Can you explain why you think increasing the number of subunits would be bad? It might help clarity if you can avoid using the word supply.
Correct … but we aren’t saying the “supply is capped” we are saying the supply of SNT is capped. I think that smart people will know the difference and dumb people won’t care.
I believe that most here when considering the supply are meaning SNT, not total divisible units.
Getting down to the crux of it finally.
Supply is to many the number of SNT, supply to me is the number of subunits.
This is convenient as the number of transactional units which are the true supply can seemingly be increased without any opposition but it does have economic consequence.
My point is that until divisibility is defined and no longer open to change (my definition of) supply is an open number.
That is no different to saying that the number of SNT is not set… yet.
Both need to be set in stone, neither is more important than the other.
You’ve stated this twice now. Can you point to a writeup somewhere about how this caused some problem for IOTA? genuinely curious. thx.
Would you explain that further please?
Also on a related but separate note - the total supply of SNT is going to be minted over years and maybe decades … that appears to me to have a vastly more important economic impact than the subunit supply by a huge margin (at the moment I don’t see any economic impact of subunits, so will leave you to explain that).
until you can explain the clear economic impact of subunits here then one is vastly more important than the other. The number of SNT dilutes the value people hold now. The other has no impact on it and never will.
Echoing this post Updated: RFC 0061 — Safe Network Token Distribution - #19 by peca
Maybe they have the source
ah, my mistake. I was attributing that first post to you when I said you had stated it twice. anyway, I doubt that unit naming alone caused serious problems for iota. iiuc, they just called their smallest unit IOTA and the fiat pricing unit MegaIota, so it functionally works like other cryptos. A bit of a mouthful to pronounce though.
This is a logically inconsistent perspective.
This isn’t really true. He hasn’t shown why it can’t, and the real truth of the matter is that far easier, simpler, and typical solutions exist to make it work just fine and hold true to @dirvine’s original plan/vision. One frustration I have is that the correct choice between the two options should have been completely obvious to everyone. While there may be other factors at play which I am not aware of, the current proposal makes no sense given all prior discussions that have occured on the forum or publications released elsewhere.
Maybe this is deserving of a poll?
IIRC we’ve already had one!
Thanks. Is this the 2019 poll you are referring to?
Summary of 53 Voters:
51% voted to “Use max allowed variable for Safecoin 1 MAID => 4.294967296 safecoin (~4.3 safecoin/MAID)”
38% voted to “Keep to 2^32 coins for SAFE coin 1 MAID => 1 Safecoin”
Probably yes. I was thinking about how to handle distribution after publication of the first version of the RFC but maybe that didn’t go to a poll.
If you agree that increasing divisibility increases supply (you agreed)
Then the simple answer is supply and demand.
If I have 10 SNT totaling 1000 subunits and 1100 users, each user could not have 1 subunit.
Not enough to go around, scarcity.
If I have 10 SNT and 10,000 subunits and 1100 users there is abundance to go around, each user can have many.
You don’t think that has economic impact?
I think that few people care about the technicality of this because it does not directly affect them through dilution.
I am open to being convinced otherwise!
I think that answers why I think it should be no more open to change than the number of SNT. @happybeing
I don’t know about any good link, only what I remember when it was news.
One problem was technical - some exchanges and other services, that needed to work with exchange rates between IOTA and other coins or fiat, were unable to work with so many decimal places. Most services do 6-8 decimal places, IOTA/BTC needed something like 12-14 decimal places because 1 IOTA was something like 0.0000000000001 BTC.
The other problem is psychological. Almost nobody is able to imagine 10000000000 or 0.00000000001, we know how to work with these numbers mathematically, but not intuitively. Difference between 1 and 1000 is easy, but 10000000 and 10000000000 are both “a lot” and you don’t feel the 1000x difference. When two politicians steal public money, one steals $100000 and the other steals $1000000000, a lot of people will hate the first one more, because $100k is amount they understand and know “how much is it worth”. It is hard to quantify how many people it discouraged from IOTA, but this trouble of human brain thinking about very big/small numbers is well known.
Bitcoin itself is an example with increased divisibility after launch. Before lightning network, the smallest unit was satoshi (1 sat = 10-8 bitcoins), but now a lightning invoice amount is expressed in millisatoshi (1 msat = 10-11 bitcoins). This allows to send very very small payments.
This is uncorrelated to Bitcoin market price.
You’re contriving a scenario where there’s a problem, but one which doesn’t exist in practice on Safe Network or in economies generally because… they ensure there are enough subunits to avoid this difficulty.
Once you ensure that, further division has no effect. And since that’s where we’re starting, further increases in divisibility does not affect money supply of SNT (ie total value of SNT) - using the economic definition of money supply.
When economists talk about money supply they are talking about the total dollars, or pounds etc in circulation. When the UK did away with farthings or halfpennies it didn’t change the money supply.
Somebody gave the example of share splits. This doesn’t affect the value of the business - the equivalent of money supply total value.
If you create more money, print more pounds, mint more SNT etc. you do increase the money supply. Same when a bank creates a loan out of thin air, more money enters circulation until the loan is paid off that money is removed again.
But if the maximum number of SNT is capped, the money supply can’t increase beyond that even if you increase the number of subunits. (Assuming the economic definition of money supply).
So I concede that it’s possible to construct a scenario where increased divisibility has an effect, but you have to start from a place of scarcity for that to matter, where it interferes with the usefulness of the currency. All currencies attempt to avoid this though it can happen.
In practice subdivisions are increased or decreased to avoid that scarcity of units and keep the units of currency at a level where they don’t hobble usefulness.
off-chain, not a consensus rule change, subset of btc economy, so a bit apples/oranges but kinda interesting precedent, sure.
btw, I never have understood (or looked into) how lightning channels can “settle up” using an on-chain tx when the balance does not match a whole satoshi. Do they round, trunc, ceil, or what? And if so, that appears to be lossy, which seems problematic…
This is related to decimal placement (divisibility), not naming of units.
As I understand it, the smallest (base) unit is the IOTA and the unit for trading/pricing is the MegaIOTA aka Miota which is 1 million IOTA. So people can think/transact in Miota using “intuitive” numbers, but there is always a subtle reminder in the name about the “true” representation. This makes a ton of sense to me, and is what I’ve been advocating for SNT.
Ok, at least that’s the theory. Now you are saying it didn’t work well in practice, so that’s the part I’m curious about. But then you don’t mention about the iota/miota distinction, so I’m left a bit confused.
They wanted to use only IOTA in the beginning, nothing else, that was the problem. (Also there were some hacks and other reasons too).
They did a network redesign and as a part of the comeback they started using MIOTA as the base unit to be more user friendly and more compatible with other things.
ah that explains it, thx.
My thought has always been to have names for all the 10^3 units, at least. Ideally the market would choose/settle on which named unit to first use for trade given supply/demand and the known total number of base tokens. However picking an arbitrary (named) unit to use for exchange pricing at launch seems a reasonable compromise given how accustomed the industry has become to that.