If you have a central entity issuing infinite credit from nothing at an arbitrary price because they issue it from nothing, then everything you just laid out is meaningless. If on the other hand, you have a sound money where people are lending real savings and thus the supply is real and not make believe, then everything you explained is simply exactly how a market works.

I feel like we've had this conversation before but... nothing you're describing requires a fixed number of monetary units. theres no compelling reason to have a fixed number except "that's what Bitcoin is." and there are a number of well documented reasons why a static number is a bad idea. it's true somebody would have to make a decision at some point. and all algorithmic supply inflation is a shot in the dark. but come on, has 1.5 to 2% annual supply inflation in gold been a huge problem? no, it's generally considered *too inelastic.* but as you point out, we can have l2's functioning on top of it. (really funny how Guy only responds to people who agree with his ideas. how good can an idea be that is never challenged?)