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Of course, most forms of wealth people have aren't inflationary anyway - the very wealthy tend to have little in terms of actual liquid currency and more stock

Of course, most forms of wealth people have aren't inflationary anyway - the very wealthy tend to have little in terms of actual liquid currency and more stock and property. It has been argued (http://en.wikipedia.org/wiki/Inflation_tax http://en.wikipedia.org/wiki/Inflation_tax) that inflation can be thought of as a regressive tax for this reason.

ap22213 15y ago
Exactly. As nl stated [1], bitcoin would turn the currency into an investment. The very wealthy who would otherwise hold stock and property would instead have incentive to just hold the bitcoin currency. [1] http://news.ycombinator.com/item?id=2611613 http://news.ycombinator.com/item?id=2611613
- njs12345 15y ago
  My point was more of an observation about the aristocracy point. Often the rich do still take significant risks with their wealth even though the effects of inflation are negligible on them. I'm unsure about the deflationary aspect of bitcoin - in my opinion the degree to which it is problematic depends on the rate of depreciation compared to other assets. It seems more of a problem if you wanted to use bitcoin to replace a sovereign currency, rather than use it as a currency on a smaller scale intended for grey market/black market transactions. I think the appreciation of the currency over time was probably intended to ensure it originally took off by providing an incentive for early adopters; its dubious legal status probably means it's a poor long term investment choice anyway. To some extent this discussion is entirely academic anyway - bitcoin is being used as a currency right now (see the Silk Road Market), so in that sense it's already succeeded..
thomasz 15y ago
That proves the point. They have to invest their wealth in stock, real estate etc. instead of putting it in a chest/thumb drive and burying it on a lonely island in order to keep it.
- hugh3 15y ago
  ... which is surely a very good thing? If cash paid a better return than most investments then we wouldn't have anyone to invest in things.

ap22213 15y ago

Exactly. As nl stated [1], bitcoin would turn the currency into an investment. The very wealthy who would otherwise hold stock and property would instead have incentive to just hold the bitcoin currency. [1] http://news.ycombinator.com/item?id=2611613 http://news.ycombinator.com/item?id=2611613

njs12345 15y ago
My point was more of an observation about the aristocracy point. Often the rich do still take significant risks with their wealth even though the effects of inflation are negligible on them. I'm unsure about the deflationary aspect of bitcoin - in my opinion the degree to which it is problematic depends on the rate of depreciation compared to other assets. It seems more of a problem if you wanted to use bitcoin to replace a sovereign currency, rather than use it as a currency on a smaller scale intended for grey market/black market transactions. I think the appreciation of the currency over time was probably intended to ensure it originally took off by providing an incentive for early adopters; its dubious legal status probably means it's a poor long term investment choice anyway. To some extent this discussion is entirely academic anyway - bitcoin is being used as a currency right now (see the Silk Road Market), so in that sense it's already succeeded..

thomasz 15y ago

That proves the point. They have to invest their wealth in stock, real estate etc. instead of putting it in a chest/thumb drive and burying it on a lonely island in order to keep it.

hugh3 15y ago
... which is surely a very good thing? If cash paid a better return than most investments then we wouldn't have anyone to invest in things.