4 ms·

The purposes of money are: - store of value - unit of account (a measuring stick for value) - medium of exchange Allowing the financial system to inflate th

by npoc 10mo ago

The purposes of money are: - store of value - unit of account (a measuring stick for value) - medium of exchange Allowing the financial system to inflate the money supply destroys two of those fundamental qualities. The fact it can additionally charge interest on the money funnels the stolen value into its hands. Interest on money loaned out is the only incentive required for putting money to "productive uses". Nothing about hard money affects that. In fact inflation only causes the people at the top of the pyramid to hoard all of the economic value instead. They are buying up and hoarding the entire world with the wealth they are taking from the people.

Kbelicius 10mo ago
Bitcoin was envisioned by its creator to be used as a currency. To buy and sell stuff using it. If you ask today what is bitcoin you'll be told that it is a store of value. The purpose of money is not to be a store of value. It can be, but that is not its purpose which the case of bitcoin clearly illustrates. > Interest on money loaned out is the only incentive required for putting money to "productive uses". And what is the incentive to loan money in your system?
- npoc 10mo ago
  To become a medium of exchange, it needs to become a unit of account. That will happen as it's value stabilises, and that will only happen once it's proved itself as a store of value. What if Henry Ford evisaged his Model T being used as a temporary alternative for when your horse is unwell? Or a fairground ride? Bitcoin is what it is. > And what is the incentive to loan money in your system? Interest - the age-old solution. Offer me interest that both compensates me for not having use of my money and for the risk of getting it back, and we have a deal.
  - immibis 10mo ago
    Value can only stabilise if there's either someone in charge adjusting the rate of printing to maintain a stable value. It cannot be done algorithmically as there's no way to determine the value from inside the system. Non-deflationary currencies encourage hoarding which leads to wild swings in value. Deflationary currencies do much better. Look at the price chart of BTC vs XMR.
    - npoc 10mo ago
      It depends how you measure value. By stabilise I mean stops growing in value by 50%/yr with big short term swings of 80%. As it matures and gets close to it's ultimate value, volatility will naturally reduce. Once it is used as the unit of account, everything else will fluctuate in value relative to bitcoin, which has more stable fundamentals than anything else on earth (fixed/zero issuance, liquidity etc), but this will be decades in the future when it's dollar value will be 8 or 9 figures in today's money
      - immibis 10mo ago
        > By stabilise I mean stops growing in value by 50%/yr with big short term swings of 80%. Yeah, so that can't happen unless it's used for actual trade more than it's hoarded, which can't happen unless it's inflationary.
        npoc 10mo ago
        Not at all. It naturally stabilises the closer it gets to its ultimate market cap. The more it stabilises the more it will be used as a medium of exchange.
        immibis 10mo ago
        There is no evidence for this. When gold and gold-backed currency were used for trade, it fluctuated in value wildly and there were several depressions each decade. After centrally-issued fiat currency was introduced, it had a much more stable value, since it could be issued counter-cyclically.
        npoc 10mo ago
        How are you measuring the value of gold? How are you sure it's not the value of the quote asset that fluctuating wildly. If everything was priced in gold do you really think that the prices of everything would fluctuate wildly? For what reason? The only reason for any sudden changes in value of gold are due to demand, which is caused as people move their wealth out of fiat currencies which are collapsing in value.

by npoc 10mo ago

Kbelicius 10mo ago

Bitcoin was envisioned by its creator to be used as a currency. To buy and sell stuff using it. If you ask today what is bitcoin you'll be told that it is a store of value. The purpose of money is not to be a store of value. It can be, but that is not its purpose which the case of bitcoin clearly illustrates. > Interest on money loaned out is the only incentive required for putting money to "productive uses". And what is the incentive to loan money in your system?

npoc 10mo ago
To become a medium of exchange, it needs to become a unit of account. That will happen as it's value stabilises, and that will only happen once it's proved itself as a store of value. What if Henry Ford evisaged his Model T being used as a temporary alternative for when your horse is unwell? Or a fairground ride? Bitcoin is what it is. > And what is the incentive to loan money in your system? Interest - the age-old solution. Offer me interest that both compensates me for not having use of my money and for the risk of getting it back, and we have a deal.
- immibis 10mo ago
  Value can only stabilise if there's either someone in charge adjusting the rate of printing to maintain a stable value. It cannot be done algorithmically as there's no way to determine the value from inside the system. Non-deflationary currencies encourage hoarding which leads to wild swings in value. Deflationary currencies do much better. Look at the price chart of BTC vs XMR.
  - npoc 10mo ago
    It depends how you measure value. By stabilise I mean stops growing in value by 50%/yr with big short term swings of 80%. As it matures and gets close to it's ultimate value, volatility will naturally reduce. Once it is used as the unit of account, everything else will fluctuate in value relative to bitcoin, which has more stable fundamentals than anything else on earth (fixed/zero issuance, liquidity etc), but this will be decades in the future when it's dollar value will be 8 or 9 figures in today's money
    - immibis 10mo ago
      > By stabilise I mean stops growing in value by 50%/yr with big short term swings of 80%. Yeah, so that can't happen unless it's used for actual trade more than it's hoarded, which can't happen unless it's inflationary.
      - npoc 10mo ago
        Not at all. It naturally stabilises the closer it gets to its ultimate market cap. The more it stabilises the more it will be used as a medium of exchange.
        immibis 10mo ago
        There is no evidence for this. When gold and gold-backed currency were used for trade, it fluctuated in value wildly and there were several depressions each decade. After centrally-issued fiat currency was introduced, it had a much more stable value, since it could be issued counter-cyclically.
        npoc 10mo ago
        How are you measuring the value of gold? How are you sure it's not the value of the quote asset that fluctuating wildly. If everything was priced in gold do you really think that the prices of everything would fluctuate wildly? For what reason? The only reason for any sudden changes in value of gold are due to demand, which is caused as people move their wealth out of fiat currencies which are collapsing in value.