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Some of the primary arguments he uses against Bitcoin are actually its strengths. Fundamentally, Bitcoins will be in higher demand than dollars because their va

Some of the primary arguments he uses against Bitcoin are actually its strengths. Fundamentally, Bitcoins will be in higher demand than dollars because their value will continue to rise instead of fall. This means that goods and services as priced in bitcoins will be discounted compared to dollars, driving their adoption. You can see this same dynamic at work in black markets around the world where the USD is the de facto currency vs the highly unstable local currency. It's all about the "reserve currency", which is the currency that sellers around the world prefer to receive. If bitcoins are more attractive to sellers because of built-in deflation then they'll not only accept them but offer their products at a discount to get them. All of this creates an ecosystem and drives adoption, it does not make the currency a scam as he implies.

madamepsychosis 15y ago
Correct me if I'm wrong, but it seems to me that at some point Bitcoin will stop its deflation. Once Bitcoin has mainstream success, if that ever happens, the value of a Bitcoin will stop growing and people will start spending Bitcoin. At some point, the value of a Bitcoin lost through hoarding will equal the value gained by new adapters.
- anonymoushn 15y ago
  In the eventual steady state (assuming Bitcoin becomes popular and the number of coins created through mining becomes small compared to the number of existing coins), Bitcoin should constantly experience deflation as the world population continues to grow and per-capita productivity continues to increase.
  - prodigal_erik 15y ago
    By design, the rate of coin creation must asymptotically approach zero as the supply approaches 21 million. And every lost wallet of addresses (failed backup-restore, Scrooge McDuck died without writing down his password, whatever) will take coins out of circulation, causing some additional deflation.

madamepsychosis 15y ago

Correct me if I'm wrong, but it seems to me that at some point Bitcoin will stop its deflation. Once Bitcoin has mainstream success, if that ever happens, the value of a Bitcoin will stop growing and people will start spending Bitcoin. At some point, the value of a Bitcoin lost through hoarding will equal the value gained by new adapters.

anonymoushn 15y ago
In the eventual steady state (assuming Bitcoin becomes popular and the number of coins created through mining becomes small compared to the number of existing coins), Bitcoin should constantly experience deflation as the world population continues to grow and per-capita productivity continues to increase.
- prodigal_erik 15y ago
  By design, the rate of coin creation must asymptotically approach zero as the supply approaches 21 million. And every lost wallet of addresses (failed backup-restore, Scrooge McDuck died without writing down his password, whatever) will take coins out of circulation, causing some additional deflation.