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That's like saying the USD is a negative sum game because "any CNY taken out of the system someone else has to have put in, plus whatever the government takes o
by anonporridge 5y ago
That's like saying the USD is a negative sum game because "any CNY taken out of the system someone else has to have put in, plus whatever the government takes out. Fortunes aren't created, they are redistributed."
The transference, redistribution, and storage of wealth is itself the value of monetary networks. The more circular trade that doesn't need to exit the network happens, the more valuable the network becomes.
The ultimate point of projects like bitcoin isn't to build a system that makes everyone rich. That would obviously an absurd ponzi like scheme. The point is to build an open monetary system for the whole planet that emerges out of distributed consensus rather than dictated to us by a global superpower, and is therefore not fragile and subject to failure when the superpower declines. Early investors of the network will get rich if it succeeds, just like early investors of any tech giant did. That mechanism of rewarding those who take a risk with their money when the future is uncertain is a huge part of what's driving its continued growth and success. If you didn't have that to bootstrap the network, bitcoin would likely be a forgotten oddity of a cypherpunk project that nobody ever cared about. But now, it's a global money that nation states are adopting.
I do agree that most crypto projects will fail and end up looking like nothing more than pump and dumps to scalp investor money, whether from dumb VCs or retail.
- omegaworks 5y ago>The point is to build an open monetary system A structurally impossible goal when it is deflationary in nature.
- anonporridge 5y agoWhy's that?
- quickthrowman 5y agoA rational actor would never spend a deflationary currency since it would gain value as deflation happens. If everyone was rational, no money would ever change hands. You can’t have a functional monetary system without liquidity or exchanging of currency. Bitcoin is a deflationary currency (for now)
- deleted 5y ago[deleted]
- robocat 5y agoYou could equivalently say that a rational actor would never sell any equity or property that was appreciating faster than inflation. A deflationary currency would only be one of many different investments, and people will buy and sell based on their expected gains and risks of other holdings.
- anonporridge 5y agoSo that's why retirees who have their money in investments that constantly increase in value over time never spend money? Come on man. This argument is patently absurd. I expect better from the HN community. The only thing an inflationary currency does is wipe out the savings of the poor who don't have knowledge or the privilege to invest in harder and/or income generating assets.
- louloulou 5y agoA rational actor will exchange money for food rather than starve to death, regardless of whether the currency they are using is deflationary or not. Your argument is nonsense.
- karmakurtisaani 5y agoThat rational actor doesn't need to be a human. In fact, the concept of rational actor makes more sense in the context of corporations. Now, imagine a corporation hoards a trillion dollars worth of a deflationary currency. Will it invest it back to the economy as eagerly as it would an inflationary currency?
- anonporridge 5y agoA corporation has fixed costs to continue existing, even if it's not directly food. Any possible rational actor you can come up with will have some need to trade with external actors.