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> Governments choose and maintain currencies with low, stable inflation because it's good for the economy and the people at large. Yes. > Individuals choose c

> Governments choose and maintain currencies with low, stable inflation because it's good for the economy and the people at large. Yes. > Individuals choose currencies with stable supplies to maintain the value of their wealth. Individuals are far wiser to invest the majority of their wealth instead of keeping it bundled up in any commodity that has no inherent value. This includes bitcoins, dollars, yen, tulips, pog caps, and gold. Arguably gold has more inherent value than anything else on that list, but again tying capital up in nonproductive activities (commodities) is not only a poor investment, it makes no larger economic sense. > In nations where cryptocurrencies aren't outlawed, they will prosper, and those governments will have to figure out how to manage an economy with a popular deflationary currency. This is an argument advanced without any support. Not all cryptocurrencies are deflationary. And no proof is offered that deflationary currency has any advantages whatsoever. Only hand-wavy "citizens prefer stable supply" is advanced, and I'd argue that the majority of citizens that know what they're doing prefer to invest in productive activities anyway.

natrius 13y ago
Sure, investing makes tons of sense, but does that mean checking and savings accounts shouldn't exist? Individuals are better off with the bank accounts denominated in a currency with a fixed supply. That's so clearly true to me that I don't understand why you disagree. A widely adopted currency with a fixed supply will slowly increase in value as the demand to perform transactions in that currency increases. The whole point of central bank currencies is to make sure the value slowly decreases over time. Sure, it's good for the economy, but individuals don't make choices based on what's good for the economy. They look out for number one. "Not all cryptocurrencies are deflationary." Inflationary cryptocurrencies will not succeed. Imagine there was no dominant currency in your country today. You gave goods or services to someone, and in return, they give you a choice of payment in two currencies: one with an increasing supply and one with a fixed supply. Which would you choose?
- dllthomas 13y ago
  "You gave goods or services to someone, and in return, they give you a choice of payment in two currencies: one with an increasing supply and one with a fixed supply. Which would you choose?" Other things being equal you choose the fixed supply, but other things are rarely equal. For one thing, why aren't they going to price in the expected future change in value?

natrius 13y ago

Sure, investing makes tons of sense, but does that mean checking and savings accounts shouldn't exist? Individuals are better off with the bank accounts denominated in a currency with a fixed supply. That's so clearly true to me that I don't understand why you disagree. A widely adopted currency with a fixed supply will slowly increase in value as the demand to perform transactions in that currency increases. The whole point of central bank currencies is to make sure the value slowly decreases over time. Sure, it's good for the economy, but individuals don't make choices based on what's good for the economy. They look out for number one. "Not all cryptocurrencies are deflationary." Inflationary cryptocurrencies will not succeed. Imagine there was no dominant currency in your country today. You gave goods or services to someone, and in return, they give you a choice of payment in two currencies: one with an increasing supply and one with a fixed supply. Which would you choose?

dllthomas 13y ago
"You gave goods or services to someone, and in return, they give you a choice of payment in two currencies: one with an increasing supply and one with a fixed supply. Which would you choose?" Other things being equal you choose the fixed supply, but other things are rarely equal. For one thing, why aren't they going to price in the expected future change in value?