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I'm sure the people of El Salvador won't mind having 20% of their wealth wiped out every time Elon Musk tweets something that changes his mind in some way. Cer
by ineedasername 5y ago
I'm sure the people of El Salvador won't mind having 20% of their wealth wiped out every time Elon Musk tweets something that changes his mind in some way.
Certainly if I was selling something I'd denominate it in something relative stable and then change Bitcoin asking price to match the exchange rate to that stable currency. Since the currency there is the USD... Yeah, I'd still be pricing my goods and services in USD.
- rawtxapp 5y agoHistorically, Bitcoin appreciated 300% YoY whereas the dollar is in a constantly depreciating cycle, I know which one I'd prefer.
- TenJack 5y agoWhat evidence is there that the USD is depreciating?
- auxym 5y agoDeflation is not something desireable in macroeconomics. It incentivizes hoarding cash instead of spending it on productive things (hiring people, capital investments to improve productivity, etc). Slow and steady inflation is a stated goal for most governments and central banks.
- Geee 5y agoNah. When things are cheap, people will go shopping. When things are expensive, people will save. It's a naturally self-correcting mechanism. Every deviation from the expected deflation would be an opportunity for arbitrage. Also, the deflation isn't guaranteed, so it carries a risk, which disincentivizes hoarding.
- ineedasername 5y agoThere are always some things that are expensive and some that are cheap. It is not a binary mode for many people to be in one or the other.
- Geee 5y agoPeople usually buy more when products are on sale.
- rawtxapp 5y agoIf that "productive thing" isn't productive enough to yield better than an asset that just sits there in a cold storage, I would argue it wasn't all that productive and/or efficient to begin with. People will always spend for things they need, they'll also spend it for things they want, but the current fiat system is forcing to spend it just for the sake of spending it forcing over/pointless consumerism on everyone.
- landemva 5y agoDeflation means I can buy more stuff for less money. This allows me to work less and have more leisure time. Therefore, deflation is desirable.
- foepys 5y agoSo everybody stops working after saving a few years. And then who produces the food?
- 5y ago
- djrogers 5y agoThe difference is that the dollar doesn’t drop 30% of it’s value while you’re asleep - something BTC has done multiple times, including recently.
- jordhy 5y agoThis will stop happening once adopted as reserve currency of major economies.
- lottin 5y agoExactly, it will never stop happening.
- rawtxapp 5y agoI'd even take ~99.99% daily drops (which is a great opportunity to harvest some capital losses btw) if it means I'll get 300% YoY and needless to say that has paid off very well so far.
- SantalBlush 5y ago>I know which one I'd prefer. Yeah, the dollar. Because I can be confident that my $USD won't lose half its value in two months. That's what I need in a currency.
- senectus1 5y ago!remindme 1 year :-P
- SantalBlush 5y agoFrom the time you posted this, bitcoin's price has fallen more than nine percent. That's not a currency I'd ever want, regardless of its price one year from now.
- senectus1 5y agoyeah it's volatility is very scary, but that has nothing to do with what's going to happen to the USD. I suspect we're on the verge of a nasty bubble and the only tool the Fed has shown they're confident of using is printing more money.
- SantalBlush 5y agoThe Fed doesn't print money, and the fact that so many people on HN repeat that falsehood is just sad. The Fed expands the money supply through the banking system, and they also decrease the money supply the same way. It is entirely different from printing money.
- ineedasername 5y agoAnd if you need to spend it from day to day it's both inconvenient and often worth a fair bit less than the day before. It's increased float price vs. USD over the years may make it a reasonable investment for those with a tolerance for high risk. Not so much for a population where the median annual income is about $4,000 and the average person is probably living close enough to the bottom of Maslow's hierarchy that they can't just sit back and HODL when BTC prices go into hibernation for a year. If there's a place in the world that would currently be a good test bed for a country to make BTC legal tender, it's not El Salvador. Its population simply isn't in a position take much of a risk moving from hard currency like the USD to a volatile asset class.
- tonfa 5y agoSounds like one is exhibiting features of a currency and the other isn't. I don't think you're supposed to store your wealth in cash if you want to preserve it (diversified equity holding are a popular investment too in case you find cryptocurrencies too volatile).