Megatrend Bitcoin Zahlungssystem Zukunft Digitalisierung Arnheim
Share on facebook
Share on twitter
Share on linkedin

The final amount of Bitcoins is fixed, despite Forks and Altcoins

Time and again we hear rumors that Bitcoin is about to fail, or that it suffers from a critical weakness that must be addressed to avoid failure. These assertions are made by people who have generally only ever considered one aspect of the Bitcoin system, but who have no understanding of the system as a whole, let alone its finer points. One assertion is that anyone could create a new Bitcoin fork (such as Bitcoin Cash (and now Bitcoin Cash ABC / Bitcoin Cash SV) or even an entirely new crypto currency (Dash, Monero, Ripple, Ethereum etc.). Whereby the available offering is not limited, but could in fact be subject to uncontrolled increase.

This assertion assumes that crypto currencies are actually identical and fully interchangeable with one another. In other words, if I were to receive a FooCoin, it would have the same characteristics as a Bitcoin and would be functionally identical and fully interchangeable with Bitcoin.

That is of course nonsense. It would be like saying that thanks to the hyperinflation affecting the Venezuelan Bolivar, all other fiat currencies are reduced in value. But that does not appear to be the case: At the start of 2010, 2.15 Bolivars were worth one US Dollar. By June 2018 the rate was 4 million Bolivars per US Dollar. But the enormous increase in the number of Bolivars in circulation has not affected the value of any other fiat currency. The Euro, Dollar, Pound and Yen have not been massively devalued simply because the volume of an independent currency increased. Bitcoin is no different: The creation and increased availability of other crypto currencies is of no relevance to the value of Bitcoin, of which only 21 million will ever exist. It is therefore one of the strengths of Bitcoin that the availability is limited and inflation cannot occur.