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My thinking on this issue continues to evolve, but roughly: The number of Bitcoins is capped. For it to have any semblance of price stability, the amount of us
by kaonashi 13y ago
My thinking on this issue continues to evolve, but roughly: The number of Bitcoins is capped. For it to have any semblance of price stability, the amount of users would be roughly fixed. Without price stability, the number of users would decline. So either an equilibrium amount of users, or constantly rising until scarcity makes the price unstable, at which point people stop using it until the point at which it becomes stable again.
- gnaritas 13y agoIt doesn't have to be a successful currency to be a successful distributed peer to peer payment network that extracts it's value from eliminating the likes of Western Union for international payment processing. Bitcoin is better seen IMHO as a utility rather than a currency. It can function along side official currency as a means of exchanging wealth online globally for relatively little in fees with the risk or trust required by credit cards. As a commodity, it's infinitely divisible to any number of people, so while it's value with always slowly deflate, it doesn't really matter.
- kaonashi 13y ago> it's infinitely divisible to any number of people, so while it's value with always slowly deflate, it doesn't really matter. The problems with deflation have nothing to do with lack of divisibility.
- gnaritas 13y agoI'm well aware of that, deflation is a bad thing for a currency; I agree. I just said Bitcoin makes a bad currency, but it's an excellent commodity and service. Gold is a terrible currency as well, that doesn't remove its value.