2/3rds of all Bitcoins that will ever be, have been mined today(blockchain.info)
blockchain.info
2/3rds of all Bitcoins that will ever be, have been mined today
https://blockchain.info/charts/total-bitcoins
2 comments
For the uninitiated: There will be about 21 million bitcoins ever. Today almost 14 million have been mined.
The Bitcoin system analogy is like a closed silo of wheat. All wheat (fiat currency ) is blown to the top of the silo where the value is stored until it is needed to be converted back into fiat currency again.
At the bottom on a equal basis Bitcoin purchasers and miners go to the market when they desire convert back into fiat currency to pay required taxes and or expenses that can only be done in fiat currency. The volatility in price is a added incentive for those using Bitcoin as a payment system to convert back to Fiat currency thus reducing the stored value.
Miners contribution (processing power and electricity) occur outside the silo (this is there basis of claim and conversion to fiat currency to pay the operating bills).
The miners do not increase the amount of wheat (fiat currency ) in the silo system. Bitcoins by there simple function produce no new income or growth either inside or outside the silo that increases the stored value of wheat (capital) in the silo.
So any distribution to miners reduces the amount of wheat (stored capital ) by almost 40% which is dilutive to those who paid full price to buy Bitcoin.
Tommorow if the market price of Bitcoin increase more wheat is added to silo. This is just borrowing against the future stored value.
If enough Bitcoin is exchanged for the stored value in the silo (fiat currency) then the market price will drop to reflect this inequality.
Mining bitcoin is a dilutive to the value paid by those who buy Bitcoin in the free market by those who receive coins for mining. lets do some simple math based upon today statistics. Todays volume 6297.55 x Avg price 247.6 = $1,559,273.38 minus (3,800 coins mined x 247.6 = 618,393.38) 98.1958666466. This means if you bought Bitcoin today your value has been diluted by more than 39%. So each Bitcoin has only $149.40 in fiat currency available today.
So Bitcoin 2.0 applications that grow capital is the only long term solution to this problem.
At the bottom on a equal basis Bitcoin purchasers and miners go to the market when they desire convert back into fiat currency to pay required taxes and or expenses that can only be done in fiat currency. The volatility in price is a added incentive for those using Bitcoin as a payment system to convert back to Fiat currency thus reducing the stored value.
Miners contribution (processing power and electricity) occur outside the silo (this is there basis of claim and conversion to fiat currency to pay the operating bills).
The miners do not increase the amount of wheat (fiat currency ) in the silo system. Bitcoins by there simple function produce no new income or growth either inside or outside the silo that increases the stored value of wheat (capital) in the silo.
So any distribution to miners reduces the amount of wheat (stored capital ) by almost 40% which is dilutive to those who paid full price to buy Bitcoin.
Tommorow if the market price of Bitcoin increase more wheat is added to silo. This is just borrowing against the future stored value.
If enough Bitcoin is exchanged for the stored value in the silo (fiat currency) then the market price will drop to reflect this inequality.
Mining bitcoin is a dilutive to the value paid by those who buy Bitcoin in the free market by those who receive coins for mining. lets do some simple math based upon today statistics. Todays volume 6297.55 x Avg price 247.6 = $1,559,273.38 minus (3,800 coins mined x 247.6 = 618,393.38) 98.1958666466. This means if you bought Bitcoin today your value has been diluted by more than 39%. So each Bitcoin has only $149.40 in fiat currency available today.
So Bitcoin 2.0 applications that grow capital is the only long term solution to this problem.
Question, what happens to the ledger (Blockchain) if the miners (accountants) no longer get paid for mining Bitcoin? (Asked with respect)
Transaction fees.
Won't this deincentivize Bitcoin commerce significantly though?
Maybe, maybe not. Right now, anyone using Bitcoin pays for use through a) constant inflation of the monetary base through mining rewards, and b) transaction fees, for a+b. Once (a) disappears, (b) will rise... but will the new b be bigger or smaller? Given the inflexibility of mining rewards and the rarity of double-spends in the wild, it may well be that right now the block reward is wastefully high.