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>Leaving aside the dubious idea that the Federal Reserve can give their friends the ability to print money You didn't read my comment correctly.

tux1968 5y ago
What is the mechanism that ensures bitcoin inflates proportionally to the dollar?
- dboreham 5y ago
  Perhaps inflation in the price of electricity, denominated in USD? But when people say inflation in the context of cryptocurrency they usually mean "deflation".
- moolcool 5y ago
  (not an economist) If most bitcoins are bought with USD, all else remaining equal, wouldn't this automatically happen?
  - deleted 5y ago
    [deleted]
  - tux1968 5y ago
    I'm not an economist either... but the buying power of your bitcoin goes down if people demand more of it for a given product. If USD prices rise, the bitcoin price will rise too, meaning your bitcoin wealth is affected by inflation, and you're not protected from the Fed printing money.
    - spiddy 5y ago
      You assume there is a correlation between USD and BTC. Another way to see this is this: If USD prices rise, the price of BTC will also rise, as BTC is another product you can buy with your USD. Meaning your bitcoin wealth is not affected by USD inflation.
    - worik 5y ago
      But the price of bitcoin is unrelated, it seems, to any real world thing. Pure speculation.
      - moolcool 5y ago
        You could say that about the value of any currency though
        worik 5y ago
        No. In a currency with a lot of transactions there are plenty of real world hooks to hang their value on. The volatility of Bitcoin, the fact it can hardly be used, the fact that almost no merchants accept it....
paulgb 5y ago
I was referring to this part: > stablecoins subvert the ability of the Federal Reserve to print money and give it to their friends at Goldman Sachs et al
- sjtindell 5y ago
  But you said “their friends to print money” not “print money for their friends”.
  - paulgb 5y ago
    Ok, fair, the part that I excerpted did confuse the two, but OP goes on to say: > David at Goldman Sachs starts with 1 dollar, you each have 50% of the wealth in the "nation." David and his friends start printing themselves money “David at Goldman Sachs” presumably refers to David Solomon, CEO of GS, and in this part of the post he and his friends are the ones printing the money.
    - sjtindell 5y ago
      True. It was definitely not a wildly coherent post.

tux1968 5y ago

What is the mechanism that ensures bitcoin inflates proportionally to the dollar?

dboreham 5y ago
Perhaps inflation in the price of electricity, denominated in USD? But when people say inflation in the context of cryptocurrency they usually mean "deflation".
moolcool 5y ago
(not an economist) If most bitcoins are bought with USD, all else remaining equal, wouldn't this automatically happen?
- deleted 5y ago
  [deleted]
- tux1968 5y ago
  I'm not an economist either... but the buying power of your bitcoin goes down if people demand more of it for a given product. If USD prices rise, the bitcoin price will rise too, meaning your bitcoin wealth is affected by inflation, and you're not protected from the Fed printing money.
  - spiddy 5y ago
    You assume there is a correlation between USD and BTC. Another way to see this is this: If USD prices rise, the price of BTC will also rise, as BTC is another product you can buy with your USD. Meaning your bitcoin wealth is not affected by USD inflation.
  - worik 5y ago
    But the price of bitcoin is unrelated, it seems, to any real world thing. Pure speculation.
    - moolcool 5y ago
      You could say that about the value of any currency though
      - worik 5y ago
        No. In a currency with a lot of transactions there are plenty of real world hooks to hang their value on. The volatility of Bitcoin, the fact it can hardly be used, the fact that almost no merchants accept it....

paulgb 5y ago

I was referring to this part: > stablecoins subvert the ability of the Federal Reserve to print money and give it to their friends at Goldman Sachs et al

sjtindell 5y ago
But you said “their friends to print money” not “print money for their friends”.
- paulgb 5y ago
  Ok, fair, the part that I excerpted did confuse the two, but OP goes on to say: > David at Goldman Sachs starts with 1 dollar, you each have 50% of the wealth in the "nation." David and his friends start printing themselves money “David at Goldman Sachs” presumably refers to David Solomon, CEO of GS, and in this part of the post he and his friends are the ones printing the money.
  - sjtindell 5y ago
    True. It was definitely not a wildly coherent post.