Quote from: pjce on June 22, 2011, 12:37:36 PM

Gresham's law only applies if the government forces the same value on the "good" and the "bad" money.

I think it applies here too. Assume a shop sells a gadget for USD or BitCoin. What would you use to pay ?

In case you understood BitCoin's deflationary nature you would use USD and hoard BitCoin.
In case you did not understood BitCoin you would pay with USD since you have no BitCoins.

No matter you use USD. This is why I do not see BitCoin picking up for trade.

To encourage trade and discourage hoarding we might need to use either inflation or demurrage. We know and do not like inflation, rule that one out for now...

Demurrage means a block created yesterday would be accepted for less than a block created today. If parameters are chosen right block creators, who contribute to the function of the system would make up for this devaluation. Success rate of mining would have to be aligned with demurrage and total amount of money in circulation remains constant, favors those who invest into the system, until they keep doing it, others are encouraged to spend it.

This would also end the disproportional reward for early adopter, foster trading and allow hoarding only if aligned with CPU power to keep up with demurrage, that is again common interest.

I assume above arguments are not unknown to some seniors here, please tell me if and why they were rejected at design ?