It's not simple, and extreme deflation can also be detrimental.  However, just like inflation, the cause of the deflation matters.  In the case of Bitcoin, the vast majority of the deflation occurs because the economy is expanding at that rate.  While deflation can impede that growth, (which is not necessarily bad, btw) it cannot prevent it; for to whatever degree that deflationary effect impeded the growth of the economy also limits further deflation.  It's a self-limiting process.

A satoshi can still be divided without significant changes to the running code, by the use of a digitial token in the big end of the 64 bit integer.  Even with all 21million BTC in a single transaction output, not all of the bits would be in use.  There would be several on the large end that could be used as a digital marker to identify the output as a 'sub-satoshi' value.  Alternately, a new kind of bitcoin address could be developed to specificly identify very small values with sub-satoshi amounts included.

Yes, this too has long been considered.  This is a non-issue, and even if it was, it's not pressing.  If any of you newbies can come up with a "flaw" that has not already been discussed to death in this forum before you have 300 posts, I'll give you a bit-nickel myself.

Yeah, you keep up that mature perspective for another four years of seeing this BS at least once each week.

We shall see how agreeable to it you are in a couple years.

Go for it.  There is notihing stopping you from doing it yourself.

Buy a bigger screen!

While I agre it's possible, I don't agree that parrallel blockchains are the ideal way to deal with scaling issues.  Merged mining might prove to be a viable method for securing those parrallel chains, but otherwise their very existance must reduce the security of the main blockchain or be too insecure in their own right.  Merged mining is promising, but not proven to not reduce security overall.

The idea of simple bank-like insitutions with readily auditable bitcoin reserves is a much more scalable method, and they only need be trusted by those who choose to do so.

Regardless, all of these methods are likely to see production if their technical issues can be resovled; and then the market will decide.

Because it's no more trustworthy than a gold backed USD.  That didn't prevent the FedRes from creating more USD's than the government had in gold.  There was a reason that Nixon "closed" the "gold window" (which never really did exist, anyway) in 1971.  The French alone had enough USD's to take half of Fort Knox's offical stores, and probably all of what it really has.

Yes.  Search for 'bitcoin spinner' and 'stratum' for two different, functioning, overlay networks that intergrate into the main network quite well.


Perhaps, although that is not an easy technical hurdle.  A parrallel blockchain is likely unnecessary anyway, once enforcable contracts are working within the blockchain itself.


Practically speaking, no.  Because there is no way to do truly 'instant' transactions with confirmations of any practical block interval.  Instant transactions will be handled in other ways.


Yes, see Stratum.


It's not possible to answer this question at this time.

Yes.


Yes.

Any other easy questions?

5 posts and 4 hours total of forum surfing.

I seriously doubt it.  You can sit back and wait for the collapse, though.  You'd have plenty of company that is already fat with crow.

No, I trust my hardware, but only to a point.  I don't trust your hardware at all.  Trusted computing used for the exchange of bitcoins would require that the vendor trust the sender's machine, and probably more than he should rationally trust his own.

I understood your argument better than you think, and right from the start.  It's one that I thought of myself, three years ago.  I was wrong then and you are wrong now.  At least that I can claim that I actually researched the topic before posting; for over two weeks.  The solution that you are reaching for, but don't know it, is called demurrage; (storage fees for very deep transactions, basicly) and it's a core element to freicoin.  It's also unnecessary.  And even if it wasn't, any successful method of implimenting demurrage that freicoin could come up with would just be taken into Bitcoin proper, should freicoin (or any other alternate cryptocoin) grow legs and offer a real challenge to Bitcoin's superior market position.  The only way that does not happen, is if the new cryptocurrency were to develop an obvious advantage for which Bitcoin could not replicate.  This is not impossible, but is rather unlikley in my view.

All that is required, IMHO, is that the cost of a double spend attack to likely be higher than the potential ill-gotten gains.  So if you go and buy a car for $50K in BTC, it should be more expensive an attack than that.  However, you are already overlooking a feature of Bitcoin, the more 'confirmation' blocks that one waits for after the first one that accepts your transaction before you walk away, the more "expensive" (in several ways) that such a double spend attack becomes.  Also, it becomes more expensive at an exponential rate.  Thus, anyone who is selling you that car, considering the sums involved, is going to want to wait for 6 confirmations or so before letting you drive away.  At the current hashrate of about 400 PetaFLOPS equivalent, it would take at least 20 of these to overcome just one block confirmation...

http://en.wikipedia.org/wiki/Titan_(supercomputer)

Therefore, the current level of security is several orders of magnitude beyond what is necessary to disincentivize a frausdster from even attempting a double spend attack.  We crossed that point around 2010.

The security that is being paid for is to protect teh entire system from an institutional attack on the blockchain itself, and there is (likely) not a single nation-state with the spare resources to attempt it for even a few hours.  So I'm going to assume that the current profitablility for miners is more than sufficient to secure the blockchain.

Thus the question then becomes, how do we make sure that the curernt level of profitablity continues after the block subsidy is reduced?  First off, that may not realy matter for decades, as teh growth in value has thus far outweighed the reduction in block subsidy.  What was the exchange value when the subisdy dropped from 50 BTC to 25?  I know that it was under $15, and I'm fairly sure that it was under $10.  So at the current price of $34, we are already well over double the profitablity for miners overall.  As long as the real spending value of a BTC continues to double within a four year period, the concern is moot.

But, of course, eventually it wont.  Such growth is not sustainable, so at some point the value must stablize.  How, then, can we be certain that transaction fees will be enough for miners to continue to secure the network?

In short, we can't really know this, but the economics of the system imply that we can expect that an equilibrium of fees will be reached in one fashion or another.  So long as the overall Bitcoin economy is large & mature enough by that time, a tiny fraction of the GDP would be required to incentivize miners into the foreseeable future.  Far less, in fact, than what is taken from you via inflaiton of fiat currencies; which are at least 2% of their entire monetary base every year.  The big key is that Bitcoin is much more economicly efficient than fiat currencies are.

<sigh>

No.  That would be me doing your research for you.  I'm normally not inclined towards hand holding.  The search function really does work.  Start by trying to think about it from an economics perspective.  What are the economic drivers for people to seek out off-network transactions, for example?  The short answer is that, in order for people to worry about avoiding the high costs of on-network transactions, the on-network transactions must be more expensive than the costs associated with the development of an off-network transaction method.  As already noted, cash isn't costless.  So what is the real costs of those off-network transactions?  You assume them to be free or near free, but that is provablely not the case. 

And yet, free transactions exist, and we can reasonablely asume they will always exist so long as the blocksize is not near the maximum.  So if the blocksize is near the maximum, then the fee required to get included into a block would be forced (by the free market) to rise.  If the transactions are maxed out, and the fees are rising, under what conditions would an off-netowrk method of avoiding those fees actually lead to the collapse of that market price in on-netowrk transactions?

You Sir, are he who are challenging the status quo; and thus are the one with the burden of evidence, not I.  So please explain how a rising market price in transaction costs, followed by the developmetn of a cheaper off-network method, fails to reach a price equilibrium in the average costs of transaction fees before crashing to zero?  If the price for on-network transactions is non-zero, how does the resources supplied by miners (who desire those transaction fees) also not reach an equilibrium?

No to the sticky.  Read the forum, try to understand the topic.  Use the search function.

If you fail, then ask questions.

Addressing only the part I highlighted...

While it's true that off-network or out-of-band transactions could be executed without fees, that does not mean that they are without cost.  Bitcoin transactions are, currently, free under certain conditions; and it's going to remain difficult to compete with that for some time.  That said, even if Bitcoin is so successful that on-network transactions are no longer free in practice; off-network transactions cannot ever be costless, you just might not understand the cost.

For starters, it cost's real resources just to manufacture casascious coins.  Thus they will only be used in cases that their costs are perceived to be lower than their advantages.  Cacasicus coins are as anonymous as paper cash (advantage cash) but still require either an in person transaction or a physical shipping method (advantage bitcoin).  Other off-network methods will have different advantages and disadvantages, but will all have to deal with problems that bitcoin has already solved.  Certainly, there will be cases wherein off-network transactions do make sense.  That's a far cry from the assumption that off-network transactions will always make sense.  For example, your (theoretical) DRM model might have a real use, but it already sufferes from it's own flaw.  Namely that users would have to 1) have a computer capable of 'trusted computing' and 2) an owner that actuallly believes that it is true.  

Furthermore, you'd have to be transacting with a vendor who has similar faith in your computer's trusted computing model.  It's still a central authority model, except you're then putting your faith in Microsoft's ability to deliver on their promises compared to the security model of the blockchain.  While, certainly, there will be a market for this kind of thing; it would likely be limited to small transaction values that a vendor would likely be willing to accept with zero confirmations anyway.  And the first time a computer virus breaks that trusted computing model, whether or not it's bitcoin related, and your theory falls apart.

There is also the issue of vaporware, since the 'trusted computing' thing has been floating around the net as the next big thing for a decade now, and there is no example of it in the wild.  At least not an example anyone would be willing to trust with actual currency.

Good God, another one.

Correct, and this wouldn't even require a 'hard fork' of the code, like in the example of the max blocksize debate going on now.  And the current limit of divisablity is an artifact of the limitations of common computers today, as the value of any particular bitcoin address is stored as a 64 bit integer.  Once 128 bit CPU's and architectures are commonplace, the transition to 128 bit integers for bitcoin would be fairly straightforward.

In sort, the divisablity of bitcoins are only presently limited to eight decimal places; due to the limitations of common computing hardware, not due to any particular limitations of the Bitcoin protocol itself.

I think I've had enough of this BS.  I warned the OP early that there was much to be learned on this topic by simply reading the forum and using the search function.  Apparently no one bothered to attempt it, because I keep seeing tired arguments that have long been settled. 

This thread shall be locked.

Beeblebrox, learn to do some research before you start spouting crap about a complex subject for which you do not understand.  If, after some effort on your part, you still do not understand why you are wrong; ask again politely in the Bitcoin Discussion section, and I have no doubt you will get the clear answers you seek.  Too many of the old salts here are not going to bother to post in the newbie section, or even read your complaints, to expect that the best responses are going to be found here.