How can bitcoin be finite?

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Even if a finite number of coins exist if it can be split up by sending out .000001 per say than I don't see how that wouldn't be infinate money. Because lets say you have one bitcoin that is worth 1 dollar and I sold you something that only cost one penny than your saying I would recive 0.01 Bitcoin. So then wouldn't I have a bitcoin too just one worth a penny. We would have created a new coin? Or are you saying that only 26 million people will ever be able to use the currency at one time? Not trying to agrue I just would like to know. =)

Kenneth

Posted 2013-04-11T20:57:57.527

Reputation: 11

Question was closed 2013-04-17T07:34:59.127

2No, you'd have 1/100 of a bitcoin, and I'd have 99/100 of a bitcoin. – Nick ODell – 2013-04-11T21:08:13.033

In theory than wouldn't you be able to pay a hundred people "0.01" for a hundred items. (now you have no bit-coin) Than Those 100 people could do the same for ever and ever, if their was no limit on how many points you could go out. Your splitting new money each time you split your sum value. Effectively inflating the bit-coin. Wouldn't 26 million bit-coins split in half make 52 million half dollar (value) bit-coins. That to me sounds like the vary definition of inflation! – Kenneth – 2013-04-11T21:49:34.327

What your telling me is that you could have hundreads of owners for one coin, only each person is each owning a fraction of the same coin at the same time? (wow) – Kenneth – 2013-04-11T21:54:21.550

Wait .. are you suggesting that you can split bitcoins indefinitly? No you can't; there's a limit (I don't know it - read the docs). – hasen – 2013-04-11T22:05:08.747

Also if I'm selling something for 2 bitcoins, why would I take 0.0000001 bitcoins for it?? – hasen – 2013-04-11T22:06:36.110

Well if the vaule of the coins kept going up than you would be forced to increase the amount of times it could be split. – Kenneth – 2013-04-11T22:11:07.550

2only each person is each owning a fraction of the same coin at the same time? Bitcoins are an entirely arbitrary unit. The underlying protocol deals entirely with hundred millionths of a bitcoin. You could just as easily say that multiple people owned fractions of the same kilobitcoin. – Nick ODell – 2013-04-11T22:12:22.100

Answers

2

It seems to me that your confusing the number of bitcoins in existence with the value of bitcoins in existence.

"Because lets say you have one bitcoin that is worth 1 dollar and I sold you something that only cost one penny than your saying I would recive 0.01 Bitcoin."

Say for instance that there will only ever be 21 million pounds of gold in the world. I can split it up and sell it into arbitrarily many different pieces. It may change in value and through trading gold I may be able to come out with more money then when I started. But at the end of the day If I were to gather up every last bit of gold in the world there would be exactly 21 million pounds of it.

The same is true for bitcoin. If your wondering how the system itself is limited to only ever making a finite number of bitcoins, its because the people who first wrote the code decided it should be that way.

Loourr

Posted 2013-04-11T20:57:57.527

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Asked: 2013-04-11T20:57:57.527

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