4. Bitcoin is inherently deflationary, which is an awful idea if you talk to anyone who knows anything about money
5. Bitcoin is fundamentally backed by pointlessly wasting CPU cycles and wasting energy trying to reverse hashes.
5. Printing paper money wastes way more resources. And how is using energy to create something of value a bad idea anyway? Bitcoin doesn't even require that you use a contaminating type of energy, for all I know you could be hashing with solar energy.
Question for you regarding your reference to forced inflation and consumerism: Do you believe there would be even a temporary economic collapse if the world were to suddenly move to a deflationary currency? If so, how many months/years would the collapse have to last before you would say that the transition to a deflationary currency isn't worth it?
The reason I ask is because while fundamentally I have a lot of problems with our financial system, I've come to the conclusion that historically there were periods of recession that lasted hundreds of years. I just don't feel that my lifetime in a bad transition economy is worth the sacrifice of moving to a "better" financial system. I'd rather just keep the status quo as it slowly degrades to something worse and worse since I think that's the best outcome for me. It's a selfish outlook, but I have to believe it's the outlook of most people and that's why we are where we are right now.
Furthermore, there will be an energy cost to transactions even after no substantial number of bitcoins are mined, since just verifying transactions requires wasteful hashing.
The solar energy part is totally irrelevant--if you happen to have a solar panel sitting around, you could just as easily use it for actual work (and offset coal burning) rather than computing hashes.
Huh? You seriously think Visa/Mastercard are using less energy than Bitcoin?
> Furthermore, there will be an energy cost to transactions even after no substantial number of bitcoins are mined, since just verifying transactions requires wasteful hashing.
You can call it wasteful all you want, but if you don't see the value in creating/maintaining a global framework for storing and exchanging value, then I don't know what to tell you. Besides, you are comparing apples to oranges. Bitcoin is a currency. You can build things like Visa around Bitcoin.
The argument that inflationary expectation is better than deflationary expectation because during period of deflation purchasing stops because 'it will be cheaper tomorrow' is flawed because such periods of deflation are short lived, and the market returns to a price where people are willing to re-enter the market and purchase to gain utility from the goods and services.
Just be careful believing people who "know anything about money" without thinking it through.
For more: http://www.zerohedge.com/news/guest-post-if-you-want-help-po...
http://en.wikipedia.org/wiki/Deflation#Historical_examples
Notice how nothing good ever comes of deflation? That should be a hint. I would be highly suspicious of the unsourced "In Ireland" section:
http://byline.timetric.com/2010/11/25/ireland-deflation-debt...
though there were some upsides: http://marketmonetarist.com/2012/08/14/good-deflation-the-ca...
I'm not against Bitcoin per se, but all this anti-inflation crap is, quite simply, at odds with historical data to the point that it has become essentially "views differ on shape of planet". If economics is to be useful at all, it has no choice but to be empirical, and everything we've ever measured has always told us that deflation is bad.
Perhaps Satoshi simply felt it was easier to implement finite Bitcoins than a constantly increasing supply. I don't think he can be blamed for that. Bitcoin is, if nothing else, certainly intriguing.
> Perhaps Satoshi simply felt it was easier to implement finite Bitcoins than a constantly increasing supply. I don't think he can be blamed for that. Bitcoin is, if nothing else, certainly intriguing.
No, he was against inflation. In the first block of the blockchain, he added a message; it was something about Bernake approving a new bailout for the banks.
USD (or GBP or AUD etc) are deflationary relative to technological items, such as computers. By your theory, no-one should buy such items. In reality, they do.
I think this shows your theory is wrong.
But adding a deflationary currency to an ecosystem that also contains inflationary currencies isn't the same thing as having a deflationary currency be the only currency available.