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My argument would be it's the only thing on that list of inflation hedges that has a fixed supply. Lot's of gold is mined each year. Houses are built. Stock is
by rybosworld 6y ago
My argument would be it's the only thing on that list of inflation hedges that has a fixed supply.
Lot's of gold is mined each year. Houses are built. Stock is issued, etc. Bitcoin has a well-established upper limit.
- tome 6y ago> [Bitcoin is] the only thing on that list of inflation hedges that has a fixed supply. Aha! That brings me to my next question. In what sense does bitcoin actually have a fixed supply? Sure, a loose coalition of people agree for it to have a fixed supply at the moment, but if enough of the miners, core developers, etc. agree they can change the rules arbitrarily, viz. hard forks. Why should we believe that bitcoin really has a fixed supply, just because everyone has roughly stuck to the rules so far?
- rybosworld 6y agoThat's mostly a matter of economic incentives. It's technically possible but it's similar to the idea of a rich person lighting a pile of money on fire. If a proposal to raise the cap is introduced, price would react negatively, hurting miners, and making it more (relatively) expensive to mine. It's unlikely there is any scenario where it is economically feasible to try to raise the supply cap.
- notahacker 6y agoA [relative] lack of block rewards to earn hurts miners too...
- tome 6y agoCan you point me to some more thorough analysis of your claim? I've heard such things before but I've never seen it modelled and worked through. Until I see such an analysis I can't help thinking the argument is "we've thought about it a bit and it seems like it will be OK".
- ur-whale 6y agoEvery single thing you said applies to the greenback. Therein lies your answer: if a large enough number of people place faith into something, it "takes".