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Author Topic: Why was bitcoin designed with no inflation?  (Read 3108 times)
makomk
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July 05, 2011, 12:31:54 PM
 #21

1) Inflation is good for holders of debt. Nonsense. Inflation makes interest rates higher, which is bad for holders of debt. Inflation makes it harder for people who hold debt to refinance and makes creditors want their money back sooner, which is also bad for holders of debt.
I think you're confusing nominal interest rates with real interest rates. Inflation increases nominal interest rates - the amount of interest charged in terms of the currency in question - which matter to savers but not debtors. Debtors care about real interest rates - the cost of the loan taking into account both nominal interest rates and inflation/deflation - because that's their actual cost of borrowing that they have to repay.

2) Inflation gives people an incentive to spend money. Nonsense. Inflation means you can get a higher interest rate if you save the money, giving you an equal incentive to save.
Inflation gives you an incentive to invest the money rather than just stuffing it under the mattress, either directly, by sticking it in a savings account where it's used to make loans, or by buying something that will give you future benefits.

3) Deflation gives you an incentive to hold money. Nonsense. You can just as easily sell the right to hold  that money and get its value today rather than holding it yourself.
Why should someone buy it for more than it'd cost them to get the same amount of money right now, though?

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Vladimir
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July 05, 2011, 12:46:08 PM
 #22

It is extremely difficult to bootstrap currency like Bitcoin. It is simply necessary to have in place significant incentives in the first few years to get over period of initial vulnerability and ensure that  the network is secured as quickly as possible.

Go create your own inflationary currency, if it is so easy. You talk the talk, now show us that you can walk the walk.

Also many noobs seem to fail to realize that they ARE the early adopters. In age of ASIC mining anyone who mined using GPU's in GPU age will look like CPU miners of early 2010 look now.

Do not be a stupid jelly whiner, cease the opportunity instead. For example, go sell miners some shovels and jeans if you are too frail to work in the pit yourself.




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Etlase2
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July 05, 2011, 01:14:37 PM
 #23

You get pretty angry when people threaten the value of your bitcoins, vlad.

incognegro
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July 06, 2011, 05:28:37 AM
 #24

I have found Vlad's posts to be of high quality.
Been reading for a month now.
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July 06, 2011, 07:39:17 AM
 #25

good stuff
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