3 problems with crypto's scarcity claim

[Pekelo]

I used to have 1 argument against that lie, now I have 3, so let's see, shall we?


1. Forking: The possibility of forking (the ability to create an almost or nearly identical another crypto from the original) itself defeats the claim of scarcity. It is like having a 3D printer that can copy the original down to a T. Or like a reciprocating machine like in sci-fi. And it doesn't even cost anything. Nope, such a product not scarce.

2. Other cryptos: This is the most obvious counter example. As long as other cryptos can be freely created that can have completely identical features (or for God's sake, even better ones!) no crypto is scarce.

3. Infinite divisibility. This is a good one, but harder to understand. As long as a crypto is divisible and usable infinitely, it doesn't matter what the original maximum limit is on the issued coins. Bitcoin, Litecoin and Dogecoin have all the same amount of infinite little coin pieces, no matter that one has gazillion times bigger upper limit, than the others.

For the purpose of the system even 1 Bitcoin could work, they don't really need 21 million of them. Because of this fact it is highly irrelevant if this upper limit is 21 or 84 million or 2 billion. Not to mention for practical usage, they should have split Bitcoin 1 to 100, but "only 2.1 billion is ever going to be made" just doesn't sound as good.


Anyhow, now you know. Cryptos are not scarce.

 

[aqtrader]

Similarly, in the network, we have a limited maximum number of around 4 billions of IPv4 addresses when the Internet was invented. Now we have a lot more than 4 billion devices and each has its own sort of IP addresses of IPv4 and private IPv4 addresses (reused in different sub-networks) and almost unlimited IPv6 addresses. People are smart and creative. As for crypto currency they are just bits. These bits are available in some way to anyone, you like or not, to be used in some way. Some day, some thing may happen and all virtual digits and bits will be wiped out accidentally, mysteriously, maliciously, inexplicably, and sadly still too many people there to chase ...

 

[maxinger]

Anyhow, now you know. Cryptos are not scarce.

right.
cryptocurrency is one of the very few things in this universe
which is not scarce.
Its supply is infinite.


Anyway, the price of cryptocurrency doesn't really depend on
supply vs demand but fear vs greed.

 

[Azalea]

We need to look past the hype of cryptocurrency being scarce. Cryptocurrencies will truly add value to society when we will concentrate on finding the right solution to the problem at hand instead of trying to blockchain them as a magic bullet for all problems.

The scarcity argument is an over-generalization of how cryptocurrencies work as it effectively groups all cryptocurrencies into a single basket. The intrinsic value of a cryptocurrency is therefore also largely dependent on the goals of the cryptocurrency. It can be the ability to easily access a ‘store of value’ asset, it can be the ability to conduct microtransactions with ease or it can be in the value add that a particular cryptocurrency introduces into our lives.

 

[HolyGrailSeeker]

I beg to defer. The value of bitcoin lies in the number of users. Therefore forking it or creating new bitcoin clones is useless since it's not the same user base.

It's like why Facebook or Instagram has value when literally anyone can create a similar clone.

 

[Pekelo]

I beg to defer. The value of bitcoin lies in the number of users. Therefore forking it or creating new bitcoin clones is useless since it's not the same user base.

But it can be. Since reaching consensus on any kind of improvement is almost impossible with the miners, forking a more technically advanced coin is much easier. See Bitcoin Cash for example.

Sure the cult/herd mentality will work because original holders don't really care about technical advancement, just greed. Nevertheless, the solution does exist, people just need to SWITCH.

 

[zghorner]

1. Forking: The possibility of forking (the ability to create an almost or nearly identical another crypto from the original) itself defeats the claim of scarcity. It is like having a 3D printer that can copy the original down to a T. Or like a reciprocating machine like in sci-fi. And it doesn't even cost anything. Nope, such a product not scarce.

this only defeats the claim of scarcity if you lump all cryptos together as a category instead of looking at each individual one. The same could be said about world currencies speaking about them as a whole group...you can always just create another one. so not a very strong argument IMO

2. Other cryptos: This is the most obvious counter example. As long as other cryptos can be freely created that can have completely identical features (or for God's sake, even better ones!) no crypto is scarce.

This is what concerns me the most...cryptocurrency is still in its infancy so we really should expect better ones in the future to replace the current.

3. Infinite divisibility. This is a good one, but harder to understand. As long as a crypto is divisible and usable infinitely, it doesn't matter what the original maximum limit is on the issued coins. Bitcoin, Litecoin and Dogecoin have all the same amount of infinite little coin pieces, no matter that one has gazillion times bigger upper limit, than the others.

again I think you are wrong here as the same thing could be said about the USD. The US used to have half-cent coins but we are going the opposite direction as BTC. bottom line is one is appreciating rapidly while the other continues its infinite cycle of inflation->depreciation.

 

[Pekelo]

1.this only defeats the claim of scarcity if you lump all cryptos together as a category instead of looking at each individual one.

2. This is what concerns me the most...cryptocurrency is still in its infancy so we really should expect better ones in the future to replace the current.

3. again I think you are wrong here as the same thing could be said about the USD.

1. Quite to the contrary. If only Bitcoin existed but forking was still available, the scarcity claim goes out of the window. Give me a crypto without forking and this argument goes away.

2. Right. The problem with crypto world is that the newer, better cryptos ARE NOT replacing the old, obsolete ones. Like greed and your little pyramid scheme is more important than technical improvement. But if so, then there is no right to bitch about the banking system.

3. First, the USD is not divisible infinitely. Second, we are talking about cryptos so there is no point in bringing up a real currency. The point is again: there is no real difference between 1 coin or 21 million if both can be divided infinitely.