To a) : Would you agree with me that in our current system as you get wealthier it becomes easier to increase that wealth even more?
You are also comparing apples to oranges. The current value increase is price discovery and not deflation. Deflation will happen once this has stabilized
I agree that this is an general concept that you can more easily increase wealth when you have wealth. But with the nature of bitcoin it's a lot worse.
Whether you call it price discovery or deflation, the general idea is the same. Bitcoin is called a currency, with it's main value should be in transferring value. But the speed of deflation is just too high to build any stability. It was built so it would be attractive as an investment. It was built so people would buy in hopes of selling higher. This system was never meant to find stability, but to find increasing amount of users. That is the reason why bitcoin is compared to an pyramid scheme, because it's in a constant hunger of needing new adopters.
b) I'm not sure what you mean here. If bitcoin finds mass adoption prices won't fluctuate as much.
Because bitcoin is deflationary the incentive to spend it is lower. It will be interesting to see how that plays out on a larger scale if
bitcoin is ever to become mainstream
The increasing market cap won't help with stability much. It will only attract players with deeper pockets and more knowledge on how to play the unregulated market for personal gain.
Only thing that would create stability would be if bitcoin would be unattractive as an investment, but then all the get-rich-quick part of the community would walk. Most of the people aren't here because they find bitcoin to be useful in transfer of value. They are here because they want to invest into bitcoin so that their wealth will increase.
And that is the fundamental flaw in bitcoin. Money should never be attractive as an investment. It could work with 1% a year deflation, but with bitcoin the deflation rate is and will be ridiculous with its future plan with inflow of new coins.
c) I've told you before that Proof of Work is a robust way of building consensus in such an anonymous probabilistic consensus
Bitcoin is a protocol. If a better method comes along that is guaranteed to work it can be implemented trivially.
Proof-of-Stake is already better and could be implemented but there is no interest in doing that because even the very small decrease in deflation that is created, will put most people off. Most here want as much deflation as possible.
When looking at the past developments and the current discussions on possible developments, then I don't see any hope for important changes.
People need to wrap their head around the fact that bitcoin is what the majority of miners use as a protocol.
Anything can be changed, yes this includes the 21 million cap. If everyone adopts a protocol that changes this then
thats that. If some don't agree with this you'd fork bitcoin, effectively creating a new altcoin.
I myself find it funny that bitcoin is called as a protocol to some. Protocol needs to be something neutral without increasing unit price. You don't see e-mail being created in a way where the new adopters have to fill the pockets of the old adopters to join the game. If e-mail would have been created in this way, then people would have found a workaround to create an alternative where everyone can get a fair chance in using this protocol.
These are the wet dreams of bitcoin adopters, that everyone will start using bitcoin and will start filling their pockets in the process. But the world doesn't work like that. There are smart enough people to create alternatives, so people don't have to feed the leeches to use a piece of technology.
Anyway, I like your post because you explained yourself in a calm and constructive manner. I still can't see how bitcoin could survive very long though.
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