[Cryptography] BitCoin bug reported

Peter Todd pete at petertodd.org
Fri Feb 14 19:42:39 EST 2014

On Fri, Feb 14, 2014 at 11:33:20AM -0500, Phillip Hallam-Baker wrote:
> BitCoin is super deflationary, the value of goods relative to BitCoin has
> dropped to 1% of their original value in a year. In an economy like that,
> anyone spending money is an idiot because their money will be worth much
> more in a short period of time.
> But for the same reason, nobody is going to hire anyone to work in BitCoin
> because the cost of their labor will go up exponentially over the course of
> the work. Instead of a contract being the price of a new car as expected
> when it was signed, it is the price of a house or a private jet by the time
> payment is due.
> That just isn't a viable economy.

Whether or not the deflation of Bitcoin is good for the economy as a
whole has little to do with the success of Bitcoin as a currency.
Personally I happen to agree with contemporary economic thinking and
think some monetary inflation is a good thing for society. But in
determining whether or not I should own Bitcoins what matters to me is
my personal rate of return, and for that I have every reason to want a
deflationary asset that will become more valuable in the future.

Paraphrasing Yogi Berra:

   Bitcoins are worthless! Deflation makes them too valuable!

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