Where will it stop?
Am i right in thinking the majority of bitcoins that will enter circulation are now accounted for?
Am i right in thinking the majority of bitcoins that will enter circulation are now accounted for?
So it took 4 years from 0 - 10.5 million, then the next 4 years sees 5.25 milion minted, then 2.125 million in the 4 years after that, and so on for decades until all 21 million have been minted.
A much closer analogue might be what happened to Iceland's currency. The value of BTC (and, by association, its purchasing power) is going way up because supply isn't keeping up with demand. But unless there's some strong real growth to anchor that expansion, it's just a balloon economy. And what balloon economies tend to do is keep rising until the pressure differential causes them to pop.
However, someone can start Bitcoin2, which would have substantially the same effect.
Bitcoin made it through because nobody knew that a proof-of-work based cryptocurrency would ever end up being worth several hundred million dollars or more.
Now that bitcoin exists, any competitor risks getting spanked down. Even bitcoin is at risk of getting spanked due to a 51% attack, except that it will cost more than $10 million in hardware to do that.
One alternative is using scrypt instead of sha256(), and thus GPUs aren't as effective and the one crypto currency doing that has avoided attack thus far. That currency is worth under half a million dollars of valuation at the current exchange rate and there are hardly any exchanges where it is traded so there's little financial gain from attacking it sooner rather than later. But it is still very vulnerable, in comparison to bitcoin.
(or they can just lock the bitcoins they receive for guaranteed swap-back at any point later - the bitcoin2 issuer is a bitcoin bank too: how do you trust they can effectively lock them up with the possibility of return later?)
I suspect some large companies could also do something like this. Amazon or Walmart, for instance. They could give discounts to people who use a digital currency they are trying to push, and that could be enough to bootstrap things.
A new government backed currency being disconnected from paper is one thing, but being disconnected from fractional reserve banking is another and likely to be met with very violent opposition if a target can be found.
There'd a have to be a total change in government policy for a modern day digital Lincoln greenback. I don't think the Corporatocracy would allow it to happen at this point. So bitcoin is the closest we can get to it - money for the people by the people (instead of money for the corporations by the banks with the help of government.)