Bitcoin (BTC) – From eCash to Collectible – Why the Original will Shine Forever
How much can a collectible be worth?
If you’ve ever wondered how much Bitcoin will one day be worth stop thinking about it as a form of storage of value.
Ask yourself this question: how much does the first gold coin ever made would cost if sold right now? Your answer will probably be a lot, or maybe invaluable even. Now let’s put that in contrast with one gold coin with the same weight in gold but made yesterday? Which coin do you think is more valuable?
The oldest one is probably not only dirty but deformed. There are gold coins that are way more efficiently cut, prettier and have many more use-cases since they can be melted and transformed without losing value. Still, which coin do you think is more valuable?
If you feel that gold and Bitcoin (BTC) cannot be compared then let’s take another example.
How about the first computer ever built? If we compare it to the most recent computers in production it’s a joke. Still, which do you think that it will be worth more, the first computer ever built or any one of the recent ones?
Being first will forever take you a long way. Especially in a historic perspective, anything that is historically valuable will forever be valuable, especially while times go by.
If you think Bitcoin could never be a collectible you’re wrong. Look at for example a Nintendo 64. Many emulators can now simulate and duplicate its functionality, you can play it in your PC but still an original Nintendo 64 that’s fully functioning will still be worth a lot right now.
Charlie Lee for example, Litecoin’s creator, who recently sold all his Litecoins said that the only ones he kept we’re special editions of hardware wallets that store one Litecoin (LTC) each and are to him a collectible!
And why does this phenomenon occur? Because of the shortening of supply, a lot of old models stop being produced which means that instead of having an inflationary number of copies you then have a deflationary one.
Read more about Charlie Lee’s announcement below:
The concept of Deflation
Many people justify Bitcoin’s (BTC) growth as it being a form of deflation, a term that was almost never used before Bitcoin’s appearance. What does deflation mean? Exactly what was referred above, the shortening of supply of a certain item or information.
The expectation of only reaching 21 million Bitcoins means that if everyone in the world wanted one they couldn’t have one. The fraction they would be entitled to would be 0.002625 BTC.
Now add this to the fact that fiat currencies will always be printed whenever Europe’s Central Bank or the US Federal Reserve Bank decides that they should, just like any other centralized form of currency usually works. That means that total of fiat money circulating will be increased and, on the contrary, each 0.002625 BTC will remain the same amount.
Not enough? Let’s bring to the table all the Bitcoins that have been lost forever. It’s possible to lose Bitcoins as many unfortunately know by now. That means that the circulating supply will eventually decrease because of these “vanished” tokens.
Bitcoin’s protocol estimates that by 2140 the last Bitcoin will be issued through a block reward.
The estimates sit that in the future (around 2136) each block will reward only 42 Satoshis, which means that either each Satoshi will be worth a lot or it means that people who collect Bitcoins will be the only ones paying for the electricity costs of mining. Many people ask:
Why would you do this if it’s costing you money?
I’ll make another question as a form of reply to this one. If your Bitcoin was worth millions wouldn’t you be willing to mine the network even if it has no profitability? You would be ensuring that your storage of value had a healthy network, $10/month for this in electricity seems fine by me.
Cover image: https:/portaldobitcoin.com
Ex-Google engineer, Charlie Lee is the creator of Litecoin and MD of the Litecoin Foundation. Previously Director of Engineering at Coinbase, Lee now focuses full-time on Litecoin. To enhance fungibility and privacy of LTC, integration of MimbleWimble has begun, however Lee has recently announced a crowdfunding launch to fund the development.