> The reason balance of the system is important: if it's going to be used for payments, you don't want to have large changes in the value of the coins. It would lead to distortions, I believe, by continually increasing the "purchasing power" of a single coin.
Stability of the coins' value is desirable for long term use.
Not promises, but predictions. I don't think Nakamoto anticipated the massive interest in speculation, which is driving the lack of stability.
Long term, I'm more bullish on solutions like GNU Taler[1][2] that don't try to invent a currency, but instead work with existing currencies to simply transactions. I don't think Taler will necessarily be _the_ solution, but something like it could work out.
I mean, I get that a lot of people see it that way, but it's always struck me as giving off an experimental vibe. Presumably an enduring solution to something as fundamental as a monetary system should have stronger design principles. By contrast, Bitcoin feels more like a prototype/demonstration of blockchain technology mixed with a social experiment.
Minor point, it’s a cryptocurrency not a currency. I don’t think it’s fair to compare it to government backed currencies because of its novelty and decentralized properties.
If you could only get Team Fortress 2 hats or whatever with Bitcoin, that's one thing. People have been exchanging it for USD. Since it doesn't have any intrinsic value (it's not like a concert ticket or gold) outside of a medium of exchange and a store of value, comparing it with other currencies is completely fair.
1) there is a bed of competing currencies around it with their own strengths and weaknesses
2) those strengths and weaknesses are well known and understood in the finance world
3) there are established versions of the major services we have around the US dollar: fraud protection, escrow, banking, exchange, etc
I would say that 2) probably requires two full rounds of PhD level study, so let’s say 15 years from wide scale awareness at a minimum.
We already have 1) although I suspect some of the true neighbors are early in development at this time.
3) Is slow going it seems. The USD ecosystem has had a long time to develop. It’s not trivial to set up sturdy, legal, reputable replacements since it’s an n-sided market problem.
... but I do think it will stabilize. Until then it has uses even with the instability, but it’s just not possible to estimate its true value.
Points 2 and 3 would seem to violate the essential anarcho-capitalist nature of Bitcoin, though. If it can be effectively regulated and stabilized in opposition to the volatility of the free market then it would seem to have failed at its purpose.
> The reason balance of the system is important: if it's going to be used for payments, you don't want to have large changes in the value of the coins. It would lead to distortions, I believe, by continually increasing the "purchasing power" of a single coin.
Stability of the coins' value is desirable for long term use.