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Yeah but that disincentivizes investments.

• vntok 6y ago
  Another way of looking at it: that incentivizes better investments.
  • edgyquant 6y ago
    Not really. If you can earn risk free appreciation on a currency the smart thing to do is not spend it. This incentivizes hoarding money, not making smarter investments.
    • vntok 6y ago
      Nope, you are therefore incentivized to spend that money in objects or services that will bring in more value to you than the risk-free "interest" or gains brought by the mere deflation. Ergo, smarter investments.
      • pertymcpert 6y ago
        No, it disincentivizes investments full stop. People aren’t making dumb investments deliberately. You don’t get any new information about whether an investment is smart or not based on your currency being deflationary.
        • vntok 6y ago
          In developed countries (ex in Europe), fiat currency officially loses at least 2% of its worth each year on average (or you yourself lose 2% worth of purchasing power every year, depending on how you see it). In reality it's much more of course. Bitcoin gains 200% of its worth each year on average. Owning bitcoin, any investment you make that brings home more than 200% a year (+ fin. taxes - fiat inflation) when risk-adjusted is worth making. Anything else is an objective loss, so you want to really assess what it will bring you subjectively before making it. In other words, "given that you are basically paid by the financial system to hold bitcoin, any bitcoin you spend should be for something that you value more than what it pays", i.e a smarter investment.