Quote from: Red- Beard on January 24, 2014, 10:29:49 PM

Quote from: digitalmagus on January 24, 2014, 09:42:23 PM

*** For a monetary unit to be a globally accepted currency it must have PRICE STABILITY! ***

I'm not so sure about that. Have you seen CAD / USD lately?
http://www.xe.com/currencycharts/?from=CAD&to=USD&view=1Y
Considering we've got $61+ Billion in circulation here in Canada, I would consider our dollar to be anything but stable. -10% over a year is volatile imho.
Besides, no cryptos are mature yet. Once a crypto is completely mined out (in terms of new blocks of coin), then my best guess is that it would be no more or less stable than the CAD or USD.

My layman's definition of 'price stability' infers that street prices of consumer goods and wages remain mostly the same. The value comparison you make here is only with the USD which impacts some % of all Canadian imported goods, but albeit a small overall % (we import most of our widgets from Asia). Sure ~70% of our exports are to the USA and thus the export companies and their employee's wages may be impacted, but again, they are a small % of our total economy.

The $5.00 Starbucks coffee you bought last year, likely still costs $5.00 today ? Likely, your wage is probably still the same or +~2% (CPI)? Stable prices and wages = price stability. When year ago you paid 2000% more for anything priced in BTC than you do today... that's not price stability. Even when compared to 10% devaluation of the CAD vs USD, BTC's volatility is still 200 times in magnitude greater over the same period of time.

You are right in saying that crypto currencies are not mature and this is a catch 22 problem. Until they are widely accepted and massive liquidity exists in the system, they cannot be considered currencies because lack of liquidity = high volatility.... and you can't get them widely accepted quickly because... well, people don't like high volatility currencies ;-)

However, to purposely design a highly deflationary currency (i.e. bitcoin), puts the potential of it being accepted as a currency decades into the future - as you said, after all mining is done. More than likely if bitcoin were allowed to proceed unperturbed by governments, it will cause a global deflationary black hole for all fiat currencies. In other words, everyone will dump all paper money and trade it for bitcoins and the global economy as we know it will collapse. More than likely, governments will shut down bitcoin well before this, whether through legislative means (i.e. bitcoin is now illegal for all businesses to use (aka. China)), or by technical means : TCP port 8333 is firewalled at Tier 1 ISPs - and don't think they can't. At most BTC would only continue to function for black markets.

In regards to Ethereum, I think there's recognition that bitcoin's deflationary model is somehow flawed, although the devs don't offer a thesis for this... but suffice it to say they are taking a significantly different approach closer to our existing Keynesian system. My previous commentary was to suggest that they need more expert brains at work on the economic model to offer justification for what they came up with... else, somebody else will eventually do it better, and Ethereum will eventually be replaced.

And now back to the Ethereum discussion...