Quote from: DeathAndTaxes on December 21, 2011, 10:05:41 PM

There is no reason for money supply to keep growing infinitely.

Thanks for response, DeathAndTaxes.

I understand that there's no reason for the supply to grow indefinitely, but obviously there is a reason for the money supply to grow initially, and that need has to be balanced against inflationary concerns. In other words, enough money has to be created (and dispersed) for the system to be viable, but too much of an increase would devalue the currency, undermining the system.

So my question comes down to this: How was it decided that this particular algorithm was the best way to balance those two competing factors? Was some economic principle applied, or was it just a matter of Nakamoto arbitrarily picking an algorithm that would eventually cause the creation of new bitcoins to peter out?

Thanks again.