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> it doesn't promote commerce and trade The problem is that our existing financial system probably had an intention of using inflation to encourage commerce a
by Frogolocalypse 9y ago
> it doesn't promote commerce and trade
The problem is that our existing financial system probably had an intention of using inflation to encourage commerce and trade, but over the past 40 years, that focus shifted from using debt for the funding of productive enterprises to debt being used for the bidding up of fixed assets like houses, but also stocks. The only thing that mattered to this bidding process was capital growth. The solution to these bubbles wasn't to reign in debt creation, or to force the targeting of debt creation to productivity, but to simply increase it. Bubble after bubble after bubble, crisis after crisis after crisis. But not only that, a death in productive capacity, which is all too apparent to the middle-income demographic.
Because of this irresponsibility of the finance world, crypto-currency technology was developed to allow people to park their productive gains in inflation resistant financial instruments. So in order to get these people to part with their inflation resistant instrument, you will have to convince them that you will give a better return than inflation, and that means by increasing productivity. You can no longer just create more debt, because the only thing that will do is increase the value of the deflationary asset, by decreasing the value of the inflationary one. That means if you want to survive as a national currency, you better start working on education and building productive capacity, because you'll no longer be able to fleece your populace whenever banking execs are looking to buy a new bentley.
- cryptodogemoon 9y agoFun fact: Bitcoin is designed as a hyperinflationary currency that begins to slow down inflation as more users join and time passes. Why? To control the supply early and exploit later speculators.
- Frogolocalypse 9y ago> hyperinflationary I don't think you understand what this word means.
- deleted 9y ago[deleted]
- icebraining 9y agoI think cryptodogemoon is talking about monetary inflation, not price inflation.
- cryptodogemoon 9y agoIt's forever part of Bitcoins orgin story that it begin as hyperinflationary and has since slowed the minting of more BTC. The irony is the mythos of bitcoin being "deflationary" is not historically accurate and the supply is inflating every 10 minutes. What Bitcoiners conveniently omit from explanation in Satoshis protocol is the initial "dump" of the supply to the first few users who ran the software. This is a malicious design decision intended to control the supply early. Any user who joins the network must than attempt to psychologically exploit new users by selling their asset previously generated for less effort/work/watts as the protocol increases in difficulty to any new user.
- Frogolocalypse 9y ago> deflationary ? It is deflationary because it is known what the total number will be, and coins will be permanently lost over time. > Any user who joins the network They do this out of free choice do they not? No one is coerced into acquiring bitcoin. There isn't even a coordinating body, like a company, that controls the issuance or exchange of tokens. I would encourage any person that invests in anything to understand what they are investing in before they commit their funds to it. Bitcoin is extremely unforgiving if you don't manage your security well. None of this has anything to do with your incorrect usage of words though. You can't just invent new definitions of words because you don't like something, and you think it would be nice to assign that word to it. You don't like it. Fair enough. Don't invest in it.
- cryptodogemoon 9y agoBitcoin is inflationary until the year 2140, and assuming no fork changes that sooner. If you actually understand Satoshis algorithm and history you'll take notice at how the supply was intended to benefit the first few users to run the software during the brief phase of hyperinflation and production for minimal work, while later users are punished merely for running the same protocol and offering the same computational work equivalent to prior users. If you consider how easy a linear curve could have been chosen by Satoshi instead of the reverse log curve, you'll understand the manipulative nature of how Bitcoin exploits new users. The supply inflates every 10 minutes, this by definition is inflation.