Wow deisik, you surprised me. Your two most recent posts were astute. Indeed the First and Second Industrial Revolutions. And now we are in the First Computer Revolution which is maturing towards the coming Second.
Goldbugs want only the yang and want capital to be absolute.
The most productive period per annum in the history of mankind was 1871-1913, the time of the gold standard. (Disagree?)
- Money supply was not only bullion, it was augmented with
real bills. (Real bills can be implemented with bitcoin, if bitcoin is the quote currency.)
- Debt was kept in check by the natural mechanism as debt was not money, only bullion was (and real bills acted as money without strictly being that).
Exactly. No one could print the bullion for free, thus no one could bailout the private banks. Thus corrections were frequent and thus the system was much more optimized and annealed (less Antifragile if using Taleb's math). Then the central banks were created to deal with the crisis caused from World War I when Europe's socialism imploded, so then the base money became fiat. But the problem with Bitcoin is that it is MUST become cartelized due to the transaction withholding attack and the loss of coin rewards, so therefor the base money (if Bitcoin) will be fiat again as
I explained upthread on this page.
Note the bullion was not the dominant (most accepted) money. The receipts were (no need to assay). There
can't exist widespread expansion of debt with bullion as money. If capital is absolute, e.g. bullion is the ONLY money, then society declines into the abyss of a Dark Age.
So yes there must be a meaningful (5% per annum at least) expansion of the money supply, not just a (roughly) static number of BTC. It can happen from writing receipts for fractional reserve BTC and using those as money, or it can happen with an altcoin that has an expanding money supply. Or both. Either one or both could help mitigate the dystopian outcome for Bitcoin concerning relative impoverishment of the masses, but neither deals with the dystopia that Bitcoin is designed to become cartelized and thus morph into the government's coin.
I prefer the non-fractional reserve, expanding altcoin money supply option, because it is more honest and transparent on the public decentralized ledger. Whereas, private entities (opaquely or via government oversight) printing fractional reserve receipts (IOUs) is inherently unscrupulous.
P.S. 5% per annum coin rewards are not a threat to the coin's appreciation. Bitcoin is at roughly 11% now and the price is rising astronomically fast. With CPU-only mining, you would be getting more people into the coin to match the 97% gas diffusion distribution of wealth in society, thus a large market penetration and better future for the coin.