[xchaotic]

By design, Bitcoin is scarce - there will only be 20999999.9769 bitcoins ever made. Contrast that with USD where more and more money is being printed or added to the system via: quantative easing increasing federal debt ceiling So that is one factor. The other is simple supply and demand - more and more people want to invest in bitcoin for speculative reasons, not as a means to buy goods and services but to heard in hopes that the price is going to continue going up. That removes even more bitcoins from circulation, driving the price even higher. To sum up: supply of bitcoin is limited by design, the shortages are made worse by speculators. It's not too different from speculators driving iPhone or Nintendo prices up on secondary markets. Same can be said some cars and many luxury good in general - look up veblen goods.

[6d6b73]

At any point number of bitcoins can change.. It might be another fork, but that number is not set in stone afik

[celticninja]

It is one of the basic pillars of bitcoin that the supply is limited, it is unlikely that a fork which minted new coins would be accepted, you can create a fork but that fork is not bitcoin. 1 Bitcoin is divisible by 100,000,000.

[soyrunner]

I agree. The bitcoin number limit is fundamental. It's what shows up fiat for what that is. It's also what makes it threatened. I believe the growth of altcoins was in part to placate the financial system. Maybe not increase the total number of bitcoin that will ever exist but the creation of altcoins gives the idea that the alternative to fiat is expanding as fiat multiplies.

[theklub]

It's not really scarce though because you can divide up bitcoins into tiny pieces. It's more of a mental scarcity.

[xendo]

Dividing is not same as 'printing' for regular currencies. It won't drive the inflation.

[asafira]

I don't think that means it isn't scarce: if there was a supply of water (and you could buy it in any amount) and people were buying it up and selling it on a secondary market, it would still cause the price to go up.

[theklub]

Water isn't bitcoin though.. you can meaningfully divide a bitcoin down to .0001 and give it to someone. You can't really trade drops of water.

[asafira]

Why can't you trade drops of water? If people were interested (for eye drops it aerosols, for example), why not?

[nonsince]

Yes, but that still means that the price _per bitcoin_ will keep increasing.

[theklub]

That's fine, I'm not talking about the price. I just mean its not really scarce when you can divide it up so much and trade it. The scarcity is fake. It's like saying there is only 10 trillion dollars in a bank so the trillions are scarce if I'm only going to trade 1 trillion at a time.

[appleflaxen]

i don't understand your reasoning.

it seems like you're saying potato chips aren't scarce, because I can break the chips in my bag up until everyone in the world has a piece of potato chip, and thereby feed the world.

in economic terms, scarcity means that the supply is fixed. and bitcoin supply, by definition and network consensus, is fixed.

[oulrich]

Potato chips have some intrinsic utility. Coins (digital or otherwise) generally do not.

I think this is what makes 'breaking up potato chips' into a million pieces to solve hunger seem ridiculous. Where-as splitting a coin into values seems natural. To me at least.