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> Investors would be choosier about speculative opportunities because the yield on the risk-free asset would be much, much higher. It won't help how choosy inv

> Investors would be choosier about speculative opportunities because the yield on the risk-free asset would be much, much higher. It won't help how choosy investors are, or how well the economy performs. The money supply is fixed. So for someone to make 120 bitcoins from an investment of 100 bitcoins, someone else has to lose 20 bitcoins, which would be other investors, or the public (workers / consumers).

a_tractor 8y ago
Are you saying that with an inflationary system, where the money supply is not fixed, for someone to make 120 dollars from 100, the 20 extra dollars comes from.... where? Thin air? The alternative to inflationary currency is not zero-sum. For someone to make 120 bitcoins from an investment of 100 bitcoins, that investment would have to actually produce 20 bitcoins of value, and that person has to get people to pay the higher price for something he has improved or created with it. That is the whole idea. Its how most economies worked up until 1913 or so. We built civilization without "inflation." Anyway, I would say it is less about deflationary vs inflationary, and more about transparency of control (even if automated) of the money supply, a movement away from usury and debt based fiat (which would be a return to a value based system), and finally, decentralization of value exchange.
TomMarius 8y ago
Or Bitcoin grows its value.
- simias 8y ago
  Bitcoin growing its value (deflating) is precisely the problem because then you have no reason to take the risk to invest in the first place since you'll reap the benefits by merely doing nothing and holding your coins that keep getting more valuable.
  - TomMarius 8y ago
    At the same time, it allows you to put brakes on your investment ("lose only up to the deflation!") and invest more. And since your other savings are growing in value as well, you are able to invest more and into more risky projects.

a_tractor 8y ago

Are you saying that with an inflationary system, where the money supply is not fixed, for someone to make 120 dollars from 100, the 20 extra dollars comes from.... where? Thin air? The alternative to inflationary currency is not zero-sum. For someone to make 120 bitcoins from an investment of 100 bitcoins, that investment would have to actually produce 20 bitcoins of value, and that person has to get people to pay the higher price for something he has improved or created with it. That is the whole idea. Its how most economies worked up until 1913 or so. We built civilization without "inflation." Anyway, I would say it is less about deflationary vs inflationary, and more about transparency of control (even if automated) of the money supply, a movement away from usury and debt based fiat (which would be a return to a value based system), and finally, decentralization of value exchange.

TomMarius 8y ago

Or Bitcoin grows its value.

simias 8y ago
Bitcoin growing its value (deflating) is precisely the problem because then you have no reason to take the risk to invest in the first place since you'll reap the benefits by merely doing nothing and holding your coins that keep getting more valuable.
- TomMarius 8y ago
  At the same time, it allows you to put brakes on your investment ("lose only up to the deflation!") and invest more. And since your other savings are growing in value as well, you are able to invest more and into more risky projects.