alt Hacker NewsTo become a medium of exchange, it needs to become a unit of account. That will happen as it's value stabilises, and that will only happen once it's proved itself as a store of value.
What if Henry Ford evisaged his Model T being used as a temporary alternative for when your horse is unwell? Or a fairground ride? Bitcoin is what it is.
> And what is the incentive to loan money in your system?
Interest - the age-old solution. Offer me interest that both compensates me for not having use of my money and for the risk of getting it back, and we have a deal.
Value can only stabilise if there's either someone in charge adjusting the rate of printing to maintain a stable value. It cannot be done algorithmically as there's no way to determine the value from inside the system.
Non-deflationary currencies encourage hoarding which leads to wild swings in value. Deflationary currencies do much better. Look at the price chart of BTC vs XMR.