Quote from: Theb on January 22, 2017, 06:59:42 AM

Quote from: jaysabi on January 21, 2017, 06:29:39 PM

Quote from: Hammerschmidt on January 17, 2017, 07:02:22 PM

Paper money is only limited by earth's supply of trees

At least digital currency is "backed" by the mining's ever-soaring level of difficulty. This built-in scarcity model prevents deflation of bitcoin value, raises the miners' bar for return on investment, and thereby guarantees a steady climb in price. Each transaction buyer wants to hold for a later price rise, and so on down the line. Not every trader can outwait their own need for their own fiat currency, so naturally there are trades at a loss. Whoever has the most patience and greatest wealth can end up with a large hoard of bitcoins.

Mining difficulty in no way backs the value of bitcoin. Mining difficulty is only a result of how many computers are solving the algo that mints coins. Whether bitcoin was worth $1000 or $1, it wouldn't directly affect the difficulty of the mining.

The built-in scarcity does not give it a floor value. If that was true, any altcoin with fewer than 21 million possible coins would have a price point higher than bitcoin. What gives bitcoin value is the collective belief by people holding it or seeking to buy it that it will continue to have value. It's just a confidence game.

Well in mining there is more chance of running out coins to be mines than trees running out first. Also if Trees are the problem there is a lot of ways now creating a new fiat currency and that is the use of Fibers from fruits and other materials. Also the government does not need to develop new prints of money because it creates an imbalance in the economy. Remember they control the flow of currency in the country.

Most new dollar creation is digital these days compared to physical money anyway. So worrying about "running out of trees," while not a major concern to begin with, is even less of a concern in today's economy. All the bitcoins will be mined long before we run out of trees. Especially since money isn't made out of trees to begin with!