bitcoin as a global medium of exchange (was Re: Interesting take on Sanjuro's Assassination Market)

Mike Gogulski mike at gogulski.com
Wed Nov 27 06:12:45 PST 2013


The concern with the current price rise and deflationary aspect seems a
bit short-sighted to me.

The mining reward is algorithmically destined to fall to less than 1
Bitcoin per block somewhere around 2032
(https://en.bitcoin.it/wiki/Controlled_Currency_Supply), at which point
around 99% of all Bitcoins that will ever exist will have already been
mind. In the intervening years, Bitcoin has the potential (I dream) to
draw in most or perhaps all of the global economy. The after-2030 state
then looks like a more or less fixed money supply (99% is mined by 2060).

This is early days. I liken it to the phenomenon of momentary shock
sometimes experienced when one sits on a train, perhaps reading a book,
and misidentifies what is seen out the window as the station suddenly
moving. We're still getting up to speed.

Lodewijk andré de la porte wrote:
--
You're still left with the
same problems though. Unless you can make the coin's real-life value
constant in some way. Best I can come up with is increasing mining payout
with the difficulty. That'll link the value of a coin to the cost of
mining, directly. Meaning you can turn electricity into coin, but not the
other way around. I suppose you'll need demurrage because else the coin
will inflate beyond making mining cost neutral, and the mining rates will
decline accordingly.

Actually.. Why isn't this how Bitcoin worked in the first place? Maybe it
just complicates things too much.

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