Bitcoin was supposed to be limited, so hyperinflation doesn't occur. Apparently creating new blockchains is a workaround for this limitation -- a limitation which was put there for the stability of Bitcoin.
Any windfall from mining "alternate blockchains" HAS to come from somewhere -- maybe partially from me, when I sell my 10 BTC for $85 instead of $115? It's gotta be. For every extra dollar gained *someone* is losing a dollar.
I don't think many people understand this whole *coin universe is a closed system. 100% closed. As in, only so much money sloshing around.
John, Mike, Frank, Sally, Alice, and Tom are playing "economy" with seashells and buttons. There are only so many of either, so the economy is stable. They trade them in exchange for US Dollars, too. Sure, once in a while one of the kids begs his/her mom for a few bucks of their next allowance...but basically there is only $5 from each kid in "the system" sloshing around. One person's windfall is another person's wipeout. And if Tom starts another currency, "Acorns" and starts trading them for buttons/seashells, it's bound to bring down the value of the existing 2 currencies. The fact is that only $25 is sloshing around the kids' "economy", which would have to be the total value of the various "currencies" they're trading. Now what if the seashells and buttons were limited, but the acorns weren't? In other words, the value of their existing currency(ies) were stable, but then a second or third currency comes along, and causes the value of the STABLE currency to drop, because demand is divided up.
I think the key point here is: Even if the quantity of Seashells is carefully monitored to prevent hyperinflation, the introduction of a second currency (Acorns) can cause hyperinflation IF two conditions are met: A) the citizens use both currencies, B) the price of Acorns is pegged to Seashells
Zimbabwe experienced hyperinflation, but it didn't affect us here in the US, because no one here uses Zim dollars. Moreover, we don't peg the dollar's value to "how many Zim dollars" it's worth. The same can't be said for Bitcoin and other *coins. The latter are easily traded for BTC, BY THE SAME SMALL GROUP OF PEOPLE.
Anyone holding their wealth (or a portion of it) today in "solidcoins" or "IXcoins" means that much less demand for BTC. No wonder BTC is $8.50 instead of $11.50 like last week.
This describes the Bitcoin universe to a T. It's a closed system. We have X members, with a total of $X they can play around with in this Bitcoin game. People come and go, making and losing money, but when you make $10 it's coming from someone else. (Unlike the real economy, where wealth is actually created.)
Show me a factory that was built with Bitcoins (no USD) and I'll be proven wrong. All we have in the Bitcoin economy (besides gambling and speculation) is a few niche retailers selling things like T-shirts. These "mom & pop" shops have to sell their BTC immediately to buy more T-shirts, since their suppliers don't accept Bitcoin. So you spend 2 BTC on a shirt (causing 2 BTC to be "bought" on the market) and the seller has to SELL 2 BTC on the market. How does it help the market to spend 2 BTC?
