- Question 1: Fiat currency like US dollars don't limit the amount in circulation so as to manage inflation of the currency. Currencies in the past that don't do this are usually subject to runaway inflation or deflation at some point. Why won't bitcoin be subject to this economic condition? I understand that bitcoins are infinitely divisible so perhaps that is the way bitcoin inflation/deflation is handled?
- Question 2: I believe the bitcoin network processes it's transactions by incentivizing miners with new currency in exchange for processing the transactions (I think that's how it works). What happens when there are no more bitcoins for miners to mine? How will all the transactions be processed? What are the incentives to support the transaction network without new bitcoins as incentives?
I definitely appreciate any insights into the economic mechanics of the network along these lines!"
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