Quote from: Anon136 on April 28, 2013, 03:39:17 PM

Quote from: bitchess on April 28, 2013, 03:36:50 PM

Quote from: Anon136 on April 28, 2013, 03:27:55 PM

Quote from: Wekkel on April 03, 2013, 05:23:21 PM

Bitcoin would continue to appreciate to infinity while an economy would shrink because nobody spends.

what if satoshi is an alien sent from his planet to conquer the earth and bitcoin is basically.... like a memetic virus created to destroy civilization with a tulup bubble that never crashes, it just inflates and inflates until everyone dies.

that alien will fail because btc would simply never reach widespread use and everone continues to use fiat.

the endgame with a deflationary currency is that its value grows exponentially and then explodes to zero. just like tulip mania.

this might be why btc is so volatile these days.

Anyway it's not at zero now because the jury is still out on if btc can address the fixed 21million supply in 2140. it might be addressable by instituting a fractional reserve/lending system. of course, the ability to create one in a decentralized environment has yet to be proven.

rofl. Sure the deflationary nature creates wild swings but thats only because speculators have no experience with a deflationary currency. They will eventually learn how to price this stuff in. and sure bitcoin may explode into a value of 0 a hundred years from now but so what, think of how many trades it will have facilitated by then.

how do you price a deflationary currency? let's be very clear with an example

For simplicity sake, it is defined to rise 3% in real value each year. how many apples would you trade for it today? it is defined, that you'll be able to buy more apples in the future. conversely would anybody ever accept a 0% interest loan from you? in short, you wouldn't trade, you wouldn't lend, you would stop transacting, and that would create a reinforcing feedback cycle, then nobody transacts at which point the ccy is explodes to 0.