#2: It's not just a client parameter.

#3: The supply cap and underlying deflationary bias were conscious design choices. Maybe in analogy to precious metals.

In my understanding this is a major design flaw which might break the currency in the future. (Please correct me if I'm wrong.)

Having a limited amount of currency improved early adoption akin to a gold rush because you could obtain a large amount of currency (relatively speaking) for a comparatively low amount of work. This worked very well in my opinion.

To my understanding you need active miners to keep the currency alive. (Is this really true?) But the returns for those miners vanish with time. This makes the monetary investment in the miners go down and a single group could take over and manipulate the whole system by majority vote. (Is this also true?)

In my opinion a currencies value should vanish with time because currency is not something that really holds value as physical investments do. Fiat currency as we now have in the "real world" now reflects the monetized value of contracts expressed in that currency. A currency like bitcoin should be used mostly to settle transactions and not to store vast amounts of wealth. Therefore a steady inflation with a rate like e.g. 10% p.a. would be good to thwart money hoarding and ensure a steady supply of new currency.

With an inflation of 10%, each year 10% of the stored value gets taken away and redistributed to the miners. This means that it's wise to not store too much value in that currency but to quickly and efficiently use it for transactions such that the total sum of transactions us much much higher than the stored value.

The current implementation of bitcoin does not reflect this idea at all and I'm very convinced that it cannot play a huge economical role due to its design. In its niche, however, it currently works very well. I see it as a good design study for future cryptocurrencies which can be adopted at a larger scale.

1. Bitcoin runs on proof of work, nodes agree on solved blocks by an increasing number of zeros on a sha256 hash of the block header. This is a mechanism to keep the supply roughly constant despite increases or decreases in total network capacity so that the rate of increase in the money supply is consistent. Difficulty is adjusted every 2 weeks, or 2016 blocks, so that we have 10 minute block times.

2. You can fork bitcoin, but manipulating the blockchain would break consensus. If I have a custom client that changes the rules concerning how much bitcoin I made or whatever, that will not affect other people because their clients will disagree.

3. This depends on what Bitcoin becomes, it could go either way, remember the upper bound is separate from divisibility. So right now its divisible to 8 decimal places, but could be more if needed later. If bitcoin is a store of value then this is probably a reasonable design decision, if it becomes a generic transport of value then we may have to investigate other options.

4.The verification time is a function of the capacity limits of the network, tests have shown that we can handle many more transactions than are currently being verified, but the block size limits the number to 1mb worth of tx data every ten minutes, which equates to roughly 3 or 4 verified transactions per second on average. There are also numerous ways this is being addresses, but its a very contentious and on going subject.

5. The spat is about the block size. Should it be increased, or should alternatives be developed. The heart of this is whether you think bitcoin is a store of value network or a transaction network. The current core developers work at Blockstream and have developed SegWit as an intermediate step since it allows for decreasing the space that each transaction takes up, and has other benefits with regard to support for more sophisticates smart contracts and side chains. Blockstream has a monetary incentive to see side chains succeed versus strictly on chain scaling. That conflict of interest and the direction bitcoin has taken has been highly contentious within the community, and has created some fractures.

6. Bitcoin does have a scripting language, it is at the heart of how bitcoin works, but for various security reasons it has been substantially curtailed. Right now its being used for multi signature support, normal payment, time locked payments, and for adding additional meta data. Ethereum has a "turing complete" implementation, it has some serious limitations, but promises to do more. So far that promise has been tempered by numerous serious security problems in various smart contract platforms using Ethereum like the DAO. Its an interesting experiment, and the lessons learned are going to help us develop other systems as time goes on.

7. The mining farms haven't changed the rate of supply, but they have shifted the "control" of the network, mostly to China which has subsidizes or near free electricity in several regions. Coupled with close access to asic development and delivery it has become a prime location to build server farms. This gives them the ability to hurt the network in various ways.

8. Nasdaq and other financial firms are experimenting with it for low volume transactions as a sort of distributed shared database. R3 is building a consortium backed digital currency again for settlement. There are lots and lots of interesting potential applications, but we haven't seen a killer application beyond bitcoin itself which is pretty amazing when you think about it.

9. Most governments have taken a hands off approach, with the exception of New York state which is actively regulating entities as part of their Bitlicense legislation. There are also various overlaps with traditional money transfer that makes licensing complicated in the United States, and gives first mover advantage to other countries that are more permissive.

Obviously it wouldn't be anonymous. It might not be able to be international. But liberal Western governments want their citizens to be able to interact economically with each other easily (but taxed), don't they?

I recall some messaging from the EU about their interest in establishing ways for ecommerce to work over the continent, without relying on foreign credit card companies.

I guess I should read up on the history of failed microtransaction systems.

Yes, assuming that others will pay for it. And perhaps an increasing number of productive individuals will. But that just pushes the question back one step. Why do those other people want to own Bitcoins? You see the infinite regress problem here?

(With fiat currency, there's a finite regress. It terminates with specific facts like historical government actions, gold, taxes.)

True if any only if, and the degree to which, possession of BTC is considered desirable. If it's a sought-after 'commodity'. Otherwise it's just a decentralised simulation of money, no matter how many desirable qualities it simulates. MMO games have simulated internet money, and various transfer features too.

People who got into BTC early, did so because they wanted it to fulfil its potential as a better sort of modern money. They knew nobody else would accept it as payment at the time. They hoped it would become valuable in the future... and it has. The early adopters essentially gave it its initial kick start by role-playing as if it was money. I don't know if this basis of playing pretend can be a solid foundation for an invented money's value.

It seems too ephemeral. It's based on belief in belief, ultimately based on pretending.

Maybe it would be beneficial, for the sake of stability, to invent a powerful mythological origin story for BTC. Maybe that's what they are trying to do with this still-mysterious Satoshi avatar.