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Under these population curve assumptions, doesn't crypto have the same inflationary risk, as a share of future economic value? It's not a technical characteris
by saltcured 5y ago
Under these population curve assumptions, doesn't crypto have the same inflationary risk, as a share of future economic value? It's not a technical characteristic of the financial instrument, but instead a basic imbalance between a net supplier and net consumer generation. A bunch of retirees holding crypto tokens is only rational if there is a reason to believe that a bunch of future kids would see value in those tokens. Just like dollars or euros or yuan.
If the future population does not drive a large enough economy, there are dwindling products and resources available to swap for all existing financial instruments. These real resources are things like clean water, food, medicine, shelter, energy, technology, and services which cannot be stored over a person's lifetime and then consumed decades later.
It seems to me that the instruments with meaningful value in this picture are those rooted in a right to capture future production. That is things like ownership shares in continuing business enterprises, industrial infrastructure, natural resources, buildings, and developed land for housing and commerce. Of course, infrastructure and buildings decay over time, but they do represent a kind of real stored value for a planned service lifetime.
An actual plan to take care of a shrinking population would need to think about how automation can increase the efficiency of production such that a smaller future generation can generate sufficient output to satisfy the needs of the whole population including the elder non-workers. To avoid the Ponzi threat or more generally the "musical chairs" game mode, this plan needs to accomodate continous, incremental decline. The important technological and cultural skills to operate this system need to be passed down to ensure continued production for all who remain alive.