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> it incentivizes hoarding over spending, especially in the face of an expanding economy. That kind of macroeconomic analysis assumes that everybody already ow
by 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 agoSure, 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.