Bitcoin will never work
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Bitcoin will never work as a currency, at least not when PoW and/or a fixed amount of bitcoin is being used. If you don't understand the issue with deflation, then it's probably hard to imagine. We all dislike inflation, so it is easy for the con artist to use this deflation as a unique selling point for this bitcoin con and trick people into thinking that this is a better design than now with fiat currency. Because, nobody likes inflation, right? And deflation sounds good, doesn't it?
But deflation is an issue, and fiat currency has not evolved to where it is now for no reason. OK, too much inflation is bad, but that does not make bitcoin any better, as mentioned in my main article. To give you an idea about why this does not work I would like to do a thought experiment with you and this thought experiment is:
Let's imagine a world where bitcoin is the only currency
OK, I think you bitcoin fans will love this idea, unless you are honest and know you are only in it for the fiat money that you hope to make with bitcoin. But a currency should be able to stand on its own legs, so we are going to think about the 'wonderful' world, with only bitcoin as currency.
Now imagine that you are in for a raise, and your boss offers you a decrease of 8% bitcoin/sats as your salary raise for the next year. As the deflation for bitcoin rate is projected to be 10%, this will effectually be a raise of your salary. I hope you see the problem here, rationally this is a raise, but we people are not that rational, for most of us this does not compute.
Then there is the standard issue with deflation, that people stop spending money, as they can buy more with it the longer they HODL it. Deflation might even get so that 1 satoshi is worth more than a loaf of bread, so we shall reach a limit where it all breaks down. And how about lending money? How would you pay interest when there is constant deflation, and there will not be an increase of money supply? And how can you get interest when there is a maximum number of bitcoin? That will not work without an increase of money supply. Investing will no longer work, because due to deflation you will always get less for your product/service, on the whole there can be no growth due to the fixed number of bitcoin, HODL is the only way.
OK, so now lets take PoW into account. Miners get fees, and bitcoin when mining. These will then be paid fully in bitcoin of course. Say miners get the amount of bitcoin offered at next halving 3.125 bitcoin each 10 minutes and maybe for ease 0.875 in transaction fees. So that is 4 bitcoin every 10 minutes, and when mining rewards go down, fees go up. There are 1,440 minutes in a day, that divided by 10 is 144 times 4 bitcoin a day, that is 576 bitcoin per day, and times 365 that is 210,240 per annum to keep bitcoin running. That is 1% of the maximum amount of bitcoin. And this cannot drop too much, or else miners might go rogue, see chapter 6 incentives of the bitcoin whitepaper. As going rogue will get them 'paid' in bitcoin, the total incentive in bitcoin should be stable at minimum. Of course, as there is deflation, this 1% of all bitcoin will become an ever greater cost for keeping the currency running and transactions being processed.
But it is even worse. Due to deflation, the mining cost will decrease, while the reward will increase. So it would be logical to start mining, and here we will hit a Catch 22, this must happen and cannot happen. Due to the increase of mining, the mining difficulty will also increase, making mining more costly. This will increase power consumption, and increased demand for power will raise it's price, making everything more expensive. But that cannot happen, because we have a limited supply of bitcoin. It's even worse, as sometimes people lose their private key, there is even a decrease in accessible bitcoin.
It is mind boggling what issues there are with bitcoin using PoW and a fixed number of coins.
Does not compute error...
I hope this thought experiment will make you see that bitcoin is not a step forward in the evolution of money, it is multiple steps backward, packaged in technical IT language most people don't even understand. Just looking at it with a different view, like we did in this thought experiment, gives you some insights in how mind boggling stupid this bitcoin idea is. As I stated before, fiat currency has not evolved to where it is now for nothing. That does not mean fiat currency is perfect, we should keep the central banking people in check so they don't increase the money supply too much.
And don't be fooled, these issues with bitcoin don't go away because we do have fiat currency in our reality. The issues are just a bit different. Bitcoin now consumes a great deal of fiat currency to keep it running, that is why it is a negative sum game. Bitcoin must raise in price to make mining worthwhile, and difficulty/costs/power consumption must increase to keep it save. This also cannot go on forever, that is why A bitcoin death spiral is inevitable. I hope this thought experiment will open your eyes to the issues there are with bitcoin. No, our fiat currency isn't perfect, but bitcoin isn't the solution, it is a Con.