Ray Dillinger:
> the "currency" is inflationary at about 35% 
> as that's how much faster computers get annually
> ... the inflation rate of 35% is almost guaranteed 
> by the technology

Increasing hardware speed is handled: "To compensate for increasing hardware speed \
and varying interest in running nodes over time, the proof-of-work difficulty is \
determined by a moving average targeting an average number of blocks per hour. If \
they're generated too fast, the difficulty increases."

As computers get faster and the total computing power applied to creating bitcoins \
increases, the difficulty increases proportionally to keep the total new production \
constant.  Thus, it is known in advance how many new bitcoins will be created every \
year in the future.

The fact that new coins are produced means the money supply increases by a planned \
amount, but this does not necessarily result in inflation.  If the supply of money \
increases at the same rate that the number of people using it increases, prices \
remain stable.  If it does not increase as fast as demand, there will be deflation \
and early holders of money will see its value increase.

Coins have to get initially distributed somehow, and a constant rate seems like the \
best formula.

Satoshi Nakamoto