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>>"Why? Well assuming all things being equal (convenience as medium of exchange etc.), an individual is always going to prefer holding currency that isn’t subje

>>"Why? Well assuming all things being equal (convenience as medium of exchange etc.), an individual is always going to prefer holding currency that isn’t subject to inflation." And why should they spend a so wonderful asset? And what is the point of a currency that is always appreciating and nobody want to spend? >>"The problem for governments is: the genie is out of the bottle regarding fixed supply." Central banks don't target the quantity of money, they target the interest rate. The quantity of money is a function of the economic activity, as it should. The idea that people is going to change to private currencies is a joke. The only thing a government have to do, in order to create demand for its currency, is accept only its currency as payment for taxes.

aserafini 7y ago
> what is the point of a currency that is always appreciating and nobody want to spend Fixed supply doesn't mean it will always appreciate. It just seems like it today because the first fixed supply currency that can be transferred over the internet was only invented 10 years ago. It (or an equivalent, or a mix of equivalents) has to rise from 0 USD to X USD over time where X is "the value of global, fixed supply currency". When X is reached, it reverts to being the worst investment you can possibly make, useful only for buying higher yield assets or exchanging for food, shelter and stuff. > The only thing a government have to do, in order to create demand for its currency, is accept only its currency as payment for taxes. Just because I pay taxes in USD/EUR doesn't mean I can't store my cash in a fixed supply currency, and anyone who does this avoids inflation. And if everyone does this, government no longer controls the money supply.
- RobertoG 7y ago
  >>"Fixed supply doesn't mean it will always appreciate." It seems to me that you believe that when the economy stay the same and the supply of money grows, money loss value. Then, the other side of the coin ;-) is that when the economy grows and the currency don't, it increases value. >>"[--] And if everyone does this, government no longer controls the money supply." Governments already don't control the money supply. If a bank gives a credit, it's creating money in the system. After giving a credit (and creating money in the process), it needs to increase its reserves. If the government don't give it enough reserves it have to go to the inter-bank market, that will create demand for reserves, and that increase the interest rate. If the government want to control the interest rate it can't control the quantity of money. >>"Just because I pay taxes in USD/EUR doesn't mean I can't store my cash in a fixed supply currency, " You can do it already, for instance, buying gold. Note that the price of gold also move up and down. You can lost money buying gold and it will be not different with any other asset.
- camgunz 7y ago
  > Just because I pay taxes in USD/EUR doesn't mean I can't store my cash in a fixed supply currency, and anyone who does this avoids inflation. (Let's just use BTC and USD) Let's say yesterday milk was $2/gallon. But overnight, USD hyperinflated 50% and now it's $3/gallon. Yesterday, I invested 2 USD in BTC. Unless I can convince someone to give me 3 USD for my BTC, I can't buy a gallon of milk. No rational person will help you avoid inflation like this, because they'd be losing money. They would have to think that the BTC they get from you will appreciate. In other words, they have to speculate. So the only thing that you do by storing your cash in a fixed supply currency is speculate, and the only way you "avoid inflation" is if your speculation outpaces inflation. --This is exactly the same as every other investment.-- But there's a huge difference: speculating in BTC helps no one (actually, it almost certainly helps super awful criminals like drug cartels and human traffickers). Please don't do this. Please invest your money in businesses that need it, or in real estate to help build homes, or in any one of a million ways that actually fuel economic growth and have the potential to help a human being. > And if everyone does this, government no longer controls the money supply. Why do you think this is a good thing?
  - aserafini 7y ago
    > Unless I can convince someone to give me 3 USD for my BTC. This is exactly what would happen, no convincing required. Overnight 50% hyperinflation of the dollar would mean 2 USD worth of BTC/EUR/GBP/milk/anything bought yesterday could be sold for 3 USD today. > Why do you think this is a good thing? I’m not claiming it’s a good or bad idea. I’m claiming it’s an inevitable consequence of usable fixed supply currencies continuing to exist.
    - camgunz 7y ago
      > Overnight 50% hyperinflation of the dollar would mean 2 USD worth of BTC/EUR/GBP/milk/anything bought yesterday could be sold for 3 USD today. Ahh, but BTC doesn't belong in that list at all. The Euro and Sterling are backed by large, stable economies, used by each to value their exports. Milk is a commodity, which has intrinsic value (not to mention cost to produce, market, transport, regulate, and sell). BTC is an asset, but not anything like REIT or bonds, because it doesn't represent anything of actual worth. Or, skipping some steps, its only worth is that you can convince someone it will eventually have any value at all. Cryptocurrencies are unique among all other assets in that, at the bottom of them, they are figuratively bankrupt and actually meaningless. There are no goods valued solely in BTC (even black market stuff is like "$100 / .0092 BTC") and no strong, stable economy backing it. At the end of the day, BTC basically says "someone will give you a lot of currency you actually care about for these zeroes and ones", and because those zeroes and ones have no additional value (i.e. it's not a cure for cancer or a TLS skeleton key), the proposition is literally worthless. So yes. Normally that is what inflation means, but only for currencies that can actually purchase goods and services people want, or goods people actually want to consume, or services people actually want to use. Cryptocurrencies are none of those things.
rohit2412 7y ago
Also, it is a joke that crypto will not have inflation. The government will always require taxes and utilities to be paid in their currency. So, every one will need to sell cryptos to fulfill those electricity bills and taxes. This sell pressure will carry on a inflation into cryptos.
- aserafini 7y ago
  It won't have inflation caused by the underling supply being increased which is the largest component of inflation. But you’re correct to point out that inflation has other causes (eg. natural fluctuations in demand for goods and services) that will still exist in FixedSupplyCoin world.

aserafini 7y ago

> what is the point of a currency that is always appreciating and nobody want to spend Fixed supply doesn't mean it will always appreciate. It just seems like it today because the first fixed supply currency that can be transferred over the internet was only invented 10 years ago. It (or an equivalent, or a mix of equivalents) has to rise from 0 USD to X USD over time where X is "the value of global, fixed supply currency". When X is reached, it reverts to being the worst investment you can possibly make, useful only for buying higher yield assets or exchanging for food, shelter and stuff. > The only thing a government have to do, in order to create demand for its currency, is accept only its currency as payment for taxes. Just because I pay taxes in USD/EUR doesn't mean I can't store my cash in a fixed supply currency, and anyone who does this avoids inflation. And if everyone does this, government no longer controls the money supply.

RobertoG 7y ago
>>"Fixed supply doesn't mean it will always appreciate." It seems to me that you believe that when the economy stay the same and the supply of money grows, money loss value. Then, the other side of the coin ;-) is that when the economy grows and the currency don't, it increases value. >>"[--] And if everyone does this, government no longer controls the money supply." Governments already don't control the money supply. If a bank gives a credit, it's creating money in the system. After giving a credit (and creating money in the process), it needs to increase its reserves. If the government don't give it enough reserves it have to go to the inter-bank market, that will create demand for reserves, and that increase the interest rate. If the government want to control the interest rate it can't control the quantity of money. >>"Just because I pay taxes in USD/EUR doesn't mean I can't store my cash in a fixed supply currency, " You can do it already, for instance, buying gold. Note that the price of gold also move up and down. You can lost money buying gold and it will be not different with any other asset.
camgunz 7y ago
> Just because I pay taxes in USD/EUR doesn't mean I can't store my cash in a fixed supply currency, and anyone who does this avoids inflation. (Let's just use BTC and USD) Let's say yesterday milk was $2/gallon. But overnight, USD hyperinflated 50% and now it's $3/gallon. Yesterday, I invested 2 USD in BTC. Unless I can convince someone to give me 3 USD for my BTC, I can't buy a gallon of milk. No rational person will help you avoid inflation like this, because they'd be losing money. They would have to think that the BTC they get from you will appreciate. In other words, they have to speculate. So the only thing that you do by storing your cash in a fixed supply currency is speculate, and the only way you "avoid inflation" is if your speculation outpaces inflation. --This is exactly the same as every other investment.-- But there's a huge difference: speculating in BTC helps no one (actually, it almost certainly helps super awful criminals like drug cartels and human traffickers). Please don't do this. Please invest your money in businesses that need it, or in real estate to help build homes, or in any one of a million ways that actually fuel economic growth and have the potential to help a human being. > And if everyone does this, government no longer controls the money supply. Why do you think this is a good thing?
- aserafini 7y ago
  > Unless I can convince someone to give me 3 USD for my BTC. This is exactly what would happen, no convincing required. Overnight 50% hyperinflation of the dollar would mean 2 USD worth of BTC/EUR/GBP/milk/anything bought yesterday could be sold for 3 USD today. > Why do you think this is a good thing? I’m not claiming it’s a good or bad idea. I’m claiming it’s an inevitable consequence of usable fixed supply currencies continuing to exist.
  - camgunz 7y ago
    > Overnight 50% hyperinflation of the dollar would mean 2 USD worth of BTC/EUR/GBP/milk/anything bought yesterday could be sold for 3 USD today. Ahh, but BTC doesn't belong in that list at all. The Euro and Sterling are backed by large, stable economies, used by each to value their exports. Milk is a commodity, which has intrinsic value (not to mention cost to produce, market, transport, regulate, and sell). BTC is an asset, but not anything like REIT or bonds, because it doesn't represent anything of actual worth. Or, skipping some steps, its only worth is that you can convince someone it will eventually have any value at all. Cryptocurrencies are unique among all other assets in that, at the bottom of them, they are figuratively bankrupt and actually meaningless. There are no goods valued solely in BTC (even black market stuff is like "$100 / .0092 BTC") and no strong, stable economy backing it. At the end of the day, BTC basically says "someone will give you a lot of currency you actually care about for these zeroes and ones", and because those zeroes and ones have no additional value (i.e. it's not a cure for cancer or a TLS skeleton key), the proposition is literally worthless. So yes. Normally that is what inflation means, but only for currencies that can actually purchase goods and services people want, or goods people actually want to consume, or services people actually want to use. Cryptocurrencies are none of those things.

rohit2412 7y ago

Also, it is a joke that crypto will not have inflation. The government will always require taxes and utilities to be paid in their currency. So, every one will need to sell cryptos to fulfill those electricity bills and taxes. This sell pressure will carry on a inflation into cryptos.

aserafini 7y ago
It won't have inflation caused by the underling supply being increased which is the largest component of inflation. But you’re correct to point out that inflation has other causes (eg. natural fluctuations in demand for goods and services) that will still exist in FixedSupplyCoin world.