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Author Topic: A huge test of the majority peoples feeling about deflation  (Read 2338 times)
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August 02, 2012, 06:53:30 PM
 #21

Sure, it could be broken. But if we accept Bitcoin is destined to be a "success" as a currency we have to accept the fact that policy-wise it'll ultimately succumb to the nature of man and his government.

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August 02, 2012, 07:19:48 PM
 #22

Sure, it could be broken. But if we accept Bitcoin is destined to be a "success" as a currency we have to accept the fact that policy-wise it'll ultimately succumb to the nature of man and his government.

Fair enough. Let's wait and see. Except, I won't be waiting doing nothing, I'll be using Bitcoin.

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August 02, 2012, 09:03:57 PM
 #23

After block reward is 0, miners will process payments for tx fees. more blocks = more fees. They'll have little or no incentive to do single transaction blocks, but there will be plenty of incentive to process transactions.

As to government mandating fees in clients.... That's just silly. They tried a similar strategy with Napster... and now nobody actually uses Napster.

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August 02, 2012, 11:23:21 PM
 #24

The only thing that matters about the deflationary aspects of Bitcoin is that eventually miners will have little to no incentive to mine. Every non-miner Bitcoiner thinks fees are going to be enough but they won't be and all the smart miners know this. Think about it, imagine you're someone who is creating Bitcoin and you want to encourage people to use it, you have the problem of if you make it inflationary then no one will hoard it, so it will never get used or become valuable enough to use, and if you make it deflationary it will get hoarded, but sometimes the speculation is going to create bubbles that make it unusable and eventually just a handful of people will own large amounts of it that they are unwilling to sell.
Can you elaborate on this point? I don't think what follows the highlighted part explains why miners will have no incentive to mine.

Quote
Also, because it is deflationary, at some point you know the miners aren't going to be willing to mine anymore, yet they will, having been involved in large monetary purchases of the currency, have an immense amount of sway over politicians.adopted.
What is your reasoning for thinking this is the case?

I completely agree with you that governments will have huge incentive in trying to control Bitcoin. Controlling the monetary unit of a country is a very effective way for a government to finance itself. Let's hope they're as unsuccessful doing this as they have been at deterring piracy though.
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August 03, 2012, 02:50:04 AM
 #25

The only thing that matters about the deflationary aspects of Bitcoin is that eventually miners will have little to no incentive to mine. Every non-miner Bitcoiner thinks fees are going to be enough but they won't be and all the smart miners know this. Think about it, imagine you're someone who is creating Bitcoin and you want to encourage people to use it, you have the problem of if you make it inflationary then no one will hoard it, so it will never get used or become valuable enough to use, and if you make it deflationary it will get hoarded, but sometimes the speculation is going to create bubbles that make it unusable and eventually just a handful of people will own large amounts of it that they are unwilling to sell.
Can you elaborate on this point? I don't think what follows the highlighted part explains why miners will have no incentive to mine.

Quote
Also, because it is deflationary, at some point you know the miners aren't going to be willing to mine anymore, yet they will, having been involved in large monetary purchases of the currency, have an immense amount of sway over politicians.adopted.
What is your reasoning for thinking this is the case?

I completely agree with you that governments will have huge incentive in trying to control Bitcoin. Controlling the monetary unit of a country is a very effective way for a government to finance itself. Let's hope they're as unsuccessful doing this as they have been at deterring piracy though.

I wouldn't say Bitcoin is currently deflationary...in fact, the _inflation_ rate (as measured by the amount of new BTC created as a % of circulating BTC) is ridiculously high -- eg, how many coins existed 1 year ago cf. today?

If you measure inflation by how much stuff costs, then every time the ticker goes up, bitcoin is deflating...but that's happening despite massive % increases in the coin supply...if governments tried to pull that of, their currency would lose tremendous % value.


Hardfork aren't that hard.
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