Quote from: robkroese on December 21, 2011, 09:48:29 PM

Hi,

I'm working on a near-future sci-fi novel where a virtual currency similar to Bitcoin is used, so I've been doing some research on how Bitcoin works. One question I can't find addressed is this:

What is the rationale for the rate of decline in the creation of Bitcoins? That is, what would be wrong with allowing the supply of Bitcoins to increase by, say, 5% per year indefinitely, rather than maxing out at 21 million? It seems like continually creating more Bitcoins would create a greater incentive for users to remain on the network to process transactions as well as removing some of the incentive to hoard.

Apologies if I'm missing something; trying to get a handle on the concepts. Thanks in advance for any feedback.

I think that no one really knows what works and what doesn't. Bitcoin was created this way so it will stay this way. Other bitcoin-based cryptocurrency could easily be created with a constant increase of supply.