Why do I need a bitcoin?

[mb1268mb]

I've been studying currency for a while. Why is bitcoin limited to 21m coins?

Discussions of money, currency and inflation need to have parameters defined. Simply expanding currency may cause inflation but not just because there are more coins to go around. To make a point, deflation of your bank account doesn't necessarily mean the balance went down.

The discussion needs to involve goods and services. Currency is nothing if not tied to the goods and services backing it. Deflation means my coins buy less, not that I have less coins to spend. Of course if I loose my coins my purchasing power is deflated, and if I find coins on the ground my purchasing power is increased. But a discussion of coinage, electronic or otherwise, needs to focus on goods and services. Goods and services or future promise of goods and services to be delivered will expand and thus the currency supply to buy them has to expand.

Any currency that hopes to overcome the banking industry control and monopoly must find a way to tie value to the goods and services backing it.

Right now, if there is such a thing as a BTC to dollar ratio, then BTC is tied to the level of unfunded liabilities in circulation and it not a new form of currency at all. BTC simply has a different name but no additional value other than the currency backing it up.

Why do I need a bitcoin?

[iFixBTCmemoryIssues]

I've been studying currency for a while. Why is bitcoin limited to 21m coins?

Discussions of money, currency and inflation need to have parameters defined. Simply expanding currency may cause inflation but not just because there are more coins to go around. To make a point, deflation of your bank account doesn't necessarily mean the balance went down.

The discussion needs to involve goods and services. Currency is nothing if not tied to the goods and services backing it. Deflation means my coins buy less, not that I have less coins to spend. Of course if I loose my coins my purchasing power is deflated, and if I find coins on the ground my purchasing power is increased. But a discussion of coinage, electronic or otherwise, needs to focus on goods and services. Goods and services or future promise of goods and services to be delivered will expand and thus the currency supply to buy them has to expand.

Any currency that hopes to overcome the banking industry control and monopoly must find a way to tie value to the goods and services backing it.

Right now, if there is such a thing as a BTC to dollar ratio, then BTC is tied to the level of unfunded liabilities in circulation and it not a new form of currency at all. BTC simply has a different name but no additional value other than the currency backing it up.

Why do I need a bitcoin?

You ever use Bitcoin for a few days?

[mbarna89]

I'm actually asking the same questions. I'm very interested in the idea of investing in bitcoins, but not sure about the long term. Seems terrifying.

[iFixBTCmemoryIssues]

I'm actually asking the same questions. I'm very interested in the idea of investing in bitcoins, but not sure about the long term. Seems terrifying.

The reason why I asked if you ever used Bitcoin is because until you have, you won't know what you have been missing. There is a priceless feeling of power that you get from using Bitcoin, you are your own bank with global on-the-fly transactions. While this comes with security precautions, you can easily mitigate these risks. If you need tips on staying safe, just ask for help and a lot of Bitcoin users will post links to help you.

In regards to being terrified, breath in - and out. Start small, socialize and be cautious just as you would when hiking through a park where bears are known to be. The majority of trading strategies apply to Bitcoin, as they do in any major stock exchange.

The long-term outlook on Bitcoin is spectacular. As the old saying goes, "in numbers we trust", view Litecoinguy's charts: economics/charts-charts-charts-t334.html

The media and Bitcoin's enemies can leave a bad taste in your mouth if you fall victim to their rhetoric. Best to prove them wrong by trying Bitcoin on a small-scale and making your own conclusions from there!

Do not let anyone persuade you to buy their altcoin (a knock-off of Bitcoin), unless you feel the risk is worth the reward. Altcoins are extremely unstable right now, whereas Bitcoin has remained stable and steadily growing.

[TsonicTsunami]

Because in the next 3 - 7 years the ROI could reach anywhere from 100X to 1000X . the outcome is binary, if you think it is going to zero perhaps a precious metals forum is more up your alley.

Bitcoin is many things but to your point 4 come to top of mind,

1. Bitcoin is the best performing currencies in 5 of the last 6 years.

2. Store of value

3. A peer to peer payment rail, you can send any amount of value to anyone, anywhere in the world and there is nothing anyone can do to stop it. No other payment method can make this claim and this is the ground breaking innovation. This is why Bitcoin exists and that is enough.

4. A trustless. immutable, super secure public ledger with a network churning north of 1000 petahash, an unthinkable speed in the not to distant past. This innovation is as important as the value token and the two work in concert to provide the most secure value transfering network known to man.

[subcypher]

Bitcoin is limited to 21M because it's a designed to be a deflationary currency. The hard cap ensures that the inflation rate is set in the code, predictable, and decreased over time until it is no more.

Discussions of money, currency, and inflation need only have two parameters: supply and demand. Expanding the currency doesn't need to mean pumping more of it into the system. It can mean increasing divisibility. This puts more tradeable units into the system without reducing the wealth of those saving their money.

The discussion doesn't need to involve goods and services. It needs to simply do with value. How much bitcoin would it take for someone to perform that service or sell that good?

Right now, Bitcoin has a value compared to the US Dollar, but it's not tied to it. Bitcoin also has a value compared to hundreds of fiat currencies around the world. It's not tied to those either. Bitcoin even has a value compared to several international commodities, but it's not tied to those either.

Bitcoin has value based on supply and demand and that value is compared to many fiat currencies and commodities. It is what worth what we all agree it's worth and we can compare that worth to whatever fiat or commodity you wish. But I know which one I want to be paid with for selling goods and providing services.

[SpartanZA]

This is a fantastic thread, with some brilliant answers all from different viewpoints.

My "Journey" into BitCoin was small, started trading in BitCoin with a friend, and now, all I am doing is looking for ways and business' I can setup with it.

However, my journey into BitCoin only started after the journey with the current financial system ended. In my experience, once I understood the current banking and financial system, and its ways and behaviours and its totally destructive nature of its participants (us), I only then realised the true power of BitCoin. - There is much more to this of course. The value of it, the limited amount of it, the growth, etc, all those figures are for everyone to see and discover for themselves.

I am also an avid Freedom lover. If you had to use Freedom and use it as a currency, it is called BitCoin. There are no secret meetings, no board member meets that shareholders are excluded from. The source code is there for everyone to see and scrutinize and check, and it is. It's a system that works. Everything you want from a bank/payment system/currency/payment gateway/exchange/savings/investments is all rolled into BitCoin.

Take the advice, and get yourself a wallet and start playing with it. Don't play too much. 1 BitCoin is worth over $410. Its not play play money.