I believe that if there ever becomes a consensus that Bitcoin?s inflation
parameters were a show-stopper for the Bitcoin economy, that the power to
correct it lies with merchants, who would vote for changing the rules. I
believe they would do this not by changing Bitcoin, but by accepting, in
parallel, a brand new alt coin that reflects the consensus as to how the
inflation should be. I believe such an alt coin would have its genesis at
around the time that consensus moved toward accepting inflation, rather
than adopting the seignorage of some other alt coin out there today.
The economic parameters of Bitcoin are fixed in stone forever. Adding a
monetary authority to Bitcoin is impossible and undesirable because the
implicit contract of Bitcoin is that there would finally be a currency in
which no one could mess around with. It would betray all prior holders.
But these are ideas everyone is free to experiment with in new altcoins. If
the lack of inflation in Bitcoin ever becomes a problem in day-to-day
usage, such a parallel chain could become the de-facto cryptocurrency for
spending. Or just maybe fiat already works well enough there...
How do you propose to use Bitcoin on a week-long vacation or for life in
general, when it's value constantly swings up and down? Or for the average
person's paycheck to swing up and down in value every week? Awfully hard to
budget. There is also a catch-22, no altcoin can gain acceptance because
the infrastructure for Bitcoin already exists, but without infrastructure,
no altcoin can gain acceptance. Furthermore, the average merchant or
consumer lacks the idealism or knowledge to bring about such changes in
Bitcoin. It's a lofty idea that the average person will bring about such
change when they don't bring about such change already in their own lives.
It is ironic considering that there's no Bitcoin chamber of commerce,
just a few programmers in a development mailing list who direct the future
of Bitcoin, and thus these merchants you speak of have little to no voice
what so ever, with a few exceptions of merchants who do subscribe to this
What I am proposing makes sound economic sense. It is the only way to fix
the speculation crisis.
Just ask an economist.
And the economic parameters of bitcoin are not fixed in stone. If there
needs to be a change, it will be messy but it could happen.
Besides, using Austrian precepts of inflation blurs the fact that deflation
will still be possible under my proposal. Although amusingly enough
Austrian-defined inflation is still occurring within Bitcoin, in fact
faster then desired since blocks are being processed every seven minutes
now as opposed to ten, and it's quite likely when 28nm ASIC miners are
released that blocks will be processed every five minutes before the
difficulty is adjusted again.
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