4 ms·

Importantly, distributed public blockchains like Bitcoin and Ethereum don't give large holders the power to tax other participants, engage in seigniorage (1), o

Importantly, distributed public blockchains like Bitcoin and Ethereum don't give large holders the power to tax other participants, engage in seigniorage (1), or censor transactions and thereby become gatekeepers/tollgaters. (1) PoW hardware or staked coins, in PoW and PoS Sybil control mechanisms, respectively, do give their owners the power to issue new currency and collect transaction fees, but it is an open market where all capital earns the same percentage return, and thereby does not exacerbate wealth inequality.

8note 5y ago
I'd consider the deflation to be a tax.
- armenarmen 5y ago
  Isn’t it the exact opposite?
  - anonporridge 5y ago
    Yes. Inflation is a tax.
    - superice 5y ago
      Inflation is a "tax" on owning money, an equalizing force if you will. Deflation is a "tax" imposed that benefits large holders of the currency on people who hold less or none of that currency. There is ofcourse also the moral argument for inflation: society pays you because you it values what you sold or did. That valuable service is not going to be worth as much 50 years into the future, so inflation is the cost imposed on withholding that money from public circulation for your private benefit of being able to decide 50 years later what you do with that money for a thing you did back then.
      - runeks 5y ago
        > Inflation is a "tax" on owning money, an equalizing force if you will. Deflation is a "tax" imposed that benefits large holders of the currency on people who hold less or none of that currency. The problem is that these “large holders of currency” are the poorest people. Rich people have their wealth invested in various assets, e.g. stocks, bonds, land. The poorest people live paycheck to paycheck and can’t possibly invest in anything.
      - throwaway248329 5y ago
        Inflation is a tax for poor people who don't and often can't hold assets that appreciate with time. It not only makes their savings worth less, but also makes their fixed salary have less buying power. The wealthy love inflation since it's just going to pump their assets and redistribute money from the poor into their pockets.
      - anonporridge 5y ago
        Inflation doesn't just negatively affect holders of the currency. It also negatively affects earners of the currency. When your salary is constantly getting devalued, employers effectively get to constantly cut your salary while saying with straight face that they haven't done anything. Now, everyone on this forum is well educated and valuable enough to be able to regularly negotiate salary increases. It's poor and uneducated people who get most taken advantaged by it. Just look at how minimum wage is a never ending fight. Inflation gives employers and the holders of capital the high ground fighting to maintain the status quo of wages and forces the poor and desperate to take time out of their personal lives to fight for more pay.
    - webinvest 5y ago
      Inflation is a tax that subsidizes transaction fees. Currently 98% of the miner revenue is paid out by inflation and 2% by the transaction fee.(1) As the Bitcoin inflation rate falls, transaction fees will rise. (1) https://www.theblockcrypto.com/data/on-chain-metrics/bitcoin/bitcoin-share-of-transaction-fee-from-total-miner-revenue-monthly https://www.theblockcrypto.com/data/on-chain-metrics/bitcoin...
      - CryptoPunk 5y ago
        There is no in-protocol mechanism to increase transaction fees in reaction to declining inflation.
- CryptoPunk 5y ago
  Deflation is not a tax. It comes from economic growth, leading to the growth in the demand for the asset outpacing the growth in its supply. Deflation does however accrue economic rent to currency holders, so is an economic inefficiency. Fortunately in a decentralized economy, multiple currencies can co-exist and seamlessly operate in parallel, allowing the growth of the total money supply to keep pace with the demand for currency.

8note 5y ago

I'd consider the deflation to be a tax.

armenarmen 5y ago
Isn’t it the exact opposite?
- anonporridge 5y ago
  Yes. Inflation is a tax.
  - superice 5y ago
    Inflation is a "tax" on owning money, an equalizing force if you will. Deflation is a "tax" imposed that benefits large holders of the currency on people who hold less or none of that currency. There is ofcourse also the moral argument for inflation: society pays you because you it values what you sold or did. That valuable service is not going to be worth as much 50 years into the future, so inflation is the cost imposed on withholding that money from public circulation for your private benefit of being able to decide 50 years later what you do with that money for a thing you did back then.
    - runeks 5y ago
      > Inflation is a "tax" on owning money, an equalizing force if you will. Deflation is a "tax" imposed that benefits large holders of the currency on people who hold less or none of that currency. The problem is that these “large holders of currency” are the poorest people. Rich people have their wealth invested in various assets, e.g. stocks, bonds, land. The poorest people live paycheck to paycheck and can’t possibly invest in anything.
    - throwaway248329 5y ago
      Inflation is a tax for poor people who don't and often can't hold assets that appreciate with time. It not only makes their savings worth less, but also makes their fixed salary have less buying power. The wealthy love inflation since it's just going to pump their assets and redistribute money from the poor into their pockets.
    - anonporridge 5y ago
      Inflation doesn't just negatively affect holders of the currency. It also negatively affects earners of the currency. When your salary is constantly getting devalued, employers effectively get to constantly cut your salary while saying with straight face that they haven't done anything. Now, everyone on this forum is well educated and valuable enough to be able to regularly negotiate salary increases. It's poor and uneducated people who get most taken advantaged by it. Just look at how minimum wage is a never ending fight. Inflation gives employers and the holders of capital the high ground fighting to maintain the status quo of wages and forces the poor and desperate to take time out of their personal lives to fight for more pay.
  - webinvest 5y ago
    Inflation is a tax that subsidizes transaction fees. Currently 98% of the miner revenue is paid out by inflation and 2% by the transaction fee.(1) As the Bitcoin inflation rate falls, transaction fees will rise. (1) https://www.theblockcrypto.com/data/on-chain-metrics/bitcoin/bitcoin-share-of-transaction-fee-from-total-miner-revenue-monthly https://www.theblockcrypto.com/data/on-chain-metrics/bitcoin...
    - CryptoPunk 5y ago
      There is no in-protocol mechanism to increase transaction fees in reaction to declining inflation.
CryptoPunk 5y ago
Deflation is not a tax. It comes from economic growth, leading to the growth in the demand for the asset outpacing the growth in its supply. Deflation does however accrue economic rent to currency holders, so is an economic inefficiency. Fortunately in a decentralized economy, multiple currencies can co-exist and seamlessly operate in parallel, allowing the growth of the total money supply to keep pace with the demand for currency.