If you think bitcoin would make a good currency, ask yourself what happens if you have any debts, lease or mortgage denominated in bitcoin.
At least hyperinflation wipes out debts, in hyperdeflation some people become millionaires and others owe millions based on whether you had positive or negative money at the start.
What I find most interesting about Bitcoin are its inherent contradictions - the tragedy hidden amongst the tensions in the inventor's world-view.
Some of the aspirations are really interesting - a currency which no-one controls, a currency without built in inflation, which is stable in value, a financial system with low fees and without government control, untaxable and ungovernable. A currency where the people own the means of production.
The implementation however expresses the contradictions hiding beneath the surface of these seemingly benign ambitions:
A stable currency cannot simultaneously be a valuable asset. A money supply which cannot be manipulated means an economy completely at the mercy of economic cycles. A system not amenable to government also means one not amenable to regulation. A fully distributed eventually consistent ledger cannot form the basis of a fast global payment system. A partially anonymous yet public ledger is open to abuse and but not redress. An immutable ledger doesn't match how we think of social transactions (which are usually reversible or revokable). A fixed money supply in practice means deflation, with all the problems even a little deflation causes.
If nothing else I hope the bitcoin and cryptocurrency experiment brings us all to question just how much inflation is good, just how well politicians manage our economy, and how much good a fractional reserve banking and arbitrary money supply manipulation really does. Are the fictions and confidence tricks we live by at present much better than the cryptocurrency systems proposed? Perhaps marginally, but they too will be replaced in time with something better, hopefully something which no one government controls.
This development though hints at a darker future, where corporations issue or control their own money supply, and force others to use it.
> If you think bitcoin would make a good currency, ask yourself what happens if you have any debts, lease or mortgage denominated in bitcoin.
They don't have to be denominated in Bitcoin for Bitcoin to be a successful currency. You could denominate your mortgage in junior cheeseburgers and still pay it off in Bitcoin.
I don't think the long term is Bitcoin. I think the long term is a diverse market of currencies, some of which are deflationary and others which are not. It's not critical that we all decide on one currency and set all the prices based on that, and even if it helps, that currency doesn't have to be Bitcoin.
Twitch, for example, already accepts unrelated gift cards as payment for subscriptions [1]. I think that is more like what we're moving toward.
What else would they denominate their mortgages in? Their respective national currencies were abolished after the introduction of the Euro.
Although it could be argued that joining the EMU may not have been their best interest in the first place, but that is the fault of their politicians, rather than the banks.
Iceland is the better example - during the boom years they were offered loans in Euro instead of their national currency. Then after the crash when their own currency was devalued in respect to the Euro, they were left with repayments they could not possibly service.
At least hyperinflation wipes out debts, in hyperdeflation some people become millionaires and others owe millions based on whether you had positive or negative money at the start.