Post
Topic
Board Economics
Re: Deflatory nature of Bitcoin - the problem and a possible solution
by
cr1776
on 04/01/2014, 20:04:51 UTC
...
This would be a hard fork and you would likely get very few people to switch to something that guarantees they will lose a certain amount of value each year. ...

As for people losing money within the system I'm proposing; either you are deliberately oversimplifying or you just don't understand economics. Given the fixed final amount of Bitcoins on one side and the ever growing world economy, Bitcoin is bound to be at least slightly gaining value, prices of goods in Bitcoins are bound to be going down and exchange rates to other currencies are bound to constantly rise. If the yearly fee rate would be smaller or equal to the appreciation rate, nobody would lose their money.

Assume I have 10 bitcoins today. Ten years from now I go to spend them and have the 2% annual "fee" taken. I can only spend 8 bitcoins. I have lost twenty percent of the bitcoins I owned. That is a loss of value.  If, as you stated, bitcoin is only a currency the exchange rate is irrelevant.

Anyway, I'll be interested in seeing how this alt-coin turns out. I dare say that most people will look at the calculation above and do it the same way and stick with the real bitcoin, not this proposed fork.

Good luck forcing the majority of the network to do so if they disagree with a fee that erodes the number of bitcoins they own over time like inflation does whether or not the fiat value increases or not.