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Author Topic: A question on Attrition of BitCoins ???  (Read 2934 times)
kiba
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March 02, 2011, 04:19:10 AM
 #21

Yea, I get it. But IRL there is a lag. And that Lag causes problems. There will be a certain number of things sold at one value before people get around to repricing the products, their will be an affect.

Just like the minimum wage joke:  They raise the wage, so product price will raise overtime to eat the increased cost, and then everyone is back to the same position. The time between those two positions there is an affect on the economy.

Tell everybody they will make 50 bucks and hour; they love you. But then the cost of products go up to counter the inflated wages.

The losers are people with contracts that don't cover changes in CPI (Consumer Price Increases).  Like mortgage and car loans. It will help the consumer but kill the business.  All the Big Boy contracts put in the CPI clause.  The "little guy" mortgage and car loans are covered in surprising ways. A little secret. Yea, the amount you pay on your loan will stay the same, but I bet you a 100 BitCoins that the insurance on those loans go up. Guess what, You are forced to carry insurance on Cars, and Houses until you own them.  The Big Boys are good at hiding the details.

Have you see a loan market in bitcoin? Not really.

Well, I was one of the first to be loaned with bitcoin once to go shorting. I shorted once, then I try to short again..but I gave up and paid all my debt(with a positive inflation rate!)

Anyway, if the loan market is really small or non-existent, than loans aren't really a problem in the bitcoin economy.

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The Script
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March 08, 2011, 02:42:40 AM
 #22

What the OP is talking about here would likely take hundreds of years to happen.  BitCoins aren't going to leach out of the system that fast.  Besides, if BitCoins succeed I bet it will only be 5 or 10 years before someone else starts another digital currency akin to BitCoins.  It is likely that if Crypto Currency takes off you will have several different ones competing with each other and so the whole world won't have to exclusively use BitCoins. 

Adding another decimal place to the RIGHT of the zero isn't inflation.  1 BTC will still be 1 BTC, you simply will be able to use smaller portions of it in your transactions.

If the Federal Reserve suddenly started minting 1/10th penny coins the US dollar wouldn't suddenly inflate.  Of course in the case of the US dollar no one would use them because a penny is already a very small amount which is only used when exact change is required.

Am I wrong?

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March 08, 2011, 03:16:29 AM
 #23

Isn't this just psychological? If the client tomorrow started fully working with all the 8 decimal places, would that hurt the Bitcoin economy in any way? I wouldn't expect things to be any different when a nineth or more places get added...

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eMansipater
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March 08, 2011, 03:29:59 AM
 #24

A topic like this seems to appear once or twice every week.
Yes, I've been thinking I should try and write out a very careful response to this and a couple other common ones that we could sticky.

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March 08, 2011, 03:31:17 AM
 #25

Bitcoins are infinitely divisible. The protocol currently supports 8 decimal places and can easily extended to support as many as needed.

This has been discussed thoroughly before in the forums.
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March 08, 2011, 03:49:03 AM
 #26

Perhaps a thread on the matter should be stickyfied....

(I dont always get new reply notifications, pls send a pm when you think it has happened)

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