Quote from: Barnabe on July 14, 2016, 03:28:36 PM

Quote from: serjent05 on July 14, 2016, 03:20:36 PM

Quote from: ripplehd on July 14, 2016, 09:38:01 AM

we've heard a bunch of times about fiat money and escalating problems. any reason for bitcoin to decline rapidly and all the online wallets closing down how will everyone fear the loss of bitcoins. It can happen because its the problem with real money its causing bitcoin to get blocked halfway.

I think this is the reason why Bitcoin is created, money is produced instantly whenever the government wanted. Thus making it inflationary and resulting to economic crisis. Since Bitcoin has finite number, and the coin produced is designed as how the gold is mine, there is a slim chance that bitcoin will have a fast decline.

Bitcoin may have a finite number, but it's easy to bypass. If banks and companies start using bitcoin massively similar mechanisms than the ones seen today may be created which could lead to an increase of money supply via indirect money creation (set by liquidity ratios for instance).

In that scenario, existing Bitcoin holders will get rich.

Also, if banks, corporations, and governments build leveraged assets on top of Bitcoin (say, by issuing Bitcoin IOUs backed by the 'full faith and credit' of the government,) even though the system is still subject to manipulation by the elites at the core, just because money (Bitcoin) is now a non-state-issued, limited-quantity asset, the pace of asset inflation and all the associated problems will grow slower than under fiat money, over the long term.

This would be similar to the gold standard, when financial busts tended to cause immediate pain as central banks couldn't rescue the system by creating so much money, but, over the long term, financial inflation (with all its perverse economic and social incentives) was also slower than during the fiat era.