Let’s create more Bitcoin.

No we shouldn’t, I can end the post here, but I will explain the reasons why I think we shouldn’t.

The biggest problem with the central bank’s money printing is that it can be infinite, right? Bitcoin solves this problem because it has a fixed supply. However, let’s say that everyone who owns Bitcoins decides not to sell or use them. This is an extreme case, but just for the sake of argument, the system wouldn’t work right?

Question number one: What if no one wants to sell their Bitcoin and everyone becomes a permanent hoarder? Even though this is an extreme case, just for the sake of argument, we’re using it as an example. My answer to this is that even very scarce things that people want are always available at the right price. For example, California Beach real estate in terms of the actual land and Hawaii real estate in terms of the actual land are both finite. Palladium, rare Pokemon cards, picassos are also scarce as Bitcoin. Some things are rare and expensive, like oceanfront real estate in California, but you can always get some, even if it’s just a tiny piece. Bitcoin also comes in tiny pieces called SATs or satoshis. There are 100 million satoshis in one Bitcoin. If and when SATs reach dollar parity, which means that one Satoshi is worth one dollar, then one Bitcoin will be worth $100 million. This is a very large number and it’s hard to imagine, but it’s definitely something that’s possible. This would be a result of more people using Bitcoin, which is already happening. We haven’t seen hoarding with shares of Apple, Amazon, or Microsoft, where the founders had very large stakes. Of course, you can dilute a company’s equity, but I think there’s a similar dynamic with Bitcoin. I might never sell my Bitcoin. In fact, I’m never going to sell my Bitcoin. I might borrow against it at some point. I hope my children won’t sell the Bitcoin they get from me, and I hope my grandchildren won’t sell the Bitcoin they get. I don’t think Bitcoin hoarding is a problem because everyone has different needs and wants, and everyone has their own price that they’re willing to sell out for or exchange for goods and services directly.

Question number two: Should Bitcoin add tail emissions like Dogecoin or Monero? this is a way to deal with Bitcoin’s extreme scarcity by making sure that there’s always Bitcoin being created. Monero has a similar thing that started at the end of May 2022. Instead of letting the block rewards drop to zero, Monero has this mission where each block miners earn 0.6 Monero per block. These are called “tail emissions,” and they mean that the total Supply is technically infinite, but you get to “infinity” very slowly because these are very small amounts. The goal is just to make sure the miners stay in business. I don’t think this will be a problem. The block subsidy has been going down since the first Bitcoin block was mined in 2012. This hasn’t been a problem for the past 13 years. The price of Bitcoin has gone up as the block subsidy has gone down from 50 to 25 to 12 and a half to 6.25%. The Bitcoin hash rate keeps hitting new all-time highs. In fact, we just hit a new all-time high in the hash rate, so there doesn’t seem to be anything stopping people from wanting to mine Bitcoin. The whole point of bitcoin’s monetary policy is that it was set in stone at the beginning and will never change. We have this 21 million coin cap, we have the havings worth the block subsidy, the block reward goes down from 50 to 12 to 50 to 25 to 12.5 to 6.25 and everyone knows what it is, so if you change it, that sets a really bad precedent.

Ethereum is an example of a system that has changed its monetary policy every few years and sometimes every few months. In September of 2022, it switched from proof of work to proof of stake in order to send a message about energy consumption and give pre-mined insiders more control. Under proof of stake, the more coins you own, the more control you have over the system, which is not true for proof of work. Lastly, why would anyone want to change to a different proof-of-work coin? Let’s say we wanted to switch to Dogecoin because it has this “tail emission” and uses “proof of work” like Bitcoin. The problem is that Dogecoin is not a serious competitor to Bitcoin. Bitcoin has a much better global brand because it has been around for a lot longer. Dogecoin is literally a dog joke coin. The Bitcoin network has a much higher hash rate than any other proof-of-work coin, and I don’t think people realize how big this difference is. The current Dogecoin hash rate is about 297 Tera hashes per second, which is a very large number of hashes being done every second. If we convert Tera hashes to Exa hashes, we get 0,00000297 EXA hashes when we do the conversion right now. Bitcoin, on the other hand, has a hash rate, or average hash rate, of 216 Exahashes per second, so do the math, we can see how far Bitcoin is ahead of all these other coins, including Dogecoin, in terms of its hash rate.

I just want to say thank you to ethereans and thank you to ethereum for leaving proof of work because you lost the proof of work game. People will say that Ethereum was always going to switch to proof of stake, which is true, but I think that if Ethereum had been the most popular proof-of-work coin, people would have been much more hesitant to switch. Now that Ethereum has left the proof-of-work arena, there’s really only one coin left: Bitcoin. Proof of work, as we’ve said many times on this channel, is a very special thing, and I’m glad that Ethereum has left it. Proof of Stake is too similar to the current Fiat system. Proof of Stake always ends up with coins that are controlled by people who have captured them. Bitcoin now has 94% of the market capitalization of proof-of-work coins. Once you understand how important proof-of-work is, you can see that Bitcoin has already won the race, even though it’s not over yet.

Thanks for reading. Would it be too hard to ask you for a follow?