Showing posts from December, 2013

Red/Green CryptoCoin

Bitcoin has some features that might be considered 'bugs'.  I'll propose here a couple of changes that might be improvements.

Bitcoin is currently deflationary - the number of coins increases at a declining pace, while the number of users has been increasing rapidly.  This has the benefit of making it very profitable to create bitcoins and hold bitcoins as an investment since they increase in value - encouraging people to mine them and merchants to accept them, though it also somewhat discourages spending them.

But even if Bitcoin becomes the sole currency for every person in the world, usage will eventually plateau and the currency will mostly cease to deflate.   With the end of deflation, more people will spend their coins instead of saving them, so that more coins will chase goods and services, which will begin driving down the value of a bitcoin.   Seeing inflation coming, the "smart money" types will dump their bitcoins as soon as they think Bitcoin has star…