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The truth is complete opposite. Fiat currencies have created insane amount of wealth inequality, because they benefit those who have the power to borrow cash an

by Geee 6y ago

The truth is complete opposite. Fiat currencies have created insane amount of wealth inequality, because they benefit those who have the power to borrow cash and own assets. With bitcoin, people can maintain their purchasing power and wealth. Bitcoin isn't pegged to CPI which means that it increases in value when economic productivity increases. CPI pegged currencies move purchasing power from labor to capital.

imtringued 6y ago
>and own assets. Assets like Bitcoin? > Bitcoin isn't pegged to CPI which means that it increases in value when economic productivity increases. Bitcoin increases much faster than CPI, that's a sign of a bubble. The mystery is that Bitcoin survived consecutive bubbles. I can't explain it, it's what it is. The vast majority of alternative cryptocurrencies had one bubble and died after that exactly as one would expect. >CPI pegged currencies move purchasing power from labor to capital. This is the first time I have heard "CPI pegged currency" I assume that you are talking about inflation. Mild inflation is actually a wealth transfer from capital to labor because inflation is in its essence a wealth tax. Labor is paid in current year salaries as long as you switch employers. You don't get paid 1930 salaries, you get paid more to compensate for the loss of purchasing power, you just have to ask for a raise or switch employers and that is the entire point of inflation. If anyone steals from you it's your boss. You know who doesn't get paid more? Capital owners, they have to invest productively and earn enough to beat inflation. Your next job will pay more than your last so you should switch as soon as possible. If you were paid in Bitcoin then employers would have to pay you less and less Bitcoin per year because they simply cannot afford the Bitcoin since it keeps going up in value. So your best bet is to stay with your current employer until the employer fires you because they cannot afford you anymore. Ultimately you lose anyway. Let's also talk about why high inflation is bad. Basically, at some point you have to switch jobs so frequently that you never actually end up doing any work, most of your day is spent finding a new job. Important work like food production gets neglected.
- Geee 6y ago
  I don't mean inflation. Even if inflation was 0%, it means that money didn't change value relative to CPI. CPI tracks the value of customer goods, which depreciate in value because productivity increases. Essentially, the value of dollar is tied to the value of bread. Assets, such as stocks, real estate, gold and bitcoin maintain their value better. That's why those assets seem to go up measured in dollar value. Those who are wealthy, don't own cash at all. They borrow cash as much as possible and buy assets that go up in value. The loan is diluted away while value is stored. Those who credited the loan (poor people and businesses who own cash) lost their earnings. Inflation is definitely not a wealth tax. Bitcoin survives because more and more people find out that it is the best store of value, because of its absolute scarcity and other properties. Lots of people join just because the value goes up, which causes bubbles. However, the long term trend is that inferior assets (which is everything) will go down relative to bitcoin.
  - MrMan 6y ago
    Wealthy people who use leverage actually are very likely to enjoy shrinking assets, there is no magic bullet to risk management
    - Geee 6y ago
      In a fair world this would be true. You shouldn't get reward without risk. But because the monetary system is broken, this bet is asymmetrical and you are guaranteed to get rich.
tw600040 6y ago
That is in theory. If BTC becomes legit one fine day, what percentage of the world owns BTC and what percentage of the world's wealth will they own? If that doesn't scare you I don't know what will..
MrMan 6y ago
How do you obtain 1 btc if you are poor? Doing work for well-off holders? Sounds identical to regular life and inequality is baked in
- Geee 6y ago
  Smallest unit of bitcoin is satoshi, which is 0.00000001 bitcoin. Everyone can earn that. And yes, you have to work to earn it, but it won't lose value like regular money. Which means that the value of their work doesn't vanish.
  - tw600040 6y ago
    //And yes, you have to work to earn it, Like how all the existing owners earned it?
    - Geee 6y ago
      Currently we're in a price discovery phase, so those who take the risk can benefit more. This phase will end soon though, and the price will stabilize. Everyone still has to buy it for the market price, as no one gets it for free. Also, most of those who got in early, have sold already.

by Geee 6y ago

imtringued 6y ago

>and own assets. Assets like Bitcoin? > Bitcoin isn't pegged to CPI which means that it increases in value when economic productivity increases. Bitcoin increases much faster than CPI, that's a sign of a bubble. The mystery is that Bitcoin survived consecutive bubbles. I can't explain it, it's what it is. The vast majority of alternative cryptocurrencies had one bubble and died after that exactly as one would expect. >CPI pegged currencies move purchasing power from labor to capital. This is the first time I have heard "CPI pegged currency" I assume that you are talking about inflation. Mild inflation is actually a wealth transfer from capital to labor because inflation is in its essence a wealth tax. Labor is paid in current year salaries as long as you switch employers. You don't get paid 1930 salaries, you get paid more to compensate for the loss of purchasing power, you just have to ask for a raise or switch employers and that is the entire point of inflation. If anyone steals from you it's your boss. You know who doesn't get paid more? Capital owners, they have to invest productively and earn enough to beat inflation. Your next job will pay more than your last so you should switch as soon as possible. If you were paid in Bitcoin then employers would have to pay you less and less Bitcoin per year because they simply cannot afford the Bitcoin since it keeps going up in value. So your best bet is to stay with your current employer until the employer fires you because they cannot afford you anymore. Ultimately you lose anyway. Let's also talk about why high inflation is bad. Basically, at some point you have to switch jobs so frequently that you never actually end up doing any work, most of your day is spent finding a new job. Important work like food production gets neglected.

Geee 6y ago
I don't mean inflation. Even if inflation was 0%, it means that money didn't change value relative to CPI. CPI tracks the value of customer goods, which depreciate in value because productivity increases. Essentially, the value of dollar is tied to the value of bread. Assets, such as stocks, real estate, gold and bitcoin maintain their value better. That's why those assets seem to go up measured in dollar value. Those who are wealthy, don't own cash at all. They borrow cash as much as possible and buy assets that go up in value. The loan is diluted away while value is stored. Those who credited the loan (poor people and businesses who own cash) lost their earnings. Inflation is definitely not a wealth tax. Bitcoin survives because more and more people find out that it is the best store of value, because of its absolute scarcity and other properties. Lots of people join just because the value goes up, which causes bubbles. However, the long term trend is that inferior assets (which is everything) will go down relative to bitcoin.
- MrMan 6y ago
  Wealthy people who use leverage actually are very likely to enjoy shrinking assets, there is no magic bullet to risk management
  - Geee 6y ago
    In a fair world this would be true. You shouldn't get reward without risk. But because the monetary system is broken, this bet is asymmetrical and you are guaranteed to get rich.

tw600040 6y ago

That is in theory. If BTC becomes legit one fine day, what percentage of the world owns BTC and what percentage of the world's wealth will they own? If that doesn't scare you I don't know what will..

MrMan 6y ago

How do you obtain 1 btc if you are poor? Doing work for well-off holders? Sounds identical to regular life and inequality is baked in

Geee 6y ago
Smallest unit of bitcoin is satoshi, which is 0.00000001 bitcoin. Everyone can earn that. And yes, you have to work to earn it, but it won't lose value like regular money. Which means that the value of their work doesn't vanish.
- tw600040 6y ago
  //And yes, you have to work to earn it, Like how all the existing owners earned it?
  - Geee 6y ago
    Currently we're in a price discovery phase, so those who take the risk can benefit more. This phase will end soon though, and the price will stabilize. Everyone still has to buy it for the market price, as no one gets it for free. Also, most of those who got in early, have sold already.