[leoedin]

But bitcoins do have a use. There's at least a few million dollars a month of value moving through Silk Road.

However, it's not in the interest of users of BTC to use a wildly unstable currency. My prediction is that bitcoin will be replaced at some point by another crypto currency which fixes some of its major flaws - particularly its deflationary nature.

[shawabawa3]

> particularly its deflationary nature.

As far as I can tell, there's no real reason it has to stay deflationary.

At some point there could be a consensus that inflation would be good for bitcoin and they could patch the client to start increasing the new bitcoins per block.

tbh I don't know why it isn't inflationary, if it was you could remove/reduce transaction fees as miners would always have an incentive

[danielweber]

At some point there could be a consensus

In theory there could.

In practice, the vast majority of the bitcoin users are speculators, and will fight tooth-and-nail against changing away from being deflationary.

[rlpb]

Bitcoin users don't call the shots; they have no say whatsoever. Bitcoin miners control the network. What matters for them is their return on mining in BTC, and the exchange rate to their local currency to pay their capital expenses and electricity bills.

If the miners think that they'll get more value out of the system by creating new coins forever, they'll make the change. They have to be careful not to destroy confidence in the system; this will be part of their value assessment.

[maxerickson]

Confidence in the system is more or less exactly the say of the users.

[gnaritas]

> particularly its deflationary nature

Which IMHO is what will kill it; it's just a terrible feature for a currency.

[jpadkins]

why?

[gnaritas]

Currencies are meant for spending, money that's worth more tomorrow than today doesn't get spent, it gets hoarded by investors, it has a built in deflationary spiral. Bitcoin is a terrible currency. The ability for a fiat currency to be inflated is not a bug, it's a necessary feature. The supply of wealth to be traded in the world is not fixed, nor can the supply of the tool we use to exchange it be.

That bitcoins are divisible completely misses the point that prices go up faster than they go down, i.e. they are sticky, and deflation is painful and feeds back into itself leading to a recession. Divisibility is not the correct solution, inflation is the correction solution, i.e. add more money rather than expect all prices to go down to adjust to the supply of a fixed currency.