Overall psychology in the currency markets is a vile hatred for inflationary fiat currency. So the bitcoin, deflationary, tightly reigned in finite model is well received. Any attempt to "better" bitcoin with more units by some great degree is bad as the current psychology is a true hatred for any model that even speaks to inflationary.
Clearly, an inflationary coin cannot have the same success pathway of Bitcoin, with people simply hoarding it. Maybe just for the first leg, when it starts from zero. After it has reached a decent value, you need to spend it or face the inflation tax.
On the other hand, if the inflation tax is small, it's earned by charities and the result is a decent coin that is stable and drives trade, than it could kill bitcoin for mere practical reasons. Most people are not that dogmatic about inflation and understand full well they shouldn't keep cash as is. "Store of value" is antithetical to "money".
Right. We need a digital gold and a digital currency, and its become somewhat clear they cannot be the same thing. The problem is that even if the coin has permanent inflation (unlike Bitcoin's "still inflating for the rest of our lifetimes" model), a rapid appreciation in value (relative to fiat) will cause the coin to not function as a currency. And, a rapid appreciation in value will happen for any coin that is useful, making it suck, at least temporarily, as a currency. So its difficult problem to solve, regardless of the coin's economics. Having some method for adjusting creation rate in the future, may prove to be quite useful.
Having said all that, Bitcoin has now been around for over 4 years and its time for a legitimate alt coin to be created that actually offers some possible actual improvements. If mining consolidation is really a strong concern (or the strongest concern), the solution is not scrypt (or anything that at best temporarily retards that consolidation), the solution is PoS or a PoS / PoW hybrid. It looks like one with a good implementation may soon be born.
Rapid appreciation was never a problem. The problems and reasons Bitcoin isn't working as a currency are
1. Volatility
2. Lack of infrastructure
When the price appreciates rapidly, no one really minds that. It's more profit for the community, it's exponential growth. The Internet faced similar growth and while it did lead to a bubble no one actually thought it was a bad way for the Internet to grow, it was the crash that made it bad. I think Netcoin if it has enough infrastructure can have the rapid appreciation and avoid the crash.
And I don't buy the argument that inflation is needed to get people to spend. People like entertainment, they will always have to spend for it. Food, rent and utilities are a matter of infrastructure not a matter of people not wanting to pay. If you're Netcoins are gaining value you'll still use it to pay your rent, pay your electric bill, buy food, buy clothes, and pay for your cost of living expenses.
I just don't think we need to worry about encouraging people to spend when people naturally are too greedy anyway and naturally are addicted to shopping via advertisements. Currency does not need advertisements built into it to trick people into parting with it, if anything currency needs the opposite to trick people into saving their way out of debt.
That said it's very difficult for one coin to be good as both a store of value and as a currency and do it both well at the same time. I think Bitcoin will become a much stronger currrency than people give it credit and has more value as a currency than as a store of value but because right now we can't pay our bills with it and buy live off of it we assume people aren't going to spend it. People are hoarding it because right now we there isn't much else you can do with it if you can't pay your living expenses yet. Solve the living expenses payment infrastructure problem and that is when Bitcoins will be spent just like dollars. Maybe if you're a property owner and you accept rent in Bitcoins you can speed the process up but before you can do that the volatility issue has to be solved so that you don't have to instantly cash it out the moment you receive it.
