He is claiming that increasing the divisibility of a currency does inflate its supply.
He's just plain wrong. A sat can have infinite value but you can't create more and thus you can't inflate the money supply. You can't just give yourself more sats to buy more things the way central banks can with fiat. The value of a sat will be determined by demand for sats, and not by a money printer.
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So can I say that in a thermodynamically sound system like bitcoin, all value must accrue to every last satoshi?
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Absolutely. What does he think is happening when Bitcoin goes up in USD terms? You're squeezing more and more value into a scarce denomination. i.e. the value of ONE BITCOIN will be forever increasing and can buy increasingly more "things"
Claiming that increasing the divisibility will inflate the currency would be like saying that if I have a gold bar (of which we know has a certain volume/density/USD value) and cut it in half, then I now have two gold bars of that same volume/density/value.
Imagine that USD value is the equivalent of density and it will make more sense.
Innumerate people will think this way. One argument for money printing (digital reward) is that people don't have access and need some. It's practical when dealing with physical bearer instruments but really it's a matter of understanding math.
In the Bitcoin on chain the smallest unit will never exceed 2.1 quadrillion and in lightning it is currently 2.1 quintillion. As the buying power increases the smaller units will become available on solutions that are off chain but settled on chain by agreement.
Lightning may end up as a settlement solution to a third layer Bitcoin technology. This is like subnettng. With IP4 you can infinitely subnet because the packets of an IP4 address are routed. As long as there is a DNS name to an address eventually it will get to where it's needed. It's not efficient but it's possible.
Settlement is what Bitcoin is powerfully able to do. As the buying power increases the mining fees will decrease for competition. There may be parties that never settle but keep a balance in multi signature.
I know people who actually do things for free for each other. These are things like give trucks, cranes and raw materials in exchange for favors. No money is ever exchange just reputation and friendly favors. We might do the same in Bitcoin. There may even be a point where miners will beg us to settle transactions because all the action is on higher level protocols.
Simply put. If you can do math and break down something that has great buying power it will be done. The limit is in your ability to settle.
"Dude, let's settle up. You owe me 15 mSats. You got that spreadsheet with the 512 hash?" Says, Ben.
"Yeah, man." Jack responds.
Both hash their matching documents and the same hash cones out.
"Alright, Ben, let's subtract 15 mSats from my column to yours."
The document is updated and a new hash is calculated. Both parties keep the new encryption number. Their larger balances are on chain and were recorded in the document. Both can see on chain what the UTXO has.
Something like that.
It's hard to argue with people who are unable to plan. It's also hard to deal with people who have used FIAT all their life. Literally I learned about Bitcoin on slashdot and ran Bitcoin core in 2013. I gave up. I'm 2017 a friend asked me to consider it again. I declined. I'm 2019 September I got into shitcoins and Bitcoin. 2020 I said only Bitcoin and I started really learning.
Those that can explain simply are the salesmen. Bitcoin still takes a lot of contemplation and education. It's a discipline. Those of us who have Bitcoin may never have to use it. We also might get paid to settle transactions for others. Who knows?
But you might want to get some.
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