Jan 20, 2022
Host C.J. Wilson opens the episode by talking about the mystery of Bitcoin’s fixed supply. There are only twenty-one million Bitcoins that will ever exist, giving folks a grasp on how much Bitcoin there will be in supply at any given time.
In May 2022, the block issuance went from eighteen hundred to nine hundred. People did not know how to address the supply being different. How much were folks willing to pay due to the psychological mechanism of the fear of missing out?
About 18.9 billion Bitcoin has already been mined, but early Bitcoiners did not know what to do with the money because it could not be traded and was not yet worth much.
The total worth of the world is roughly six hundred trillion dollars. There are 100 billion pieces of one Bitcoin called Satoshi. If you were to take one dollar, you would get about seven hundred Satoshis. People view it as an added saving mechanism.
You can be a Satoshi millionaire for a couple of hundred dollars. You will see growth in the value of Satoshis, as you do with one Bitcoin. If you were to multiply one hundred million Satoshis per Bitcoin times twenty-one million Bitcoin, you would get two point one quadrillion Satoshis. Theoretically, if a Satoshi was worth one dollar, you would have three and a half the total market capitalization of every asset on the planet. There is room for Bitcoin to absorb and convert elements of the world economy.
Wilson explains how to buy Bitcoin and where the money goes. Theoretically, you sign up for an exchange and send them your currency. The exchange has some liquidity, so if someone makes a withdrawal, they have the cash to do so. An exchange functions similar to a currency exchange kiosk at an airport that will sell you British pounds for too expensive and buy them for too cheap. Therefore, exchanges like Coinbase Pro are doing a billion dollars in Bitcoin volume daily. If you are going to be a heavy trader, you want to chase the most significant liquidity. Bitcoin moves through exchanges because of scarcity.
Bots can be up on Twitter to monitor when significant moves happen in Bitcoin. If there is five thousand Bitcoin leaving an exchange, everyone can view it. Once someone takes the Bitcoin personally, it has the potential to be a one-way trade because of the fixed supply.
Bitcoin will not stop mining until 2140. People will still be running a form of Bitcoin mining system 120 from now to compete for fees, which are paid to miners.
There will be between 1,000 and 3,500 transactions in a block. If multiplied out, some of the blocks will not only be 6.25 Bitcoin, but there can be an additional .2, .3, or .4 Bitcoin in mining fees. The winner of the block will get all of it, incentivizing folks to participate in mining.
Bitcoin can be considered rarer than anything because it is fixed and ruled by rules instead of rulers. Folks should view it as “stacking sats” and not just buying part of Bitcoin.