Quote from: JohnDoe on July 17, 2011, 03:47:26 PM

The cost of mining BTC will stay equal. The only way that merged mining would be able to devalue BTC is if people start caring more about NMC (or any other currency) and they sell their BTC for it.

I never said it wouldn't stay equal. However, by merging all these other ones into it, you effectively could get 100 different other ones at no cost to you. Why would the average person only want to mine in one currency when they can do it in 100 different ones? By not doing so, you're effectively getting only 70% (assuming BTC are worth 70% of the worth of all 100 currencies) compared to what other people are getting. People wouldn't need to necessarily care about currency X as long as the currency still has a trade value for something with a more widespread purpose (BTC).

However, let's assume that people don't care about all these other currencies. What's going to happen is there will be massive inflation in those currencies due to merged BTC mining and then people will start rejecting those currencies, causing them to fail.

Quote from: JohnDoe

To me, saying that merged mining will devalue bitcoins is akin to saying that printing more yens will devalue the dollar.

No, this is akin to saying instead of just being able to print more yen, you'd be able to print JPY, USD, CAD, AUD, ZWD, etc at the same cost in resources. People that have JPY, USD, CAD, or AUD will be in jeopardy of devaluation and eventually a failed currency. People with ZWD won't care as much because it's basically worthless and failed already. Because all these other currencies are being printed at the same time as JPY, people can effectively use the other currencies as substitutes for JPY, causing effectively an increase in the JPY money supply and driving its worth down along with all the other printed currencies.

Quote from: nodemaster

I'd agree to the devaluation arguments if (and only then), when we could mine for new coins endlessley. But this is not the case. After for example all bitcoins have been mined merged mining assures, that there are still many people mining for perhaps another blockchain making sure the bitcoin blockchain is still strong.

This is effectively what can happen. Instead of being limited by the 21m coins, you're creating these other pseudo-BTC. With enough time and as long as they haven't failed, there will be a tightly knit relationship between those currencies. Also, BTC won't reach its limit for another 100 years, and that's plenty of time for it to fail.

I'm not saying this will happen but I think it's a very likely scenario. However, I'm fairly certain that what will come out of this will be a lot of failed currencies that might have had a chance to exist if they weren't merged. I don't think there has ever been a time when you could print 100 different currencies by only printing 1 so there isn't anything directly related to compare against. I see pseudo-BTC will come out of it (thus, leading to devaluation and a higher risk of failure) while you and JohnDoe don't. What's certain though is that all currencies that inflate beyond sustainability end up in failure. IMO, there is a lot more downside to merged mining than upside.

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