Hey Mark — Thank you so much for taking the answer seriously, for not showering me with “this is FUD” and for taking time to write a well thought out response. I read it with interest and I have just ordered the book you recommended.
However, I believe we are not entirely speaking the same language yet. I do not per se worry about there not being enough units to go around (nota bene: just dividing up bitcoin into smaller units won’t help here as once they are all distributed, the ones that “have” will not necessarily share with the ones that don’t). It is actually one step deeper that my worry lies, namely with incentivation.
When all bitcoins are distributed and they keep rising in value, people will (a) not want to spend them for goods and services unless they have to, impeding growth, (b) will not want to lend them to anyone so that person, starting with nothing, can start a business with a loan or (c) will want so much interest on these loans that people cannot afford them.
Your analogy to the gold standard is a good one (and my main worry). I am among many who would actually say that the gold standard was a major reason why the “Great Depression” was so deep and the fact we devalued paper money so strongly in this latest period was a major reason that we did not in fact end with a depression.
So what I am saying is — based on what I think I know (and I am well aware I know very little overall, so I might be wrong), bitcoin is not a viable payment replacement on a global (or even national) scale. We would indeed need a “Crypto Dollar”. In other words, something that is sufficiently stable in value, but that does loose value over longer periods of time, so people are incentivized not to hoard it, but to invest in order to create wealth. There is a reason central banks aim for low, positive inflation… Maybe a 100% inheritance tax from a certain point onwards (say, above 2 btc) could be a part of the solution for this problem, but I am not sure.
I will read your book recommendation though. Thank you again.
By the way — paper money and bitcoin might neither be the solution. Maybe both are just a step towards the right “mix”.