How is adding decimal places *not* inflationary?
🤔
Discussion
Great fucking question
because it doesn't diminish the value of what's already present. The ratio between numerator and denominator always stays the same.
it would be like saying pennies are inflationary because we only ever had dollars and dimes.
It's a minute amount of inflation that can go on forever and will just trend to 21M Bitcoins as we've already marketed so well.
If we don't add decimals, we'll never get closer to 21M.
2.094 ≠ 2.1 (quadrillion sats).
inflation is when you grow the monetary base. you don't call it inflation when you break a dollar into pennies. even thought you now have 100 pennies, it's still just a dollar.
0.100 = 0.10000
2.094 quadrillion sats after the last halving epoch.
If we add more decimals it'll trend to 2.1.
That's minor inflation but we quote 21M BTC already so people shouldn't have an issue with changing the value of 1Sat from .00000001 to .000000001
Breaking a dollar into pennies is a bad example,
It's more like breaking a penny into smaller denominations.
Don't lose the forest for the trees. Regardless of what you're breaking, it doesn't change the value of what you are currently holding.
Inflation has a definition. It's when you expand the monetary base and adding decimal places doesn't change the value of one 1btc... period. it just means you can buy BTC at even smaller fractions.
1.0 =1.00 =1.000
0.1 = 0.10 = 0.100
1btc doesn't exist - only satoshis do.
There is no "breaking a dollar" when you send Bitcoins.
You are sending satoshis.
lol. alright dude. you win... enjoy your day.
I feel bad that you're taking it the wrong way my g.
But that's why Satoshi added extra halvings into the code.
1.00000000
=
1.000000000
This is true.
But in our scenario one Satoshi isn't the 8th decimal place anymore.
1.000000001
That is a new Satoshi that didn't exist before and cannot exist unless consensus changes that one day.
So you have to ask yourself how many satoshis make up 1BTC in this scenario?
1BTC = 1BTC
This is true, because to accumulate 1.0....
You need 100M of the current lowest denominator, which if we're adding decimals doesn't change the amount of Satoshis as we describe them today,
That's why LN uses the millisat denomination for everything after 8 decimals so as to not break consensus on how we describe "1 Satoshi".
So if we do add decimal places - we should probably also change the name of the smallest denominator to millisat - which doesn't change anything but can give people a marker of how to count to 1BTC.
"I have 100m Satoshis + 1 millisat"
= 1.000000001
If you have a chocolate bar.
And I have a chocolate bar.
If I cut mine in half, from one whole to two halves, we both still have two chocolate bars between us, but I've added a decimal place (1 bar to 2×0.5 bars). I could also make 1000 0.001 bars, it doesn't make a difference. There's no inflation because we each still have the same amount of chocolate.
But if I conjure a second chocolate bar out of thin air, then suddenly I have twice as much chocolate as you, and we have three bars between us, which is chocolate inflation and a crime worthy of the guillotine.
...perhaps because the scenario that would prompt this would ... actually be deflationary...
e.g.
"1 sat is too valuable vs this loaf of bread...we need to enable even lower prices."
Zero is a great example, it doesn't exist.
Only trending towards zero exists, infinity doesn't equal more - it's just a trend towards 0.
In computing, zero exists.
It doesn't, it's a placeholder.
What's the function of zero in computing?
Also how about positive and negative zero?
In the case of #Bitcoin, we're trending towards ~21M if we add decimal places.
If we don't add any, <~21M Bitcoins will have come into existence.
Henry Grady Weaver, [The Mainspring of Human Progress](https://a.co/d/gFiZHBB) talks about the invention of zero. Very interesting.
If you add new places/numbers behind the point (right side), its deflation.
If you add new places/numbers before the point (left side), its inflation.
No zaps set up?
The interesting part is that you're wrong and right at the same time!
Adding decimals increases the value of the network as more humans can access it as a unit of account & medium of exchange - meanwhile increasing the accuracy of payments for everyone.
New Bitcoins will be distributed to miners that were never in existence though.
So the net effect will be deflationary - as we can't exceed the ~21M barrier by adding decimals & surely we'd be doing this for people clamoring for it as Satoshis become more valued for goods and services.
It’s not because;
1 sat = 1.00000000000 sat