Post
Topic
Board Speculation
Re: Bit coin is on a down hill slope
by
interlagos
on 17/12/2014, 16:28:04 UTC
2009-2013 has all been good years, precisely because all the new money coming in, plus Bitcoin marketcap was tiny back then, so the 10% of something tiny, is still tiny, new money easily overwhelmed the 10% PoW mining tax.

At the end of 2013, Bitcoin marketcap went up big time. Now 10% is not so tiny, it's a pretty large amount of money. Therefore 2014 new money was not able to balance out the 10% PoW mining tax, and we are seeing Bitcoin going down in value.

Why would you call emission rate a tax?

When the block reward was 50 coins the inflation was higher than 10% per year, it gets lower and lower with every new halving. Bitcoin was designed to distribute coins over the course of several decades on a permission-less basis. All coins (before they are mined) are guarded by an algorithm, as opposed to any form of private money (including fiat) guarded by a group of people.

It might be cheaper to maintain an electronic money system, where people are at the center of its security model, but you will get all the downsides of that as well.