You ever use Bitcoin for a few days?I've been studying currency for a while. Why is bitcoin limited to 21m coins?
Discussions of money, currency and inflation need to have parameters defined. Simply expanding currency may cause inflation but not just because there are more coins to go around. To make a point, deflation of your bank account doesn't necessarily mean the balance went down.
The discussion needs to involve goods and services. Currency is nothing if not tied to the goods and services backing it. Deflation means my coins buy less, not that I have less coins to spend. Of course if I loose my coins my purchasing power is deflated, and if I find coins on the ground my purchasing power is increased. But a discussion of coinage, electronic or otherwise, needs to focus on goods and services. Goods and services or future promise of goods and services to be delivered will expand and thus the currency supply to buy them has to expand.
Any currency that hopes to overcome the banking industry control and monopoly must find a way to tie value to the goods and services backing it.
Right now, if there is such a thing as a BTC to dollar ratio, then BTC is tied to the level of unfunded liabilities in circulation and it not a new form of currency at all. BTC simply has a different name but no additional value other than the currency backing it up.
Why do I need a bitcoin?
The reason why I asked if you ever used Bitcoin is because until you have, you won't know what you have been missing. There is a priceless feeling of power that you get from using Bitcoin, you are your own bank with global on-the-fly transactions. While this comes with security precautions, you can easily mitigate these risks. If you need tips on staying safe, just ask for help and a lot of Bitcoin users will post links to help you.I'm actually asking the same questions. I'm very interested in the idea of investing in bitcoins, but not sure about the long term. Seems terrifying.
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