Bitcoin compared to gold and actual limitation vs artificial

[BlueManifest]

Was thinking about this earlier today. Gold on earth is a physical thing that is truely limited, no more can be made, even if someone wanted to make more gold they couldn't. This gives gold a limitation that is real.

Now bitcoin. The creators said they aren't going to make anymore. Everyone says because of this it gives it value.

Ok, but those people are just ignoring that the creators can flip a switch anytime they want and have an unlimited supply, so the supply is artificially limited not truely limited like gold.

Now my question is how can something that's unlimited that's being artificially limited be valued like bitcoin

 

[FantaSoda]

Was thinking about this earlier today. Gold on earth is a physical thing that is truely limited, no more can made, even if someone wanted to make more gold they couldn't. This gives gold a limitation that is real.

Now bitcoin. The creators said they aren't going to make anymore. Everyone says because of this it gives it value.

Ok, but those people are just ignoring that the creators can flip a switch anytime they want and have an unlimited supply, so the supply is artificially limited not truely limited like gold.

Now my question is how can something that's unlimited that's being artificially limited be valued like bitcoin

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When it comes to the asking price of something, scarcity is less of an issue than you think it would be. Things are worth what they think they are worth and financial instruments like crypto-currency are no different in their ability to rapidly appreciate in value (while not really being limited by physical tangibility) than stock options (or stock in general, tbh). Consider diamonds, a physical good that has a high price but is not actually all that rare. The supply of diamonds are artificially limited to keep the prices high.

 

[Karateka]

I mean you could say the same thing about any currency

 

[BlueManifest]

I mean you could say the same thing about any currency

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Yes thats why i was comparing it to gold.
Atleast the $ has some gold backing, not the same as it was but it still does have some

 

[leenbzoold]

Gold has its value because we declare it to have that value. Because it's shiny.
What is it but a metal that doesn't rust and conducts electricity well?

 

[Karateka]

Yes thats why i was comparing it to gold

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Countries don't print millions of dollars more when they are broke because if they do that the value of their money goes down. I imagine bitcoin would have the same issue, and assumedly the people managing it know well enough not to do so.

it was a science teacher though

 

[BlueManifest]

Gold has its value because we declare it to have that value. Because it's shiny.
What is it but a metal that doesn't rust and conducts electricity well?

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And because there's a limited amount of it

 

[Mivey]

Actually, gold can be created artificially. Yes, science has actually made possible the goal of alchemy. Problem is, it's so expensive to make, that it literally costs many times the market price of gold. (Read it up here: https://en.wikipedia.org/wiki/Synthesis_of_precious_metals#Gold. Also, often it produces unstable isotopes, though there are published papers where tiny amounts of stable, nonradioactive gold were reported to have been produced.)

The limitations is part of the protocol, the reward for new coins is halved every four years, and drops to 0 once 21 million coins have been produced. If you wanna change that, you need essentially another protocol, or else everybody using Bitcoin would have to agree on the change (which would likely decrease the value of Bitcoin and therefore cause them to lose money, so yeah, not happening). The limit is by design, but there is no simple switch to be flipped, BlueManifest. You could always make your own coins, sure, but that's happening all the time anyway.

 

[RSTEIN]

And because there's a limited amount of it

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Yes, doesn't decay + crustal abundance of 4 ppb. Been revered since ancient Egypt.

 

[BlueManifest]

Actually, Gold can be created artificially. Yes, Science has actually made possible the goal of Alchemy. Problem is, it's so expensive to make, that it literally costs many times the market price of Gold. (Read it up here: https://en.wikipedia.org/wiki/Synthesis_of_precious_metals#Gold. Also, often it produces unstable isotopes, though there are works where tiny amounts of stable, nonradioactive gold were produced.)

The limitations is part of the protocol, the reward for new coins is halved every four years, and drops to 0 once 21 million coins have been produced. If you wanna change that, you need essentially another protocol, or else everybody using Bitcoin would have to agree on the change (which would likely decrease the value of Bitcoin and therefore cause them to lose money, so yeah, not happening). The limit is by design, but there is no simple switch to be flipped, BlueManifest. You could always make your own coins, sure, but that's happening all the time anyway.

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Well if it's expensive to make then it still has value, how much would cost the creators of bitcoin to make more bitcoin? 0

 

[killerrin]

Diamonds. Made of one of the most common elements in the galaxy. Are easy to make out of thin air through the power of science and are available in vast quantities. And yet it still costs someone a couple grand to get one. The reason for the price? Artificial scarcity.

 

[Deleted member 22490]

Yes thats why i was comparing it to gold.
Atleast the $ has some gold backing, not the same as it was but it still does have some

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US dollars are backed by gold in some way? This is news to me.

 

[Kyuuji]

Well if it's expensive to make then it still has value, how much would cost the creators of bitcoin to make more bitcoin? 0

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Why ask the question if you're going to ignore half of the answer?

 

[BlueManifest]

US dollars are backed by gold in some way? This is news to me.

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It was stopped at one point but the treasury still holds a lot of gold

 

[Deleted member 22490]

It was stopped at one point but the treasury still holds a lot of gold

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So it's not backed by gold.

 

[Fat4all]

i remember the good old days, when money was just a giant rock with a hole in the middle

 

[BlueManifest]

So it's not backed by gold.

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If the people that print the money still have gold, then it's still backed by gold. Ratio just isn't the same it use to be

 

[Страна Мечты]

Was thinking about this earlier today. Gold on earth is a physical thing that is truely limited, no more can be made, even if someone wanted to make more gold they couldn't. This gives gold a limitation that is real.

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You should also look at it's applications, Crypto can be used to create distributed databases and transaction ledgers that are difficult to forge. Gold has a wide range of industrial applications due to it's reasonable conductivity, it's ability to be machined and the fact that it's chemically inert.
Gold still has an advantage on this perspective.

 

[Deleted member 22490]

If the people that print the money still have gold, then it's still backed by gold. Ratio just isn't the same it use to be

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I don't think it works like that.

 

[Mivey]

Well if it's expensive to make then it still has value, how much would cost the creators of bitcoin to make more bitcoin? 0

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There is no "creator of Bitcoin" who can decree that "henceforth shall there be more Bitcoins". It's a just a protocol, text file if you will, that a lot of independent actors follow carefully. There is, to my knowledge, no process of deviating from it that doesn't risk the entire thing breaking down. That's why there are so many other competing ideas for how cryptocurrencies should work: Bitcoin can't be amended (please correct me if I'm wrong about this).

 

[N.Domixis]

i remember the good old days, when money was just a giant rock with a hole in the middle

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Proof of evolution.

 

[Kirblar]

If the people that print the money still have gold, then it's still backed by gold. Ratio just isn't the same it use to be

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No, the US just has gold reserves independent of the currency. US currency is fiat, backed only by its intrinsic value.

 

[4859]

If the people that print the money still have gold, then it's still backed by gold. Ratio just isn't the same it use to be

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The gold standard was abandoned in 1933, and the link between dollars and any manner of gold or silver backing was severed in 1971.

Us dollars are backed by the "full faith and credit" of the U.S. Government.

 

[Kitsunelaine]

You're coming at it from the wrong angle, you should be looking for comparisons to the stock market

 

[BlueManifest]

The gold standard was abandoned in 1933, and the link between dollars and any manner of gold or silver backing was severed in 1971.

Us dollars are backed by the "full faith and credit" of the U.S. Government.

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Yes but I was saying since the government still has gold it's still backed by gold in a diff sense. But yes not exactly the same way it was

 

[BlueManifest]

There is no "creator of Bitcoin" who can decree that "henceforth shall there be more Bitcoins". It's a just a protocol, text file if you will, that a lot of independent actors follow carefully. There is, to my knowledge, no process of deviating from it that doesn't risk the entire thing breaking down. That's why there are so many other competing ideas for how cryptocurrencies should work: Bitcoin can't be amended (please correct me if I'm wrong about this).

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You have a link to this as fact? I've always been under the impression that no one knows where bitcoin came from or who made it or if no one made it

 

[Vanillalite]

Actually, gold can be created artificially. Yes, science has actually made possible the goal of alchemy. Problem is, it's so expensive to make, that it literally costs many times the market price of gold. (Read it up here: https://en.wikipedia.org/wiki/Synthesis_of_precious_metals#Gold. Also, often it produces unstable isotopes, though there are published papers where tiny amounts of stable, nonradioactive gold were reported to have been produced.)

The limitations is part of the protocol, the reward for new coins is halved every four years, and drops to 0 once 21 million coins have been produced. If you wanna change that, you need essentially another protocol, or else everybody using Bitcoin would have to agree on the change (which would likely decrease the value of Bitcoin and therefore cause them to lose money, so yeah, not happening). The limit is by design, but there is no simple switch to be flipped, BlueManifest. You could always make your own coins, sure, but that's happening all the time anyway.

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This is the way I understand it to be as well, and you can't just fix it.

Hence why other coins have sprung up among other reasons.

 

[4859]

Yes but I was saying since the government still has gold it's still backed by gold in a diff sense. But yes not exactly the same way it was

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Nope. That golds all for the gubberment. Ain't got squat to do with the US currency.

You can tell there is no longer any backing by simply looking at the money.

Older bills would say:
A dollar bill used to say "This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury or at any Federal Reserve Bank."

That means you used to be able to turn in a certain amount of dollars and get an ounce of gold or silver.


Today they say "This note is legal tender for all debts, public and private."

 

[Erik Twice]

US currency is fiat, backed only by its intrinsic value.

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Extrinsic. Fiat money doesn't have any value on its own, it only has value in so far you can exchage it for things that do have value on its own, like goods and services.

 

[Mivey]

You have a link to this as fact? I've always been under the impression that no one knows where bitcoin came from or who made it or if no one made it

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What exactly do you mean? Bitcoin was designed to not have a central authority, like say the US Dollar has with the Federal Reserve. This is in the original paper that introduced it, by the infamous Nakamoto (https://bitcoin.org/bitcoin.pdf). You are right that the identity of Nakamoto is secret, could be a group of people for all we know. But everything about it, it's definition, it's implementation, is open source. There is no secret backdoor, no central server that defines what Bitcoin costs, what fees are payed.

There is some argument among researcher that there is a trend towards centralization, more links here (https://en.wikipedia.org/wiki/Bitcoin#Decentralization). But ultimately, your premise here is very much misguided, at least when it comes to how Bitcoins functions, and more importantly, how it does not function.

 

[Kirblar]

Extrinsic. Fiat money doesn't have any value on its own, it only has value in so far you can exchage it for things that do have value on its own, like goods and services.

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Yes, that one lol.

 

[Deleted member 2171]

Gold is just as fiat as anything else. Bitcoin's algorithm trying to make it function like gold is made by someone and pushed by people that still didn't get the memo that having the gold standard was dangerous and stupid in the first place. It's made even worse by the fact that Bitcoin transactions cost so much now that you're spending money to spend money which makes it even worse than other currencies.

 

[King of FeatherCoin]

More Bitcoin cannot just be created, it's already being limited by it's own blockchain algorithm and only farms of ASIC machines can fulfill theextremely expensive mining process. Eventually the hard limit will be reached anyway.

Dogecoin however is a crypto that has no such limit in it's blockchain.

 

[Punjabi_Hitman]

The reason dollar bills are the medium with which we barter or trade with is because the gov't made it law that it's the only thing they accept for you to pay taxes with.

Then the credit card and online banking was invented. This is just a digital signature of a transaction taking place. These transactions are secured on a server at a centralized location.

A bitcoin is another type of digital signature of a transaction taking place and secured in a decentralized location as transactions are secured on computers that are mining so multiple people around the world are recording and storing transactions.

 

[Occam]

Was thinking about this earlier today. Gold on earth is a physical thing that is truely limited, no more can be made, even if someone wanted to make more gold they couldn't. This gives gold a limitation that is real.

Now bitcoin. The creators said they aren't going to make anymore. Everyone says because of this it gives it value.

Ok, but those people are just ignoring that the creators can flip a switch anytime they want and have an unlimited supply, so the supply is artificially limited not truely limited like gold.

Now my question is how can something that's unlimited that's being artificially limited be valued like bitcoin

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That's not how any of this works.

 

[DemonSwordsman]

Was thinking about this earlier today. Gold on earth is a physical thing that is truely limited, no more can be made, even if someone wanted to make more gold they couldn't. This gives gold a limitation that is real.

Now bitcoin. The creators said they aren't going to make anymore. Everyone says because of this it gives it value.

Ok, but those people are just ignoring that the creators can flip a switch anytime they want and have an unlimited supply, so the supply is artificially limited not truely limited like gold.

Now my question is how can something that's unlimited that's being artificially limited be valued like bitcoin

Click to shrink...

Bitcoins creators are not in control of bitcoin. They cannot flip a switch and make more

 

[BlueManifest]

More Bitcoin cannot just be created, it's already being limited by it's own blockchain algorithm and only farms of ASIC machines can fulfill theextremely expensive mining process. Eventually the hard limit will be reached anyway.

Dogecoin however is a crypto that has no such limit in it's blockchain.

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What about bitcoin cash? What's keeping more being made in just diff forms?

 

[BlueManifest]

Bitcoins creators are not in control of bitcoin. They cannot flip a switch and make more

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Where did bitcoin cash come from?

 

[Deleted member 8561]

Where did bitcoin cash come from?

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It's a fork of Bitcoin, just like the multiple other forks that bitcoin has had

 

[darkazcura]

You can't just flip a switch to create more bitcoin. Changing the protocol for bitcoin would be a very difficult thing to do.

 

[Cipherr]

If the people that print the money still have gold, then it's still backed by gold. Ratio just isn't the same it use to be

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This is wrong. It doesn't work that way dollars are not backed by gold. And the idea you have that a switch can be flipped and more bitcoin being made is wrong too. It's a consensus system, everyone using it would have to agree for that to happen, and what realistically ends up happening is a fork (which has happened many times)

Yes but I was saying since the government still has gold it's still backed by gold in a diff sense. But yes not exactly the same way it was

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Nope, I know this may be surprising, but no. Its not backed by gold at all anymore. Those are completely separate things. A lot of us were raised and taught it was backed by gold, so finding out that changed is shocking, but its true.

What about bitcoin cash? What's keeping more being made in just diff forms?

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Its a fork of bitcoin. It comes from people doing something similar to what you suggest. Wanting a form of different rules and pursuing it. Its the only fork I know of that obtained any level of legitimacy (which is currently on the decline big time). But it isn't the only bitcoin fork. Theres tons of them floating around that no one really pays attention too except small cult groups. Nothing stops you from making one right now. The real question is once you fork it, how are you going to give it legitimacy and get millions of people to spend millions on it, and believe in its future so it gains a value worth a crap?

It took the most powerful mining organizations in the world + a known crypto big name + millions of dollars in the biggest pump and dump we have ever seen to even get Bitcoin cash on the MAP. And a few months later its bleeding out and showing signs of irrelevance.

 

[BlueManifest]

This is wrong. It doesn't work that way dollars are not backed by gold. And the idea you have that a switch can be flipped and more bitcoin being made is wrong too. It's a consensus system, everyone using it would have to agree for that to happen, and what realistically ends up happening is a fork (which has happened many times)



Nope, I know this may be surprising, but no. Its not backed by gold at all anymore. Those are completely separate things. A lot of us were raised and taught it was backed by gold, so finding out that changed is shocking, but its true.

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K, this was supposed to be more about a comparison to gold anyway, not sure how paper currencies got brought into the discussion

 

[darkazcura]

K, this was supposed to be more about a comparison to gold anyway, not sure how paper currencies got brought into the discussion

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It got brought up because creating more bitcoin is as unrealistic as printing more cash.

 

[BlueManifest]

why don't copies of bitcoin work? Why can't any group of people just keep creating digital currency non stop? If supposedly no more bitcoin can be made all with their own currency names

 

[darkazcura]

why don't copies of bitcoin work? Why can't any group of people just keep creating digital currency non stop? If supposedly no more bitcoin can be made all with their own currency names

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This already happens. There are over a thousand cryptocurrencies and projects with all kinds of different goals. It doesn't mean much if people don't want to support it.

 

[BlueManifest]

There are over a thousand cryptocurrencies and projects with all kinds of different goals. It doesn't mean much if people don't want to support it.

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You can't have groups of people creating different versions of gold though

 

[Alucrid]

why don't copies of bitcoin work? Why can't any group of people just keep creating digital currency non stop? If supposedly no more bitcoin can be made all with their own currency names

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i'm actually working on a bluemanifest coin right now. sadly it's worthless at the moment.

 

[RefreshZ]

What about bitcoin cash? What's keeping more being made in just diff forms?

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Bitcoin iterations exist (Bitcoin Gold, Bitcoin Cash etc.) These are consensus based forks on the block chain and represent new tokens with new "features" e.g. larger block size or more coins available to mine. They live or die depending on market take up - if at the fork point everyone stops mining the original coin and mines the new token instead then that becomes the dominant. This however as many people have mentioned has nothing to do with value and the original coin - in this case Bitcoin - continues to exist with all its inbuilt limits and market value.

 

[darkazcura]

You can't have groups of people creating different versions of gold though

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People creating different cryptocurrencies literally doesn't mean anything for bitcoin unless those currencies gain mass support. Even then it's just competition and not impacting bitcoin's value directly. I mean what's the real reason why people value gold more than silver despite silver having more real world use? People really just chose to find value in gold.

 

[tokkun]

What about bitcoin cash? What's keeping more being made in just diff forms?

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Yes, people can make infinitely many Bitcoin forks or other cryptocoin flavors.

However, people can also pick any number of alternative physical stores of value besides gold. Silver of course, but there are actually a lot of things you could put in a similar category that aren't precious metals - bottles of wine, paintings, etc.