[ExI] [mta] Re: "Crypto Coin Law" vs "Law of the Crypto Coin"?

[Mirco Romanato]

Il 14/08/2013 23:15, Gordon ha scritto:

> Bitcoin is I think already an interesting way to bet against the dollar,
> but very speculative. Assuming the inverse correlation with the dollar
> is meaningful and statistically significant, (as I suspect it is or will
> soon be), rapid and substantial appreciation in the dollar could disrupt
> the uptrend in bitcoin in dollar terms. This is true even if bitcoin
> continues to succeed in other ways. 

The only reason I could see for a rapid and substantial appreciation of
the US$ against other fiat currencies is just these currencies inflate
faster than the US$.

The current internal inflation of Bitcoin is around par with the US$
(because for various reasons the network is finding new blocks faster
than designed, for now). In the future, the inflation rate of the US$ is
expected to be faster and the inflation rate of Bitcoin slower.
This should cause an increase of the exchange rate.
If we add an expansion of the use of Bitcoin in the future, we can
expect the long term trend against the US$ will be maintained; the only
thing to change will be the pace of the trend.

Mirco