One bitcoin (BTC) is equal to exactly one bitcoin, according to a chart that Pierre Rochard posted on Twitter on February 23, 2019. The tautology has left many confused, with some asking what the phrase "1 BTC = 1 BTC" even means .
Samson Mow added a comment and clarified that the calculation relates to the limited quantity of Bitcoin (BTC).
Only 21 million bitcoins will ever be created through mining. However, many of these have been irrecoverably lost, bringing the overall number to closer to 17 million.
According to Mow, a finite supply is insufficient to produce sound money on its own. However, it does enable the measurement of other things.
Although Mow does not specify what these other things are, it is simple to assume that they could be any number of goods or services.
Bitcoin Cannot Inflate
When a currency has a finite supply, the value of things will depend on their perceived demand and supply in relation to a fixed restriction. But when the currency's supply expands over time, unstable restrictions begin to apply on the value of products. In other words , they must be valued to reflect the rising volume of money in use.
For example, the cost of milk or eggs in bitcoins would depend on a fixed factor: the currency's limited supply. The dollar, however, is an unstable variable. As it rises over time, basic goods like milk are subject to inflation. In proportion to an increase in the amount of money in circulation, milk's value rises. While it is true that a limited amount of money does not in and of itself provide sound money, it may help to lessen or even avoid inflation.
bctt tweet “While it is true that a finite supply of currency alone does not create sound money, it might help to alleviate the consequences of inflation or prevent inflation altogether.” username=”beincrypto”
Another Problem
Since not all bitcoins have been mined, Pierre's graph is incorrect, according to Atsu Davoh.
According to Pierre's graph, one bitcoin was worth one bitcoin on April 28, 2013. However, due to the fact that there were fewer bitcoins available in 2013 than there are currently, this is technically inaccurate. Until all bitcoins are mined, the relative worth of each bitcoin will decline over time. One Bitcoin will only truly equal one Bitcoin at that point.
[bctt tweet=”The current relative value of Bitcoins will decrease over time until all bitcoins are mined. It is only at that time that 1 BTC will actually equal 1 BTC.” username=”beincrypto”]
Pierre seems to agree with this assertion. He answers to Atsu in joke, "I live in the future." All joking aside, the future limited quantity of bitcoin may provide economic advantages that the unendingly abundant supply of dollars cannot.
