Quote from: Accumulate on April 06, 2013, 09:01:38 PM

The bitcoin protocol is limited to 21million-ish bit coins. This is done to simulate scarce resources, such as oil. The first barrels of oil are easy to mine, yet the last barrels of oil are incredibly tough to mine. As the cost increases, and more computing power is required, the price of the bitcoin rises (not the only factor). The solution to this is that you can use fractions that represent smaller amounts that we're used to pay for smaller purchases such as a sandwich.

My question is, what does it mean for the bitcoin user when the number of decimals is expanded? What if we end up paying 0.000000000000000001 bitcoin for a sandwich? Is a deflated market not just as bad as an inflated market? The people that get in first will have the biggest supply of bitcoins, and they will rise because it will cost more energy to harvest new bitcoins. That means the system will either fail prematurely (it won't), or the people who got in first will become the technocrats of the bitcoin economy. The problem of the "1%" or winner takes all problem leads me to believe that the bitcoin is flawed, (less, but different flaws compared to regular currency).

If, in a hypothetical world, the bitcoin would be the world wide currency, then those that get in early and do not spend, will be the millionairs of the world, and those who start late can hardly afford paper to wipe their ass with.

What am I missing here?

The rich early-adopters will be more spend-happy later and still stimulate the economy. In fact, you have much more class mobility without inflation, since inflating currency is used to limit class mobility.