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Look, Bitcoin is without a doubt super cool; but to claim that the macroeconomics of it are known to be sound is utter folly. No one knows what would happen in
by leot 13y ago
Look, Bitcoin is without a doubt super cool; but to claim that the macroeconomics of it are known to be sound is utter folly. No one knows what would happen in an economy based increasingly around a deflationary currency, and there are lots of hints suggesting the outcome could be pretty grim.
At the very least, it seems like to be a very big (and disruptive) change. Fingers crossed ... !!
- spamizbad 13y ago> No one knows what would happen in an economy based increasingly around a deflationary currency, It's fun to speculate though! My guess: Debt is extremely expensive and investments are more scarce (You have to at least beat the "returns" from deflation). Doesn't sound like a very business-friendly climate but it does reward those who hold on to their bitcoins.
- uwe_dushan 13y agoProvided that Bitcoin succeeds (reaches the end of its adoption S-curve), wouldn't the deflation be simply equal to the rate of growth of the gross world product? This is currently around 4% - definitely more expensive than today's 'free' money but not insanely so...
- spamizbad 13y agoI guess it would, assuming the only currency participating in that universe is Bitcoin OR bitcoins could not be exchanged, directly or indirectly, for other currencies.
- dnautics 13y agoNo one knows what would happen in an economy based increasingly around a deflationary currency, and there are lots of hints suggesting the outcome could be pretty grim. This is some macroeconomic myth. Most economies ever have been mildly deflationary. It's inflationary economies that have been experiments (in the literal sense) as perpetuated by centralized authorities to silently confiscate wealth from the poor, sometimes for mendacious reasons, sometimes for 'virtuous' ounes... Most of these inflationary regimes have ended rather poorly. For a more comprehensive perspective, check out "the great wave" by david hackett fisher (author of Paul Revere's ride), has an analytical span of a thousand years and geographically covers cultures all across Europe. An amazing tome, but surprisingly easy to read.
- leot 13y ago"silently confiscate wealth from the poor" ... with inflation? That is certainly counter-intuitive, to say the least. I'd always thought that the way to keep inflation low was to keep everyone poor, thereby increasing the relative value of work.