 Ok, so you say: "In a fully decentralized monetary system, there is no central authority that regulates the monetary base. Instead, currency is created by the nodes of a peer-to-peer network. The Bitcoin generation algorithm defines, in advance, how currency will be created and at what rate. Any currency that is generated by a malicious user that does not follow the rules will be rejected by the network and thus is worthless."
I still do not quite understand the Bitcoin story, specifically with regard to a limited supply. To me, this supply limit is created by the decision(s) of someone, or some several people, who wish to remain anonymous. Why are they anonymous? If I were the one who invented the Bitcoin algorithm, then I would also be able to change it, modify it as needed. Really, I do not understand how that algorithm cannot be subject to change. Surely the smart people who created the Bitcoin algorithm have more control and influence over it than 10 year old boys have over the flight path of a bottle rocket.
If I am mistaken in this, then please try to esplain the supply limit Bitcoin a bit more.
In the field of math, there is no limit to the number of integers you can line up. To me, it seems logically possible that a small variation of the bitcoin algorithm could potentially increase the number
of potential bitcoins by a factor of 10, 100, 1000, take your pick.
On the other side there is demand. The great success of ransom-ware must have something to do with it, because people are desperate to get their data back. So it seems that if the ransom-ware crooks are (hopefully) beaten at their game, the demand for bitcoin and its value would fall. Discuss?
Could Bitcoin become too expensive if the price is driven too high by demand?
Then there is the issue of the block-chain. It is supposed to be an uncorruptible ledger system.
I work in accounting. From the start of a bank account, math and accounting rules hold that if I start
a bank account in say 1903, and I carefully and truthfully register all additions and withdrawals from 1903 until January 6, 2017, then any accountant using the same rules should come up with the same
end result. In theory, the ending balance of a bank statement at the end of June 30, 1997 must always
equal the beginning balance of July 1, 1997. In practice I have actually observed bank statements that
differed in exactly such an example. How was that possible? Human error.
If the bitcoin algorithm is made by humans, then there could be human error in it. Has that been researched?
What happens if the block-chain becomes unchained, interrupted? How are the preceding bitcoins and
the bitcoins created after the interruption affected? How does that work?
I could possibly come up with a competing currency, say the "IFcoin", the "WHENcoin" and,
obviously, the "BUTcoin". Competing crypto-currencies ought to have an effect on the demand side and value of the prior de-facto monopoly of the bitcoin. Additional features, such as a replacement of
currency through some insurance scheme, in case it gets lost, stolen, misapplied etc. might make one currency more desirable than others.
Finally, how does a crypto currency like bitcoin "gain currency"? There are numerous problems with
all kinds of fiat currencies, but we know what these are. With bitcoin, we don't even know yet what potential problems could develop. More questions than answers right now.
 Commented 2658 days ago |
