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Argentinians who want to avoid their own currency would be 10x better served by USD than BTC.

hogrider 5y ago
This is true but you van only buy a few dollars from official sources, after that you need to go black market where thry will screw you over with fake bills.
kragen 5y ago
The USD inflated 6% over the last year, and getting it into the country is often difficult, but it is indeed very popular here.
- jollybean 5y ago
  6% is fine, at least it's not +/-100% and it's accepted everywhere. For now.
  - kragen 5y ago
    It's fine as a medium of exchange or a unit of account; as a store of value, 6% inflation in a year is disastrous.
    - jollybean 5y ago
      6% was just one year, not a long term value. And nobody should be using common currency as a store of value. The USD is designed to have a bit of inflation, i.e. it's not supposed to be a store of value on purpose.
      - kragen 5y ago
        It's true that we don't know whether US$ inflation this year will be 1% or 12%, but that's not actually better than a predictable 6% per year inflation rate. It's worse. A predictable inflation rate could be priced into things like bond yields. Use as a store of value is a significant part of what we're talking about here. You said, "Argentinians who want to avoid their own currency would be 10x better served by USD than BTC." Why do you think Argentines want to avoid our own currency? Part of it is that it's useless for export; nobody abroad has AR$. But the main reason is that designed-in secular inflation makes it a shitty store of value. This was specifically mentioned in the comment you were replying to: "Not only that, you also are forbid from buying dollars, so if you want to get them to avoid our rampant inflation (50% average, around 100% for groceries) you only have the black market which is around 200 pesos." Bitcoin has its own problems, like volatility, but it doesn't have that one. Why would you claim that people wanting to "avoid rampant inflation" would be "10x better served by USD than BTC"? We can now discard the hypothesis that you don't know about the secular inflation of the US$, since you explained it yourself in your own words in the comment I am replying to. It seems like you were being, at best, careless with the truth.
- notriddle 5y ago
  And Bitcoin deflated by 18% https://finance.yahoo.com/quote/BTC-USD/history/ https://finance.yahoo.com/quote/BTC-USD/history/ 43,565.51 on January 6, 2022 36,833.88 on January 6, 2021
  - kragen 5y ago
    Yes, but I think the more crucial aspect is not how much it's gone up or down in a given year, but more the secular trend. The dollar has a secular inflation trend, having lost something like 95% of its value over the last 50 years, because that's just what fiat currencies do, while Bitcoin was designed to not have the structural incentives that cause that. Indeed, some have argued that Bitcoin is inherently deflationary, which would make it an ideal savings vehicle if true. How's Not Mimblewimble going?
    - notriddle 5y ago
      The "ISO Standard" argument against inflation is that it favors the capital class over the middle and lower class, because money loses value over time faster than capital does. This means it steals from the poor and gives to the rich, because the upper class puts most of their wealth into capital, because they have a higher return on investment, while the poor and middle class store most of their wealth in savings accounts, because they need the ability to access significant chunks of their wealth in a hurry if they suffer an emergency (the rich have "lots" of cash on hand, too, but it is a smaller fraction of their overall wealth). This seems like it implies that a deflationary currency would be better, but it does not, because in a deflationary economy, the behavior of the rich would change. In effect, the rich would keep most of their wealth in cash, while the middle class and the poor would not be able to change their behavior at all. The middle class family that has 50% of their wealth tied up in a house would still have that wealth tied up in a house because they actually need to live in it. A rich investor who owns hundreds of houses in the current economy would, however, move their wealth into cash and sell the houses. It might help the housing market, but it would screw up the currency market in exchange, and would probably not do anything for wealth disparity. In short, "wealth" is the ability to make a wider range of choices. Both paths, deflation and inflation, favor the wealthy over the poor because of this.

This is true but you van only buy a few dollars from official sources, after that you need to go black market where thry will screw you over with fake bills.

kragen 5y ago

The USD inflated 6% over the last year, and getting it into the country is often difficult, but it is indeed very popular here.

jollybean 5y ago
6% is fine, at least it's not +/-100% and it's accepted everywhere. For now.
- kragen 5y ago
  It's fine as a medium of exchange or a unit of account; as a store of value, 6% inflation in a year is disastrous.
  - jollybean 5y ago
    6% was just one year, not a long term value. And nobody should be using common currency as a store of value. The USD is designed to have a bit of inflation, i.e. it's not supposed to be a store of value on purpose.
    - kragen 5y ago
      It's true that we don't know whether US$ inflation this year will be 1% or 12%, but that's not actually better than a predictable 6% per year inflation rate. It's worse. A predictable inflation rate could be priced into things like bond yields. Use as a store of value is a significant part of what we're talking about here. You said, "Argentinians who want to avoid their own currency would be 10x better served by USD than BTC." Why do you think Argentines want to avoid our own currency? Part of it is that it's useless for export; nobody abroad has AR$. But the main reason is that designed-in secular inflation makes it a shitty store of value. This was specifically mentioned in the comment you were replying to: "Not only that, you also are forbid from buying dollars, so if you want to get them to avoid our rampant inflation (50% average, around 100% for groceries) you only have the black market which is around 200 pesos." Bitcoin has its own problems, like volatility, but it doesn't have that one. Why would you claim that people wanting to "avoid rampant inflation" would be "10x better served by USD than BTC"? We can now discard the hypothesis that you don't know about the secular inflation of the US$, since you explained it yourself in your own words in the comment I am replying to. It seems like you were being, at best, careless with the truth.
notriddle 5y ago
And Bitcoin deflated by 18% https://finance.yahoo.com/quote/BTC-USD/history/ https://finance.yahoo.com/quote/BTC-USD/history/ 43,565.51 on January 6, 2022 36,833.88 on January 6, 2021
- kragen 5y ago
  Yes, but I think the more crucial aspect is not how much it's gone up or down in a given year, but more the secular trend. The dollar has a secular inflation trend, having lost something like 95% of its value over the last 50 years, because that's just what fiat currencies do, while Bitcoin was designed to not have the structural incentives that cause that. Indeed, some have argued that Bitcoin is inherently deflationary, which would make it an ideal savings vehicle if true. How's Not Mimblewimble going?
  - notriddle 5y ago
    The "ISO Standard" argument against inflation is that it favors the capital class over the middle and lower class, because money loses value over time faster than capital does. This means it steals from the poor and gives to the rich, because the upper class puts most of their wealth into capital, because they have a higher return on investment, while the poor and middle class store most of their wealth in savings accounts, because they need the ability to access significant chunks of their wealth in a hurry if they suffer an emergency (the rich have "lots" of cash on hand, too, but it is a smaller fraction of their overall wealth). This seems like it implies that a deflationary currency would be better, but it does not, because in a deflationary economy, the behavior of the rich would change. In effect, the rich would keep most of their wealth in cash, while the middle class and the poor would not be able to change their behavior at all. The middle class family that has 50% of their wealth tied up in a house would still have that wealth tied up in a house because they actually need to live in it. A rich investor who owns hundreds of houses in the current economy would, however, move their wealth into cash and sell the houses. It might help the housing market, but it would screw up the currency market in exchange, and would probably not do anything for wealth disparity. In short, "wealth" is the ability to make a wider range of choices. Both paths, deflation and inflation, favor the wealthy over the poor because of this.