Quote from: Miz4r on May 17, 2013, 11:01:51 AM

Quote from: myrkul on May 17, 2013, 05:31:45 AM

Quote from: Le Happy Merchant on May 17, 2013, 05:24:22 AM

I would like to hear an explanation for how interest can work in conjunction with an inflexible money supply.

Will mine do?

Put simply, Moneylenders do not just hoard all the money that they get back. Yes, it's entirely possible for someone to borrow BTC20MM and end up owing BTC36MM. This does not mean that they will be unable to pay it, necessarily, just that there will have to be at least BTC15MM that goes through his hands (and back to the moneylender) twice. While he's paying his tremendous debt, the economy is chugging right along, and he's providing value to that economy in order to get the BTC that he owes.

Sounds like a pyramid scheme to me. The rich (big lenders) get richer, and the poor get poorer by borrowing and paying interest on top of it. Eventually this will shift most of the BTC in the hands of a few, just like we see now with fiat money. I don't think FRB and charging interest is in our best interest if we want a sustainable economy and future.

I'm not sure why the Bitcoin Faithful feel they need to present Bitcoin as the universal panacea. I'm hoping Bitcoin becomes a successful currency, but claiming that it's the Final Solution to money is silly. The fools will be parted with it, hoarders will hoard it, tax dodgers will withhold it as taxes, and Christians will keep saying "Render unto Caesar the things that are Caesar's, and unto God the things that are God's" (well, a few, anyhow).

I'm not sure how the lending problem is solved in deflationary currency. If there's a total of 21 coins in the entire system, and all of those coins are loaned at 1% yearly interest, at the end of the year the borrower is obligated to pay back 21.21 coins. The borrower won't have 21.21 coins, no matter what he does -- only 21 coins exist. This problem is trivial in fiat -- print moar!
Lending at 0% is not a silly notion, and we don't have to reach for high morals to justify doing it. Lending, even at 0 profit, does a few things i can see offhand: It creates social bonds, insures stability & maintains the value of your currency (if you hold all the bitcoinz, they're worthless). So i'm sure solutions exist, just not so much in this thread.