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The problem with a deflationary currency is that prices, wages and income go down over time. Someone borrowing 100 BTC today will have a hard time paying back t
by ufo 9y ago
The problem with a deflationary currency is that prices, wages and income go down over time. Someone borrowing 100 BTC today will have a hard time paying back that 100 BTC one year from now (let alone the interest) because they will be earning less than they do today.
- knocte 9y agoSo loans would need to be short-lived and with high scrutiny, to make sure they are payed back. I consider this a good thing, as opposed to the other extreme: give everyone a loan no matter what (the root cause of the 2008 financial crisis).