"You didn't mention the part of bitcoin which prevents paypal implementing a chargeback mechanism for bitcoin payments. Cash has no chargeback mechanism, but you can pay to use a mechanism created by someone else...or choose not to. Bitcoin...the same."
Right, so you agree it's a crap payment method, and in order to make it into a good one we effectively need paypal and VISA. excellent.
The pretty paper is not really printed by the government - they just mint the coins. The paper is printed by the banking system...
This is factually false. It's outsourced by the government to printing firms like De La Rue. Are you actually labouring under the illusion that coins are 'real' money but notes are just the bank promising real money? What an interesting world you live in.
So a banking system using credit-based money denominated in bitcoin is not inconceivable, and would grant you the inflation you desire.
So why bother? We already have that, so bitcoin adds nothing. Also, as with payment systems, it's good to see a BTC enthusiast admit we'll still need banks issuing fiat, only now we've decoupled them from any government regulation where it comes to currency. Awesome.
If inflation is 4% then everyone would look for investment opportunities which lose 3% per year; they will come out on top by destroying value. Do you see that you don't make sense?
No, in fact you don't make sense, that sentence doesn't even make sense. What the hell are you even trying to say there? I'll restate in case you missed the point -
If inflation is 4% then you come out behind the game by 4% if you stuff your mattress with cash, so instead you look for saving and investment opportunities to earn greater than 4% so you can at the least break even. This has knock-on positive effects on the economy.
If deflation is 4% then you come out ahead of the game by 4% just by stuffing your mattress. This has no positive knock-on effects for the economy.
To paraphrase your initial comment on this and really hammer it home - if you want 3% return in an inflationary environment you charge inflation + 3%, at the end of the day you come out 3% better off than if you had done nothing. If you want 3% return in a deflationary environment you *could* charge deflation +3%, but if deflation is greater than 3% you'd actually be better off doing nothing.
Do you understand the difference yet?