You know that even gold is debased at 2 - 2.5% per year.
You do know that there is a finite amount of gold on the Earth and that eventually all of it will be mined?
Pedantic and irrelevant part of our discussion don't you agree? There is gold throughout the universe. And we are not close to tapping all the gold on earth. Mankind's technology for tapping gold on earth and throughout the universe will continue to improve.
Malthusians always annoy me, because throughout the history of the world they have
never been correct.
I don't necessarily have anything against a coin with perpetual debasement, as long as the cost of creating the new currency is equal to or more than the value of the new currency, and it happens in a decentralized fashion. Like you said, the main problem is decCentralized debasement, and it's because it costs them very little to generate the new currency and because they hand it out to a small group of banks instead of to the average joe. I don't necessarily care if my savings go up in value or now, what I care about is that my saving HOLD THEIR VALUE. The reason people save their wealth in gold is because they trust gold to be a secure store of value, and the reason they trust it is because they know gold cannot be created out of thin air.
Then you and I are very much in agreement.
The same thing essentially applies to Bitcoin, I know that bitcoins are very difficult to create and it requires a lot of electrical energy to generate them.
A few pools control more than 51% of the hash processing power. A cartel of them could eliminate the requirement to use Proof-of-Work (PoW) and so then we are right back to fiat again (even if controlled by corporations, those corporations are beholden to the government and can be "nationalized"). I am confident that this is the coming outcome for Bitcoin. How could it go any other way given the facts presented in the OP?
The stone money used on the island of yap is a good example of why it's important for a currency to be hard to create, but it's also an example of why perpetual debasement can work so long as the currency is hard to create. It was extremely difficult for them to create those huge donut shaped stones, so every time a new stone coin was created the market didn't freak out because the market knew a lot of energy was burnt up in their creation. And there was essentially no limit to how many coins they could create, so long as they didn't find an easy and cheap way to craft the stones into a donut shape then they could keep making them and adding new coins into circulation without worrying about price inflation. You can even have an increasing money supply while the value of the currency is increasing at the same time, in fact that's exactly what has been happening with Bitcoin for the last few years.
Great example! And I'm giddy to see you write that, since you were disagreeing a few months ago when we debated in your mini block chain thread. I really admire people can refine their philosophies. Very few people can do that. I expected you might be one, since your mini block design is excellent.
Fundamentally I agree with you that perpetual debasement can be a good thing, what I don't agree with you about is that a finite money supply is a bad thing.
It is impossible to have a finite supply of anything without a top-down controller stealing the thing. Ponder that. You would essentially have to steal human innovation, e.g. to stop technological progress at mining gold.
They both have their advantages, gold will always be trusted so long as the amount on this planet always remains finite.
Gold is not trusted because the total is not finite. It is trusted because it takes real effort to mine it, thus the supply can't be debased egregiously in corrupt ways, i.e. it won't go hockey stick tomorrow as Bernanke did. And the mining of gold is thus competitively available to everyone. Humans want a fair game of competitive opportunities not a corrupt one of top-down slavery. Actually many humans want socialism where they get everything equally without competition, but this is a failed economic system (The government and society is $150 trillion in global total debt and I estimated upthread only $241 trillion in global net worth but much of that $91 trillion balance is concentrated among the upper 1% and much illiquid such as real estate.
)
Bitcoin will always remain relevant for the same reason. Obviously there are things which make a better currency than gold, just as there may be cryptocurrencies better for use as a currency. But that doesn't mean gold or bitcoin cannot be used to conduct trade, and the finite nature of gold and bitcoin doesn't make them some sort of evil "corporate top-down controlled fully compliant government's" money". How you reach such an absurd conclusion is beyond me. The centralized nature of mining could take away some of the decentralization of Bitcoin, but that's just about the limit of it.
Once you centralize the mining, then you centralize which transactions will be blocked (by the full clients), and everything else in the protocol can be changed by the top-down controllers at-will. (perhaps you will next argue that the users running simple clients have the power to vote on which protocol they will support so see below)
You are right back to democracy and fiat again. They can then debase at-will as well.
You have not technically refuted the Threats section of the OP which drive Bitcoin to a centralized control. If Bitcoin can be taken over by vested interests, then we are back in the same predicament, just a different set of slave masters.
Decentralized means the vested interests can't take control, only contribute in a decentralized competition. Centralized means it gets swept into the
power vacuum of democracy.
Democracy = the majority force their will on the minority. Or actually all the minorities force their will on the majority. Democracy binds everyone together in a monolithic outcome and a power vacuum.
But that's not a "flaw", the people with the most resources will always have the most power, that's just a simple rule of the world and it will aways exist.
The difference is that with decentralization, the small guy always can compete for part of the pie (no one is bound together in a monolithic outcome).
With centralization, the winner takes all.Rich hate decentralization, because they can't possibly invest in all those small opportunities that can double capital in a month. In decentralization, the small guy grows his capital at a faster percentage rate than the rich guys.
Of course we can attempt to minimize the effectiveness of their resources but they will always have an advantage by having more resources at their disposal.
With the altcoin design proposed in the OP, the rich can not take it over and it will remain decentralized.
People will always be attracted to Bitcoin because of its features, but there's no reason Bitcoin can't coexist with other cryptocurrencies which improve upon the basic design. You need to learn that there is a place for everything, stop looking at things with such a black and white perspective. Bitcoin is not flawed, it simply is what it is, and if you want something different then build it and prove to us how much better it is.
Did I say Bitcoin can't exist also? Please read the entire thread more carefully. I wrote that Bitcoin's decentralized premise is threatened and flawed.
