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In the global economy, resources are not constant. Every time you do some work, you add value to the system. The problem is that with bitcoin, the total amount
by lokedhs 9y ago
In the global economy, resources are not constant. Every time you do some work, you add value to the system.
The problem is that with bitcoin, the total amount of currency is fixed, which means that when value is added to the system, you the value of the bitcoin has to increase.
You might think that not having inflation sounds like a great idea, but the problem is that unless the total amount of currency increases to match the value of the system you will not end up with zero inflation, you'll end up with deflation.
Deflation is really bad, because it encourages people to sit on their cash instead of spending it, and an economy without spending means that more value is not added to the system.
Of course, I am arguing against people who I have heard who suggests that bitcoin is all we need and it can take over all currencies in the world. That seems more or less impossible based on what I just said.
Perhaps cryptocurrency is the future of finance, I have no opinion on that, but if it is, I don't see that it would be bitcoin.