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Comment by rprasad

I don't think you understand how currencies or economics work.

Currencies are by nature inflationary in a growing economy. This is a good thing, because inflation encourages spending and/or investment. Deflation is fatal to an economy: because the value of the currency will grow with non-use, deflation inhibits spending and investment.

Bitcoin's fatal flaw is that it is deflationary. At any given monent, you're better off not spending your bitcoins, because that same quantity of bitcoins will be worth more in the future.

Bitcoins other fatal flaw is that roughly half of all bitcoins mined thus far are held in the hands of the inventor of bitcoins and his closet buddies. They haven't been spending their bitcoins--but they're encouraging others to spend bitcoins as they are mined. This is close to (but not quite) the definition of a Ponzi scheme.

parent rprasad 14 years ago

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