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Bitcoin holdings don't pay interest either and its purchasing power swings wildly. If you want to guard against inflation in the long run you have to own produc
by fauigerzigerk 13y ago
Bitcoin holdings don't pay interest either and its purchasing power swings wildly. If you want to guard against inflation in the long run you have to own productive assets or lend your money to someone who uses it productively.
- FBT 13y agoWell, in theory, Bitcoin is deflationary: By holding it it goes up in value, not down, over time. This has its own problems, and it yet remains to be seen if those problems are insurmountable. We shall see. But insofar as Bitcoin is what it is, this means that it doesn't suffer from this specific problem, in theory.
- fauigerzigerk 13y agoThat theory relies entirely on the supply side. But what about the demand side? Without accounting for both you know nothing about the price of something traded on a market. What if next year some other cool new "currency" comes along and no one wants your stinkin' bitcoins any longer? Does it matter that supply has a cap? No. It matters as little as the limited supply of paintings created by some forever unknown artist.