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I contend that sustained issuance is in fact GOOD for a cryptography- and blockchain-based currency like BTC. The function of currency is to be spent, not accumulated.

As long as it depreciates at a moderate to slow pace, there is no downside or "robbery" in that. On the contrary, as coins get lost (that applies to physical cash too), they should be replaced with newly issued ones, to keep prices stable.

In other words, an uncapped supply would be ideal or even required -- if you really want BTC to be currency.

That idea is at odds with the concept of a store of value, which definitely requires and benefits from a capped maximum supply.

So not only we must separate money and State, but also currency from store of value.

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Discussion

Judge Hardcase 1y ago

I wouldn't be ideologically opposed to an uncapped supply schedule. But, I'm not sure I get the point. I suppose replacing lost coins could help with price stability - that is, if there was a way to track how many coins are being lost. Otherwise, it seems to me that an arbitrary supply schedule would just have an equally arbitrary effect on price stability. Not to mention, there are other (likely stronger) natural forces other than lost coins that impact prices (technology, population growth, etc).

All this is to say, trying to pin down price stability seems like a fool's errand. I strongly suspect that once the price volatility of bitcoin isn't dominated by a still way early rate of increased adoption and speculation, its natural deflationary nature - even with a capped supply schedule - won't be too overwhelming to achieve reasonably stable (but yes, still slowly deflationary) prices.

hh 1y ago

I on the other hand am 100% opposed to it, because it destroys the store of value function.

The "right" supply issuance ratio is not something that needs to be determined or pinpointed. The market should determine it.

Judge Hardcase 1y ago

Maybe we should take this one point at a time.

Why do you say an uncapped supply schedule destroys the store of value function? As long as the purchasing power of each sat increases (via lost coins, march of technology, etc) faster than they are being devalued by new issuance, wouldn't there still be value in storing sats?

🦊🔫🥩🏴‍☠️⚡ 1y ago

This is the Keynesian excuse for inflation. “If the money isn’t debased, people won’t spend it.”

No, people are not going to starve to death, living under bridges under tarps, clutching to their precious bitcoins.

🦊🔫🥩🏴‍☠️⚡ 1y ago

I’ll send you some tether on tron if you zap me the equivalent sats back

StackSats.IO 1y ago

Rothbard would disagree with you and I would agree with him. He didn’t live to see Bitcoin but he said the perfect money would ideally be static in supply.

We don’t need the supply of BTC to remain stable.

And we most definitely don’t need to separate currency from store of value.

We need Bitcoin to appreciate and move beyond 8 decimals. Don’t even need to change the protocol, this can be handled in layers (which I know you don’t agree are Bitcoin but you’re going to be overruled by consensus).

Imagine a world with 10,000 ecash fedimints (7/9) backing at the Sat level. 1 Sat divided to 1.00000000 off chain.

That’s where this goes with mass adoption.

Bitcoin won’t scale to humanity without trust. But that trust doesn’t have to be JPow saying he’s immune to external authority, it could very well be mint custodians putting their lives on the line not to rehypothecate but fractionalising beyond the day level.

Gotta think big for where we’re going!