On Tue, 2008-11-04 at 06:20 +1000, James A. Donald wrote:
If I understand Simplified Payment Verification
New coin issuers need to store all coins and all recent
There are many new coin issuers, as many as want to be
issuers, but far more coin users.
Ordinary entities merely transfer coins. To see if a
coin transfer is OK, they report it to one or more new
coin issuers and see if the new coin issuer accepts it.
New coin issuers check transfers of old coins so that
their new coins have valid form, and they report the
outcome of this check so that people will report their
transfers to the new coin issuer.
I think the real issue with this system is the market
Computing proofs-of-work have no intrinsic value. We
can have a limited supply curve (although the currency
is inflationary at about 35% as that's how much faster
computers get annually) but there is no demand curve
that intersects it at a positive price point.
I know the same (lack of intrinsic value) can be said of
fiat currencies, but an artificial demand for fiat
currencies is created by (among other things) taxation
and legal-tender laws. Also, even a fiat currency can
be an inflation hedge against another fiat currency's
higher rate of inflation. But in the case of bitcoins
the inflation rate of 35% is almost guaranteed by the
technology, there are no supporting mechanisms for
taxation, and no legal-tender laws. People will not
hold assets in this highly-inflationary currency if
they can help it.
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