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229 sats \ 6 replies \ @Undisciplined 16 Apr \ on: I simply felt like sharing it since it feels like a small personal victory :D bitcoin
One of the things I keep seeing being discussed incorrectly is what the halving means for Bitcoin supply. Since Bitcoin is a durable good, it's supply is not equivalent to the amount being produced currently. All we can say is that, other things equal, the halving reduces the rate of supply increase.
Bitcoin's supply is the entirety of what's available for trade. This is actually a really difficult quantity to estimate, because of the unknown amounts of Bitcoin that have been lost and the amount being truly hodl'ed.
New production is a very small share of total Bitcoin, so whether the supply is increasing or decreasing is almost entirely related whether hodl'ers are becoming more or less willing to use their Bitcoin in transactions.
halving reduces the rate of supply increase.
Exactly. Details matter here.
We are still so early in Bitcoin's existence that the things you mentioned aren't in my opinion having the impact that emotion has. There is a lot of fear and greed but little understanding. Gonna take many years to change.
Few. Few get it.
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"Few. Few get it."
Absolutely, you had to hear the way he said "There seem to be only 21M bitcoin, of which ~20M are already mined", like "Can you believe that?! Damn."
And then those are guys that make their living with financial markets and the likes... Imagine the average Joe.
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I don't think we're disagreeing, but you're making a really important point that I overlooked.
The supply curve does shift around whenever sentiments of Bitcoin owners change and those are still highly volatile. That's part of what I was thinking about when I was talking about hodl'ers, but of course it applies to anyone whose reserve price is changing.
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In other words:
The daily total sum of newly mined Bitcoin can be cut in half, but that doesn't mean that the available "supply" is automatically cut in half as well.
After all, the total available supply to be bought isn't static, as it can double, triple, or be reduced to a tenth of what it was a week ago.
Correct?
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Exactly. I'm certainly no expert on this, but I've seen people attempt to estimate the currently available supply and it's very small. That's why so many people expected rapid price growth when the ETF's launched.