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0 pointscryptica6y ago0 comments

>> The whole idea that Bitcoin will have a finite supply is nonsense. There's already dozens of Bitcoin forks, some of which lay claim to be the "one true Bitcoin".

But there is a limited supply of user attention to be divided up between all available cryptocurrencies and it's not divided equally by any measure; so cryptocurrencies are constantly competing with each other for that attention and this is where they derive essentially all of their value. Underlying technology at this stage has almost no value.

In our economy, even an untalented fool speculating on random projects can generate a profit if they have capital; this fact makes talent worthless and means that capital and network effects are EVERYTHING.

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gridlockd6y ago· 2 in thread

I'm not saying there will be yet another Bitcoin fork that just gets rid of the block halving "as a feature". That would be nonsense.

I'm saying that the official Bitcoin blockchain is going to get rid of the block halving, the minority fork will keep the limit "as a feature" and will be called "Bitcoin Classic" or something.

sparkie6y ago

There is no official bitcoin blockchain. There is only the chain with the most accumulated work, and orphan chains. Anybody attempting to remove a limit which may cause the holdings of all bitcoin users to be devalued will simply be ignored by all other users.

Conversely, lets say I put out a proposal to tighten the limit, increase the rate of disinflation and reduce the maximum total supply that could ever be mined to 20M rather than 21M. This proposal might actually gain some interest among bitcoiners because if price speculation so far has been under the assumption that there will be an eventual ~21M bitcoins issued, and this gets scaled back to ~20M, then the 5% reduction in overall supply, without corresponding 5% reduction in demand, would cause all existing bitcoin to gain value.

This could also be implemented as a soft-fork and be compatible with all existing software - because the software checks that the amount paid in a coinbase is less than or equal to the subsidy plus fees. It is technically possible to mine blocks which don't release all of the available bitcoin for that block. (This has been done, and such bitcoin are permanently unavailable and reduce the theoretical maximum 21M supply).

To relax or remove the block subsidy, one would need to hard fork the protocol in order to defeat the "less than or equal" check. You would have to convince the vast majority of bitcoin users that they aught to download and install alternative software which may cause inflation and devalue their holdings. Keep kidding yourself that this will happen.

gridlockd6y ago

> There is no official bitcoin blockchain.

Let's just say there is consensus over what the Bitcoin blockchain is, versus whatever the "Bitcoin Cash" or "Bitcoin ABC" blockchain is.

> There is only the chain with the most accumulated work, and orphan chains. Anybody attempting to remove a limit which may cause the holdings of all bitcoin users to be devalued will simply be ignored by all other users.

Most users of Bitcoin perform no work whatsoever. Miners perform the work. Users can't ignore the interest of miners, even if miners are a tiny minority. Miners may not even have any holdings.

A core value proposition of Bitcoin is that it's the "most secure" network. If a majority of hashing power is priced out of operation because of low block rewards and low fees, that security flies right out of the window. This situation would have a far more significant impact on price than a little bit of controlled inflation.

> To relax or remove the block subsidy, one would need to hard fork the protocol in order to defeat the "less than or equal" check. You would have to convince the vast majority of bitcoin users that they aught to download and install alternative software which may cause inflation and devalue their holdings.

It's not going to be alternative software, it's going to be a software update, through the official channels. It also likely would only affect full nodes, and the majority of Bitcoin users haven't been running full nodes for a while.

It's really up to a few key stakeholders, not Bitcoin users in general. When faced with the decision of giving up network security versus maybe losing a little bit of value to inflation, they will choose the former, because they're not that stupid.

> Keep kidding yourself that this will happen.

A similar thing already happened with Ethereum, the rules were changed mid-game in the official client, the loser fork (Ethereum Classic) was the one that kept the old rules intact.

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