Quote from: Billy3 on April 03, 2013, 03:41:27 PM

Disinflation has been covered to some extent. What would an economy look like if the only currency was one with built in deflation.

Would people live in smaller homes since their currency would generally appreciate relative to their home? Would companies need to outperform the general level of productivity increases and population growth in order to get their first dollar of investment capital? I believe that if the entire word used only a deflationary currency then deflation would be a function of productivity increases, population increases and the shrinking of the supply of currency (e.g. lost passwords); is this a correct view?

What other implications/problems or benefits are there with a potential worldwide adoption of Bitcoins and a ubiquitous rejection of fiat currency?

As compared to a stable purchasing power money, it wouldnt as accurately reflect the will of consumers in their relative preference for savings vs consumption. It would skew it in favor of a higher savings rate than they would have otherwise practiced. In my opinion its better than the opposite but not as good as a stable currency.

also it would incent people to invest in money, which is a non productive asset. It would be much better if people invested in capital instead.