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I wish all these resources spent & millions of investment dollars would go to a better version of Bitcoin. BT is a major breakthru but it is still in an alpha s

I wish all these resources spent & millions of investment dollars would go to a better version of Bitcoin. BT is a major breakthru but it is still in an alpha stage. The main problem is that it is deflationary, to support a global economy it needs to slightly inflationary. This is because for hundreds of millions of people to use BT, the supply of the coins need to gradually increase to support the flow of spending. Right now more half of Bitcoin supply is already own by someone (a lot of them stolen). The BitCoin owners are holding on their stash in hopes that they will get a return on their investment. They will sell their BT for currency rather buy depreciating goods with them.

a-priori 13y ago
I disagree, because Bitcoin's monetary policy can be changed at any time. In fact, Dogecoin, which uses a fork of the Bitcoin code, just changed theirs a short time ago, without much fuss, to a continuous inflation policy like you mentioned. I agree that for either of them to be used as a currency (rather than just for speculation), a low and stable level of inflation is necessary. But that's all about inflation in the long term. In the short term, the rate of inflation depends on other factors such as the rate of capital moving into the Bitcoin economy and the rate of Bitcoins being lost. So right now, there's no reason people should hold back on adopting Bitcoin because of its current monetary policy of having a fixed maximum number of coins. It's not like there's a fixed amount of money or time that can be invested in it; there's no reason people like Stripe and merchants can't do their bit at the same time core Bitcoin developers do theirs..
- tlrobinson 13y ago
  Dogecoin is much smaller than Bitcoin. It would be vastly harder for Bitcoin to change it's monetary policy without forking the network.
wyager 13y ago
>The main problem is that it is deflationary This is not a critical problem (or even a problem at all, depending on whom you ask). This has been argued again and again, and what is always comes down to is that, according to the Keynesians, an inflationary currency is preferable for encouraging economic growth, but the reality is that A) economics is not hard science and B) as long as the inflation/deflation rate isn't extreme, both inflationary and deflationary goods make fine exchange mechanisms. >supply of the coins need to gradually increase to support the flow of spending. Why? If adoption increases, the value goes up, and people spend fewer bitcoins for the same thing. Bitcoin is especially good at this because it has a lot of base units. >They will sell their BT for currency rather buy depreciating goods with them. This is incorrect. You're arguing the extreme of the effects of deflation. People will buy goods with deflationary assets, because sometimes the expected value of owning a good is higher than the expected value of keeping an equivalent value of the deflationary asset. The equivalent (and equally incorrect) ad extremum argument against inflation is "With inflationary currencies, no one will bother working, because they know the payoff of their labor will be worth less by the time they get it."
tlrobinson 13y ago
"The main problem is that it is deflationary, to support a global economy it needs to slightly inflationary." Bitcoin doesn't need to "support a global economy" for it to be useful/successful. "Right now more half of Bitcoin supply is already own by someone" Are you saying one entity owns half of all Bitcoins? I've heard the figure of a few percent thrown around, but never half.
- jsutton 13y ago
  More than half the Bitcoin supply is in existence right now, no one person owns any significant percentage. Except SN.
- haakon 13y ago
  I'm sure he means that half of all bitcoins that will ever exist have already been mined, meaning they belong to someone (obviously not one person). This is correct (unless you want to argue about lost coins etc).
gnaritas 13y ago
> The main problem is that it is deflationary Actually it's current inflationary and will be for a while. It's deflationary eventual nature is a long term issue with plenty of time to be addressed; short term, it's inflationary.
eof 13y ago
if bitcoin weren't deflationary, it never would have been bootstrapped from zero. why would i buy a worthless bitcoin in 2010 if it was going to be worh the same or less in 20xx? This applies to all other cryptos as well; without central backing there is only supply/demand. No one wants to be the first to take a risk if there is no upside.
- Nursie 13y ago
  Why should anyone use a currency that others are holding in an effort to cash out though? My economic activity in that currency would enrich others who have done nothing but havng on to it. Not really an attractive feature.
collision 13y ago
We're not opposed to supporting other cryptocurrencies in future. We're cryptocurrency nerds, not Bitcoin nerds specifically.

a-priori 13y ago

I disagree, because Bitcoin's monetary policy can be changed at any time. In fact, Dogecoin, which uses a fork of the Bitcoin code, just changed theirs a short time ago, without much fuss, to a continuous inflation policy like you mentioned. I agree that for either of them to be used as a currency (rather than just for speculation), a low and stable level of inflation is necessary. But that's all about inflation in the long term. In the short term, the rate of inflation depends on other factors such as the rate of capital moving into the Bitcoin economy and the rate of Bitcoins being lost. So right now, there's no reason people should hold back on adopting Bitcoin because of its current monetary policy of having a fixed maximum number of coins. It's not like there's a fixed amount of money or time that can be invested in it; there's no reason people like Stripe and merchants can't do their bit at the same time core Bitcoin developers do theirs..

tlrobinson 13y ago
Dogecoin is much smaller than Bitcoin. It would be vastly harder for Bitcoin to change it's monetary policy without forking the network.

wyager 13y ago

>The main problem is that it is deflationary This is not a critical problem (or even a problem at all, depending on whom you ask). This has been argued again and again, and what is always comes down to is that, according to the Keynesians, an inflationary currency is preferable for encouraging economic growth, but the reality is that A) economics is not hard science and B) as long as the inflation/deflation rate isn't extreme, both inflationary and deflationary goods make fine exchange mechanisms. >supply of the coins need to gradually increase to support the flow of spending. Why? If adoption increases, the value goes up, and people spend fewer bitcoins for the same thing. Bitcoin is especially good at this because it has a lot of base units. >They will sell their BT for currency rather buy depreciating goods with them. This is incorrect. You're arguing the extreme of the effects of deflation. People will buy goods with deflationary assets, because sometimes the expected value of owning a good is higher than the expected value of keeping an equivalent value of the deflationary asset. The equivalent (and equally incorrect) ad extremum argument against inflation is "With inflationary currencies, no one will bother working, because they know the payoff of their labor will be worth less by the time they get it."

tlrobinson 13y ago

"The main problem is that it is deflationary, to support a global economy it needs to slightly inflationary." Bitcoin doesn't need to "support a global economy" for it to be useful/successful. "Right now more half of Bitcoin supply is already own by someone" Are you saying one entity owns half of all Bitcoins? I've heard the figure of a few percent thrown around, but never half.

jsutton 13y ago
More than half the Bitcoin supply is in existence right now, no one person owns any significant percentage. Except SN.
haakon 13y ago
I'm sure he means that half of all bitcoins that will ever exist have already been mined, meaning they belong to someone (obviously not one person). This is correct (unless you want to argue about lost coins etc).

gnaritas 13y ago

> The main problem is that it is deflationary Actually it's current inflationary and will be for a while. It's deflationary eventual nature is a long term issue with plenty of time to be addressed; short term, it's inflationary.

eof 13y ago

if bitcoin weren't deflationary, it never would have been bootstrapped from zero. why would i buy a worthless bitcoin in 2010 if it was going to be worh the same or less in 20xx? This applies to all other cryptos as well; without central backing there is only supply/demand. No one wants to be the first to take a risk if there is no upside.

Nursie 13y ago
Why should anyone use a currency that others are holding in an effort to cash out though? My economic activity in that currency would enrich others who have done nothing but havng on to it. Not really an attractive feature.

collision 13y ago

We're not opposed to supporting other cryptocurrencies in future. We're cryptocurrency nerds, not Bitcoin nerds specifically.