Quote from: deisik on November 29, 2013, 05:29:49 PM

Quote from: DeathAndTaxes on November 29, 2013, 05:21:06 PM

Or you could just keep your gold and were immune to the inflationary effect. Of course paying with gold was difficult, keeping your gold safe was also difficult. Bitcoin however makes paying direct with Bitcoin easy. There is no need to put you Bitcoins in some bank which will issue fiat currency using it as a reserve. Of course you are free to CHOOSE to do so but others are free to not. If these fiat issued currencies end up inflationary well it will make people less likely to choose that option.

You're right, but in this case you were losing interest which you could potentially earn by depositing your gold in the bank. The same holds true for Bitcoin...

But you just said there would be inflation and the inflation would be higher than the interest. I would simply keep my real Bitcoins and while the nominal number won't change the purchasing power of it will. Your system assumes everyone is stupid and opt for inflationary non-Bitcoin tokens instead of the "real thing". Even if people temporarily did that, the scenario requires them to be stupid over an extended period of time. They would need to see that year in and year out they have a decline in real purchasing power and continue to not act by taking the very easy step of taking their coins out of the bank.

Simple version:
a) Bitcoins in bank = losing purchasing power daily.
b) Bitcoins not in bank = gaining purchasing power daily.
Your conclusion: The vast majority of people will knowingly opt for "a".

Also without a central bank able to print infinite amounts of money and be the lender of last resort many of those banks will fail and when they fail depositors will lose everything. This will further reduce the real return. Net change in purchasing power = interest - inflation - losses.

People didn't opt to deposit gold in banks for interest. People opted to put gold in banks and use gold notes because ....
GOLD IS HEAVY.
GOLD IS HARD TO AUTHENTICATE.
GOLD IS EASILY STOLEN.
GOLD IS HARD TO TRANSPORT SAFELY.

The benefits of secure storage outweighed the cost. Bitcoin significantly mitigates those concerns. The "need" for Bitcoin based fractional reserve banks is less and people have a VERY EASY way to "opt out" ... don't deposit your coins.