kenstauffer Posted August 18, 2017 Posted August 18, 2017 With bit-coin at $4000, it got me to thinking about what it must be like to spend bit-coin and I arrived at a point of befuddlement and would like to share my train of thought and see if someone can point out the flaws my thinking. Although bit-coin is valued at $4,000, I am not limited to buying items that cost multiples of $4,000. I can still buy things for less than this amount by selling a fraction of a bit-coin. For example, I could by 1,000 items valued at $4 with a single bit-coin. If I did this, then my bit-coin would be smeared across the internet and owned by up to 1,000 other people. Some people might own 1/1000th of my original bit-coin. Some people might own 30/1000th of my original bit-coin. These people could then use my fraction of a bit-coin combined with other peoples fractions to buy stuff. So... As my chimpanzee brain was pondering this fact, I made the following leap: Why have bit-coins at all? Why not invent a crypto currency in which just a single unit exists? There would be no mining, no algorithmic problem solving. Just create one unit. And henceforth fractions of this original unit are exchanged. At a philosophic level, I am wondering, is having multiple units of crypto currency a fundamental property of the cryptos, or just an accidental feature? Does this thought experiment prove cryptos are bs? Or that mining is an essential property of cryptos? or what?
RichardY Posted August 18, 2017 Posted August 18, 2017 Some time ago Peter Schiff mentioned the same thing in a talk with Stefan Molyneux on Bitcoin.
neeeel Posted August 18, 2017 Posted August 18, 2017 Is this not basically what bitcoin does? There's a theoretical upper limit to the number of available bitcoin, which is the same as having one unit divided into smaller bits
Boss Posted August 18, 2017 Posted August 18, 2017 Well there can only be a maximum of 21 million bitcoins. The units doesnt matter too much since you can trade as low as 0.00000001 BTC so there is a lot of room. As far as not needing mining, mining was done so everyone with a computer could mine and get bitcoin Its kinda like gold, there are people who mine gold and anyone can do it but most dont. Obviously now it would cost quite a bit to mine bitcoin, its unprofitable for most but possible for everyone which is what matters.
lorry Posted August 19, 2017 Posted August 19, 2017 21 hours ago, kenstauffer said: I think because have multiple units allows us to conceptualise what is occurring in a manner familiar to out embodied experience of reality. Like, why do me use a measure of a meter instead of cm, or mm, or nano m or pico m etc? What happens if you consider a fall from a height of 6m, does it feel like it would hurt as much as a fall from 20ft? With regards to the rest of your question, check out this video...
LuxAlex Posted September 18, 2017 Posted September 18, 2017 There are crypto currencies out there which consists of only 42 units of currency or even just 1. The numeric value doesn't really matter that much as long as it is dividable and you have to look at the absolute units of value (smallest divisible fraction). Imagine if you have 210 000 000 000 000 of the smallest dividable units, and you say well I want to call 100 of these a Cent and 1000 of them a Kilo and 1 000 000 of them a Bitcoin. Well there you go. You have a divisible unit of currency. Its all relative what you call a Unit of currency as long as you aren't talking about the smallest indivisible faction of unit. Regarding Mining, mining serves two main purposes, it as you pointed out correctly A. distributes the currency around the world, but also B. serves as a validation mechanism which is incentivised via the economic reward (mining reward of new bitcoin). This validation mechanism certifies the ledger which has the most mining power assigned to it as the valid one. Which means that if you wanted to attack the bitcoin network with malicious intents, you would have to gain control of at least 51% of the mining power. This would cost you millions of dollars in equipment and electricity cost. And as bitcoin grows bigger so does the computational power pointed towards mining making it increasingly more difficult to infiltrate and manipulate the bitcoin network. Mining is what essentially is what is valuable about Bitcoin, its what allows people to put trust in the validity of the payment protocol being immutable. I hope that isn't too much of a slap of information, happy to elaborate on details! Best, Alex.
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