So, I guess the question becomes.. is there a (or what is the) difference between:
1. [0, ∞)
2. (0,1]
when it comes to a currency?
I think that the traditional "boil the frog" approach of monetary inflation is psychologically easier for people to take.
A central authority just sort of wills new currency into existence as it is demanded.. Which, presumably, allows for price stability.
To me, the fact that it is hard to get "1 bitcoin" makes it too unstable. Someone could will 0.001 bitcoin into existence and pay $1 for it.. but, that 0.001 bitcoin may be worth $0.50 tomorrow (but then worth $3 the next week). So.. what's the point (presuming I desire an alternative currency).
One needs a clever way to create an "algorithm" (seems people think this stuff is as magical as the idea of a central bank).. that people trust to sell currency units.
The system would just run and sell 1 bitcoin (or 1 mystery coin or whatnot) for $1 to anyone who wanted it. The goal would be to achieve parity with the dollar (and maybe any other currency).
The thing this magic algorithm would NOT do is.. it would not BUY its mystery coins back. It would just create a verifiable.. non-counterfeit coin for anyone who desired one for a set price.
If a deflationary spiral set in on the dollar.. well, magic algorithm learned from Soros and the Bank of England.. you don't fight that..
