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Federal Reserve profits are returned to the federal government. While that's still a step or two removed from being returned directly to society, it's far close
by praxulus 9y ago
Federal Reserve profits are returned to the federal government. While that's still a step or two removed from being returned directly to society, it's far closer than anything in the bitcoin ecosystem.
Inflation is pretty stable and thus predictable. The profits from seigniorage are made by the Fed itself (and thus the government), not the member banks. Member banks can make money from having privileged access to the discount window, but that's still not seigniorage.
Coinbase, Bitpay, et. al. incur all the same kinds of costs as VISA, MasterCard, Paypal, et. al. on top of the Miners' power consumption. Traditional systems might be inefficient because they're running on old hardware or something, but that's a problem that can be fixed. Bitcoin mining is already done on bleeding edge hardware, so its power consumption cannot be significantly reduced. I suspect it isn't enough to be a major concern, but Bitcoin clearly has a higher lower-bound than traditional systems.
- Frogolocalypse 9y ago> Federal Reserve profits are returned to the federal government. Is inflation returned to the people forced to pay it?
- princeb 9y agoinflation benefits borrowers. should all families who borrowed for a house be forced to pay those who chose to save?
- Frogolocalypse 9y ago> inflation benefits borrowers. Not if the price of living increases at a greater rate than the rate of return it doesn't. Which, as you would know, it is doing.
- princeb 9y agothat makes no sense. both borrowers and savers have to live, they both get hit by the cost of living. savers don't get to avoid eating and paying for healthcare just because they don't borrow.
- Frogolocalypse 9y agoYou've just explained why people want bitcoin.
- shawabawa3 9y ago> inflation benefits borrowers Not really, because lenders factor inflation into their rates.
- Frogolocalypse 9y agoWouldn't it be great if inflation aligned with price increases then.
- RobertoG 9y agoIt depends. It seems that you see inflation as a kind of taxes and that you are against taxes. If the government "print" new money to create more roads or to give healthcare and this cause inflation is that so unfair? Only if you consider that you are entitle to a part of the economy, only because you have savings, nevertheless the needs of the society where you live.
- Frogolocalypse 9y ago> you are against taxes. I said no such thing.
- praxulus 9y agoInflation is expected, so by holding dollars you're agreeing to pay it. Nobody is forced to hold dollars. If you don't want to pay that 2% a year, don't accept payment in dollars, or immediately convert it to another store of wealth upon receipt.
- Frogolocalypse 9y agoIndeed. That's what bitcoin is. The store of wealth.