You're right, it appears that inflation is the only way out central banks have. That's where alternative currencies could play a major role and where the different components of the story would start coming together.
On one side, we are going to see progressive drops in the value of major currencies. On the other side, we are going to see an increasing number of alternative currencies gaining both in value and reliability. So the use of non-traditional monetary interventions, by decreasing the value of standard currencies, could lead to increased reliance on alternative currencies and ultimately to the obsolescence of credit-based currencies.
That would be a smooth and natural transition towards what economists from different streams of thought have been calling for since the early 1900s, from Irving Fisher (separation of the monetary and credit functions of the banking system) to Friedrich Hayek (denationalized and competing currencies). A working paper published by the IMF a few years ago shows that some of these ideas are receiving interest in institutional arenas, which is an encouraging start.
I am still looking for a rigorous analysis of the Steemit monetary system and its sustainability. Do you know of any thread or anyone who has delved into the details and would be able to shed some light on the apparent Ponzi nature of the system? Thanks a lot!
@andrarchy has some ideas and did some interesting videos. The system is still being tweaked, so I would call it still experimental. There are 3 currencies in the system roughly analogous to debt (liquid STEEM), equity (STEEM POWER) and a derivative product with a loose peg to USD. To me, the most interesting observation so far is that even if the theory is sound, the system needs to explicitly account for the psychological implications of inflation rate. I believe that's what the hard fork revisions are addressing.
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