Bitcoin is inherently deflationary, which would be economically disastrous if it supplanted the dollar. Granted, I think bitcoin supplanting the dollar is unlikely, but it does make me question how beneficial bitcoin really is.
On top of that, bitcoin erodes transaction privacy. Is this really a step forward?
Citation of deflation caused by an increase in productivity or population has caused an economic disaster?
I've searched and came up empty. Thanks in advance if you find something and reply.
I like peercoin, which is a bitcoin that can maintain wallets without the full block chain, do less expensive proof of work problems when the network is computationally competitive enough, and has a fixed inflation rate of 1%.
The only improvement I'd like to see is a currency that uses a coin generation algorithm based off recent monetary velocity, so that if exchange slows the inflation rate increases to stimulate more exchange, and if a lot of money is changing hands the inflation rate is slowed, with a targeted turnover ratio of the entire economy that is whatever is most economically healthy, it would require research.
History gives us plenty of episodes of deflationary growth, such as America after the civil war during resumption of the metallic standard. Yes, a sudden collapse in a money supply is bad, but economies work fine under slow deflation.
Economists are the worst intellectuals. Their predictions are always wrong and their growth advice is ineffectual. I wouldn't take what you read from an economist in a newspaper op-ed page at face value.
You're referring to the period known as "The Long Depression", from 1873 to 1896?
It had an extremely high unemployment rate during the quarter century that it lasted. Ten states went bankrupt. The US manufacturing output virtually stagnated, with periods of significant decline.
That sounds like a great model /sarcasm!