The whole idea that Bitcoin will have a finite supply is nonsense. There's already dozens of Bitcoin forks, some of which lay claim to be the "one true Bitcoin". If the majority decides that whatever is now referred to as the Bitcoin blockchain should not have a limited supply, so it will be. Ultimately, the ones calling the shots here are the same people receiving the block reward, so if transaction fees don't make up for loss in block reward, what's to stop them?

On a secondary note, who can claim that it is a good thing that money can't be printed if necessary? The crisis of 2008 was a liquidity crisis, without the ability to print money it could've turned into a great depression. Making the money supply fixed is just throwing out one tool out of the toolbox.

>> The whole idea that Bitcoin will have a finite supply is nonsense. There's already dozens of Bitcoin forks, some of which lay claim to be the "one true Bitcoin".

But there is a limited supply of user attention to be divided up between all available cryptocurrencies and it's not divided equally by any measure; so cryptocurrencies are constantly competing with each other for that attention and this is where they derive essentially all of their value. Underlying technology at this stage has almost no value.

In our economy, even an untalented fool speculating on random projects can generate a profit if they have capital; this fact makes talent worthless and means that capital and network effects are EVERYTHING.

There is no official bitcoin blockchain. There is only the chain with the most accumulated work, and orphan chains. Anybody attempting to remove a limit which may cause the holdings of all bitcoin users to be devalued will simply be ignored by all other users.

Conversely, lets say I put out a proposal to tighten the limit, increase the rate of disinflation and reduce the maximum total supply that could ever be mined to 20M rather than 21M. This proposal might actually gain some interest among bitcoiners because if price speculation so far has been under the assumption that there will be an eventual ~21M bitcoins issued, and this gets scaled back to ~20M, then the 5% reduction in overall supply, without corresponding 5% reduction in demand, would cause all existing bitcoin to gain value.

This could also be implemented as a soft-fork and be compatible with all existing software - because the software checks that the amount paid in a coinbase is less than or equal to the subsidy plus fees. It is technically possible to mine blocks which don't release all of the available bitcoin for that block. (This has been done, and such bitcoin are permanently unavailable and reduce the theoretical maximum 21M supply).

To relax or remove the block subsidy, one would need to hard fork the protocol in order to defeat the "less than or equal" check. You would have to convince the vast majority of bitcoin users that they aught to download and install alternative software which may cause inflation and devalue their holdings. Keep kidding yourself that this will happen.

> There is no official bitcoin blockchain.

Let's just say there is consensus over what the Bitcoin blockchain is, versus whatever the "Bitcoin Cash" or "Bitcoin ABC" blockchain is.

> There is only the chain with the most accumulated work, and orphan chains. Anybody attempting to remove a limit which may cause the holdings of all bitcoin users to be devalued will simply be ignored by all other users.

Most users of Bitcoin perform no work whatsoever. Miners perform the work. Users can't ignore the interest of miners, even if miners are a tiny minority. Miners may not even have any holdings.

A core value proposition of Bitcoin is that it's the "most secure" network. If a majority of hashing power is priced out of operation because of low block rewards and low fees, that security flies right out of the window. This situation would have a far more significant impact on price than a little bit of controlled inflation.

> To relax or remove the block subsidy, one would need to hard fork the protocol in order to defeat the "less than or equal" check. You would have to convince the vast majority of bitcoin users that they aught to download and install alternative software which may cause inflation and devalue their holdings.

It's not going to be alternative software, it's going to be a software update, through the official channels. It also likely would only affect full nodes, and the majority of Bitcoin users haven't been running full nodes for a while.

It's really up to a few key stakeholders, not Bitcoin users in general. When faced with the decision of giving up network security versus maybe losing a little bit of value to inflation, they will choose the former, because they're not that stupid.

> Keep kidding yourself that this will happen.

A similar thing already happened with Ethereum, the rules were changed mid-game in the official client, the loser fork (Ethereum Classic) was the one that kept the old rules intact.

> Let's just say there is consensus over what the Bitcoin blockchain is, versus whatever the "Bitcoin Cash" or "Bitcoin ABC" blockchain is.

The consensus is the chain which has the most accumulated work. And also, the one which is backward compatible with the one which previously had the most accumulated work. A backward incompatible fork is a shitcoin.

> Users can't ignore the interest of miners, even if miners are a tiny minority. Miners may not even have any holdings.

You have this backwards. It is miners who cannot ignore the interest of the users. Miners can only profit by selling the bitcoin that people want to buy, and the bitcoin people want to buy is the one which is inflation-free. The market decides the correct chain and the miners follow it.

Miners can't orchestrate a fork because they need consent from the users, and they won't get it. If a majority attempted to mine a forked chain, the minority chain would just become unfairly cheap to mine (due to difficulty reduction), and cause more people to mine it again. In the mean time, the miners who forked away would be making nothing, as they have no market to sell their shitcoins into.

> A core value proposition of Bitcoin is that it's the "most secure" network. If a majority of hashing power is priced out of operation because of low block rewards and low fees, that security flies right out of the window. This situation would have a far more significant impact on price than a little bit of controlled inflation.

If bitcoin cannot be sustained by fees alone, the experiment is a failure. There is little advantage to "digital fiat" which cannot be done in other ways without the inefficient blockchain.

However, there is also the acute possibility that mining is not profitable, but still performed. The reason is simply that it is a way to recover some money from energy which would otherwise be completely wasted. Consider production flaring in the extraction of crude oil. Energy companies can recover some of the loss by deploying mobile bitcoin miners, which already exist on the market today. There is also the potential for miners to be data furnaces, whose electricity costs can be partially recovered through fees, which may be utilized anywhere that heating is required.

> It's not going to be alternative software, it's going to be a software update, through the official channels. It also likely would only affect full nodes, and the majority of Bitcoin users haven't been running full nodes for a while.

The majority of users don't need to run full nodes, but there are sufficient full nodes that they don't have to. It also happens that the people running full nodes are the bitcoin maximalists who understand bitcoin and are even less likely to accept any inflation attempts than those who are running SPV nodes.

> It's really up to a few key stakeholders, not Bitcoin users in general. When faced with the decision of giving up network security versus maybe losing a little bit of value to inflation, they will choose the former, because they're not that stupid.

If multiple software clients are running on the network, then none of them will have an absolute majority. It is questionable whether developers of Bitcoin Core will roll an auto update feature into the software, which means there will always, very likely, be a majority of users running old software. The new software can only introduce backward compatible features or it will fork the minority of users who upgrade away from the network. Auto-update is an implicit backdoor and unlikely to be installed by competent users, especially where significant amounts of money are concerned.

> A similar thing already happened with Ethereum, the rules were changed mid-game in the official client, the loser fork (Ethereum Classic) was the one that kept the old rules intact.

That's because Ethereum is a personality cult and not an experiment in sound money.

Bitcoin maximalists have developed a culture of weeding out such personalities.

It is unlikely that a hard-forked bitcoin will ever gain traction. The SegWit rollout demonstrated that it is possible to perform sophisticated upgrades without breaking backward compatibility, and this mindset is now the default for all developers left on Bitcoin. Those with the mindset that they are in charge, rather than the market, have all left.

> You have this backwards. It is miners who cannot ignore the interest of the users. Miners can only profit by selling the bitcoin that people want to buy, and the bitcoin people want to buy is the one which is inflation-free. The market decides the correct chain and the miners follow it.

The Bitcoin people will want to buy is the one with a network that hasn't collapsed. That's far more important than a little bit of inflation. Other cryptocurrencies without a fixed supply are successful as well, it's not the most important factor.

> If a majority attempted to mine a forked chain, the minority chain would just become unfairly cheap to mine (due to difficulty reduction), and cause more people to mine it again.

If a majority is priced out of mining, the network would be vulnerable to a 51% attack and blocks would take long time to mine until difficulty adjusts. What's that going to do to the value of Bitcoin, the "most secure" of all the networks?

> If bitcoin cannot be sustained by fees alone, the experiment is a failure.

If Bitcoin cannot be sustained by fees alone, block reward will return. What else do you think is going to happen, everyone will just give up on Bitcoin and make it become worthless, rather than accept inflation?

> That's because Ethereum is a personality cult and not an experiment in sound money.

The market has decided Ethereum Classic is not the way to go. I don't think that's down to a personality cult. The "code is law" attitude on the other hand is pure ideology.

> It is unlikely that a hard-forked bitcoin will ever gain traction. [..] Those with the mindset that they are in charge, rather than the market, have all left.

It will gain traction through the market if the situation that I described should arise.

> What else do you think is going to happen, everyone will just give up on Bitcoin and make it become worthless, rather than accept inflation?

Precisely. Bitcoin with inflation is just fiat money, but less efficient. If there is a cabal which can set an inflation policy, then it would be more efficient to just let them run the show and do away with the mining process. Would be kinda like what we have today.

Bitcoin will only succeed if it is superior money to fiat, and the way that it is superior money is its hardness to inflate.

In fact, if a policy of inflation were to be necessary, then better than what we have today would be one where people can vote on the policy, or at least, elect those who decide it. What we have today is a system where the people making the decisions are unelected and unaccountable. Bitcoin with a cabal of miners deciding the policy would be no improvement whatsoever.

> Bitcoin will only succeed if it is superior money to fiat, and the way that it is superior money is its hardness to inflate.

Currency that can't be inflated in times of a liquidity crisis is inferior. That's exactly what happened during the great depression - the gold standard only exacerbated the problem.

Sure, some Bitcoiners have such a narrow understanding of economics that they think the permanently fixed supply is somehow really important. It's not.

Think about it, why would you not want inflation? Because you want a stable currency! There's no other reason. Yet, for cryptocurrencies, the amount of inflation barely affects price at all.

What affects the price is mainly speculation. It's far more important that the system be stable than the fact that maybe over 10 years the supply of Bitcoin grows by another 10% or 20%. It's far more important that people actually use the system to conduct trade, creating actual demand for Bitcoin. Long-term inflation just doesn't matter for trade. It may matter for investors, but investing long-term in a currency is total nonsense.

I think your definition of failure is "people who believe in certain things abandon it". Sure, maybe that'll happen, but that doesn't mean the network is going to disappear or that Bitcoin will become worthless. It's going to adapt against beliefs that threaten its survival.

> Currency that can't be inflated in times of a liquidity crisis is inferior.

Inferior to whom?

The problem of MMT is it thinks that the collective is more important than the individual.

Individuals who save money for a rainy day don't need inflation - they've already accounted for potential liquidity crises. The fact that the rest of you can't save is not my problem, it is yours. Please deal with it without devaluing my savings, thanks.

> Sure, some Bitcoiners have such a narrow understanding of economics that they think the permanently fixed supply is somehow really important. It's not.

It's not important to you. What you lack in understanding of economics is the most basic tenet - that value is subjective. The entire field of Austrian economics, which largely gets ignored by mainstream "economists", is based upon this.

Fixed supply is important to savers of money, who don't want to see their savings devalued. Instead of their savings decaying with time, there's fair chance that they'll appreciate in value due to increased demand and deflation due to lost wallets.

> What affects the price is mainly speculation. It's far more important that the system be stable than the fact that maybe over 10 years the supply of Bitcoin grows by another 10% or 20%. It's far more important that people actually use the system to conduct trade, creating actual demand for Bitcoin.

You're still ignoring that saving is a valid use of money. Demand for bitcoin is almost entirely driven by people wanting to save and/or profit from the market for exchange. The "spending" use case just doesn't really exist yet - there's little demand because people can already do this with fiat money. Bitcoin just doesn't bring big enough benefits for spending yet, and people don't want to spend it because it is harder money and they'd rather spend the softer money first (Gresham's Law).

> Long-term inflation just doesn't matter for trade. It may matter for investors, but investing long-term in a currency is total nonsense.

Saving is investing. You are investing in the medium of storage retaining its purchasing power over time. When you hold a stack of USD, you are investing in the dollar. If you suspected that the dollar was not going to retain its purchasing power, then you would certainly not invest in it. The dollar is just a commodity like any other.

Saving in BTC and saving in dollars are the same kind of "investment", except one of them is very likely to always lose some purchasing power over time and makes a poor investment. The other one is risky for now, but it's purchasing power is subject only to conditions of the market and not the decisions of unelected bureaucrats.

> I think your definition of failure is "people who believe in certain things abandon it". Sure, maybe that'll happen, but that doesn't mean the network is going to disappear or that Bitcoin will become worthless. It's going to adapt against beliefs that threaten its survival.

The issue is, as you've suggested yourself, that bitcoin just isn't used that much for spending. It is not going to survive as a medium for exchange if people aren't using it as such. Bitcoin would become worthless because it no longer offers the benefits over fiat money. The "programmable money" thing is complete hogwash that doesn't need an expensive and inefficient blockchain to perform - it can be done with centralized services offering fiat.

Bitcoin is savings technology. There will be plenty of ways for people to spend bitcoin in future, but I suspect that once people become exposed to it, their time preference will rapidly decrease and they'll probably find themselves spending less.

> The problem of MMT is it thinks that the collective is more important than the individual.

Who said anything about MMT? I'm taking the monetarist position of Milton Friedman here.

> Individuals who save money for a rainy day don't need inflation - they've already accounted for potential liquidity crises. The fact that the rest of you can't save is not my problem, it is yours. Please deal with it without devaluing my savings, thanks.

I don't think you understand what a liquidity crisis is. Your view of economics seems to be that of a caricature of an early Austrian.

> Fixed supply is important to savers of money, who don't want to see their savings devalued. Instead of their savings decaying with time, there's fair chance that they'll appreciate in value due to increased demand and deflation due to lost wallets.

The point of a currency is not savings. Currencies are neither investments nor stores of value. If you want to invest, buy assets. If you want a store of value, buy gold.

If individuals are so financially uneducated that they put their savings in currency, that's not my problem.

> When you hold a stack of USD, you are investing in the dollar.

No you're not. The stack of dollars doesn't do anything. It doesn't pay rent. It doesn't pay interest. It doesn't pay dividends. It doesn't appreciate. It's not an investment.

> The "programmable money" thing is complete hogwash that doesn't need an expensive and inefficient blockchain to perform - it can be done with centralized services offering fiat.

Sure, but those are controlled systems. Bitcoin is really good for one thing: Speculating on cryptocurrencies. Sure, you can trade BTC and maybe a handful other cryptocurrencies on ordinary broker platforms, but if you want to gamble on the latest shitcoin, the easiest thing is to just deposit some BTC on an unregulated trading platform.

> Bitcoin is savings technology.

That's a narrative that people came up with to deal with the fact that Bitcoin failed as a currency. It makes no sense. Bitcoin is a highly volatile speculative asset. There is no intrinsic value, no intrinsic demand in "rare numbers" like Bitcoin, no matter how "scarce" they are or whether the supply is fixed.

> If Bitcoin cannot be sustained by fees alone, block reward will return.

Somewhere in the next 20 years, before Bitcoin has another 5 halvings (which would reduce the reward to 0.195312 BTC), I expect there will be a proposal for Bitcoin LTS (Long Term Security, sounds better than Bitcoin TE for Tail Emission) which will be a Hard Fork to end further halvings. The ensuing debate could make the 2015 scaling debate look pretty tame...

>> Unfortunately, practically all cryptocurrencies subscribe to the notion that early miners must receive greater rewards, even when they often already enjoy lower difficulty.

This habit of disproportionately rewarding early adopters is a universal feature of our economy and doesn't only apply to cryptocurrencies. The reason why it's like this is simply because it's extremely difficult to get any project or company off the ground; the risk of failure for an early adopter is ridiculously high so rewards also need to be ridiculously high to justify those risks.

This is because most economic activity today is focused on seeking rents and building moats; so this has made the environment extremely adverse for newcomers; it lowered their probability of success and forced early adopter payoffs to skyrocket. We live in an age where the moats are so wide that that even offering customers a solution which is 10x better isn't going to cut it anymore in terms of being able to turn any profit.

One might think that cryptocurrency would be immune to this; after all, the entire point of the blockchain movement was to fix such kinds of socio-economic problems - But having worked in the space for several years, I can say with confidence that incumbents in the cryptocurrency space have become part of the same problem which they were originally claiming to solve. Development in the space is slow, inefficient, lacks a clear vision and the incumbents of the cryptocurrency space lack any incentives to give newcomers a fighting chance. They will happily let the most promising new projects drown in the noise of popular mediocrity.

The hypocrisy of it all is unmistakable. I've seen the ugliest side of human nature in this industry. That said I'm still cautiously optimistic but it's clear that something has to change at a social level in order to move forward.

Even better, we could adjust the rate of issue in accordance with the demand for money, thus negating the need for more than a constant, low amount of inflation in the first place.

We could call the entity that adjusts the rate of issue a "central bank" and they could perform this "inflation targeting" to keep the value of the currency stable through economic shocks.

Even, even better that "central bank" could choose winners and losers providing credit to certain participants eliminating the need for petty "price discovery" and creating a system where 20.5 million people can lose their job on the same day something called "the stock market" goes up 400 points...a pure "stable" utopia!

Good points. I haven't read the link but aren't you missing the equation of price economics? Bitcoin is only highly skewed for early miners only if they have held on to their rewards stash.

Atleast what the designer intended/predicted if I remember correctly, is for the reward value over time to be the same. This is of course not backed by mathematical equation of sort. I would way super early mining is more similar to being the first employee of a startup that pays you in equity only.

Well - ETH has infinite supply.

> Unfortunately, practically all cryptocurrencies subscribe to the notion that early miners must receive greater rewards, even when they often already enjoy lower difficulty.

Well, it's a great way to get people to be invested in your new cryptocurrency.

Would you be happier if we said "bounded"/"unbounded" supply

Why can't I just declare that I issue "TREE(3)" of my own fiat currency? There's finite supply only in some astronomical sense that computers would have difficulty storing bank balances represented in BCD or something.

Because TREE(3) units are not well divisible. You can't give someone one and have the leftover amount representable with any reasonable amount of memory.