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What's the problem with that? It seems to be working so far.

by omouse 10y ago

trendia 10y ago
Working for whom? It certainly works the best for those that mine early (aka the founders)
colanderman 10y ago
It incentivizes hoarding over spending, especially in the face of an expanding economy. Though to be fair, the rate at which new cryptocurrency pools are being created seems to more than keep up with the growth of the economy. Who needs the government to print money when anybody can?
- VMG 10y ago
  > it incentivizes hoarding over spending, especially in the face of an expanding economy. That kind of macroeconomic analysis assumes that everybody already owns some amount of the currency. However in the new currency markets that are developing, you have to consider the incentive to even start accepting a currency. One that loses value over time is not attractive to the recipient.
  - colanderman 10y ago
    Sure, pyramid schemes are a great way to drum up interest. How about stability and liquidity instead? The more readily exchangeable a unit of currency is for goods, the easier it will see adoption. Deflationary currencies, due to their incentivization of hoarding, tend to be both unstable and illiquid, driving away anyone but speculators.
  - bduerst 10y ago
    >One that loses value over time is not attractive to the recipient. Correction: One that changes value over time is not attractive to the recipient. You can shine the deflationary currency as much as you'd like, but economists have a consensus on why the volatile behavior of set-supply currencies are inferior. It's precisely why the world's major currencies don't use the gold standard, but honestly, this conversation repeats itself almost every time a deflationary cryptocurrency gets posted.
- SEK3NLM 10y ago
  This is true when the rate of interest in the new currency exceeds the rate of inflation, but as the adoption starts reaching diminishing returns (you can't add %100 more users every year) this will diminish and it will just be a currency. Bitcoin is like the internet-- for many years it wasn't really known or understood by the general population. A look at mainstream impressions and articles about it seems to indicate this is still the case. I've never seen a convincing argument that the low rate of inflation (bitcoin isn't deflationary, just fixed ultimate supply) is a problem. Personally, I have spent a fair bit of my bitcoin buying things on purse.io.

What's the problem with that? It seems to be working so far.

by omouse 10y ago

What's the problem with that? It seems to be working so far.

trendia 10y ago

Working for whom? It certainly works the best for those that mine early (aka the founders)

colanderman 10y ago

It incentivizes hoarding over spending, especially in the face of an expanding economy. Though to be fair, the rate at which new cryptocurrency pools are being created seems to more than keep up with the growth of the economy. Who needs the government to print money when anybody can?

VMG 10y ago
> it incentivizes hoarding over spending, especially in the face of an expanding economy. That kind of macroeconomic analysis assumes that everybody already owns some amount of the currency. However in the new currency markets that are developing, you have to consider the incentive to even start accepting a currency. One that loses value over time is not attractive to the recipient.
- colanderman 10y ago
  Sure, pyramid schemes are a great way to drum up interest. How about stability and liquidity instead? The more readily exchangeable a unit of currency is for goods, the easier it will see adoption. Deflationary currencies, due to their incentivization of hoarding, tend to be both unstable and illiquid, driving away anyone but speculators.
- bduerst 10y ago
  >One that loses value over time is not attractive to the recipient. Correction: One that changes value over time is not attractive to the recipient. You can shine the deflationary currency as much as you'd like, but economists have a consensus on why the volatile behavior of set-supply currencies are inferior. It's precisely why the world's major currencies don't use the gold standard, but honestly, this conversation repeats itself almost every time a deflationary cryptocurrency gets posted.
SEK3NLM 10y ago
This is true when the rate of interest in the new currency exceeds the rate of inflation, but as the adoption starts reaching diminishing returns (you can't add %100 more users every year) this will diminish and it will just be a currency. Bitcoin is like the internet-- for many years it wasn't really known or understood by the general population. A look at mainstream impressions and articles about it seems to indicate this is still the case. I've never seen a convincing argument that the low rate of inflation (bitcoin isn't deflationary, just fixed ultimate supply) is a problem. Personally, I have spent a fair bit of my bitcoin buying things on purse.io.