Topic: Can someone smart teach me the concept of fiat currency vs. virtual currency? (Read 3701 times)

We're heading right into particulars!
Personally, I don't think that even increased Bitcoins supply could presently affect its price significantly or in any predictable way. So your question remains a moot point...

Productivity of altcoin programmers?

As far as I remember, we were talking about forces possibly driving Bitcoin inflation up, not down...

http://www.youtube.com/watch?v=8Bfe6CgYbH8

 

It can increase too.

Right, if productivity falls things usually become more expensive because less is done with the same cost (and vice versa). Though this is not strictly a monetary phenomenon and more difficult to grasp...  

And don't forget productivity too.

This is also not true for obvious reasons. Inflation is determined not only by the amount of money in circulation but also by the velocity of circulation, i.e. the frequency at which one unit of currency changes hands within a given time period. Increasing the velocity of money would in effect be equal to additional emission of currency into circulation, which can bring about inflation even if the amount of money remains constant. As simple as that...

In this aspect Bitcoin is not very much different from what you get with Visa or MasterCard...

Well true on currency's local purpose, although that is starting to change a bit with internet.

If this remark of yours refers to Bitcoin, there is nothing new or revolutionary in this either...
In any case this is not currency's fault or virtue

But you couldn't teleport across the world in 10 minutes.

I consider it a badge of great honor. It means I am saying what you don't want the others to know.

My ignores appear to be about 0.001% of the users on this forum. That is hardly a lot. Can't you muster more than that?

There is nothing revolutionary about Bitcoin for not being centrally controlled. In the medieval times you would bring a gold (or silver) bullion to the mint and for a small fee had official coins hammered from it. You could take coins and melt them into a gold ingot as well

Bitcoin doesn't have anything to do with dollars.

Okay, honestly, I had to read your post a few times, because your questions do seem rather dumb.  But here's the answer.  Bitcoin is revolutionary for basically one reason.  It isn't centrally controlled.  All of the other revolutionary design characteristics of Bitcoin flow from this.  For instance, it is limited in quantity because, in a decentralized currency, no one can set an inflation rate

Bitcoin doesn't have anything to do with dollars.

Okay, honestly, I had to read your post a few times, because your questions do seem rather dumb.  But here's the answer.  Bitcoin is revolutionary for basically one reason.  It isn't centrally controlled.  All of the other revolutionary design characteristics of Bitcoin flow from this.  For instance, it is limited in quantity because, in a decentralized currency, no one can set an inflation rate.  So once all 21 million Bitcoins are mined, there is no inflation.  As you pointed out, the value fluctuates as determined by the free market.  This is also revolutionary in a way that fiat currencies are not.  Limited, free market currencies efficiently transmit pricing information so that all sectors of the economy can work together optimally.  Because Bitcoin is decentralized, there are no banking monopolies.  Fees are determined by the market, so they approach cost.  Bitcoins are completely digital.  Unlike previous limited, free market currencies such as gold and silver, Bitcoin is extremely liquid.  It can be near-infinitely divided to use in everyday trade.  Because of it's decentralized design, there is no need to trust centralized entities such as governments or companies such as Paypal that can, and frequently do, arbitrarily disrupt trade.

Bitcoin is going to destroy all the value just the same. It is proven pyramid scheme.

In almost every way Bitcoin is exactly the opposite of Government issued fiat currency:

There is a reason your ignore button is glowing.  On the ignore list you go.

Bitcoin is going to destroy all the value just the same. It is proven pyramid scheme.