Re: DEAR SATOSHI, did you WANT an UNSTABLE coin, or why the harsh 4-YEAR HALVINGS?
Well, we can say "we just don't know what would happen", but the most fundamental economic principles of supply and demand are at play here.
The supply of new bitcoins today is 1800. After 2020, they'll be just 900 per day. That suddenly halved supply (supply shifts left in the graph below) would meet higher demand (buy) prices, as there will be a relative shortage.
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The supply of new bitcoins today is 1800. After 2020, they'll be just 900 per day. That suddenly halved supply (supply shifts left in the graph below) would meet higher demand (buy) prices, as there will be a relative shortage.
when Satoshi created bitcoin and set the supply distribution plan the way it is right now, he was thinking about controlling the supply and the way it is going to be created. and he had no concerns about the price.
besides what you are proposing is only an assumption. who is to say that if we actually had that method of distribution with block rewards reducing with a fixed rate every block, then price could be stable?
as I always say price is volatile because the market is pretty small and price is only determined on exchanges. so when someone dumps a large amount of bitcoin on exchanges the price drops drastically. so whether block reward is reduced every 4 years or every 10 minutes the exchanges will still remain small.
besides what you are proposing is only an assumption. who is to say that if we actually had that method of distribution with block rewards reducing with a fixed rate every block, then price could be stable?
as I always say price is volatile because the market is pretty small and price is only determined on exchanges. so when someone dumps a large amount of bitcoin on exchanges the price drops drastically. so whether block reward is reduced every 4 years or every 10 minutes the exchanges will still remain small.