[jnordwick]

I didn't know that. But i also work in HFT (have heard of Hudson River plenty of times) and I'm not sure that really gives any extra expertise.

I say BTC lack economic understanding not from some theoretical view but from some of the almost religious decisions that comes from the project (fixed issue, low tx volume, etc). It is almost like they don't want people to use it for anything important.

But i will search out Alex's posts more often though.

[haakon]

The fixed, pre-determined inflation rate has been part of Bitcoin since its launch, and is widely regarded as one of the most fundamental, immutable rules of Bitcoin, much like "software freedom" is to Debian. It is not something that is widely cited by the Bitcoin community as a problem, and I'm unaware of any efforts to change it. It has nothing to do with Bitcoin Core.

[hendzen]

The fixed supply doesn't really make sense if you want BTC to function as a unit of exchange (rather than a commodity). I won't go in to the reasons why since they have been elaborated on by many other people.

However, the fixed supply does incentivize holders (ahem hodlers) to increase the value of the coin - whether that is by starting companies that use BTC, spamming HN with BTC/Reddit related posts, etc. It's an interesting way of arranging a bunch of people in a sort of distributed boiler room.

That said, once the mining subsidy completely ends (assuming BTC is still actively used then) its possible we will see some calls to increase the supply. Otherwise the transaction fees will need to become huge (or the price will need to rise 1-2 orders of magnitude) to support current levels of mining activity.

[omarchowdhury]

But you do know that a Bitcoin is divisible? A satoshi is one hundred millionth of a single Bitcoin. Why would there need to be an increase in supply to make Bitcoin a unit of exchange if its that divisible? Other than for psychological reasons?

[hendzen]

I do, in fact, know a Bitcoin is divisible.

That however, is irrelevant to its lack of utility as a unit of exchange. In particular, if Bitcoin is "going to the moon" - i.e. expected to always increase in purchasing power superlinearly, why is it ever rational to spend a Bitcoin (or a Satoshi)? This is the problem with hyperdeflation.

[omarchowdhury]

I'm in agreement with you there, there is no rationale to spend BTC in commerce with its current properties.