Why doesn't Bitcoin consider a low interest rate mechanism to fight deflation?

[Lizzylove1]

Your  proposal is what POS offers, BTC already rewarding miners and that is strong enough economic value. The best way to benefit from bitcoin and accumulate more if you're not a miner, is to buy low and sell high and repeat same with the hope you won't get caught by the market.

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[hugeblack]

Here it will create an additional problem, which is that everyone will prefer not to spend his money because he knows that it will increase in the future, and the lender will try to give a higher interest, otherwise it is better to leave the money in his addresses.

The pattern you mentioned is already in the Cardano ADA crypto. You can check it out to see if it is effective in increasing the price or not.

[Ucy]

The number of bitcoins issued is halved roughly every four years.
In the future this number of releases will be small.

Why not consider a fixed low interest rate mechanism to ensure that Bitcoin is more suitable for current economic activity?
For example, if you hold 1 bitcoin in an address, you will be rewarded 0.02 bitcoin after holding it for 1 year.
Interest is calculated and paid every year or before you will pay to another address.

Why would you want to fight deflation? To prevent price from increasing so quickly that it keeps it from becoming a better medium of exchange? If the purpose is to prevent price from increasing so quickly,, it will most likely not work because supply would decrease and demand increase when lots of people hold that way to earn rewards.
Besides, things are not that simple. Such payment will only be meaningful if the saved bitcoins are put into good use or are useful for the network to keep it profitable/valuable otherwise a worthless network will pay worthless rewards.
In reality such fixed payment or rewards would be non-guaranteed and can only be based on how profitable your company's or organization's is otherwise you get paid worthless interest.

The deflationary model remains the best option for long-term holders who wish to earn valuable rewards that are non-guaranteed. It could encourage people to work harder to increase demand and sustain a price increase. The guaranteed reward like you suggested can be very deceptive and unsustainable

[avikz]

The number of bitcoins issued is halved roughly every four years.
In the future this number of releases will be small.

Why not consider a fixed low interest rate mechanism to ensure that Bitcoin is more suitable for current economic activity?
For example, if you hold 1 bitcoin in an address, you will be rewarded 0.02 bitcoin after holding it for 1 year.
Interest is calculated and paid every year or before you will pay to another address.

Having a limited number of bitcoins can ever exist, is itself a deflationary measure. Then we also have halving where the mining reward decreases to half at certain stages. I believe Satoshi has already implemented two very powerful deflationary measures for bitcoin.

Adding interest rate to bitcoin holding can surely help. This will encourage people to hold their bitcoins which can have a decreasing effect of supply which will eventually drive the price up. But it needs to go through consensus mechanism.

[BlackHatCoiner]

For example, if you hold 1 bitcoin in an address, you will be rewarded 0.02 bitcoin after holding it for 1 year.

You don't fight anything this way. If, given that the interest rate is 2% annually, all users were entitled to this reward, it'd nullify its purpose. If everyone became slightly richer, with constant national gross product, then nobody would actually gain anything. Prices would just rise, that's all.

Inflation and deflation are complex problems, that require complex solutions. Commonly political problems. That's why you shouldn't try searching for a simple technical solution.

[jrrsparkles]

The number of bitcoins issued is halved roughly every four years.
In the future this number of releases will be small.

Why not consider a fixed low interest rate mechanism to ensure that Bitcoin is more suitable for current economic activity?
For example, if you hold 1 bitcoin in an address, you will be rewarded 0.02 bitcoin after holding it for 1 year.
Interest is calculated and paid every year or before you will pay to another address.

So you understand the whole concept wrongly...

If there is something called interest rate then who is going to give that interest and how that it will be created? So if there is a mechanism which creates bitcoin out of nowhere then its inflationary right then how can you say it is a solution to fight deflation of having.

[NotATether]

That would require moving to PoS.

I was waiting before I responded to this, for some explanation on why inflation doesn't solve anything, which BlackHatCoiner made excellently:

For example, if you hold 1 bitcoin in an address, you will be rewarded 0.02 bitcoin after holding it for 1 year.

You don't fight anything this way. If, given that the interest rate is 2% annually, all users were entitled to this reward, it'd nullify its purpose. If everyone became slightly richer, with constant national gross product, then nobody would actually gain anything. Prices would just rise, that's all.

Inflation and deflation are complex problems, that require complex solutions. Commonly political problems. That's why you shouldn't try searching for a simple technical solution.

PoS (and PoW) coins that provide everybody subsidiaries, also have inflation problems.

[NotFuzzyWarm]

The number of bitcoins issued is halved roughly every four years.
In the future this number of releases will be small.

Why not consider a fixed low interest rate mechanism to ensure that Bitcoin is more suitable for current economic activity?
For example, if you hold 1 bitcoin in an address, you will be rewarded 0.02 bitcoin after holding it for 1 year.
Interest is calculated and paid every year or before you will pay to another address.

So you understand the whole concept wrongly...

If there is something called interest rate then who is going to give that interest and how that it will be created? So if there is a mechanism which creates bitcoin out of nowhere then its inflationary right then how can you say it is a solution to fight deflation of having.

Precisely. The key points of BTC is that there is no central authority and that there can never be more than 21 million BTC. Well, technically actually 20.9999999 million.

So:
Just who/what would be monitoring every address that is holding coins and checking how long they are held so interest could be paid?
Coin dates checked by incoming tx date and the interest being calculated and added when the coins are spent?
By what mechanism would the coins be generated?
Would the interest paid come out of the 21 million or would that rule be thrown out to create more?
So many things wrong here...

[justdimin]

Your  proposal is what POS offers, BTC already rewarding miners and that is strong enough economic value. The best way to benefit from bitcoin and accumulate more if you're not a miner, is to buy low and sell high and repeat same with the hope you won't get caught by the market.

That’s the point, the price could drop in any investment, it is up to you to profit from it or be upset about it. If you are simply just upset because the price dropped, then you are going to do nothing and you are not going to benefit from it, crying over the price and deflation (which is none if you ask me) is not going to solve any of your problems and would just be empty whining.

However, if you buy more when the price drops that means you are going to end up with some profit and that is the way you could get out of this with less harm done to you and more profit chances when the time comes. That’s the only beneficial method during any of the bear markets that we have faced so far.

[AmoreJaz]

Your  proposal is what POS offers, BTC already rewarding miners and that is strong enough economic value. The best way to benefit from bitcoin and accumulate more if you're not a miner, is to buy low and sell high and repeat same with the hope you won't get caught by the market.

That’s the point, the price could drop in any investment, it is up to you to profit from it or be upset about it. If you are simply just upset because the price dropped, then you are going to do nothing and you are not going to benefit from it, crying over the price and deflation (which is none if you ask me) is not going to solve any of your problems and would just be empty whining.

However, if you buy more when the price drops that means you are going to end up with some profit and that is the way you could get out of this with less harm done to you and more profit chances when the time comes. That’s the only beneficial method during any of the bear markets that we have faced so far.

when you go into the one of the investment markets, of course, you want to get profit later on. so just hodl if you truly believe on this market. that one day, you can reap your rewards of holding. but if you are not very sure about this market, better look for other assets (tangible ones preferably) if you do want to diversify and make sure you will not be at the losing end if one of them failed your expectations.