Interest Dilemma:

I was thinking, if Bitcoin were to be virtually completely adopted as the currency of the world, how would interest work? There is only a finite amount of btc in existence. If loans are made at 1%, where does that 1% come from? New economic activity would create new wealth, but NOT more btc. The btc in existence would be more valuable, but there would not be any more of it. There would never be enough btc in the world to allow for interest payments.

With this model, there would be no incentive to loan and society’s capital would be tied up and unproductive. Unless I’m mistaken, a deflationary currency could never work. Bitcoin’s role would be as digital gold, and not an everyday currency.