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> the ability to independently verify the money supply and being able to transfer money across political boundaries without censorship is probably the most impo
by Rury 6y ago
> the ability to independently verify the money supply and being able to transfer money across political boundaries without censorship is probably the most important intrinsic value one could hope for in a MoE/SoV.
This is opinion, not a fact.
The problem with bitcoin as a currency (and arguably all currencies) is that its value isn't stable, and can never be, because value is arbitrary and subject to opinion.
But if you don't agree, just look at how it's deflationary. Most don't realize it, but deflationary currencies are equally problematic to inflationary currencies in that both deflation and inflation are natural drivers of inequality.
Generally speaking, with inflationary currencies, the rich who get richer are those who own assets, and/or those who control the money printer. Those who are at a disadvantage, are people without a money printer who hold onto the devalued currency, and those who have fewer or no assets.
With deflationary currencies it's the opposite. The rich who get richer are the hoarders and earlier adopters of the currency. Those at a disadvantage are those who own other things, and those with fewer or no amounts of the currency.
As so, if the world mass adopted bitcoin, society would be no better off in terms of the problems people behold to inflationary fiat... (problems regarding inequality). But that's not to say, it wouldn't solve some problems as your statement suggests, but it also introduces new problems. As an example, your very argument above could be changed to "the inability to exchange money without a computer is probably amongst the worst intrinsic value one could hope for". Is it worse/better - again, that's subject to opinion.
In short, the only reason to grab bitcoin, is so you can trade it to someone else later who thinks it has value, which means it only has or holds value because people thinks it does or will - same as anything else.
- doggosphere 6y agoWith deflationary currencies it's the opposite. The rich who get richer are the hoarders and earlier adopters of the currency. Those at a disadvantage are those who own other things, and those with fewer or no amounts of the currency. I don't follow; how does real estate and stock become less valuable in a Bitcoin world? Or do you just mean relative to the returns on owning Bitcoin?
- bb88 6y agoIn a deflationary economy, holding money becomes more valuable over time, so why would anyone spend it or invest it if you're guaranteed 5% - 20% more per year by leaving it in the bank? One way to think of the economy is by money flowing between people and industries. The more the money flows the healthier the economy, as it becomes easier to create companies, get a job, etc. When the money is stagnant, it becomes harder to convince people to spend it.
- Rury 6y agoImagine this hypothetic scenario just to demonstrate the point: Bitcoin becomes mass adopted, but not after 30 institutions end up hoarding ~60% of bitcoin in existence by some time in the next decade or two. Then by the year 2147, bitcoin is mined out, with the majority of those 30 institutions still holding the majority of their bitcoin stashes. The population is 17 billion with more being born into the world without any bitcoin to inherit... Economically speaking, goods and assets will HAVE to become cheaper if no more bitcoin is to be made. Why? Well, if all the bitcoin has come into existence and is already owned by members of society, how will new born people who come to exist in the world - come to acquire bitcoin to do trade with? Especially considering that those 30 people/institutions had hoarded so much of it, and as the number of goods and people in society grows, there are fewer and fewer bitcoins available for everyone else to do trade with as time goes on? Thus, in order to prevent liquidity crises - the price of wages, goods, and assets (even stocks) MUST become cheaper relative to bitcoin as more people and goods enter the world. Eventually, the price of things will eventually no longer be measured in bitcoins, but fractions of a bitcoin (satoshis). One day a house may cost 700,000 satoshis. Decades later, as more houses and people come to in existence, a house may cost 70,000 satoshis. Those who held onto their bitcoin in their digital wallet, over the that timeframe, would be able to buy 10x more house simply because of the deflationary nature of the currency. Those who bought a house decades earlier would not be able to buy 9x more house just as easily... Again, the numbers and scenario here I made up, but hopefully demonstrates the point. The hoarders and early adopters of the currency will be the rich who get relatively richer as time goes on, as more goods and people come to in existence forcing the cost of goods, assets, and wages to become cheaper. Those who don't own the currency (such as those yet to be born into the world) or those who have fewer amounts of it, would be at a relative wealth disadvantage as time goes on. Mind you, I'm not arguing that bitcoin couldn't work. Just that it's inherently no better/less problematic than the inflationary currencies we already have (economically speaking), despite many proponents claiming otherwise.