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> You are 100% incorrect. Bitcoin is wildly deflationary. Therefore it does not encourage an economy to function, it encourages people to hold onto it with whit

> You are 100% incorrect. Bitcoin is wildly deflationary. Therefore it does not encourage an economy to function, it encourages people to hold onto it with white knuckles. It's not oil for the economy, it's sand. In my opinion, that's the biggest lie that people have been made to believe to justify constant stealing of their purchasing power over time. People will always spend money for things they need, they will also spend money for things they want, our current system is forcing them to spend it for the sake of spending it causing unnecessary over-consumerism. It doesn't matter how much Bitcoin price will appreciate in 5 years. If I need to eat, I'll have to spend today, if I want to buy a house, I'll have to spend too. Instead, I will think twice on upgrading to the shiny new iPhone every year, maybe doing it once every 2-3 years, which is a good thing.

GhostVII 5y ago
It also encourages them to invest their money. The choice isn't either spend money on over-consumerism or lose it, the choice is either spend it or invest it so someone else can allocate more resources to what they are doing.
- rawtxapp 5y ago
  For sure, but then you have to understand and research what you're investing in. We also end up with sky high (in my opinion unjustified) P/E ratios just because money doesn't have elsewhere to go and it creates all kinds of wild inaccurate pricing imo. In this world where the currency doesn't depreciate like ~95% over a 100 year period, only investments which make sense will get money thrown at them.
  - NicoJuicy 5y ago
    Depends on the forward P/E, how much market share the company can take and the position they are in. If the P/E is high, it mostly has to do with what i mentioned and your are late to the "party". But high p/e stocks != Fiat money as the op mentioned.
- jollybean 5y ago
  This is not about incentives to spend or invest - it's about having a functioning basic unit of economic measure that is 1) stable 2) has integrity and 3) hopefully under the control over the government. BTC isn't good for any of that. USD is good for 1 and 2. The gov. can move to re-establish it's currency and have 3 as well.
  - beckingz 5y ago
    Looks like USD may be losing qualities 1 or 2 depending on how you define stability or integrity.
    - jollybean 5y ago
      Just the opposite, during difficult times people rush to USD which bolsters 1 and 2. That it's used widely and fungible is what gives it value. If your own currency is destroyed, you use the one that has the most integrity that's relative to your country. For most nations the default would be USD. For Vietnam probably RMB. For Belarus either Euro or Rouble. Then you develop integrity in governance and switch to a national currency. A nations currency is actually a vert good measure of the competence and integrity of the leadership class.
- saurik 5y ago
  This is why there is so much VC money that people build "disruptive" companies whose primary trick is "let's lose money until all our competitors who don't understand revenue is boring are out of business" :(.
pocoloco 5y ago
Yes, and this is exactly what Jeff Booth explains in this podcast way better that I ever could: How Inflation Is Stealing Your Wealth | Jeff Booth | Pomp Podcast #572 https://www.youtube.com/watch?v=RuCqFjU9Wi4 https://www.youtube.com/watch?v=RuCqFjU9Wi4
- fnord123 5y ago
  This is presented in a conspiratorial manner. "Who wants their money to be worth less?" "Governments don't want you to know..." It's very simple. 100 euros in your hand right now is worth more than a possible/probable 100 euros in your hand next week. And Jeff Booth is arguing that we are trapped in a mental prison because we agree with this obvious fact.
  - saurik 5y ago
    Inflation is a different problem: a bird in the hand is worth two in the bush, but if you have a bird in your hand you are better off trading it for a table because somehow a table in the hand depreciates less than a bird?
    - fnord123 5y ago
      I mean, yes? Are we explaining investing from first principles?
      - lowkey 5y ago
        I think the argument is that we are discussing the difference between the: A) time value of money B) inflationary aspects of fiat currency vs hard currency
NicoJuicy 5y ago
Euh... HODL ? :) I mean, it's literally the #1 meme for cryptocurrency.
- rawtxapp 5y ago
  I mean, of course hodl, but not at the cost of dying of starvation or missing out on having your dream home, etc. Bitcoin subreddit is full of stories of people buying their first homes or cars, I've seen many people start their small businesses with their gains. Life is short, you enjoy/spend what you have while you're here.
  - ethanbond 5y ago
    But currency needs to move in order to be, you know, a currency. The lack of upward price movement of e.g. the US dollar means that there is no advantage to sitting on it. Invest it, spend it, or lose it. Inversely, with BTC, you would want to spend as little as humanly possible. Make whatever philosophical arguments you want: this is not adding oil to the engine. This is adding sand.
    - emptysongglass 5y ago
      > Inversely, with BTC, you would want to spend as little as humanly possible. Sign me up. Hyper-consumerism has laid waste to our planet, commoditized every human interaction, and polluted our minds with its drivel. Behold Denmark and its glorious decision to punish its citizenry for saving any amount of money at all. Hope you weren't thinking of saving your pennies for a ticket out of the renter's racket, Denmark would prefer you stuff it in stocks and pay them their cut. It's time we seized control of the engine and refashioned it into a tool that serves our welfare.
      - perl4ever 5y ago
        >Hyper-consumerism has laid waste to our planet If you don't want to consume, then you can just...not consume. Why buy bitcoin in order to not sell it, ever?
reader_mode 5y ago
Yeah that's all fine and dandy until you need to take out a loan and on top of high interest you also need to account for deflation - good luck getting a house mortgage and falling wages. Deflation puta pressure on price of work as well - but people don't like pay cuts.
- maneesh 5y ago
  When you're one of the 70% of people who are unbanked in el salvador, there are no needs for loans or interest -- the concept barely exists.
  - technotony 5y ago
    It's very counterintuitive, but actually the more unbanked you are the more you needs loans/savings and the more complicated your personal financial balance sheet is. I'd recommend the book 'the poor and their money'[1] for the details on this, but essentially if you haven't got savings you are constantly borrowing and lending informally with your community to meet life needs like a new roof or school fees. [1] https://www.amazon.com/Their-Money-Oxford-India-Paperbacks/dp/019565790X https://www.amazon.com/Their-Money-Oxford-India-Paperbacks/d...
    - lupire 5y ago
      That's having a tightly knit society where people take care of each other instead of ignoring the poor people to die alone.
- rawtxapp 5y ago
  You know what happens then? House prices will fall because they won't have access to cheap money, so they'll end up being priced at their true value. Housing would stop being an investment, instead it would serve it's true purpose of providing lodging.
  - reader_mode 5y ago
    So you're going to end up paying more in real terms (since deflation), for a house that's going to be worth less, you're making less and you have to pay interest. Sounds like an amazing deal, would vote for bitcoin tomorrow !
willmadden 5y ago
Correct. Keynesian economics is a fraud we're taught to disguise the fact that we're being robbed. You don't need an inflationary currency for a currency to work. Gold and silver worked just fine for thousands of years, and only ran into problems when corrupt governments and banks printed more paper receipts than they had reserves. Central banking just legalized this practice for private profit, and then the peg to gold and silver was eliminated once they had monopoly control.
- boxed 5y ago
  Those years when "it worked fine" were also when the entire world lived in squalor and horrible conditions. Including kings. I don't think we should call the past horrors "fine" in any way. I'm not saying the gold had anything to do with it. But you shouldn't say that world was OK. The US gold standard collapsed. That's a fact of history.
- jml7c5 5y ago
  Gold is inflationary. Mining increased amount available by ~2% each year.
Growling_owl 5y ago
> People will always spend money for things they need, they will also spend money for things they want, our current system is forcing them to spend it for the sake of spending it causing unnecessary over-consumerism. The worrying aspect is that the one thing that people want more than anything is to be the most rich and relevant person in a given area, hence the inflationary system to avoid people hoarding in order to reach this goal of theirs. If you transition to an deflationary system and people fall in love with it....well there is a whole lot of room to go on the downside. First people start giving up vacations, then dinners, then cars, that Netflix subscription, then the smartphone purchase, then the app purchase.. all in the name of hoarding. Pretty soon the entire economy becomes a giant game of mental posturing to see who can go the distance without spending. Paradoxically in this scenario the most rational thing to do is to spend like there is no tomorrow because society would be headed into chaos, so when the fecal matter hits the fan , at least you'll have good memories
api 5y ago
People would spend very conservatively and nothing particularly interesting would happen. It would be virtually impossible to raise money for new businesses.
NicoJuicy 5y ago
The crypto holders have an irrational fear/hate about inflation and forget that it's a requirement for people to spend their money and supporting the economy.

GhostVII 5y ago

It also encourages them to invest their money. The choice isn't either spend money on over-consumerism or lose it, the choice is either spend it or invest it so someone else can allocate more resources to what they are doing.

rawtxapp 5y ago
For sure, but then you have to understand and research what you're investing in. We also end up with sky high (in my opinion unjustified) P/E ratios just because money doesn't have elsewhere to go and it creates all kinds of wild inaccurate pricing imo. In this world where the currency doesn't depreciate like ~95% over a 100 year period, only investments which make sense will get money thrown at them.
- NicoJuicy 5y ago
  Depends on the forward P/E, how much market share the company can take and the position they are in. If the P/E is high, it mostly has to do with what i mentioned and your are late to the "party". But high p/e stocks != Fiat money as the op mentioned.
jollybean 5y ago
This is not about incentives to spend or invest - it's about having a functioning basic unit of economic measure that is 1) stable 2) has integrity and 3) hopefully under the control over the government. BTC isn't good for any of that. USD is good for 1 and 2. The gov. can move to re-establish it's currency and have 3 as well.
- beckingz 5y ago
  Looks like USD may be losing qualities 1 or 2 depending on how you define stability or integrity.
  - jollybean 5y ago
    Just the opposite, during difficult times people rush to USD which bolsters 1 and 2. That it's used widely and fungible is what gives it value. If your own currency is destroyed, you use the one that has the most integrity that's relative to your country. For most nations the default would be USD. For Vietnam probably RMB. For Belarus either Euro or Rouble. Then you develop integrity in governance and switch to a national currency. A nations currency is actually a vert good measure of the competence and integrity of the leadership class.
saurik 5y ago
This is why there is so much VC money that people build "disruptive" companies whose primary trick is "let's lose money until all our competitors who don't understand revenue is boring are out of business" :(.

pocoloco 5y ago

Yes, and this is exactly what Jeff Booth explains in this podcast way better that I ever could: How Inflation Is Stealing Your Wealth | Jeff Booth | Pomp Podcast #572 https://www.youtube.com/watch?v=RuCqFjU9Wi4 https://www.youtube.com/watch?v=RuCqFjU9Wi4

fnord123 5y ago
This is presented in a conspiratorial manner. "Who wants their money to be worth less?" "Governments don't want you to know..." It's very simple. 100 euros in your hand right now is worth more than a possible/probable 100 euros in your hand next week. And Jeff Booth is arguing that we are trapped in a mental prison because we agree with this obvious fact.
- saurik 5y ago
  Inflation is a different problem: a bird in the hand is worth two in the bush, but if you have a bird in your hand you are better off trading it for a table because somehow a table in the hand depreciates less than a bird?
  - fnord123 5y ago
    I mean, yes? Are we explaining investing from first principles?
    - lowkey 5y ago
      I think the argument is that we are discussing the difference between the: A) time value of money B) inflationary aspects of fiat currency vs hard currency

NicoJuicy 5y ago

Euh... HODL ? :) I mean, it's literally the #1 meme for cryptocurrency.

rawtxapp 5y ago
I mean, of course hodl, but not at the cost of dying of starvation or missing out on having your dream home, etc. Bitcoin subreddit is full of stories of people buying their first homes or cars, I've seen many people start their small businesses with their gains. Life is short, you enjoy/spend what you have while you're here.
- ethanbond 5y ago
  But currency needs to move in order to be, you know, a currency. The lack of upward price movement of e.g. the US dollar means that there is no advantage to sitting on it. Invest it, spend it, or lose it. Inversely, with BTC, you would want to spend as little as humanly possible. Make whatever philosophical arguments you want: this is not adding oil to the engine. This is adding sand.
  - emptysongglass 5y ago
    > Inversely, with BTC, you would want to spend as little as humanly possible. Sign me up. Hyper-consumerism has laid waste to our planet, commoditized every human interaction, and polluted our minds with its drivel. Behold Denmark and its glorious decision to punish its citizenry for saving any amount of money at all. Hope you weren't thinking of saving your pennies for a ticket out of the renter's racket, Denmark would prefer you stuff it in stocks and pay them their cut. It's time we seized control of the engine and refashioned it into a tool that serves our welfare.
    - perl4ever 5y ago
      >Hyper-consumerism has laid waste to our planet If you don't want to consume, then you can just...not consume. Why buy bitcoin in order to not sell it, ever?

reader_mode 5y ago

Yeah that's all fine and dandy until you need to take out a loan and on top of high interest you also need to account for deflation - good luck getting a house mortgage and falling wages. Deflation puta pressure on price of work as well - but people don't like pay cuts.

maneesh 5y ago
When you're one of the 70% of people who are unbanked in el salvador, there are no needs for loans or interest -- the concept barely exists.
- technotony 5y ago
  It's very counterintuitive, but actually the more unbanked you are the more you needs loans/savings and the more complicated your personal financial balance sheet is. I'd recommend the book 'the poor and their money'[1] for the details on this, but essentially if you haven't got savings you are constantly borrowing and lending informally with your community to meet life needs like a new roof or school fees. [1] https://www.amazon.com/Their-Money-Oxford-India-Paperbacks/dp/019565790X https://www.amazon.com/Their-Money-Oxford-India-Paperbacks/d...
  - lupire 5y ago
    That's having a tightly knit society where people take care of each other instead of ignoring the poor people to die alone.
rawtxapp 5y ago
You know what happens then? House prices will fall because they won't have access to cheap money, so they'll end up being priced at their true value. Housing would stop being an investment, instead it would serve it's true purpose of providing lodging.
- reader_mode 5y ago
  So you're going to end up paying more in real terms (since deflation), for a house that's going to be worth less, you're making less and you have to pay interest. Sounds like an amazing deal, would vote for bitcoin tomorrow !

willmadden 5y ago

Correct. Keynesian economics is a fraud we're taught to disguise the fact that we're being robbed. You don't need an inflationary currency for a currency to work. Gold and silver worked just fine for thousands of years, and only ran into problems when corrupt governments and banks printed more paper receipts than they had reserves. Central banking just legalized this practice for private profit, and then the peg to gold and silver was eliminated once they had monopoly control.

boxed 5y ago
Those years when "it worked fine" were also when the entire world lived in squalor and horrible conditions. Including kings. I don't think we should call the past horrors "fine" in any way. I'm not saying the gold had anything to do with it. But you shouldn't say that world was OK. The US gold standard collapsed. That's a fact of history.
jml7c5 5y ago
Gold is inflationary. Mining increased amount available by ~2% each year.

Growling_owl 5y ago

> People will always spend money for things they need, they will also spend money for things they want, our current system is forcing them to spend it for the sake of spending it causing unnecessary over-consumerism. The worrying aspect is that the one thing that people want more than anything is to be the most rich and relevant person in a given area, hence the inflationary system to avoid people hoarding in order to reach this goal of theirs. If you transition to an deflationary system and people fall in love with it....well there is a whole lot of room to go on the downside. First people start giving up vacations, then dinners, then cars, that Netflix subscription, then the smartphone purchase, then the app purchase.. all in the name of hoarding. Pretty soon the entire economy becomes a giant game of mental posturing to see who can go the distance without spending. Paradoxically in this scenario the most rational thing to do is to spend like there is no tomorrow because society would be headed into chaos, so when the fecal matter hits the fan , at least you'll have good memories

api 5y ago

People would spend very conservatively and nothing particularly interesting would happen. It would be virtually impossible to raise money for new businesses.

NicoJuicy 5y ago

The crypto holders have an irrational fear/hate about inflation and forget that it's a requirement for people to spend their money and supporting the economy.