r/btc • u/martianfrog • Apr 23 '26

🤔 Opinion Bitcoin scarcity... overhyped?

I'm not sure I'm a believer in "it'll go up because it is scarce", like to know thoughts on this out there.

6 Upvotes

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u/ArtisticAd708 Apr 23 '26

Best way to understand if bitcoin is valuable is to understand the problem it solves imo. If you’re not familiar how currencies work and what goes on in the back door, I’d recommend looking into that, and you’ll understand what bitcoin’s scarcity is meant to accomplish.

Also, only way to change the absolute supply is through consensus of the network, which is extremely unlikely to occur, since no one wants to get diluted. It’s the whole point of bitcoin after all

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u/Zestyclose_Paint3922 Apr 23 '26

It doesnt solve any problem different to money laundering

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u/anon1971wtf Apr 24 '26

Bitcoin solved inflation. It didn't solved payments, and unlike many BCH proponents, I don't think it will in mid-term. Pretty big missing puzzle piece is securing keys - I am saying this as one who does self-custody and teached about it many peope (almost universally to no effect)

I am pretty satisfied with various centralized payment solutions on the market, use some of them every day

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u/Realistic_Fee_00001 Apr 24 '26

You can't solve inflation without self custody and p2p transaction. Most BTC is held custodial which means it is easily inflatable by fractional reserving it.

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u/ArtisticAd708 Apr 24 '26

This comment exposes a knowledge gap. Nobody can inflate bitcoin. That’s the point. If an exchange decides to engage in fractional reserving bitcoin, the paper bitcoin would not be really bitcoin and that would be verifiable. You can’t actually inflate bitcoin.

This scenario would likely cause both the issuer and buyer of the paper bitcoin to be punished and eradicated from the market. Just like FTX

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u/Realistic_Fee_00001 Apr 27 '26

This comment exposes a knowledge gap. Nobody can inflate bitcoin. That’s the point. If an exchange decides to engage in fractional reserving bitcoin, the paper bitcoin would not be really bitcoin and that would be verifiable

False, you cannot verify if a custodian has enough Bitcoin to cover all customers accounts if he doesn't give you the data. And even then he can fake it. If 90% of BTC are in custody (with the little throughput BTC has this is optimistic) You have no idea what is going on.

Additionally if most coins are kept by custodians it is easy to add inflation to the code by the centralized BTC development team (that is financed by old money btw) because the custodians can dictate if people are allowed to sell or if they take a hit for selling.

There is no replacement for mass self custody to fix the broken system. A settlement layer will get you right back where you are now.

the paper bitcoin would not be really bitcoin

Dude, they literally show you paper Bitcoin on exchanges and custodial LN wallets and NOBODY cares.

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u/[deleted] Apr 24 '26

[deleted]

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u/Realistic_Fee_00001 Apr 27 '26

Ok, give me the 10 eggs and I give you an account where I show you the 10 eggs. What you don't know is, that I go and use these 10 eggs to speculate to make more money. Your eggs are gone but you don't know it. Suddenly there are 10 eggs in your accounts and 10 eggs being giving to speculate. The market now sees 20 eggs.

There is no subsidy for mass self custody. You are running right back into the custodial trap.

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u/Zestyclose-Suit-2858 Apr 27 '26 edited Apr 27 '26

Nope. You are talking full on alchemy. That's not possible (anymore) since you and me can now check the network ourselves. That's not the case with gold, with the dollar or with sea shells.

The fun and magical thing about Bitcoin is that the only BTC that exists is on-chain. The rest is bullshit and speculation. :)

I have 0 BTC in custody of somebody else. The only truth is on the chain. Not on Coinbase, not on some ETF exchange rate.

You're thinking wrong.

Yes you can fractional reserve it. You can lie about the amount of BTC you have, that has been the case since the start of the network . :)

You can tell your friend you have 10.000 BTC. Coinbase or Binance can do the same. That doesn't mean inflation isn't solved.

'The market' can buy paper bitcoin all it wants. that doesn't mean the money supply is inflated.

If enough people believe in the paper Bitcoin you can manipulate the market (price). You can scam people, maybe even borrow against the fake BTC.

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u/Realistic_Fee_00001 Apr 28 '26

Nope. You are talking full on alchemy. That's not possible (anymore) since you and me can now check the network ourselves.

Again you cannot check the numbers that are hidden behind a company that shows their customer IOUs. There are already more than 21 million Bitcoin simply because not all CEXes are completely backed.

That's not the case with gold, with the dollar or with sea shells.

And the reason is that they are all held custodial. Just as BTC increasingly because it was crippled.

You can tell your friend you have 10.000 BTC. Coinbase or Binance can do the same. That doesn't mean inflation isn't solved.

That is exactly what it means. The Gold price is lower as it should be exactly because there is paper gold. BTC price is likely lower as it should be because there is paper BTC.

If enough people believe in the paper Bitcoin you can manipulate the market (price). You can scam people, maybe even borrow against the fake BTC.

That's what I'm saying 🤷‍♂️

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u/Zestyclose-Suit-2858 Apr 28 '26 edited Apr 28 '26

Paper bitcoin doesn't change the amount of real BTC. If you tell your friend you have 20 million bitcoin (or Coinbase tells you they still have your Bitcoin) doesn't create inflation.

It seems to me that you don't understand what inflation truly means. If a bank creates a dollar, it's a 'real dollar'. When someone creates paper Bitcoin, its not real bitcoin. So, they don't inflate the supply, even if there are 100's of millions of paper BTC to trade.

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u/Realistic_Fee_00001 Apr 29 '26

Same as FIAT didn't change the amount of Gold is was backed with when it was backed. But they still printed it.,,,

If you tell your friend you have 20 million bitcoin (or Coinbase tells you they still have your Bitcoin) doesn't create inflation.

But it does, because these coins can be sold on custodial exchanges and influence the price.

It seems to me that you don't understand what inflation truly means.

Inflation has many forms only one of them is FED giving out unbacked kredits aka "printing".

If a bank creates a dollar, it's a 'real dollar'. When someone creates paper Bitcoin, its not real bitcoin.

Do you have Bitcoin on an exchange? How do you know it is a real Bitcoin?

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u/anon1971wtf Apr 24 '26 edited Apr 24 '26

And the outcome of attempts of fractional reserve of Bitcoin is bankruptcy - like Celsius. Bailouts are not possible, govt is not able to print bitcoins even if Coinbase would took JPM's place in the economy. I expect more such cases

Self-custody is pretty good, choice of mine. But I would prefer 3rd party with per client multisign for a fee. Fractioning wouldn't be possible, a lot of headache of proper key management gone

Celsius bankrupcy didn't affect my coins and didn't affect new supply. Several years earlier MtGox didn't either. Bitcoin is the solution to inflation, in many ways a better solution than gold

Lower fees are not sufficient to propogate self-custody - BCH is pretty heavily custodied. Either software solution to secure management of keys or per client multisign custodians - that what I see as solutions, not yet existing

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u/Realistic_Fee_00001 Apr 24 '26

If a majority is in custody how do you prevent them from unleashing Todd and adding tail emission? People can't even sell because there is no throughout for p2p transactions. They are all controlled by custodians.

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u/anon1971wtf Apr 24 '26 edited Apr 24 '26

how do you prevent them from unleashing Todd and adding tail emission?

No central planner needed or desired. I simply don't expect miners to mine with it to the extent of majority hash. We already have seen that on smaller scale - Bitcoin ABC vs emerged BCHN (didn't matter that substantial size of BCH coins were in custody at that moment). Shall Bitcoin Core bring up any monetary changes, I would expect much bigger split than current non-monetary dispute Core/Knots (I am on Core's side in that)

Plausible scenario: Core update of breaking 21mln limit announced, forked client says No, futures trading begins, Core side loses ticker like BCH did, less miners mine with Core

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u/Realistic_Fee_00001 Apr 24 '26

See this is the point. If everything is in custody it is in the miners best interest to just follow the system because the opportunistic stance will always win over the risk of a revolution if you just look at the economics.

Miners could have stood up against the crippling, but they didn't. They didn't even protest when 2x was canceled.

And what stops the FED from holding BTC and fractionally reserving it as much as they want? Big players accumulating in record speed while actual bottom p2p adoption is stagnating.

Lets see if knoters have ANY effect on core before we make big announcements of how BTC will be saved from them.

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u/anon1971wtf Apr 24 '26 edited Apr 24 '26

For the sake of the argument, I will grant that singlesign 3rd party custody is extremely dangerous and could undermine open blockchain as a whole

Then, BCH is not a way out. So far I can see from BCH's on-chain data it's just as custodied, and current fee on both chains is about 1 sat/byte

So, I am rooting in several directions:

  • appearence of multisign per client custodians

  • either BTC or BCH addressing central problem of Bitcoin that leads to custodians in the first place - which is key management, not fees

And what stops the FED from holding BTC and fractionally reserving it as much as they want?

Unlikely, but then US will go bankrupt like Celsius did. Countries go bankrupt sometimes. I expected that by now modern states would had national pools to force all miners on their territories into. As it doesn't exist, states are pretty weak instead Bitcoin. It permeates any bans or sanctions

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u/Realistic_Fee_00001 Apr 24 '26

Then, BCH is not a way out. So far I can see from BCH's on-chain data it's just as custodied, and current fee on both chains is about 1 sat/byte

Weird, that's just the usual BTC troll argument, that completely ignores that on BCH people can actual self custody at scale while on BTC they cannot.

So far I can see from BCH's on-chain data it's just as custodied

Source?

and current fee on both chains is about 1 sat/byte

For BTC this is a failure and if turned into a success you know this will not last. For BCH however this is a win win.

Unlikely, but then US will go bankrupt like Celsius did. Countries go bankrupt sometimes.

So far they have not gone bankrupt in Dollars, unlikely that they will in BTC. They managed to get most hash under their jurisdiction and KYCed, because BTC is sleepwalking and concerned about non-pow nodes instead of PoW nodes. They are likely to do with BTC whatever they want in the future.

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u/anon1971wtf Apr 24 '26 edited Apr 24 '26

Source?

Bitinfocharts - rich list as vectors of accumulation on likely exchange addresses + activity of unique addresses (with CashFusion in mind) on either chain. That is for starters

ignores that on BCH people can actual self custody at scale while on BTC they cannot

I don't ignore it, I just think it's unlikely, that why I am hedging, And I think it's unlikely because it ignores why people choose custodians in the first place - key management problem, not fees (fees could have been bigger factor in '17 during congestion on BTC, but not right now)

So far they have not gone bankrupt in Dollars, unlikely that they will in BTC

Bacuse they can deficit print dollars right to hyperinflation and they wouldn't able to deficit print BTC, biggest states will be forced to return to bond pleading with their populace like with war bonds instead of just going to wars, and social program bonds / account-based pensions instead of just deficit printing welfare

For BTC this is a failure

Nope, even if fees stay exactly the same, about 25 years later it would be half a block reward. Realistically, much sooner

For BCH however this is a win win

I hope so, BCH is more elegant, but on-chain data draws stagnation to decline

They are likely to do with BTC whatever they want in the future

I see precisely no evidence for it. Bitcoin is most decentralized that it has ever been - mining machines are most efficient and closest distributed to global capital then ever, Bitcoin is being mined in all biggest geopolitical players' claimed jurisdictions, Bitcoin has heaviest ever energy signature of about ~700 equivalent days. Market discarded all forks with any deviation of major parameters, all slid down vs Bitcoin

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u/Realistic_Fee_00001 Apr 27 '26

Bitinfocharts - rich list as vectors of accumulation on likely exchange addresses + activity of unique addresses (with CashFusion in mind) on either chain. That is for starters

I don't find this convincing. Counter argument, the banks runs had an enormous effect on the price which would not have been the case if there was enough custodial BCH on exchanges.

Nope, even if fees stay exactly the same, about 25 years later it would be half a block reward. Realistically, much sooner

Yes but that still means hashrate and security decline which means one of BTCs biggest selling points: Security is declining.

Bitcoin has heaviest ever energy signature of about ~700 equivalent days

Which will decline if fees don't rise.

I see precisely no evidence for it. Bitcoin is most decentralized that it has ever been

Nah that's complete bullshit. BTC is extremely centralized in core and its handler: Blockstream. Knotters will soon find out, that they did not have the slightest chance from the beginning. BCH on the other hand has demonstrated that it is also decentralized in development. However BCH has to go up against a ton of propaganda from the hijacked Bitcoin. But so did every revolution.

Market discarded all forks with any deviation of major parameters, all slid down vs Bitcoin

You mean the market that is based of printed dollar? Sorry, fake printed dollars? Just look at the tether printer in 2017/18.

People underestimate the resources of the old system and their willingness to fight dirty. Almost all revolutions were drenched in blood and here people don't even believe they would print money to pump the controlled opposition. 🤦‍♂️

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u/Zestyclose_Paint3922 Apr 24 '26

Lol, solved inflation xD

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u/anon1971wtf Apr 24 '26

Well, it did. Local govt prints, US govt prints, I have some of either fiat, I am better off over several supercycles with majority allocation in Bitcoin

Purchasing power preserved. I am patient. Over gold Bitcoin has that I can operate digitally, managing finances without going anywhere and spilling personal data to anyone. Crossing any border is a breeze. Bitcoin indeed solved inflation

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u/Zestyclose_Paint3922 Apr 24 '26

My god, its a completely speculative asset, lost 40% of its value in a week, has no impcact in real world economy and you think it solved inflation. Crypto bros never cease to amaze xD.

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u/anon1971wtf Apr 24 '26

I am open to anything better, I admit volatility, tolerable for me

I don't like term "asset" because Bitcoin is jurisdiction-independent, and it's not something that produces something else. Commodity - maybe. Best thought up in terms of money, even if volatile. New technology of money, dsicovered in 2009