RE: Why Bitcoins percieved scarcity of 21,000,000 coins is a falacy: But has worked for now
YOUR POINT: Looking at the overall market cap is the standard way that we value these coins. This makes sense, but what is interesting is that bitcoin is now only 45% of the total cryptocurrency world. In the early days I am sure it was well over 90%. Based on the addition of new coins with varying supply of coins, mean that bitcoin is not scarce at all?
MY RESPONSE: I really can't grasp what you mean here. Are you saying that because Bitcoin's overall % of an overall crypto market cap has shrunk (because there are more coins and investments in those coins than ever before), that Bitcoin is not scarce?
How does overall market cap % have anything to do with the scarcity of Bitcoin, which should ultimately have a fixed supply, and theoretically increasing demand due to technological improvements, increased adoption, performance, utility, retail functionality, international facilitation of transfer of value, and more countries accepting it as a real and increasingly more dominant player in their economies?
Scarcity comes from more people wanting to own Bitcoin, with more people wanting to hold Bitcoin, use it, and especially with not many new Bitcoins being created for a global community which has barely started adopting it as a whole. How many people in the world might want to own it or some and how many will exist? The ratio is staggering = scarcity.
Thank you for catching that. I wanted to work in a section on gold, but I couldn't figure out a good place to put it. This is obviously where I should have.
What is hard for me to grasp is that Gold is Gold. There are no other forms. You can get silver, copper, zinc, and others, but they are different elements and have their own prices.
To me Bitcoin, Litecoin, and others are all crytocurrencies. Yes they have different properties too, but someone could create a "100 coin" and only have 100 coins available total. Would this mean each one should be move valuable than a bitcoin because there are far less of them?
This was the point I was trying to make, yet again I admit I do not understand so please help. Hope this clarifies my argument.
Price is not in a 1:1 relationship with quantity. Supply and demand is the key here. You seem to be neglecting demand and why there's plenty of exponential demand growing. Honestly, you could get inundated with info here with many different assertions as to why Bitcoin has a different fiat price than other coins right now. I suggest that you read up on what Bitcoin IS and what is facilitates, and that it's the Big Daddy of the cryptocurrency world, with hundreds of copycats, and plenty of differentiators to add value and functionality where Bitcoin lacks. Good luck!
Thank you. I admit I have more learning to do and that bitcoin is the big daddy. But who is to say that Ethereum, Litecoin, Ripple, or something to be released will not surpass it? If this happened, wouldn't this halt the exponential demand for bitcoin?
Yes, of course. First to market is good, but it's not invincible. Other coins serve similar or vastly different purposes. Anything can grow to overtake anything if the economy adopts it.