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RE: Did Satoshi Create an Inferior Asset on Purpose?

in LeoFinance3 years ago

Satoshi was an engineer not an economist.

The genius of his invention was that it was decentralised digital money that couldn't be double spent. The other aspects (the halving, the cap on coins etc) are all arbitary and can be changed.

In the genesis block he included the headline in the Times newspaper of the day: "Chancellor on brink of second bailout for banks"

It turns out that the Chancellor of the Exchequer had asked the Bank of England if there was a way to avoid the bailouts - could the BoE handle the payment system if the banks failed. It turns out the BoE couldn't - so the banks were bailed out mainly because they process all the transactions that make modern commerce work.

However, if you have a decentralised payment system that doesn't double spend, then you don't need to bail out banks.

My feeling is that central banks like the BoE or the Fed will issue their own digital coins based on bitcoin's technology, but without any of it's deflationary flaws. The payment system will then migrate to these digital coins controlled by the central banks - which means that if the commercial banks fail it will no longer matter, the payment system will continue to work and there won't be any need for bailouts ever again.