Post
Topic
Board Economics
Re: Inflation and the end of 50 BTC per block (from technical discussion)
by
kiba
on 16/12/2010, 06:09:56 UTC
There is no incentive for early user to promote your inflationary currency, appammato.

There's no incentive for saving if it is eroded repeatedly by inflation.

Your value is not being eroded.  Your coins represent your percentage of work put into the block chain.  That ratio will never be broken.

Let me recalibrate my understanding.

Every computer will be essentially generating bitcoin. Essentially, it is hyperinflation. However, this distort economic calculation to a really bad level. Everything you invest in looks like a profit, when it's actually not.

There is still no incentive to save, because your saving is becoming worthless every single day due to inflation. Basically, it rewards the biggest generator at the expense of everybody else, except those who borrows money.

In the bitcoin economy, the generators still benefit disapportionately, but it will also benefit those who save. In other words, everybody who save win, except those who borrows money.

Investors in business will be forced to be more conservative or efficient at finding economic opportunity.