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Using an ultra deflationary token like bitcoin as a global currency would literally be the most stupid thing that ever happened in human history. Basically peo

by qwytw 4y ago

Using an ultra deflationary token like bitcoin as a global currency would literally be the most stupid thing that ever happened in human history. Basically people who held significant amounts of bitcoin from early on would become billionaires (if not trillionaires...) by having provided zero value to the economy. As awful and unfair what we have currently is it's still several magnitudes superior in almost any conceivable way than a global financial system based on bitcoin. I can imagine some sort of a crypto currency possible becoming dominant in the future. But Bitcoin itself is pretty much the worst option I can imagine.

DethNinja 4y ago
How do you know they provide negative value to economy? Perhaps they would invest their bitcoins far better than the current status quo and create a star-trek style post scarcity economy.
- anothernewdude 4y ago
  Perhaps I'll start shitting out gold and we can go back to the gold standard.
- qwytw 4y ago
  > How do you know they provide negative value to economy? Very basic understanding of modern economics and monetary systems would be more than enough to figure that out. > post scarcity economy In fact it would maximize scarcity (imagine the Fed hiking interest rates to + 20% while inflation becomes negative, say - 20%. What do you think would happen?)
yevpats 4y ago
I don't have a side in the whole crypto vs fiat war but I do wonder why HN is so anti-crypto (maybe it's just classic position speak). Re the "people who held significant amounts of bitcoin from early on would become billionaires by having provided zero value" - isn't that true to people who held Google stock very early on? what was their value? Also, I would say inflationary token vs deflationary token is not clear what is better because it is actually highly depends on the time in history. lot's of things changed in the last 100 years and we might be entering a world where there is no need for inflationary token - For example let's say the earth is over-populated and there is going to be a decline in birth and total population - this on it's can mean we don't necessarily need an inflationary token as we don't need to build more infrastructure, buy more things and so on....
- indymike 4y ago
  > I do wonder why HN is so anti-crypto Some of it is regret from selling early (I'd be a billionaire... if I had held), some of it is FOMO, some of it is that crypto is used by criminals (see bitlocker hacks), some of it is seeing people loose everything due to security breaches, and some of it is the attitude of proponents that act like all of the above is an anomaly.
  - junofan 4y ago
    It does make for strange bedfellows. Weird to see so much support for the traditional banking system and antipathy towards people advancing an alternative. Credit Suisse has a rap sheet a mile long.
    - ben_w 4y ago
      I first heard about it at $250/btc, and I didn't invest then for the same reason I think it's bad now: the hype around it is exactly the same as every bubble I've heard about in history lessons, including the one in house prices and subprime mortgages leading up to the 2007 global financial crisis.
    - shjake 4y ago
      The fact that the current system has huge flaws doesn’t mean that any random alternative is superior to it. IMHO the current monetary/financial system is superior to everything that has ever been tried. While it might be worth having a discussion about crypto using btc as a currency would be the digital equivalent of bottle caps in a post apocalyptic society. Dogecoin would make a better currency..
- watwut 4y ago
  Early ownership of Google means you are investor in some way. They have money, because Google itself has money. If google fails without them selling, they have no money. As in, if you believe google is societal good, they gave it money by the beginning. If you think it is just a company, then they are just winners in economy. There is no reason for any of us to lobby for them to get more money. And, none of us lobby for it.
HashBasher 4y ago
Bitcoin is not deflationary. It just has a fixed supply. People who held bitcoin from early on supported the growth of bitcoin by holding up it's value through the wild gut-wrenching rollercoaster ride that it has gone through. They should be rewarded for the risk they're taking on, having invested significant amount of their net worth in the face of harsh criticism such as yours. Bitcoin and "crypto" are completely different beasts. Cryptos are unregistered securities masquerading as Bitcoin 2.0.
- Nasrudith 4y ago
  A fixed supply with growing markets is deflationary. Cryptocurrency advocates wrongly insist thid is a good thing out of motivated reasoning.
  - HashBasher 4y ago
    When describing the currency itself, bitcoin is strictly not deflationary as the supply of it is never reduced, it's actually inflationary for the next hundred years or so until the full 21 million is mined. It might create a deflationary economy in that everything gets cheaper over time, priced in bitcoin. What is so wrong with that? Why can't you expect to purchase more goods in the future than today with the same amount of bitcoin? There never has been a fixed supply world reserve asset, even gold has always been inflationary. I think it will usher in a "Golden" age for humanity where goods and services consistently increase in quality and value, while constantly reducing in cost. I'm very excited to step into the bold orange world. P.S. I'm a bitcoiner not a cryptocurrency advocate.
    - notahacker 4y ago
      > It might create a deflationary economy in that everything gets cheaper over time, priced in bitcoin. What is so wrong with that? Because then investment ceases to be about trying to capture a share of the growing pie, and more a zero sum game which the small minority of people holding most of the financial wealth have little incentive to participate in, and so the mechanism by which stuff gets cheaper over time, priced in Bitcoin, isn't economic growth but just increasing desperation of people without Bitcoin to obtain it. So all the worst parts of capitalism and none of the actual good parts, though I appreciate the idea is more appealing to people who imagine themselves as being the minority of idle rich. For related reasons, the world would not adopt a deflationary currency for very long...
aaomidi 4y ago
We’d effectively be replacing a shit system with an even worse one. We really need to crack down on amassing wealth.
- B1FF_PSUVM 4y ago
  No pyramids, only huts.
hbrn 4y ago
I never really understood this reasoning, is it just simple envy? Ok, so a few folks will amass a lot of wealth based on luck and not merit. Those already exist in current financial system, both locally and globally. Plenty of dictators have control over natural resources worth trillions. There are numerous issues with bitcoin replacing USD, I'm just surprised why you think that few nerds becoming billionaires is a major one.
- qwytw 4y ago
  I'm sorry but I really I can't tell if you're being sarcastic or not, but I'll assume that you're not... > so a few folks will amass a lot of wealth based on luck and not merit You severely underestimate how concentrated bitcoin ownership is. A couple of hundred people would control a significant proportion of the global economy just because they were lucky. Why would you want some random people controlling the majority of the global economy? I mean things are very far from perfect now in my opinion but at least most billionaires have earned their wealth through actual work in one way or the other and can be generally expected to behave rationally. The main issue in this case though is that bitcoin is deflationary. Obviously it's flawed but with Fiat money you're forced to either spend or invest your money returning it into the economy (also it's simply not physically feasible to hoard several billion (let alone trillion) of $ i a vault...). If you don't utilize your money somehow it will lose value continuously due to inflation. Bitcoin on the other hand will increase in value when the economy is growing (which is why using a commodity like gold which is still a magnitude or so so superior to bitcoin in this regard is and was a bad idea unless there are no stable governments). So hoarding money will become the safest and relatively best investment This means that these few folks will remain billionaires for ever and their wealth will keep increasing without them actually doing anything... There would be no or very few bank loans given out (imagine HUGE INTEREST RATES + HUGE DEFLATION, obviously not something that can exist now as long the people charger are not more than mildly insane...) venture capital, really any investment, which to be fair makes my last point moat cause there would be very little (or like negative) growth anyway in a such an economy. > I'm just surprised why you think that few nerds becoming billionaires is a major one So you want to take one of the biggest flaws of the current system and dial it up to 1000? Great idea...

by qwytw 4y ago

DethNinja 4y ago

How do you know they provide negative value to economy? Perhaps they would invest their bitcoins far better than the current status quo and create a star-trek style post scarcity economy.

anothernewdude 4y ago
Perhaps I'll start shitting out gold and we can go back to the gold standard.
qwytw 4y ago
> How do you know they provide negative value to economy? Very basic understanding of modern economics and monetary systems would be more than enough to figure that out. > post scarcity economy In fact it would maximize scarcity (imagine the Fed hiking interest rates to + 20% while inflation becomes negative, say - 20%. What do you think would happen?)

yevpats 4y ago

I don't have a side in the whole crypto vs fiat war but I do wonder why HN is so anti-crypto (maybe it's just classic position speak). Re the "people who held significant amounts of bitcoin from early on would become billionaires by having provided zero value" - isn't that true to people who held Google stock very early on? what was their value? Also, I would say inflationary token vs deflationary token is not clear what is better because it is actually highly depends on the time in history. lot's of things changed in the last 100 years and we might be entering a world where there is no need for inflationary token - For example let's say the earth is over-populated and there is going to be a decline in birth and total population - this on it's can mean we don't necessarily need an inflationary token as we don't need to build more infrastructure, buy more things and so on....

indymike 4y ago
> I do wonder why HN is so anti-crypto Some of it is regret from selling early (I'd be a billionaire... if I had held), some of it is FOMO, some of it is that crypto is used by criminals (see bitlocker hacks), some of it is seeing people loose everything due to security breaches, and some of it is the attitude of proponents that act like all of the above is an anomaly.
- junofan 4y ago
  It does make for strange bedfellows. Weird to see so much support for the traditional banking system and antipathy towards people advancing an alternative. Credit Suisse has a rap sheet a mile long.
  - ben_w 4y ago
    I first heard about it at $250/btc, and I didn't invest then for the same reason I think it's bad now: the hype around it is exactly the same as every bubble I've heard about in history lessons, including the one in house prices and subprime mortgages leading up to the 2007 global financial crisis.
  - shjake 4y ago
    The fact that the current system has huge flaws doesn’t mean that any random alternative is superior to it. IMHO the current monetary/financial system is superior to everything that has ever been tried. While it might be worth having a discussion about crypto using btc as a currency would be the digital equivalent of bottle caps in a post apocalyptic society. Dogecoin would make a better currency..
watwut 4y ago
Early ownership of Google means you are investor in some way. They have money, because Google itself has money. If google fails without them selling, they have no money. As in, if you believe google is societal good, they gave it money by the beginning. If you think it is just a company, then they are just winners in economy. There is no reason for any of us to lobby for them to get more money. And, none of us lobby for it.

HashBasher 4y ago

Bitcoin is not deflationary. It just has a fixed supply. People who held bitcoin from early on supported the growth of bitcoin by holding up it's value through the wild gut-wrenching rollercoaster ride that it has gone through. They should be rewarded for the risk they're taking on, having invested significant amount of their net worth in the face of harsh criticism such as yours. Bitcoin and "crypto" are completely different beasts. Cryptos are unregistered securities masquerading as Bitcoin 2.0.

Nasrudith 4y ago
A fixed supply with growing markets is deflationary. Cryptocurrency advocates wrongly insist thid is a good thing out of motivated reasoning.
- HashBasher 4y ago
  When describing the currency itself, bitcoin is strictly not deflationary as the supply of it is never reduced, it's actually inflationary for the next hundred years or so until the full 21 million is mined. It might create a deflationary economy in that everything gets cheaper over time, priced in bitcoin. What is so wrong with that? Why can't you expect to purchase more goods in the future than today with the same amount of bitcoin? There never has been a fixed supply world reserve asset, even gold has always been inflationary. I think it will usher in a "Golden" age for humanity where goods and services consistently increase in quality and value, while constantly reducing in cost. I'm very excited to step into the bold orange world. P.S. I'm a bitcoiner not a cryptocurrency advocate.
  - notahacker 4y ago
    > It might create a deflationary economy in that everything gets cheaper over time, priced in bitcoin. What is so wrong with that? Because then investment ceases to be about trying to capture a share of the growing pie, and more a zero sum game which the small minority of people holding most of the financial wealth have little incentive to participate in, and so the mechanism by which stuff gets cheaper over time, priced in Bitcoin, isn't economic growth but just increasing desperation of people without Bitcoin to obtain it. So all the worst parts of capitalism and none of the actual good parts, though I appreciate the idea is more appealing to people who imagine themselves as being the minority of idle rich. For related reasons, the world would not adopt a deflationary currency for very long...

aaomidi 4y ago

We’d effectively be replacing a shit system with an even worse one. We really need to crack down on amassing wealth.

B1FF_PSUVM 4y ago
No pyramids, only huts.

hbrn 4y ago

I never really understood this reasoning, is it just simple envy? Ok, so a few folks will amass a lot of wealth based on luck and not merit. Those already exist in current financial system, both locally and globally. Plenty of dictators have control over natural resources worth trillions. There are numerous issues with bitcoin replacing USD, I'm just surprised why you think that few nerds becoming billionaires is a major one.

qwytw 4y ago
I'm sorry but I really I can't tell if you're being sarcastic or not, but I'll assume that you're not... > so a few folks will amass a lot of wealth based on luck and not merit You severely underestimate how concentrated bitcoin ownership is. A couple of hundred people would control a significant proportion of the global economy just because they were lucky. Why would you want some random people controlling the majority of the global economy? I mean things are very far from perfect now in my opinion but at least most billionaires have earned their wealth through actual work in one way or the other and can be generally expected to behave rationally. The main issue in this case though is that bitcoin is deflationary. Obviously it's flawed but with Fiat money you're forced to either spend or invest your money returning it into the economy (also it's simply not physically feasible to hoard several billion (let alone trillion) of $ i a vault...). If you don't utilize your money somehow it will lose value continuously due to inflation. Bitcoin on the other hand will increase in value when the economy is growing (which is why using a commodity like gold which is still a magnitude or so so superior to bitcoin in this regard is and was a bad idea unless there are no stable governments). So hoarding money will become the safest and relatively best investment This means that these few folks will remain billionaires for ever and their wealth will keep increasing without them actually doing anything... There would be no or very few bank loans given out (imagine HUGE INTEREST RATES + HUGE DEFLATION, obviously not something that can exist now as long the people charger are not more than mildly insane...) venture capital, really any investment, which to be fair makes my last point moat cause there would be very little (or like negative) growth anyway in a such an economy. > I'm just surprised why you think that few nerds becoming billionaires is a major one So you want to take one of the biggest flaws of the current system and dial it up to 1000? Great idea...