On Fri, May 11, 2012 at 6:22 PM, Adam Back <[email protected]> wrote: > ([...] A stable mechanism for > value storage would be a rather useful instrument.)
Indeed, it would be, but in the *long*-term no such instrument is possible *on its own* regardless of how you might construct it. All value storage media depends on there being people willing to use that media for value exchange purposes. Given current demographic trends I think it should be clear that it's difficult to guarantee value stores regardless of their construction. As with all other currency issues this is a political problem. To illustrate this consider a novel [whose title i won't say to avoid spoiling it, though it's a very old novel now] where there comes a point at which humans can no longer procreate. Imagine being a member of the last generation and reaching retirement age with billions of today's dollars in the bank. But what use would those dollars be? None. Nor would bitcoins, gold, or even property be any use. This is an important point regarding Social Security type systems as well. The number of years of retirement that the world can guarantee people depends entirely on the number and/or overall productivity of young people! With total fertility rates plummeting world-wide, life expectancy continuing to improve, and productivity not improving fast enough, it stands to reason that retirement ages must be raised. Borrowing from future generations cannot be done for long if those generations are predicted to be smaller; eventually it becomes impossible and defaults and/or inflation must result. At most a gold standard (or equivalent) can force a default instead of inflation, but losses (and political pressures to socialize them) cannot be avoided. The fact that "value" is always in relation to other human beings with whom you might trade means that the problems of value storage and exchange media are always political problems, and always will be. To me this means that value exchange media are always more important than value storage media. Cryptographic money efforts would be best focused on value exchange rather than value storage. Nico -- . _______________________________________________ cryptography mailing list [email protected] http://lists.randombit.net/mailman/listinfo/cryptography
