Quote from: HeRetiK on July 25, 2019, 12:08:07 AM

Fair enough.

However I'm not sure whether satoshi expected the project to be a success to begin with

Arguably the jury is still out whether Bitcoin is a success. Sure it got nice purchasing power, but in the grand scheme of things Bitcoin is still little more than an experiment and cryptocurrencies have yet to grow up. For all we know deflationary digital currencies may be a dead end in the long term and inflation is the way to go after all.

Well, Hal Finney and satoshi did at least consider the possibility of total success as early as 2009:

Quote from: Hal Finney

As an amusing thought experiment, imagine that Bitcoin is successful and
becomes the dominant payment system in use throughout the world. Then the
total value of the currency should be equal to the total value of all
the wealth in the world. Current estimates of total worldwide household
wealth that I have found range from $100 trillion to $300 trillion. With
20 million coins, that gives each coin a value of about $10 million.

So the possibility of generating coins today with a few cents of compute
time may be quite a good bet, with a payoff of something like 100 million
to 1! Even if the odds of Bitcoin succeeding to this degree are slim,
are they really 100 million to one against? Something to think about...

Hal

Quote from: HeRetiK on July 25, 2019, 12:08:07 AM

That being said, I absolutely agree with you that the first cryptocurrency to enter the stage had to be of limited supply. Otherwise it would have never appealed to the speculators and remained an obscure little toy for nerds and anarcho-capitalists.

I'd even argue that the abrupt supply drops (ie. halvenings) as opposed to a steady decline in issuance played a major role in generating a hype cycle; with the duration of 4 years between each supply drop hitting a sweet spot of reminding people that Bitcoin is still alive and kicking just when they had forgotten about it (ie. the perfect recipe for FOMO).

I believe that it's impossible to create a decentralized cryptocurrency without the deflationary model because it doesn't allow for price discovery, so you would need central planning. This was also considered in Hal and satoshi 2009 exchanges:

Quote from: Hal Finney

It's interesting that the system can be configured to only allow a
certain maximum number of coins ever to be generated. I guess the
idea is that the amount of work needed to generate a new coin will
become more difficult as time goes on.

One immediate problem with any new currency is how to value it. Even
ignoring the practical problem that virtually no one will accept it
at first, there is still a difficulty in coming up with a reasonable
argument in favor of a particular non-zero value for the coins.

Quote from: HeRetiK on July 25, 2019, 12:08:07 AM

How much of it was luck or calculation is anyone's guess, but I think it's safe to say that satoshi had at least some intuition about which values to choose. Intuition is hard to put on paper though. To that extend Bitcoin might merely be an experiment to empirically verify the issuance parameters Wink

I do believe that opting for limited supply was mostly a matter of principle though. After all Bitcoin was at least in part a response to the questionable monetary policies of the world's central banks and governments.

I think he tried to model an emission curve similar to gold. We will never know how much luck was involved on things turning out this way (at this state, it's fair to claim Bitcoin a success already IMO). I tend to believe that satoshi considered every possible scenario unfolding given the initial total supply and block reward values, long term, also including blocksize. He decided to left when it was clear that the system was indeed set in stone and he wasn't needed anymore. That, coupled with the fact that Gavin started dicking around with the CIA around that time, must have caused his departure.

Quote from: pooya87 on July 25, 2019, 03:32:59 AM

Quote from: pereira4 on July 24, 2019, 06:35:07 PM

That's what he did, what I argue is that you cannot leave it to completely arbitrary numbers and expect the project to be a success. I doubt satoshi punched the keyboard and whatever numbers were typed that's what he used for total supply, block rewards and whatnot.

If for instance he decided to set the thing similar to Freicoin, which was inflationary and introduced the idea of "digital demurring", Bitcoin would have never caught up as a store of value, which coupled with the blocksize limitation, it would have been a failure. In fact, I suspect satoshi knew 1MB blocksize was set in stone years before it even was brought up by anyone else. The way I see it is that those things are "hard coded" in practice, but not mentioned in a explicit way. He was aware on the game theory that would unfold.

you have to remember that bitcoin has always been an experiment and practically the first of its kind. so you can't expect everything in it to be absolutely perfect. Satoshi considered a lot of things including the supply and i'd say 21 million was a good decision.

as for block size i don't think he had any plans from the beginning. the initial limitation had nothing to do with block size but it was with the database (implementation limitation) and then the actual limit was placed in 2010 to prevent spam

My point is that he may have realized that what was initially a temporal protection measure against spam, would become a variable that would vary as much as the total supply, in other words, never.