slothbag,
I've been bitching about the inflation rate and printing off bitcoins at a rate that would even make the Federal Reserve squirm... you'll be preaching to deaf ears.. people here won't listen to that type of logic.
And you've still never addressed the following - the money printing rate was the same (actually higher in percentage terms) when bitcoins were priced at $0.01 and at $30. Of all the variables in the Bitcoin economy, the printing rate is NOT one of them. It's perfectly steady, yet you seem obsessed with attributing a declining market price on that aspect. It's as if you're inferring that Bitcoin has lost its way because we're now printing so much money
If and when the price rises again, people will start complaining instead about bitcoin being "deflationary" - not printing fast enough. Price rising? "Bitcion will fail cause it's deflationary." Price falling? "Bitcoin is doomed because we're printing so much money!"
While I love a skyrocketing price as much as anyone, for those who understand the true value of these coins, this falling price is a blessing. Be greedy when others are fearful (although I hate quoting the socialist, hypocritical Warren Buffett).
LOL! I knew you would be the one to reply to this one
I did address it... the printing money rate isn't the same as the adoption rate, not even close.
picture this, because this is what is happening (i'm going to use simple figures rather than the real ones for simplicity sake).
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January - 5 bitcoins printed - 10 people enter market each wanting 1 bitcoin - price rises
February - 5 bitcoins printed - 11 people enter market each wanting 1 bitcoin - prices rise faster
March - 5 bitcoins printed - 20 people enter market each wanting 1 bitcoin - prices skyrocket
April - 5 bitcoins printed - 4 people enter market wanting 1 bitcoin - prices tank
May - 5 bitcoins printed - 3 people enter market wanting 1 bitcoin - prices tank
Jun - 5 bitcoins printed - 2 people enter market wanting 1 bitcoin - prices tank.
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July spot price - 5 dollars
If it was able to be adjusted
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January - 5 bitcoins printed - 10 people enter market each wanting 1 bitcoin - price rises
February - 5 bitcoins printed - 11 people enter market each wanting 1 bitcoin - prices rise faster
March - 5 bitcoins printed - 20 people enter market each wanting 1 bitcoin - prices skyrocket
April - 1 bitcoin printed - 4 people enter market wanting 1 bitcoin - prices skyrocket
May - 5 bitcoins printed - 30 people enter market wanting 1 bitcoin - prices skyrocket
Jun - 5 bitcoins printed - 45 people enter market wanting 1 bitcoin - prices skyrocket
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July spot price 50 dollars.
In the above, by taking action for just one month (April) and reducing the amount printed it changes the whole dynamics of it... the end result would still be 21 million coins at the end, just stabilize it to match demand and keep the asset price growing... because when people see the price booming more start entering... hence increasing demand.
That's very troubling sentiment... manipulating the money supply is precisely the reason fiat currencies are destined for failure. There is no legitimate reason to manipulate the price higher and higher. It may provide short term happiness to those holding coins, but it distorts the market signals that free-floating prices provide. Such manipulation would be the end of Bitcoin's value.
The movement of prices are not arbitrary. They allocate and coordinate how resources are utilized. If the supply rate of Bitcoins were restricted in order to assure a constantly rising price, you'd instantly create a speculative bubble, for every investor would buy as many coins as possible, knowing the price will be "managed" upward. The price would skyrocket - but to what end? Are Bitcoins worth $50 right now? Or $1,000? None of us know. And when that bubble you produce pops, the devastation will be ruinous.
The ability of the price to fall is JUST AS important as the ability of it to rise. Tinker with it one way or the other, and you distort human behavior. If you think you're wise enough to distort it in a positive way, then you're suffering from the same affliction and hubris of all fiat central bankers - believing they are smart enough to know the "proper" market price of any asset. It is folly. And it's precisely because so many fall for the myths of central planning that Bitcoin is so necessary, and so valuable.
The day the money supply is tinkered with (including the derivative rate of such supply), I'm gone. I'll peace out like the Lorax.
