I'm trying to reach out to those who believe btc or crypto currency may be used to replace our medium of exchange (USDX or other fiat).
Obvious Fact: USDX used to be backed by gold (physical unit with a supply cap unknown).
Obvious Fact: USDX is now unlimited with no backing, and chart shows purchasing power dwindling
Obvious Fact: BTC is not backed by a physical commodity but by a known physical limit of 21 million coins.
Theory: BTC will replace USDX as it becomes mainstream.
My thread isn't meant to discuss why those facts exist/why that theory exists or if it can change, I merely want to know about the fact that BTC is capped, while other Alt's mainly DVC is not capped.
Anyone smart enough to know why a capped coin would be better long term than an uncapped coin?
BTC wants to preserve intrinsic value by creating a supply cap at 21 million at which point you will have to start dividing your btc units, velocity of money cannot decrease drastically or there is a recession. This is an obvious conclusion as to what has to happen at 21 million.
At this point I will introduce:
Obvious Fact: Population growth is not capped
Obvious Fact: More people on earth means more demand for natural resources as basic necessities, and as a result more currency in circulation has to supply the demand for these resources.
Speaking to some people it seems as though the proponents of BTC, who understand that as population grows the demand for currency grows, have this theory that they think is valid:
Theory: At the 21 million cap of BTC dividing the BTC into units as population grows will solve the problem of supply
I think this is totally a unfounded conclusion and would like to have an explanation as to why they think this theory is valid? Namely how does the demand/supply curve link to the notion of dividing BTC into smaller units.
What makes total sense to me is a controlled supply with no cap, a controlled supply would grow as population grows to provide supply as demand increases. Thus my theory:
Theory 1: Devcoin or other uncapped Alt's would provide the security of a hashed network at the same time provide supply as population grows, creating a balance between inflationary and deflationary economic pressures.
Theory 2: Devcoin or an uncapped Alt, would provide an equilibrium at which the demand/supply curve wouldn't adversely affect the price of a resource like BTC would in the long term (BTC Cap limit).
One would have to question the growth rate of the Alt and ask if it is too fast/too slow, or does it matter? Population is growing exponentially and this is why USDx is allowed to go off gold standard which hindered economic expansion, thus higher quality of life at the expense of purchasing power long term. (wages housing prices increase at the other end of the spectrum to create a balance).
If we were to get off our usd standard and move to crypto's it seems to me that an Alt with uncapped supply is the way to go?
I only refer to Devcoin because it is the oldest Alt I know of that is uncapped, it almost as old as BTC as far as I understand it. I'm sure the other benefits of open source community support is a different issue and may or may not decide if this coin or another uncapped coin will be the one to survive long term, but not sure why BTC would survive over one of these.
Discuss below...
Thanks
Jag