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Comment by Imnimo | Hacker News Reader

But is there really a limited supply? A second bitcoin chain with the same rules but a new genesis block would provide the same technical capabilities. The limiting factor is just the willingness of people to spend compute mining original bitcoin vs this hypothetical second chain. If we collectively wanted to, we could create an arbitrarily large number of bitcoin-like tokens

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You'd have to convince the whole ecosystem - miners, exchanges, wallets, buyers, sellers, etc. - to switch over. It's the same network effect that protects Microsoft or Google or Facebook or even Nike: changing peoples' behavior is hard, and in general beyond the resources of new entrants unless the incumbent really screws up.

(Arguably, Bitcoin's rise is precisely because of the incumbent really screwing up. If someone created a new currency in the 1970s or 1990s - and people did - folks would laugh at them. It's only because trust in the government and mainstream financial system is so low - and the Fed continues to print trillions of dollars to paper that over - that Bitcoin has gained a foothold.)

"If we collectively wanted to..." is never an answer. People don't make collective decisions, they make individual ones. Adoption requires convincing lots of people, individually, that your new solution is better. You can get a boost from peer pressure, but you have to start the flywheel going yourself.

You don't need to convince miners at all. If BTCs future is in using it, it has to convince the future companies and stores to not use other coins or services. Or to a buyer today to still have as much demand even after the speculation is gone (which is currently its main/only function).

Wallets, miners, etc won't really matter at all if Square and Amazon etc have a plugin that uses a stable coin of each currency along with BTC. The world will have infinite transfer capabilities of other "scarce" non-fiat and fiat pegged coins without BTC (including other electronic currency based services).

That's my point - the thing that makes bitcoin "scarce" is not that there is a fundamental limit to the number of bitcoin-like tokens that exist, it's just that there's inertia against creating more.

I don't mean "if we collectively wanted to" to suggest that people will just up and choose to do so tomorrow, only to say that it's that lack of collective will, rather than true scarcity, that restricts the number of bitcoins.

And not only that. Once the last block is mined, the only revenue for the miners will be transaction fees. If anyone insists on a large future valuation of BTC, it follows there will be massive future transaction fees. Massive transaction fees dissolve any advantages stemming from network effects.

> You'd have to convince the whole ecosystem - miners, exchanges, wallets, buyers, sellers, etc. - to switch over. It's the same network effect that protects Microsoft or Google or Facebook or even Nike: changing peoples' behavior is hard, and in general beyond the resources of new entrants unless the incumbent really screws up.

Quite a few projects have tried exactly this, and none of them have succeeded. What makes you think your attempt would succeed?

Indeed there are already many forks of bitcoin and alternate cryptocurrencies like monero, ether, etc. It's fascinating how people assign value to an asset created out of nothing that will never show revenue.

Makes you wonder if you could get people to buy shares in a company that promises no revenue but markets itself as "exchange traded gold".

> It's fascinating how people assign value to an asset created out of nothing that will never show revenue.

The USD is created out of nothing currently and does not show revenue (if anything, the US government only creates massive debts that will have to be paid in the future thru massive taxes hikes, or inflation, or both). The only reason why the USD has any value is because it's the single piece of paper that is authorized as a currency in the US, and that people 'trust' it somehow (especially outside of the US). The day the trust is gone, it will be worth absolutely nothing.

The USD also has the full backing and power of the largest military on the face of the planet. It will last as long as that empire does.

Well as a citizen of the US I also have to pay taxes with it, giving it at least a small amount of utility that other objects do not have. But in general this is true, yes.

There are tons of crypto forks that have essentially no market value. How do you explain that, if anyone can simply create more value out of nothing? It seems clear that this is not what is happening.

People have created hundreds of “bitcoin-like” tokens. Go look at coinmarketcap.com. They aren’t fungible with Bitcoin though. It seems Bitcoin has maintained much higher demand due to its first mover advantage and network effects. The other coins don’t seem to offer a compelling reason to pay the very high costs of having everyone switch over.

I think it is sort of similar to why gold stands alone among the precious metals as the biggest one that people hold onto purely as a token.

I don’t really know what the long term picture is though. Or whether Bitcoin and friends are a “good thing” at all.

Indeed, the value of actual bitcoins relies not just on the theoretical capabilities of the software, but also the fact that lots of computers are actually running that software. I don’t see that as surprising or paradoxical at all.

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