[gwbas1c]

I think we'll get viable cryptocurrencies when the people designing them understand the basic and well-known economics of how money works; AND, when basic scalability problems are solved.

It's well-known that deflationary currencies do not work. That is a severe problem that must be solved before cryptocurrency is viable. Limiting the total number of coins means that the currency is deflationary. Furthermore, our current system of loans is based on printing money and requiring payback with interest. That won't work with a limited number of coins.

It's also well-known that blockchain can't scale to handle the volume of transactions that the Visa network handles.

Most of the USD is already electronic. Could we get something cryptocurrency-like with minor improvements? Probably. Will the "crypto" community like it? Probably not, because the "crypto" community knows nothing about how real economics work.

[stale2002]

> It's well-known that deflationary currencies do not work.

Deflationary currencies have worked out fine for literally thousand of years.

Inflationary currencies are a modern concept, with their own advantages AND disadvantages.

I'm surprised this is such a sticking point for people, and that they think the system will literally collapse, when we have centuries of history proving otherwise.

> It's also well-known that blockchain can't scale to handle the volume of transactions that the Visa network handles

Visa level only requires gigabyte level blocks. And that is well within the realm of what many cryptocurrencies are trying to accomplish.

Not Bitcoin core, though, obviously.

Blockchains can scale arbitrarily. They come with some disadvantages, for sure. But at visa levels, they are disadvantages of a certain scale, that matter to people who care about decentralization, to an insanely high degree.

For the vast majority of people, who are willing so compromise very slightly on matters of trust and decentralization, visa scale blockchains work fine.

[Zarath]

Here's a thought experiment. Satoshi (who we'll pretend is Hal Finney) owns 10% of Bitcoin, we assume he's lost the keys. Bitcoin becomes a global, and universal currency as we slowly colonize the entire galaxy. Satoshi has been unfrozen from his cryogenic sleep, and remembers his keys. Satoshi now owns 10% of the entire economy of the galaxy.

Seems ridiculous right? Satoshi contributed nothing for hundreds or thousands of years yet still owns the same fixed portion of the total economy.

[stale2002]

This is no different than of someone just happens to own a whole bunch of silver, and the price of silver goes up in the future.

Deflationary currencies are not a new thing.

Lots of things that have all the same properties as a currency already exist right now, and have existed for thousands of years.

There are already lots of limited supply things in the real world, and someone can already just buy a whole bunch of it, in hopes that the price will go up in the future.

And if you don't like the properties that a certain currency has, then you can feel free to use a different one.

Personally, though, I prefer using currencies that aren't guaranteed to decrease in value in the future (which is the definition of inflation).

Which is why most of my assets are not USD dollars, they are things like assets, stock, and other investments.

And, as for your specific example, I see no reason to believe that crypto will go up in value, over the LONG term, faster than investments. So in your hypothetical, Satoshi, IMO, would make less money than if he had invested it in an index fund.

Such is the power of compound investment.

You are also using a wired metric. Which is percentage value of dollars.

There are only 1.2 trillion dollars in circulation.

Do you have a problem with the fact that Jeff Bezos could own 10% of all USD in the world, if he wanted it?

We already live in your "ridiculous" world, sir.

[nivertech]

> This is no different than of someone just happens to own a whole bunch of silver, and the price of silver goes up in the future.

Silver is a natural scarcity. Bitcoin is an artificial scarcity. To get 10% of Earth's silver supply one will need to invest a lot of equivalent real-life resources. Satoshi just very cheaply early-mined 1M bitcoins.

> Deflationary currencies are not a new thing.

Commodity-based (i.e. based on natural scarcity) deflationary currencies are not a new thing, but "cryptocurrencies" are based on an artificial made-up scarcity, not even on a math-based scarcity (PoW math puzzles used for leader election only).

[berberous]

1. Not all cryptocurrencies are deflationary. Some have inflation built in.

2. Scalability will be much improved over the next year (see: lightning network, plasma, raiden, sharding, alternate consensus systems like dPOS, etc.; for a deep dive, this is a good place to start: https://multicoin.capital/2018/02/23/models-scaling-trustles...).

[kenpomeroy]

> It's well-known that deflationary currencies do not work.

This is laughable. Your definition of "work" includes a presumption that we all want the government to control and manipulate the economy without regard for the interests of the individual.

Ask any individual citizen whether they would prefer that their savings increased in value or decreased in value, and I suspect they'll have a different answer as to whether a deflationary currency "works" for their purposes.

[AnimalMuppet]

Sure, if you change the question you can get some people to change the answer. But if you're going to be fair, be sure to also ask what they want to happen to the loans they owe money on.