Quote from: d5000 on Today at 01:38:08 AM

Quote from: quary.sats on October 01, 2024, 12:13:24 AM

However, that doesn't dilute the value of sats from the first bitcoin transaction for example... in the same way that altcoins don't dilute the value of bitcoin.

I think there are different mechanisms of "dilution" in place.

Altcoins don't dilute the value of Bitcoin significatively because Bitcoin's value is based on network effects. There's an ecosystem of miners, merchants and service providers which can't simply be "copied" by an altcoin, even if the code can be copied.

By the way I think there is some dilution caused by altcoin competition which could in theory "take away" some value fron Bitcoin. But there are also positive effects: altcoins have expanded the niche of crypto, and enriched the ecosystem, e.g. via DeFi and NFTs, but also providing a more risky "playground" for speculative investing. This positive effect outweights any "dilution".

In contrast, the "rare sats" business works more like the collectible business, for example numismatics or stamps.

The dream of "rare sats" supporters is that "old rare sats" could get a status similar to an old coin or an old stamp. But there is a crucial difference: Old stamps or coins are valuable because they are difficult to preserve. Most old stamps or coins are lost, or damaged. In contrast, it is very rare that a Bitcoin is lost, although it does happen it is much less frequent than in the case of stamps or coins. And damage can't happen to a rare sat.

Thus, an "old" satoshi hasn't the same kind of "rareness" than an old stamp/coin/piece of art/whatever "material" collectible has. All satoshis have the same probability to exist.

For this reason I believe there is more dilution coming from new kinds of "rare sats". Some very rare cases ("epic sats" for example, and maybe the legendary pizza transaction, or Satoshi's coins which are thought of currently that they won't be moved) could escape from that effect because they are so rare that everybody knows them. But most other rare sats would compete one with another, and thus every new category which is discovered lowers the value of the existing ones (if no more investors are found - similarities with the P-word are pure casuality Wink

).

I'd compare the relation between different rare sat categories not with bitcoin-altcoins but with the competition among different memecoins, BRC-20s and Runes, where also new coins tend to "dilute" the value of old ones.

Old sats are also mostly locked. From the first 1000 blocks, only bitcoin from ~100 of them are in circulation. The older the sats, the more lost/locked.
Yeah, some categories can compete with one another, but sats from block 9, old uncommon sats, or black sats (and in general sats from the early days) are hard to come by. So i'd argue you can make a comparison with old stamps. Bitcoin is a deflationary asset in the long haul because people occasionally lose it. This is mostly true for the early days of Bitcoin.