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The 21 million limit is bitcoins bigges problem, and probably why it'll fail, IMHO.
1. The monetary supply can't expand. And no, you can't just move the comma to the left. If you divide 21 million into 210 million units of 0,1 bitcoins, you still won't get more bitcoins.nthe cake doesn't get any bigger, by people cutting it into ever smaller pieces.
2. It discourages trade, and BTCs adoption as an everyday currency. A very big group of BTC users (more than half probably) believe that Bitcoins have a very bright future, will replace/supplement fiat currencies and be worth a lot more in 5-10 years from now. As a consequence they hoard a big part of BTCs instead of spending them.
After all: If bitcoins in 2020 are going to replace just a few billion dollars worth of fiat currency, because of the 21M ceiling, it follows that one BTC is going to be worth hundreds, if not thousands of 2012 dollars in purchase power. What kind of fool would use every one of their bitcoins right now when theyre worth 8-12$ if they can hold on to them as an investment for ten years when they'll be worth thousands of 2012 dollars a piece.
When Satoshi designed the BTC protocol, I also don't think he predicted how fast the development in mining hw would be, nor what kind of people it would attract. (If he'd know for a fact the collective financial IQ level of the community and how gullible the community would be, I think it would be designed with more safeguards in place)
1. The monetary supply can't expand. And no, you can't just move the comma to the left. If you divide 21 million into 210 million units of 0,1 bitcoins, you still won't get more bitcoins.nthe cake doesn't get any bigger, by people cutting it into ever smaller pieces.
2. It discourages trade, and BTCs adoption as an everyday currency. A very big group of BTC users (more than half probably) believe that Bitcoins have a very bright future, will replace/supplement fiat currencies and be worth a lot more in 5-10 years from now. As a consequence they hoard a big part of BTCs instead of spending them.
After all: If bitcoins in 2020 are going to replace just a few billion dollars worth of fiat currency, because of the 21M ceiling, it follows that one BTC is going to be worth hundreds, if not thousands of 2012 dollars in purchase power. What kind of fool would use every one of their bitcoins right now when theyre worth 8-12$ if they can hold on to them as an investment for ten years when they'll be worth thousands of 2012 dollars a piece.
When Satoshi designed the BTC protocol, I also don't think he predicted how fast the development in mining hw would be, nor what kind of people it would attract. (If he'd know for a fact the collective financial IQ level of the community and how gullible the community would be, I think it would be designed with more safeguards in place)
I reject your first premise. Price is best to climb slowly with no downturn. Why would a store owner be upset with his holdings being worth more? Prices can go down. People with coin can buy more. Ever poor people eith not much money. Every little bit of purchasing power help
This is exatly why the supply has to be slow. If it goes too fast it might crash again. As the price rises people will sell there coins slowly to get the most out of it. The "pie" gets bigger the more each coin is worth. Commerce will be stable as long as people don't crash the market. The deeper the market gets the more stable it will get.
