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Moderate inflation is good for debtors and keeps money circulating around the economy: those with savings can invest it in a way that keeps up with inflation. D

by not2b 5y ago

Moderate inflation is good for debtors and keeps money circulating around the economy: those with savings can invest it in a way that keeps up with inflation. Deflation causes hoarding of money and economic collapse (like the Depression of the 1930s). Central banks try to manage inflation to keep is low but nonzero.

xiphias2 5y ago
Can you explain how that Ponzi scheme works? I read parts of the source code before I invested in Bitcoin, and it looked to me like an open, honest system with easy-to-understand, clean code (unlike what Ponzi was doing, which is basically lying about customer deposits). I had doubts about elliptic curve digital signatures being safe enough to hold my money (I’m still thinking of using Lamport signatures in a multisig, as I trust them more), but I don’t see other serious problem with the system.
- topranks 5y ago
  It’s a Ponzi scheme cos it’s not being used for purchasing goods and services. Bitcoins only value is it’s value relative to dollars, euros etc, which have purchasing power. So ultimately all the Bitcoin has to be converted back to dollars, euros etc for people to see a return on their investment. The only way to do that is to sell the Bitcoin to someone else who has dollars (presumably for more dollars than you bought the Bitcoin originally). So as the cycle continues each new generation of investors needs to find another bunch of suckers to offload their Bitcoin to and get their dollar reward. And they need that next set of people to consistently pay a higher price than they did. Eventually people will struggle to find buyers and be left holding the bag. This wouldn’t necessarily be the case if Bitcoin got used as a real currency. But that’s clearly not happening at this stage, people laugh at the idea of buying Pizza with it or whatever. So it’s just a Ponzi-like scheme. Tbh it’s more like a penny stock scam of old.

by not2b 5y ago

xiphias2 5y ago

Can you explain how that Ponzi scheme works? I read parts of the source code before I invested in Bitcoin, and it looked to me like an open, honest system with easy-to-understand, clean code (unlike what Ponzi was doing, which is basically lying about customer deposits). I had doubts about elliptic curve digital signatures being safe enough to hold my money (I’m still thinking of using Lamport signatures in a multisig, as I trust them more), but I don’t see other serious problem with the system.

topranks 5y ago
It’s a Ponzi scheme cos it’s not being used for purchasing goods and services. Bitcoins only value is it’s value relative to dollars, euros etc, which have purchasing power. So ultimately all the Bitcoin has to be converted back to dollars, euros etc for people to see a return on their investment. The only way to do that is to sell the Bitcoin to someone else who has dollars (presumably for more dollars than you bought the Bitcoin originally). So as the cycle continues each new generation of investors needs to find another bunch of suckers to offload their Bitcoin to and get their dollar reward. And they need that next set of people to consistently pay a higher price than they did. Eventually people will struggle to find buyers and be left holding the bag. This wouldn’t necessarily be the case if Bitcoin got used as a real currency. But that’s clearly not happening at this stage, people laugh at the idea of buying Pizza with it or whatever. So it’s just a Ponzi-like scheme. Tbh it’s more like a penny stock scam of old.