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So long as centrally managed currencies are designed to rob the public through inflation, nothing else about Bitcoin's weaknesses really matters to its users.
by logicalmonster 5y ago
So long as centrally managed currencies are designed to rob the public through inflation, nothing else about Bitcoin's weaknesses really matters to its users.
Pointing out how it's inefficient means nothing if the alternative means that you're robbed blind.
- verdverm 5y agoWhat are the cons of a deflationary currency?
- logicalmonster 5y agoI suppose the textbook Keynesian argument would be that everybody would have an incentive to save as much of their money for as long as possible because it goes up in value over time, leading to incentivizing less short-term economic consumption, which would be harmful. Is it harmful though? Whether this is a good or bad thing might come down to how much importance you place on random consumption vs capital investment as the real engine of society. The Keynesian viewpoint is more favorable towards the importance of random consumption, the Austrian mentality would put a lot more weight on the value of saving for future investment and building.
- verdverm 5y agoIf people don't spend on goods and services, where do wages come from?
- logicalmonster 5y agoAs a defense of deflation, I'd say that "being incentivized to spend less doesn't mean that you're spending zero". Humans still need to eat and stay warm and fulfill their daily needs in a deflationary environment. You'll be very-well incentivized to work in a deflationary environment, you just might think a lot harder about buying something like a movie ticket if that money might be worth more in the future.
- verdverm 5y agoRight, so discretionary spending goes way down. I may be incentivized to work, but who can afford to employ me?
- logicalmonster 5y ago"Humans still need to eat and stay warm and fulfill their daily needs in a deflationary environment." EDIT: to add onto that answer, I'd say that just as there are still savers in an inflationary environment, there will still be consumers in a deflationary environment. Incentives matter, but are not absolute drivers.
- verdverm 5y agoI'm not convinced this logic holds up. It is counter intuitive with economic theory and history
- logicalmonster 5y ago> "It is counter intuitive with economic theory" If you said "It is counter intuitive with Keynesian economic theory", I'd see your point a bit more. But different schools of thought like the Austrians view the importance of short-term consumption differently than what is a sort of textbook model of the world.
- MrMan 5y agosharecropping - feudalism
- verdverm 5y agoYou mean https://youtu.be/ZtYU87QNjPw https://youtu.be/ZtYU87QNjPw ?
- ClumsyPilot 5y ago"how much importance you place on random consumption vs capital investment as the real engine of society" Deflationary currency competes with investment, not with consumption. For example investing in infrastructure, is a safe, low return investment. in single percentage digits. If the deflation of the currency is faster than that rate of return, then nobody will ever invest in infrastructure. People will never install solar panels on their house, etc.
- tromp 5y agoFor a cryptocurrency, the cons of diminishing block subsidies (as required by a capped supply) are 1) concentration of wealth on early adopters 2) no long term security unless you have a constant backlog of high-fee paying transactions I think an uncapped, disinflationary emission is to be preferred [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...
- timeon 5y agoOk but Bitcoin is not currency.