Peter Schiff questions how the supply of Bitcoin, if calculated differently, could affect the sense of scarcity.
This economist emphasizes that instead of focusing on the figure of 21 million Bitcoins, what truly matters is the total number of satoshis, the smallest unit of Bitcoin, which remains unchanged and affects value.
MAIN CONTENT
Bitcoin has a limit of 21 million coins, but 21 billion is a new hypothesis for discussion.
The satoshi unit (1 Bitcoin = 100 million satoshis) determines the smallest part and the actual supply.
The scarcity of Bitcoin depends on the total supply of satoshis, not just the amount of Bitcoin.
What is the significance of the Bitcoin supply limit?
Expert Peter Schiff and many other analysts agree that the limit of 21 million Bitcoins is the factor that creates scarcity. However, this limit still relies on the technical convention of the number of Bitcoins.
According to reports from many reputable organizations, Bitcoin is designed with a maximum limit of 21 million coins to ensure scarcity, limit long-term inflation, and increase value over time.
How does the supply of satoshis influence the perception of Bitcoin's scarcity?
Peter Schiff asserts that instead of focusing on the number of Bitcoins, users should concentrate on the amount of satoshis – 1 Bitcoin equals 100 million satoshis. If the supply of Bitcoin increases to 21 billion but the number of satoshis remains unchanged, the perception of scarcity will change.
"The number '100 million' is an artificial unit; the core issue is not the total number of Bitcoins but the total number of satoshis."
Peter Schiff, economist, 12/07/2023
The satoshi unit is the smallest unit, used in small transactions and detailed calculations in the Ethereum Blockchain, thus the total number of satoshis more accurately reflects liquidity and actual scarcity.
What impact could changing the Bitcoin unit have on the market and investors?
Financial experts state that adjusting the standard unit of Bitcoin will affect how investors assess value and trading behavior in the cryptocurrency market.
For example, if Bitcoin is redefined to 21 billion coins and each Bitcoin equals 100,000 satoshis, the scarcity mindset could diminish, leading to changes in HODL strategies, trading, or long-term investment.
Comparing Bitcoin and satoshi supply
Bitcoin Satoshi Criteria Unit 1 Bitcoin = 100,000,000 satoshis Smallest unit of Bitcoin Maximum supply of 21 million 2.1 trillion satoshis Impact on scarcity Basis for creating the sense of scarcity in the market Accurately reflects liquidity and small-scale distribution
What do experts say about Peter Schiff's question?
Many cryptocurrency experts believe that changing the measurement unit does not alter the inherent scarcity of Bitcoin if the total number of satoshis does not increase.
The value and belief in Bitcoin are based on its scarcity, combined with its flexible use in transactions through satoshis. Therefore, the important factor is the stability and reliability of the overall supply.
"The truth is not the number of Bitcoins, but the total number of divisible units that the market trusts."
Director of analysis at a cryptocurrency investment fund, 2023
Frequently Asked Questions
1. Why is Bitcoin limited to 21 million coins? This limit is designed to create scarcity, help curb inflation, and maintain long-term value according to Blockchain design. 2. What is a satoshi and what is its role? A satoshi is the smallest unit of Bitcoin, enabling precise and flexible transactions in small payments. 3. Does changing the Bitcoin unit increase the supply? No, changing the unit is merely a technical convention and does not increase the total number of coins or existing satoshis. 4. What is the difference between Bitcoin scarcity and satoshi scarcity? Bitcoin scarcity pertains to the maximum total number of coins; satoshi scarcity reflects the ability to divide and small-scale liquidity. 5. Does Peter Schiff's question affect belief in Bitcoin? This analysis helps deepen the understanding of scarcity, not diminishing its credibility but enhancing awareness of cryptocurrency supply.
Source: https://tintucbitcoin.com/bitcoin-nguon-cung-satoshi-quan-trong-hon/
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