 vendors accept either, of course. Most people are not picking a crypto currency based on their ability to conveniently buy a coffee with it just yet.)

Playing devil's advocate: it doesn't create more Bitcoin, but it creates more "currency". Before the split, you had X oldBitcoin; after the split, you have X oldBitcoin + X newBitcoin. If a newBitcoin is worth 1/Y oldBitcoin, the effect should be as if the supply of oldBitcoin had increased by 1/Y.

But you can't say it is inflation because purchasing power didn't decrease. Theoretically the value of the old coin will be (Y-1)/Y so everybodies wealth increased by 1. If it's greater than 1 good! You can even call it deflation, let's hope it's stable. If it's less than 1 something went very very wrong with multiple possible reasons: let's hope killing one restores the balance.

The entire "banks create money" argument is based around the question of whether a money-like obligation is in fact money. See the two different definitions of "money supply" in macroeconomics.

This doesn't seem to be quite the same. A Bitcoin fork is more like somehow giving everyone who holds dollars an equal number of jstanleytokens, and jstanleytokens can be passed around just like dollars and are still hard to counterfeit. My wallet with $50 in it now has $50 and 50 jstanleytokens. The corner store may not sell me a soda in exchange for jstanleytokens, so you haven't exactly increased the number of dollars in circulation, but it seems to me that you've done something that will have significant effects.

The value of a dollar only changes if some people decide they want a jstanleytoken more than they want a dollar (i.e they start to buy jstanleytokens).

Otherwise the value of a jstanleytoken will remain at 0 and the value of a dollar will be unaffected.

I don't see why you'd need jstanleytokens to be more desirable. They'd merely need to be desirable in some way.

Let's say that the corner store arbitrarily decides that they'll accept jstanleytokens at 10% the value of a dollar. I can go buy my soda for 20 jstanleytokens, or whatever it would be, instead of $2. That decreases the demand for dollars, and thus the value of a dollar.

But since everybody got both they didn't lose anything: they got some jstanleycoins too (unless you were lending dollars, then you may not get them both back). So the wealth/spending power didn't decrease, there was no inflation.

I'd say there is inflation, just as there would be if everyone got two dollars for each dollar they hold. But the idea that people wouldn't lose anything is true.

I think that "unless you were lending dollars" bit is a really important aspect of this, though. Lending happens a lot. This is true even in the Bitcoin world. We don't normally call it "lending," but that's what people do whenever they store coins on an exchange.

This has been a major problem with these forks, too. You deposit some Bitcoin with an exchange, then there's a fork... do they owe you the forked currency as well, or not? There's no obvious answer to that.

> just as there would be if everyone got two dollars for each dollar they hold.

But that's not what's happening!

It's closer to everyone getting 1 jstanleytoken for each dollar they hold.

Which is what I discussed. All I'm saying with the bit you quoted is that there's inflation in both cases.

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