Quote from: Simon Barber on July 28, 2013, 02:59:08 AM

Quote from: Luckybit on July 27, 2013, 04:20:31 AM

In my opinion Bitcoin being deflationary does not automatically lead to it being a moral hazard. I think it's a possibility but it's not the result of the cap or it being deflationary. I don't consider it moral hazard because the early adopters are also the ones taking the biggest risks if government decides to crack down. In order to actually defend something like Bitcoin from the established players within the industry who would seek to politically and socially destroy it (by claiming all Bitcoiners are child pornographers, druggies, terrorists, etc), there must be deflation which rewards people for holding Bitcoin. This makes Bitcoin sticky, and only by making it sticky can it defeat increasing social stigma.

If enough people get rich because they saved Bitcoins, those people will have stories to tell which wont involve them being a child pornographer, terrorist, drug dealer (or user). Those stories are critical for the success of any currency. Just as the US dollar relied on the story of the American dream where anyone could get rich if they just work hard, only with Bitcoin it's currently true while with the dollar at this point it's a blatant lie.

I do agree with you on the idea of organic inflation but I don't think we will need that for many years. Netcoin intends to do what you're talking about by building a democratic mechanism into the design. These mechanisms can allow for stakeholders to eventually vote on the inflation rate.

Please have take a look at Netcoin http://www.netcoin.io/wiki/Netcoin:Community_Portal
and if you have time give a review of some of the proposed features, in particular the features I proposed:

Having a stakeholder based voting mechanism to determine money supply is a very interesting idea. The exact process by which this works is critical, to avoid gaming of the system. The biggest issue with alt-coins is that the network effect applies very strongly to moneys in general - i.e. the more users a currency has, the more useful it is. In the history of technologies with strong network effects there are very few (if any?) cases where a later technology that only improves in a small way compared to an earlier one takes over. I believe that only something massively disruptive could displace bitcoin.

I'm not too worried about deflation - deflation in technology products is well known (PCs have been decreasing in price for years), and it doesn't stop people from buying them. The limited liquidity has made bitcoin particularly susceptible to momentum driven bubbles, and I look forward to higher volume and more derivative products to help stabilize the value. This will help adoption.

Enough for this thread - getting dangerously off topic!

Myspace had the network effect but it was replaced by Facebook. Myspace had superior technology. I think the threat to Bitcoin is stigma and reputation, it's associated with Wikileaks, Silk Road, and the dark net. It's reputation may allow for other coins to catch up merely because those other coins have no reputation and can be offered as "underlying technology" or pure protocols. Bitcoin can adapt by going stealth, becoming an underlying protocol instead of being marketed as "Bitcoin". Amazon coin for instance could be powered by Bitcoin without anyone knowing it. The ideal situation in my opinion is the PaySwarm approach which is to build cryptocurrencies into the web standard itself and then not set Bitcoin up to be the single dominant cryptocurrency but to let the user choose which underlying cryptocurrency to use.

If you don't want to use Google as the default search engine there is Bing, Yahoo or whatever. I realize we are getting off topic, I apologize for that.