So
PLEASE stop (everyone) sa
Deflation = more saving, less borrowing, slightly less spending.
Inflation = less saving, more borrowing, more spending.
Inflation encourages spending yourself into debt.
Deflation encourages saving yourself into prosperity.
Why do
you think
BTC and (almost) all of the daughter Coins are deflationary?
Edit:
Also regardless of how you feel about inflation / deflation having a hard cap is stupid. Eventually all the bitcoins WILL disappear this is a fact, it may not be today, tomorrow, or even a century from now but it will happen.
Why are you so certain of this? Why do you consider it a bad thing?
1. How does having more money in circulation encourage me to spend myself into debt? Because my dollar is ever so slightly less valuable tomorrow than it was today? I hate to break it to you but most people buy stuff because they want / need it not because they have no faith in the currency they are holding, exception being commodities but I really don't think too many people take out a second mortgage to buy cattle futures. Like I said I don't think (too much) inflation is a "good" thing but I do believe a sane rate of inflation is necessary and quite frankly I think deflation is the most detrimental thing plaguing bitcoin. You can see the price swings, a healthy currency doesn't triple in value in 3 weeks and go back to about 40% of it's previous value in 2 days. If you don't believe that there's a problem try looking at the trade volume on exchanges vs the ammount of bitcoins traded for goods.
2. You ask why I think most of bitcoin's clones are deflationary? Let me see:
1. create a cryptocurrency that is deflationary and has the potential to vastly increase in price relatively quickly
2. Be an early adopter. MINE MINE MINE
3. proffit
The more I think about it the more I truly do believe bitcoin is a ponzi scheme...
3. You ask why I'm certain bitcoins will eventually disappear, well:
1. Bitcoins can be "destroyed" (lost)
2. Bitcoins are finite
you do the math, they all got to disappear sometime.
Why do you consider it a bad thing?
Oh God I hope you're trollin'
Oh for...
http://www.howstuffworks.com/ponzi-scheme.htmPonzi schemes originate at a source entity, where the money train flows to in a branched structure to the top with money flowing upward. Bitcoin has no such authority, and no such entity to eventually cash out the whole system and run. Bitcoin's decentralized nature makes that pretty much impossible.
So please, everyone, stop saying BTC is a ponzi scheme, especially if you don't even know how an actual Ponzi scheme works. The original scammer Mr. Ponzi died penniless and alone.
Bitcoin works because:
Only 21 Million will be minted, ever. As coins are lost it makes the rest appreciate in value automatically. So essentially if you have a BTC savings left to appreciate, it acts just like a bank savings account that gives you interest back. Though spending coin would also appreciate all the same as they get rarer. So it is better than the current cash system in that regard as a native feature. That 21 Million can be divided among 100 Million Satoshis (.0000001 of a Bitcoin), and more can be added to further divide later if needed as it is built into the code to allow for that. One good analogy I heard is think of a Bitcoin = 1 US Economy, where that total economy is broken down into dollars, and then into cents to divide the spending. Bitcoin simply does this much more elegantly than cash could ever hope to. Even if in the end there was only a single Bitcoin left on Earth, the entire economy could still be based on it by this division, so it is deflationary and has a backed "gold standard" but designed to not matter in terms of wealth distribution, which is the real genius behind the protocol.
It eliminates the need to go away from a hard backed standard, or create any new Bitcoins, because the theory is we can never "run out" of Bitcoins on the basis we can just keep dividing them up indefinitely. To do that with physical currency, we would need to mint entirely new coins that are smaller in denomination than the current ones to shift the growing spending power to smaller pieces, however this cannot work with USD because it is ever inflationary, which means spending power is going down, not up. Obviously this only generates a lot of work and materials to mint a new set of coins. Bitcoin is digital, these in the end are just a string of numbers to it like any other, so it is very easy to do.
As USD is inflationary, the opposite might occur, as spending power is lost, someday the Dollar bill might become the new penny and change will be eliminated altogether because their spending power is so minuscule it would cost more than they are worth to mint them (the Penny already has this problem, each takes 2.41 cents to create, and they are only "worth" a penny still.) Obviously if your money costs more to make than it spends, eventually you would go bankrupt minting them. Metal money is also victim to the metals trade as well. Bitcoin has no such problem with currency generation.
It gives you incentive to maintain a savings because that savings is ever appreciating, opposed to spending money you don't have like we do today because we can just print more paper money (based on no back at all) to pay the debt, a practice that has fundamentally and actually totally screwed our current financial model now. Fixing the debt problem is going back to a standard where you can only spend what you earn, which Bitcoin can accomplish. We'd be back to a 1950s kind of economy in a way.
The hard back ensures that we don't have the same currency problems we have today, which now involves our governments steadily devaluating our money by simply making more that isnt based on a damn thing to pay a never ending and increasing debt. It will all fail because the debt is bigger than the total currency we have available to fill it.
