Quote from: ascent on June 22, 2011, 07:28:43 PM

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Yes. But I would say that the third bullet need not be just one wallet. Collectively, the unknowns becomes greater over time, and that leads to the fourth bullet.

It seems to me that a well designed system would attempt to maintain as relatively constant over time the dynamics of the system. By that, I mean, behavior. I am in no way implying that the valuations should be constant, only that, collectively, valuations made today, or at any point in the future, no matter how far, are made with information that is relatively uniform in quantity. Granted, some noise and fluctuation in the quantity of information is expected. But the system should not be designed with the built in guarantee that uncertainty will increase over time.

The idea is interesting, but I'm not convinced that the uncertainty will ever be large enough to overcome the system.

My reasoning is this. Lets take a thought experiment where someone suddenly appears in the near future with 11 million coins. What would the impact be? Well if he does nothing with it, then there is no impact. If he attempts to sell all of it, inflation occurs and the prices of items will rise as more currency floods the market. If an attempt to flood the market occurs then the currency will spread around until an equilibrium is restored. What happened the other day with mtgox was an aberration of an immature market place. Rapid fluctuations should have placed a freeze on the market so that a reason for the change could be determined. I can only imagine a future where bitcoins are more common that there will be far greater regulation in exchanges and market places over what goes on.

And the further out I extrapolate the greater the discrepancy may be, but I can never see a great enough of a discrepancy to be concerned. Because I mentally always come back to the thought that the market will adjust.