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Deflationary currency encourages savings, inflationary currency encourages spending. We're just so accustomed to a world where our money is steadily becoming wo

Deflationary currency encourages savings, inflationary currency encourages spending. We're just so accustomed to a world where our money is steadily becoming worthless that sometimes we forget there are other options.

jeremyjh 5y ago
Deflation has nothing to do with it, its purely driven by speculation.
- Consultant32452 5y ago
  Speculation is just an emotional word used to throw you off the scent. You are also speculating about the future value of the dollar.
  - jeremyjh 5y ago
    Its true that fiat money's value is somewhat speculative, but speculation still has a specific meaning. It means you are investing not because you believe in the future value proposition of the asset (such as dividend payments, or liquidity value increase if all fixed assets of an enterprise were sold), but only because you expect the market price to increase. Often you expect the market price to increase for no reason other than you know many other people are speculating, so there is really no there, there.
    - deleted 5y ago
      [deleted]
    - Consultant32452 5y ago
      What are your thoughts on the US Mint issuing official/legal currency in the form of gold and silver coins?
UncleMeat 5y ago
The "inflation/deflation" argument is a red herring. The shape of mining curves is much more important than their upper limit. For all of the bluster that deflationary systems are better for the little guy because their wealth isn't eaten by inflation, the logarithmic mining curves are the biggest source of wealth consolidation seen perhaps in human history, shifting absolutely bonkers amounts of wealth from latecomers to early adopters. And while individual coins can be designed not to inflate, the overall proliferation of new tokens, forks, and entire blockchains does mean that there are way more assets over time. This sucks some of the investment out of older systems like BTC, putting downward pressure on their price. This can function similar to inflation and, in the extreme, send a very large number of these systems back down to zero.
- tromp 5y ago
  > the logarithmic mining curves They're not logarithmic though. Most are exponential in that they are of the form Lim * (1-e^time) which might look like a log function initially, but has different asymptotics. Several coins have a quick ramp up (high block subsidy) followed by a tail emission of fixed low block subsidy. Only one coin has a pure linear emission, which helps to deter speculation.
  - UncleMeat 5y ago
    You are right about the log thing. Can't brain in the morning.
- Consultant32452 5y ago
  Every year the federal government is creating trillions of new dollars diluting the value of your money and shifting the wealth to whoever gets their hands on that new currency, which is mostly large corporations and the wealthy. Early adopters making a bunch of money doesn't concern me at all because that's a short-term issue compared to the USD wealth transfer which will continue forever into the future. Crypto is new, and there's definitely a lot of volatility there with new coins popping up and being destroyed far more frequently than legacy currencies. I expect this will die down over time. FWIW my time horizon for thinking about these things is 50+ years. Imagine I tried to convince you to use my new foo-coin. The hand full people of who have the most foo-coins can issue themselves as many new foo-coins as they want, but nobody else can create any foo-coins. You would probably think this is a nonsensical currency that no one would think is reasonable to use. Except that is practically how the USD works. The USD is designed specifically for the purposes of corruption.

jeremyjh 5y ago

Deflation has nothing to do with it, its purely driven by speculation.

Consultant32452 5y ago
Speculation is just an emotional word used to throw you off the scent. You are also speculating about the future value of the dollar.
- jeremyjh 5y ago
  Its true that fiat money's value is somewhat speculative, but speculation still has a specific meaning. It means you are investing not because you believe in the future value proposition of the asset (such as dividend payments, or liquidity value increase if all fixed assets of an enterprise were sold), but only because you expect the market price to increase. Often you expect the market price to increase for no reason other than you know many other people are speculating, so there is really no there, there.
  - deleted 5y ago
    [deleted]
  - Consultant32452 5y ago
    What are your thoughts on the US Mint issuing official/legal currency in the form of gold and silver coins?

UncleMeat 5y ago

The "inflation/deflation" argument is a red herring. The shape of mining curves is much more important than their upper limit. For all of the bluster that deflationary systems are better for the little guy because their wealth isn't eaten by inflation, the logarithmic mining curves are the biggest source of wealth consolidation seen perhaps in human history, shifting absolutely bonkers amounts of wealth from latecomers to early adopters. And while individual coins can be designed not to inflate, the overall proliferation of new tokens, forks, and entire blockchains does mean that there are way more assets over time. This sucks some of the investment out of older systems like BTC, putting downward pressure on their price. This can function similar to inflation and, in the extreme, send a very large number of these systems back down to zero.

tromp 5y ago
> the logarithmic mining curves They're not logarithmic though. Most are exponential in that they are of the form Lim * (1-e^time) which might look like a log function initially, but has different asymptotics. Several coins have a quick ramp up (high block subsidy) followed by a tail emission of fixed low block subsidy. Only one coin has a pure linear emission, which helps to deter speculation.
- UncleMeat 5y ago
  You are right about the log thing. Can't brain in the morning.
Consultant32452 5y ago
Every year the federal government is creating trillions of new dollars diluting the value of your money and shifting the wealth to whoever gets their hands on that new currency, which is mostly large corporations and the wealthy. Early adopters making a bunch of money doesn't concern me at all because that's a short-term issue compared to the USD wealth transfer which will continue forever into the future. Crypto is new, and there's definitely a lot of volatility there with new coins popping up and being destroyed far more frequently than legacy currencies. I expect this will die down over time. FWIW my time horizon for thinking about these things is 50+ years. Imagine I tried to convince you to use my new foo-coin. The hand full people of who have the most foo-coins can issue themselves as many new foo-coins as they want, but nobody else can create any foo-coins. You would probably think this is a nonsensical currency that no one would think is reasonable to use. Except that is practically how the USD works. The USD is designed specifically for the purposes of corruption.