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The rest of your comment makes sense, but this sentence is disconnected from reality: "People El Salvador didn't get the $1200 checks that US citizens got from

by esens 5y ago

The rest of your comment makes sense, but this sentence is disconnected from reality: "People El Salvador didn't get the $1200 checks that US citizens got from printing more USD, even though they both use USD in theory." Are you seriously saying that 5% inflation a year, maybe a bit more worse case, is bad compared to Bitcoin just lost 40% of its value in the last 2 months? Oh no, better not use USD then and switch to Bitcoin! Maybe we need a stable coin that is a mix of the major currencies if you are against USD in particular? It could be pegged to some ratio of Chinese, US, Euro (and UK or Japanese?) dollars? This would be quite nice and stable.

xiphias2 5y ago
5% inflation a year (which is closer to 20% for people who want to own their own house) is devastating long term. People in the US can just buy S&P stock in their 401K to defend against it, but most people in the world don't have that privilege. I agree that volatility of bitcoin is really hard to stomach (I have been through 85% downturns and it sucked, and people have made fun of me many times, I just got used to it). But there are enough people who have so bad pension systems in the world, that they see the huge volatility of bitcoin as a better option than trusting their government.
landemva 5y ago
I have been learning more about DAI. Synthetic peg to $1usd. Interesting possible uses here.
lowkey 5y ago
As most Bitcoin advocates would say Zoom Out. Yes Bitcoin looks volatile if you look at the past 2-3 months. However if you zoom out to 1 year Bitcoin is still up almost 300% y/y. Zoom out 2-3 years and the numbers look even better. As for USD, depending on what you want to buy inflation is 3-30% y/y - think asset price inflation. Zoom out further and USD looks even less attractive as a store of value. In 1933 $20usd bought 1oz of gold. Today it would take $2000usd/oz of gold, netting out to a 100x decrease in purchasing power in ~90 years. Bitcoin meanwhile has grown in purchasing power by 200% per year on average since inception. What El Salvador has done is brilliant. Citizens can chose between a short-term stable unit of account that loses most of its value over a long time period (USD) or a short-term volatile but long term deflationary currency designed to increase purchasing power over the long-term (BTC). Remember that no traditional bank in the world will ever again pay you sufficient interest on savings to preserve your purchasing power over time - not one. Fiat is a terrible long-term store of value. Bitcoin gives users the option to fix this.
- verall 5y ago
  The point of a fiat is that it slowly loses value, so wealth holders can't get bigger and bigger just by holding the fiat, they are forced to invest to break even. Bitcoin is not "fixing" anything here, a currency that deflates forever is a dumb idea.
  - lowkey 5y ago
    So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Risk their principal? The only ones who benefit from inflationary fiat currencies are those closest to the new spending - via the Cantillon effect - namely bankers, politicians and their friends in the military industrial complex.
    - dragonwriter 5y ago
      > So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Some cryptocurrencies may (in some cases, based on past performance) be good on average as long term stores of value, but even those that are good at this are extremely volatile assets, much more so than, say, blue-chip stocks. So they certainly don’t solve any problem of “you need exposure to volatile assets to not lose value of savings” that you might imagine exists. > Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Rick their principal? People without surplus income have no way to save by definition, with or without risking their income. That people with surplus income need to participate in wealth generation to recurve additional wealth from storage of their surplus income is obviously a feature.
      - lowkey 5y ago
        > Some cryptocurrencies may (in some cases, based on past performance) be good on average as long term stores of value This is a straw man. The argument was not for some cryptocurrency. It was for Bitcoin. Bitcoin alone has the potential to become the reserve currency of the internet. It is the only crypto designed from the ground up to withstand attacks from nation states. Bitcoin is the scarcest asset ever created. It is the most decentralized and censorship resistant, and it is secured by the most powerful super-computer in the world. Therefore it isn't just about past performance, but rather past performance combined with a fundamental analysis of the unique properties of Bitcoin that make it the best performing asset in the history of assets over it's lifetime. Bitcoin is a unique snowflake. If you cannot tell the difference between Bitcoin and other cryptos you ARE missing the point. > People without surplus income have no way to save by definition Poor or rich, most people can find a way to save some of their income for the future. It may not be much to you but giving them the option to access a store of value that grows on average at 200% per year is a revolution for these folks who often have fewer options to grow savings. You are cherry-picking poor people to suit your argument. Not all poor people have zero surplus income. Some simply have too little or too insecure surplus income to escape their plight. I for one applaud giving these people more choices for a better life.

by esens 5y ago

xiphias2 5y ago

5% inflation a year (which is closer to 20% for people who want to own their own house) is devastating long term. People in the US can just buy S&P stock in their 401K to defend against it, but most people in the world don't have that privilege. I agree that volatility of bitcoin is really hard to stomach (I have been through 85% downturns and it sucked, and people have made fun of me many times, I just got used to it). But there are enough people who have so bad pension systems in the world, that they see the huge volatility of bitcoin as a better option than trusting their government.

landemva 5y ago

I have been learning more about DAI. Synthetic peg to $1usd. Interesting possible uses here.

lowkey 5y ago

As most Bitcoin advocates would say Zoom Out. Yes Bitcoin looks volatile if you look at the past 2-3 months. However if you zoom out to 1 year Bitcoin is still up almost 300% y/y. Zoom out 2-3 years and the numbers look even better. As for USD, depending on what you want to buy inflation is 3-30% y/y - think asset price inflation. Zoom out further and USD looks even less attractive as a store of value. In 1933 $20usd bought 1oz of gold. Today it would take $2000usd/oz of gold, netting out to a 100x decrease in purchasing power in ~90 years. Bitcoin meanwhile has grown in purchasing power by 200% per year on average since inception. What El Salvador has done is brilliant. Citizens can chose between a short-term stable unit of account that loses most of its value over a long time period (USD) or a short-term volatile but long term deflationary currency designed to increase purchasing power over the long-term (BTC). Remember that no traditional bank in the world will ever again pay you sufficient interest on savings to preserve your purchasing power over time - not one. Fiat is a terrible long-term store of value. Bitcoin gives users the option to fix this.

verall 5y ago
The point of a fiat is that it slowly loses value, so wealth holders can't get bigger and bigger just by holding the fiat, they are forced to invest to break even. Bitcoin is not "fixing" anything here, a currency that deflates forever is a dumb idea.
- lowkey 5y ago
  So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Risk their principal? The only ones who benefit from inflationary fiat currencies are those closest to the new spending - via the Cantillon effect - namely bankers, politicians and their friends in the military industrial complex.
  - dragonwriter 5y ago
    > So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Some cryptocurrencies may (in some cases, based on past performance) be good on average as long term stores of value, but even those that are good at this are extremely volatile assets, much more so than, say, blue-chip stocks. So they certainly don’t solve any problem of “you need exposure to volatile assets to not lose value of savings” that you might imagine exists. > Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Rick their principal? People without surplus income have no way to save by definition, with or without risking their income. That people with surplus income need to participate in wealth generation to recurve additional wealth from storage of their surplus income is obviously a feature.
    - lowkey 5y ago
      > Some cryptocurrencies may (in some cases, based on past performance) be good on average as long term stores of value This is a straw man. The argument was not for some cryptocurrency. It was for Bitcoin. Bitcoin alone has the potential to become the reserve currency of the internet. It is the only crypto designed from the ground up to withstand attacks from nation states. Bitcoin is the scarcest asset ever created. It is the most decentralized and censorship resistant, and it is secured by the most powerful super-computer in the world. Therefore it isn't just about past performance, but rather past performance combined with a fundamental analysis of the unique properties of Bitcoin that make it the best performing asset in the history of assets over it's lifetime. Bitcoin is a unique snowflake. If you cannot tell the difference between Bitcoin and other cryptos you ARE missing the point. > People without surplus income have no way to save by definition Poor or rich, most people can find a way to save some of their income for the future. It may not be much to you but giving them the option to access a store of value that grows on average at 200% per year is a revolution for these folks who often have fewer options to grow savings. You are cherry-picking poor people to suit your argument. Not all poor people have zero surplus income. Some simply have too little or too insecure surplus income to escape their plight. I for one applaud giving these people more choices for a better life.