Originally Posted by
IlPrincipeBrutto
A limited-by-design supply of money, coupled with transaction fees seems to me like an interesting combination.
After changing hands a hundred times, a 50 Euro bill remains a 50 euro bill.
But, if you start with 50 euro on your credit card/ electronic wallet, and follow those 50 euros for a hundred further electronic payments, you end up with less, as any transaction takes a little bite of the initial capital.
The same seems to be valid for any sort of electronic currency, regardless of who 'controls' it.
So, as time goes by, as as the number of transactions accumulate, the 'payment system' and its owners accumulate a growing slice of the currency tokens available.
If the number of tokens available is limited by design, it means that, as time goes by, the total amount of currency available for transactions becomes smaller and smaller, and that's deflationary, with all the consequences this entails; unless the fee collectors decide to spend those fees back in the system.
Which is probably what is going to happen; on the other hand, the possibility to withhold the fees they have collected, thus restricting the amount of tokens available, gives them a great power, one which they could decide to exercise for their advantage.
IPB