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Bitcoin needed maximum 'memeability' i.e. the idea had to spread as fast and wide as possible. That is why the 4 year halfing cycle and absolute scarcity was chosen. The 21 million cap is easy to understand and tell your friends about. The possibility of getting rich is the strongest meme.

You really need to get someone rich in order for the meme to spread. This is the only way. People have a natural tendency to not be interested in currencies. Thinking about currencies makes their head ache. It needs to be really rewarding. On the other hand, there was no precedent and it was really risky. Most people were throwing away bitcoin at the start, and they just wanted it to spread.

In Bitcoin the security depends on the price of the currency. If the price doesn't pick up, the network won't be secure enough. It has to be rewarding, it has to spread as an idea, it has to be secure. The more secure it is, the more plausible it is to succeed, and so forth.

Most people don't really understand the disinflationary model as you explained, although I agree that in theory it is better and more elegant way to distribute coins. However, I think that if Bitcoin had chosen this model, it wouldn't have taken off. This model has too high inflation for too long, and the meme and security would have died off.

If the inflation is too high for too long, the meme won't spread, and the price will stay very low or nearly zero. Then a single miner will mine all coins and no one buys them, or only a single rich dude buys them. So in the end the coins won't get distributed as widely / fairly and the project will fail.

I think that Bitcoin succeeded in it's distribution as fairly as possible. I don't think that this can be replicated. It's impossible to create a new cryptocurrency where someone won't scoop them all off cheaply in the start, and that's why the creators typically own most of the coins, which will eventually doom the project. The infinite disinflationary model might be the only way to succeed in distributing a completely new currency, because no one wants to invest in it. But it has to have some other properties in order to spread widely.

> Who, we ask, is so altruistic as to create a new monetary system but not use it to enrich themselves?

And take the fame. He also, as I mentioned before, may have been a candidate for the Noble prize in economics. https://www.newsbtc.com/news/bitcoin/bitcoin-creator-satoshi....

I take it as a given, he is dead. He would be a candidate: https://en.wikipedia.org/wiki/Dave_Kleiman

> A truly altruistic system would not confer such a huge advantage on early miners

Bitcoin never claimed to be and is not altruistic. And the same can be said about almost all investments, you need information early, you need to judge the information correctly, and you need to move in. Same with bitcoin.

GP said nothing about bitcoin claiming to be anything. They're directly quoting the article

Your point being?

But they seem to translate a quote that posits someone would be altruistic to create a monetary system without enriching themselves, to "bitcoin is an altruistic system" and then shoot down that statement rather than what the quote is saying.

Plus rewarding early miners creative the incentive structure more likely to drive adoption.

Just the reverse, you discourage adoption by turning a currency into an investment.

If bitcoins had constant or decreasing value through time then people would be more willing to trade them. This is why deflation is so economically dangerous.

It did encourage mining, but that doesn’t driving long term adoption and has nearly purely negative consequences.

The ideal long term strategy for adoption would have mining to provide a consistent reward in real terms over a long timeframe, low costs and high transaction volumes, and for unused accounts to be charged a small fee. Bitcoin failed all of those which is why it’s never had significant adoption as a currency.

> Bitcoin failed all of those which is why it’s never had significant adoption as a currency.

Yet there is no more successful digital currency on the planet. If you think you can make one with "better" rules please go ahead!

> This is why deflation is so economically dangerous.

The idea that inflation and constant spending are the only thing that makes an economy work is faith-based, and bitcoin was intentionally not started that way. So far I'd say it has worked quite well.

> is faith based

Back when people used precious metals for currency many different economies would all be tied to the same shifts in value. I don’t know all the details but there’s real world support for significant deflation being detrimental not just theory.

That said trivial levels of deflation aren’t harmful, but bitcoin had very extreme deflation.

Bitcoin has inflation at the moment.

> I don’t know all the details but there’s real world support for significant deflation being detrimental not just theory.

The problem is that the "real world support" is usually taken from fiat money economies that are entirely built on inflation, and for historical examples there usually was an economic crisis at the same time that was accompanied by deflation. It's hardly conclusive.

High levels of inflation are also harmful. +/- ~0.3% per month is fine, outside of that range and you’re hurting adoption.

> an economic crisis at the time

In non fiat currencies you also get deflation from economic growth. Where you can study the effect is when the growth occurs outside of a given economy. Again, outside of my expertise it’s just something I have read.

It's a very good store of value/gold analog and a not so great currency.

That's fine though - if you have something that holds value you can move it into whatever currency exists when you need to do that.

Is bitcoin a currency or investment? I would say neither but interesting to see it getting lumped in with investments.

Bitcoin is Schrödinger’s asset, in the sense that it is whatever it needs to be to counter the latest criticisms from non-believers.

For example, if you say that bitcoin has 7 tps and even with lightning will take decades to onboard everyone, it will become a store of value that you are supposed to buy and hold for long term. But if you point out how bitcoin has crazy volatility, it may become a currency that you don’t hold, just use to transact.

I am happy that you understood where I was going with this.

People whip up whatever they need it to be to make an argument. Sometimes we call it a currency because we can use it to buy things, other times its an investment. To reliably fit in either of those buckets is exclusive. To be a currency you need to be a store of value that is not fluctuation a lot, this means its a terrible investment vehicle.

You're right, bitcoin is something entirely new, and we don't know the future, so we don't know what it will end up being.

Entirely new is a stretch. And haven't we reached the end? It's not broadly useful nor sustainable nor trustworthy.

I’d argue it’s useful for many people who live in countries that suffer from hyperinflation.

I feel like an asset that doesn't rise or fall by a factor of 10 a year would be a lot more useful for that purpose. Even bartering levis blue jeans would offer more price stability than btc.

Blue jeans aren’t very salable in the sense that you have to find a blue jeans buyer in order to exchange them for something else.

Likewise for bitcoin. In either case the levis conversion rate is pretty stable unlike bitcoin. You can go on marketplaces like poshmark and others and readily buy and sell these jeans at prices that are both stable and widely agreed upon.

You're not one of the "it's not useful to me, so it's not useful to anybody" people, are you?

Entirely new? At this point it's getting a little long in the tooth, if anything

Bitcoin is almost 15 years old.

This is like calling the web “new” in 2005-2008 (depending on chosen start date).

The “new” excuses ran out a decade ago.

Bitcoin is a commoditized idea of sovereign value.

It can be seen as an investment by those who bet on a rise in demand for sovereign value, and can be seen as a currency by those who doubt the ability of fiat value to continue indefinitely.

I don't understand the importance of this distinction. People invest in currencies all the time.

I think its important because to be a good investment vehicle means it probably should not be considered a currency, to be a reliable currency means it should be a terrible investment vehicle. Sure, its possible to say it can be both but I think to be be reliable in either is exclusive.

And while there are indeed large currency markets, it is not very common on a population basis due to it being very much a speculators game requiring massive amounts of leverage for the average net worth.

When it goes from being worth less than a dollar to sixty thousand dollars in a few years, its an investment not much different than a limited baseball card.

What about kids who weren’t able or had any capital to invest at the time Bitcoin was doing high returns ? They will just be born poor and die poor I suppose ?

Not sure why you expect bitcoin to do "high returns" for everybody, that was never a promise and never a goal. Are you going to argue that stocks are not fair because you personally didn't buy the stocks with the best returns?

Bitcoin only makes one relevant promise: There will only be 21 million. And that means that the people who are born poor get a chance at building wealth by not having the government constantly reduce the value of their money. Bitcoin is an escape from the system that keeps people poor.

You could say as much for beanie babies too. They will be limited so therefore valuable. Forget a hundred years from now that people might not see any value at all in a plush doll, or some runescape gp, or bitcoin. Meanwhile, something like iron or gold has held value for all of human history.

Scarcity alone does not make something valuable, things that are useful have value. Happy to clear that up.

@tromp created Grincoin, which was mined and dumped from the start, eventually going to zero.

https://www.reddit.com/r/grincoin/comments/kgsetd/grin_monet...

https://coinmarketcap.com/currencies/grin/

I know it sounds bad to shill a coin but someone has made a small modification to the Bitcoin monetary policy to make the block reward proportional to difficulty and created a balanced system where the supply matches the demand to avoid deflation. Maybe you'd like to come chat with us about it on telegram! The website is https://ergon.moe

Hopefully it's not as bad since there's no early adopter advantage and I don't expect to profit at all. I just want peer to peer electronic cash!