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RE: When should you sell Bitcoin? "Never"

in #bitcoin5 years ago

Only reason why anyone should start selling any crypto currency is when the coin reaches the maximum emission, which means mining can no longer be profitable, as there will never be enough transactions to give same rewards as fee per transaction would need to increase above critical level.

Mining is what keeps transaction fees low enough for anyone to want to transfer funds from one wallet to another.

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What about coins that never reach a maximum emission, a la steem?

There is always a maximum emission due to how the number of atomic units are stored in blockchain and the daemons. Atomic unit is essentially smallest unit of currency that can be stored without rounding. For some coins it will take decades to reach the maximum, but for others it will take just few years.

The reason behind using integer atomic units instead of storing the actual coin balance is simple, because not all numbers can be stored as floating point value without precision loss. The coins that use JSON are limited to 31 bits precision even though the processor and compiler could handle 64 or more bits due to default variable type being signed 32-bit integer. Some coins store larger numbers as strings to avoid wrap-around, but constant converting between numeric variable and string variable is performance bottleneck.

In the white paper it states that steem's inflation will continue at .95% indefinitely...

2^31 = 2 147 483 648‬ ... you need to divide the total number of atomic units by 10^N where N is number of decimals the coin use... Even if the coin uses more than 31-bit precision, it takes quite a long time to reach that many atomic units, because most of the new coins are mined or otherwise generated during first few years of coin's lifetime. Inflation does not have any correllated relation to emission as inflation is just how much the real value of the currency, coin or token drops during a single year.

For Steem, I think the current emission is about 346 million, and assuming N is 3, it would mean 346 billion out of 2 billion possible for 31-bit precision is already generated, which means Steem has to be using 63-bit precision instead. 1 bit of precision is always lost as it is required for handling negative numbers.

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