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I think the biggest 'positive' is that the government in control of the currency is unable to alter the value of it. It is clear that inflation is bad for the c

I think the biggest 'positive' is that the government in control of the currency is unable to alter the value of it. It is clear that inflation is bad for the citizenry, yet that has been done throughout the ages by every dying civilization. I'm simply looking/hoping for a mechanism to stop it. It would be a 'positive' for you too! Is Bitcoin the ultimate answer? I can't say, but it is a good first step.

Per_Bothner 4y ago
"It is clear that inflation is bad for the citizenry." No. It is clear that both hyper-inflation and deflation are bad for the citizenry. However, modest inflation is generally a net positive. "yet [inflation] has been done throughout the ages by every dying civilization." Do you have any real data for this? Sounds like bullshit to me. Also, it seems preferable that government be in control of the currency rather than random speculators. Controlling the currency can be a useful tool if used responsibly. If you have bad government, then bitcoin isn't going to save you.
- laszlo-kiss 4y ago
  Roman Empire is a biggie. The Weimar Republic is the most obvious. I guess we are now arguing 'Austrian Economics' vs. 'Keynesian Economics'... This is a fair simplification. As long as you hold real assets to protect your wealth, the government's debasement of the currency (modest inflation) is of no concern. Clearly, when a person lives from paycheck to paycheck the only concern is "Can I buy food next week?" and "Can I pay the rent on the 1st?". Wealth preservation and modest inflation is not on the radar. However, it is still hurting the man that earns $12/hr, no matter the modesty of the inflation. Just look around right now. Is the current inflation rate modest? Did everyone get a raise to account for the CPI going up? Will everyone get an 8.5% raise next year? In my opinion decoupling the currency from anyone's "control" is the key idea behind Bitcoin.
  - alphabettsy 4y ago
    It doesn’t de-couple it though. Bitcoin can and is manipulated by “whales” just like any other market. If it becomes a reserve currency governments and the very wealthy will still hold the vast majority and thus maintain control right?
  - masta 4y ago
    I hate to break it to you, but the hyperinflation of the Weimar Republic ended around 1923 and the Republic prospered afterwards. Till the Great Depression, which was in big parts driven by speculative assets .... Wonder where I've heard that before. And in the aftermath, the 1930s introduced austerity and deflation policies to the Weimar Republic, which was the final straw.
    - majewsky 4y ago
      Not sure why the correction of a common misconception is being downvoted here. If you want to learn more about the history of the German economy between 1900-1945, the authority on the subject is the British historian Adam Tooze. He has a couple of books on the subject, listed on Wikipedia if you want to check them out.
thurn 4y ago
Inflation in the form of government spending on infrastructure or wealth transfers to poorer citizens is not 'clearly' bad, there's significant academic debate on the subject. Disincentivizing cash-hoarding drives economic growth, and has done so for the past 50 years.
- zamalek 4y ago
  > Disincentivizing cash-hoarding And the reason why this is important is because an asset that is not liquid has no utility as a currency. Put another way, if my $1 today would be worth $1.20 tomorrow, it would be in my best interest to "HODL" on to it instead of using it. This would be a fantastic scenario for me as an individual, in the short term. Eventually, though, I'd have to buy some bread; the problem is that the baker decided to HODL their currency instead of buying flour (because that would be in their own best interest). Everyone would be sitting on heaps of unusable wealth.
jeroenhd 4y ago
Government action around the world has had a definite impact on cryptocurrency pricing, both positive and negative. The idea that a government cannot control cryptocurrencies is ludicrous, because they can simply ban them if they feel the need to. If any real cryptocurrency actually manages to catch on for normal payments, I'd expect the government to force businesses accepting it to only accept transactions from "validated" wallets to ensure that the proper amount of tax is being paid. Any "unvalidated" wallets would risk a visit from the local tax agency for attempted tax fraud or whatever. Technology won't stop legislation. Also, if anything is inflated right now, it's the price of cryptocurrencies. They're volatile to a comical level and the ones that are reasonably stable have such high processing fees that they're utterly useless for actual payment. The solution proposed by enthusiasts seems to be centralization (Lightning network etc.) which ruins most of the theoretical benefits of cryptocurrencies. Nobody with the intention to buy groceries buys any cryptocurrencies, except for the one country where cryptocurrency companies have managed to convince the government that their system is a good solution (and even there the actual currency gets converted to US dollar in the end). Inflation, artificial or otherwise, is simply something that can happen in a free economy. So is deflation, of course, but deflation tends to be bad for trade, so the world's current attempts to keep everyone rich revolve around artificial infinite inflation. Inflation, as a concept, isn't necessarily a problem; every currency on earth has suffered through it at some point. It's more of a consequence and a goal of economic policy than a disease to civilization. It's true, many collapses of civilizations have coincided with inflation events, but the economy is bound to collapse when a civilization collapses. Turkey actually willingly let its currency deflate, with terrible results for the general population as prices for common items skyrocketed. Risking arbitrary spikes and dips in value isn't much better than the current system, in my opinion.
- laszlo-kiss 4y ago
  I thought the Lira lost its value, which is 'inflation'. If it was experiencing deflation then it would become more and more valuable, because it is becoming scarcer. Inflation is caused by the oversupply of money, it is because the government in charge of that currency is printing it w/o limits. It is a way to pay back loans with cheap money. Indeed, governments can ban things, but if there is a market for the banned item then there is going to be a supply. Governments don't seem to have the means to block drugs entering prisons, how will they stop ordinary citizens that feel the need to protect themselves from doing what they need to do?

Per_Bothner 4y ago

"It is clear that inflation is bad for the citizenry." No. It is clear that both hyper-inflation and deflation are bad for the citizenry. However, modest inflation is generally a net positive. "yet [inflation] has been done throughout the ages by every dying civilization." Do you have any real data for this? Sounds like bullshit to me. Also, it seems preferable that government be in control of the currency rather than random speculators. Controlling the currency can be a useful tool if used responsibly. If you have bad government, then bitcoin isn't going to save you.

laszlo-kiss 4y ago
Roman Empire is a biggie. The Weimar Republic is the most obvious. I guess we are now arguing 'Austrian Economics' vs. 'Keynesian Economics'... This is a fair simplification. As long as you hold real assets to protect your wealth, the government's debasement of the currency (modest inflation) is of no concern. Clearly, when a person lives from paycheck to paycheck the only concern is "Can I buy food next week?" and "Can I pay the rent on the 1st?". Wealth preservation and modest inflation is not on the radar. However, it is still hurting the man that earns $12/hr, no matter the modesty of the inflation. Just look around right now. Is the current inflation rate modest? Did everyone get a raise to account for the CPI going up? Will everyone get an 8.5% raise next year? In my opinion decoupling the currency from anyone's "control" is the key idea behind Bitcoin.
- alphabettsy 4y ago
  It doesn’t de-couple it though. Bitcoin can and is manipulated by “whales” just like any other market. If it becomes a reserve currency governments and the very wealthy will still hold the vast majority and thus maintain control right?
- masta 4y ago
  I hate to break it to you, but the hyperinflation of the Weimar Republic ended around 1923 and the Republic prospered afterwards. Till the Great Depression, which was in big parts driven by speculative assets .... Wonder where I've heard that before. And in the aftermath, the 1930s introduced austerity and deflation policies to the Weimar Republic, which was the final straw.
  - majewsky 4y ago
    Not sure why the correction of a common misconception is being downvoted here. If you want to learn more about the history of the German economy between 1900-1945, the authority on the subject is the British historian Adam Tooze. He has a couple of books on the subject, listed on Wikipedia if you want to check them out.

thurn 4y ago

Inflation in the form of government spending on infrastructure or wealth transfers to poorer citizens is not 'clearly' bad, there's significant academic debate on the subject. Disincentivizing cash-hoarding drives economic growth, and has done so for the past 50 years.

zamalek 4y ago
> Disincentivizing cash-hoarding And the reason why this is important is because an asset that is not liquid has no utility as a currency. Put another way, if my $1 today would be worth $1.20 tomorrow, it would be in my best interest to "HODL" on to it instead of using it. This would be a fantastic scenario for me as an individual, in the short term. Eventually, though, I'd have to buy some bread; the problem is that the baker decided to HODL their currency instead of buying flour (because that would be in their own best interest). Everyone would be sitting on heaps of unusable wealth.

jeroenhd 4y ago

Government action around the world has had a definite impact on cryptocurrency pricing, both positive and negative. The idea that a government cannot control cryptocurrencies is ludicrous, because they can simply ban them if they feel the need to. If any real cryptocurrency actually manages to catch on for normal payments, I'd expect the government to force businesses accepting it to only accept transactions from "validated" wallets to ensure that the proper amount of tax is being paid. Any "unvalidated" wallets would risk a visit from the local tax agency for attempted tax fraud or whatever. Technology won't stop legislation. Also, if anything is inflated right now, it's the price of cryptocurrencies. They're volatile to a comical level and the ones that are reasonably stable have such high processing fees that they're utterly useless for actual payment. The solution proposed by enthusiasts seems to be centralization (Lightning network etc.) which ruins most of the theoretical benefits of cryptocurrencies. Nobody with the intention to buy groceries buys any cryptocurrencies, except for the one country where cryptocurrency companies have managed to convince the government that their system is a good solution (and even there the actual currency gets converted to US dollar in the end). Inflation, artificial or otherwise, is simply something that can happen in a free economy. So is deflation, of course, but deflation tends to be bad for trade, so the world's current attempts to keep everyone rich revolve around artificial infinite inflation. Inflation, as a concept, isn't necessarily a problem; every currency on earth has suffered through it at some point. It's more of a consequence and a goal of economic policy than a disease to civilization. It's true, many collapses of civilizations have coincided with inflation events, but the economy is bound to collapse when a civilization collapses. Turkey actually willingly let its currency deflate, with terrible results for the general population as prices for common items skyrocketed. Risking arbitrary spikes and dips in value isn't much better than the current system, in my opinion.

laszlo-kiss 4y ago
I thought the Lira lost its value, which is 'inflation'. If it was experiencing deflation then it would become more and more valuable, because it is becoming scarcer. Inflation is caused by the oversupply of money, it is because the government in charge of that currency is printing it w/o limits. It is a way to pay back loans with cheap money. Indeed, governments can ban things, but if there is a market for the banned item then there is going to be a supply. Governments don't seem to have the means to block drugs entering prisons, how will they stop ordinary citizens that feel the need to protect themselves from doing what they need to do?