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How do you apply this logic to USD? You either want to hold it or want to use it? Since everybody need to use USD, so nobody should hold USD?
by temp8964 6y ago
How do you apply this logic to USD? You either want to hold it or want to use it? Since everybody need to use USD, so nobody should hold USD?
- hackinthebochs 6y agoIt's an entirely different beast when everyone is forced to use USD as a medium of exchange.
- mcosta 6y agoYou are only forced to pay taxes in USD.
- code_duck 6y agoCrypto would get a large boost if a mandatory customer with a multi-hundred billion dollar "market" decided to require it.
- jkepler 6y agoIf its only taxes that are forced on us, why then do US notes say that they're legal tender for all debts public and private. That sounds like force to me: I may want payment in bitcoin or Swiss francs or whatever, but if the payee wants to pay me in USD in the USA, am I free to refuse their payment as non-valid? Or am I forced to accept Federal Reserve Notes?
- dane-pgp 6y ago> if the payee wants to pay me in USD in the USA, am I free to refuse their payment as non-valid? Yes. Legal tender for debts only means that you have to accept the notes if you have issued credit to the payer. For example, if they ate at your restaurant and came to settle the bill, they would owe you the amounts printed on the menu for the items that they ordered, but if they came into your cheese shop and wanted to buy some Swiss cheese, you could choose to only carry out the transaction if they paid in Swiss Francs.
- JumpCrisscross 6y ago> How do you apply this logic to USD? You either want to hold it or want to use it? Of course it applies. Holding lots of dollars (e.g. as hard cash or in a checking account) is stupid. That is the purpose and benefit of (mild) inflation: to incentivise consuming or investing them.
- temp8964 6y agoWhat if cryptocurrencies do not have the inflation problem?
- JumpCrisscross 6y ago> What if cryptocurrencies do not have the inflation problem? Then it is rational to hold, not spend, them. Deflationary currencies don’t function. (They can be stores of value.)
- ivalm 6y agoBut inflation isn’t a problem, it’s a benefit. We want people to spend or invest (in production) their money; economy works best when money is actively circulated, not hoarded. The problem with a totally fixed money supply is that as productivity grows new investments are disincentivizes, as a fixed currently holder get the benefits of aggregate productivity increases (through deflation) without risking his money in investing in companies.
- dna_polymerase 6y agoAlso people don't expect the dollar to become more valuable anytime soon, so spending it doesn't effect seller's remorse a day later, which happens to everyone spending ETH or BTC these days.
- Jtsummers 6y agoAnd, since USD is inflationary, we expect it to become less valuable (real value) over time which encourages investment and spending today. Since we don't have crazy levels of inflation this doesn't fully discourage savings (with a 10% or higher inflation rate you have very little incentive to save, with 1 or 2% your savings lose value over time, but slow enough that it's still worth saving). Economies are improved and sustained by moving money, not by stagnant money.