It is an interesting fact about Bitcoin in general. There are 21M tokens in total AND some percentage are lost every year. Run this simulation long enough and there will be very few active Bitcoins remaining.
Worth pointing out that the monetary policy of bitcoin is not written in stone; all you need to change it is a majority of hashpower. The current chain of bitcoin mainnet includes hard forks, like this one due to miners' manual intervention over a software bug that was exploited: https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
Deflation is a good thing, it rewards delayed gratification.
Those evil Keynesians have convinced the world a little bit of inflation is good. It isn’t. Losing purchasing power on your money is a bug.
Nothing wrong with putting money under a mattress for 100y if the value of money is not evaporating.
For most of human history the money was stable. It’s the disasters of 20th century wars that eroded the value, and 21st century lack of monetary discipline that keeps driving it down now.
During much of the industrial revolution, gold also rose in real price. But people still did business in gold standard countries.
(Hint: the gold might be under a mattress or in a vault, but you can still an almost arbitrary amount of gold denominated debts and loans and deposits.)
I suspect it was a deliberate strategy to create scarcity, allowing the original creators to massively cash out. If you make an inflationary distributed currency, it may work better but it's a bit harder to get rich on it.
There is zero evidence that deflation has any effect on spending.
At the micro level, the change in price is too small for every day purchases. Would you starve yourself for one day because the pizza will be one cent cheaper tomorrow?
At the macro level, every interest rate will be adjusted based on the base inflation/deflation rate, so the net effect is zero. Banks will offer a higher profit rate for their savings account to entice people to deposit their money in the bank instead of their mattress.
It's not silly, it harnesses some of the mechanics behind ponzi schemes to encourage viral spread. Early entrants are incentivized to evangelize it to newer ones
That depends on whether the public key has been exposed.
Bitcoin addresses encode the ripemd160 hash of the public key, so by default when payments are made to new addresses they are not quantum crackable.
But when someone spends from an address they publish the public key to the chain as part of the spend. From then on, any new deposits sent to the same address are at risk of quantum attack
It is an interesting fact about Bitcoin in general. There are 21M tokens in total AND some percentage are lost every year. Run this simulation long enough and there will be very few active Bitcoins remaining.
Worth pointing out that the monetary policy of bitcoin is not written in stone; all you need to change it is a majority of hashpower. The current chain of bitcoin mainnet includes hard forks, like this one due to miners' manual intervention over a software bug that was exploited: https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
Seems pretty silly to build in deflation into a currency. It incentivises putting your money in a mattress for 100 years.
Deflation is a good thing, it rewards delayed gratification. Those evil Keynesians have convinced the world a little bit of inflation is good. It isn’t. Losing purchasing power on your money is a bug.
Nothing wrong with putting money under a mattress for 100y if the value of money is not evaporating.
For most of human history the money was stable. It’s the disasters of 20th century wars that eroded the value, and 21st century lack of monetary discipline that keeps driving it down now.
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I like the alternative even less, as it incentivises spending more than you would and taking on debt you don't really need.
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The other option is to make everyone gamblers, either speculate on properties or stocks. Pick your poison.
During much of the industrial revolution, gold also rose in real price. But people still did business in gold standard countries.
(Hint: the gold might be under a mattress or in a vault, but you can still an almost arbitrary amount of gold denominated debts and loans and deposits.)
I suspect it was a deliberate strategy to create scarcity, allowing the original creators to massively cash out. If you make an inflationary distributed currency, it may work better but it's a bit harder to get rich on it.
There is zero evidence that deflation has any effect on spending.
At the micro level, the change in price is too small for every day purchases. Would you starve yourself for one day because the pizza will be one cent cheaper tomorrow?
At the macro level, every interest rate will be adjusted based on the base inflation/deflation rate, so the net effect is zero. Banks will offer a higher profit rate for their savings account to entice people to deposit their money in the bank instead of their mattress.
It's not silly, it harnesses some of the mechanics behind ponzi schemes to encourage viral spread. Early entrants are incentivized to evangelize it to newer ones
Tail emissions and infinite divisibility are proposals to address this.
Well, they are infinitely divisible in principle, so it doesn't matter too much.
(At the moment, there's a smallest fraction you can send on the network, but they can change that.)
Can't the change the 21M?
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No they are not. There are only 8 decimal places, not infinite.
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Eventually with quantum computing we will be able to recover those wallets right? (Technically)
That depends on whether the public key has been exposed.
Bitcoin addresses encode the ripemd160 hash of the public key, so by default when payments are made to new addresses they are not quantum crackable.
But when someone spends from an address they publish the public key to the chain as part of the spend. From then on, any new deposits sent to the same address are at risk of quantum attack
The hash is merely a convenience, the _actual_ public key used in transactions is present in the ledger and available to anybody who wants it.
Technically it might be more profitable to mine extraterrestrial diamonds.
at this point bitcoin will be worthless
Really hope so too. Would be devastating