Literal gold would be a great currency if it could be easily measured in alloy form, and was a bit more accessible.
As a store of value, it's a pretty poor one. Something like 80% of people who invested in Bitcoin are underwater. From the peak, Bitcoin has lost half it's value even with it's latest gains, making it even worse than most of the world's Fiat currencies in terms of retaining value. It's extremely volatile regardless, so you could definitely make the argument that I'm cherry picking, but the fact is something that may go dramatically up or dramatically down at any time isn't a good store of value.
For the same reason, it's a terrible unit of account. How many bitcoins is your house worth? From day to day, week to week, month to month, year to year, that number is dramatically different. Therefore, the way that Bitcoin tends to be used where it is pretended to be used as a currency is something is priced in US dollars, and the person will use their local currency to purchase Bitcoin at the equivalent value, then the recipient will convert that Bitcoin into their local currency.
Finally, it's not a very good medium of exchange. If I go to the store and want to buy something with my Fiat currency, I either hand them the currency or I use my bank card and the money comes directly out of my account. If I go to the store and want to buy something with my bitcoin, for pretty much anything that I want to buy that's not an option. I have to sell my Bitcoin into the local currency and purchase what I want with the actual currency.
I'm not the only one saying this either. A number of people who are very much into cryptos have come out and said that Bitcoin is not a currency. Some crypto companies have gone in front of the US Congress under oath and said that Bitcoin is not a currency. It's an investment vehicle, it's a property, but it isn't a currency.
In that sense, holding Bitcoin isn't savings, so investing in it with the hope to beat inflation isn't savings, it's just a other asset class in an investment portfolio, and having your money in that investment portfolio is my point.
This is it right here. A guy I know had a family crisis and there was 6 months of unemployment. Savings kept him out of bankruptcy and he kept his house. Invaluable.
It also has a volatility problem. The price swings too much for most places to properly price in BTC.
“Dad I want Bitcoin for my birthday”
“What?! You want $25K for your birthday? What makes you think I should give you $10K for your birthday? Do you think I have $30K just sitting around to give you?”
If they can take Dick Masterson's credit card privileges away for newproject2, I guarantee you they can take away coinbase's credit card privileges, and suddenly crypto is no longer a thing.
>Private crypto wallets made illegal and businesses caught accepting it without using approved intermediary exchanges will be considered aiding and abetting terrorists and guilty of financial crimes.
>Carbon offset tax built into exchanges where they coin clip (hah!) you to offset the high energy cost of mining.
And you can take your assumptions about my finances and fuck off with your ignorance. I’m doing quite well, fuck you very much. My rate is historically low and is looking really good right now with rates and inflation going up. Sometimes cash isn’t the best way to pay for things if you actually know what you’re doing. The bank doesn’t like my mortgage right now. They would be thrilled if I would pay it off tomorrow. Your assumption that I can’t do that is just showing your ignorance of my situation.
Everything has value compared to something else. You can call it not BTC’s problem but it doesn’t matter. Bottom line is all of my expenses take dollars. Virtually none take BTC. That makes it BTC’s problem.
I understand how BTC can be divided. That fact doesn’t change it’s volatility problem.
I’m not trashing BTC here. It’s an investable asset. But it’s not a functional currency. Maybe that will change someday. That day is not today. If that changes, my opinion will change.
You can put in $5,000 in at age 25, have it grow to $8,000 by age 30, and take out your original $5,000 with no taxes due.
Now if you don’t have the assets to handle that, you are in a different situation. That’s why I said it depends.
* "bitcoin isn't currency because I'm so rich I don't care if banks screw me and everyone in my society over"
* "bitcoin isn't a currency because my non-bitcoin currency is dumb and broken and the government can take all of it at any time"
* "bitcoin isn't a currency because i can enslave people and then live off the proceeds of slavery and don't need bitcoin to do this"
Plus our society is already bankrupt.
It's decided. I won't wait for the collapse to become a slave merchant.
Thank you for this, Jeff, I couldn't have done it without you.
and you sure as fuck aren't going to find anyone to accept it as tender
That's kind of the big issue. Hardly anyone actually carries out real world commerce in digital coin. Except of course when it's shady.
I do know there haven't been many times in history when nobody wanted USD. Even at our low points. Only its primacy has been at issue.
@jeffcliff @11112011 @Leaflord @midway @sj_zero which only points to its volatility and lack of real security, despite the rhetoric about the bl*ckch*in -- a technology whose actual efficient practical applications are actually very small.
Say what you will about funko pops, but at least they don't lose 75% of their value within seven months.
We live in a world with banking. Even for the people who are at the top end of the income curve, there simply isn't a reasonable option to own most homes without incurring debt. Because banking exists, leverage is a force multiplier that allows people who don't make a lot of money to spend quite a lot of money on certain things. That means that the price of certain things is simply higher than it would be otherwise, and there's nothing you can really do about that.
However, just because you can't throw out the concept entirely doesn't mean that you need to put a blindfold on and mindlessly jump off a cliff. You can run a phossy jaw factory that hurts people and the environment, or you can run your factory following good ethics and be a positive force for your customers, your employees, and your community. Likewise, you can take out the absolute maximum amount the bank is willing to give you and live with massive payments until the day you die and the house belongs to the bank, or you can choose to live within your means and buy less house than the bank says you can afford, so you plan to pay off your home from day 1 and in as short a time as possible and actually own the things you buy. From what I've seen, owning your own home in the clear is one of the most important things to being able to successfully retire.
Along the way though, you have to think for yourself because no one's going to do it for you.
So just to recap:
Me: bitcoin lost 71% of value in 7 months
You: yeah but the number of dollars changed
Me: Um it changed like 3%
Besides... if the USD supply *increased*, that should mean the *value* of USD *decreased*, which should have caused =BTCUSD to *increase*. And it didn't. It literally worked in the opposite direction. So the change in M1 actually means the real loss in value of BTC was even worse than =BTCUSD suggests.
Yep. Most people are in it because of the volatility. They are speculating. Nothing wrong with that but it doesn’t lend itself to stability. Not enough see it as a true value store. It can become a currency once enough people actually use it as one. That day is not today. Until that time it’s just an volatile asset class.
Ok. But we have to deal with reality and not how we think it should be.
I would happily embrace truly decentralized finance. But it’s not a reality today. So I live in the real world and manage risk as best I can.
I’m appreciate idealism, but I’m a realist at heart.
It’s why I’m here on my own instance instead of FB, Twitter, etc. This is a practical alternative for me.
I went back and found 10 years of data showing what the price of bitcoin was in US dollars in March (in 2013 I started in April because that's when the data starts)
Month Year USD/btc, yoy % Change
apr 2013, 135 -
mar 2014, 457 238
mar 2015, 243 -46
mar 2016, 415 70
mar 2017, 1078 159
mar 2018, 6897 539
mar 2019, 4103 -40
mar 2020, 6403 56
mar 2021, 58668 816
mar 2022, 47043 -19
mar 2023, 22367 -52
This data shows something with ridiculously volatile value. It might double or triple, or quadruple, or quintuple, or octople, or it might drop by 20%, 40%, or 50%.
Central banks try to keep their currencies stuck at about 2% change. At 8%, they're in full panic mode, implementing QT and raising rates at record speeds.
So imagine now that you're a business trying to price your goods in an environment like this. One year you have to half your prices, then the next year you have to double them, then half them again, and again, and then you have to drop your prices to 1/5th what you previously charge, then the next you have to double them, then you have to halve them, then you have to drop your prices to 1/8th of what you charged, then you have to increase them by a quarter, then double them again.
How could you even stay in business in such an environment? You agree to purchase materials and the cost could double or halve from ordering the materials and agreeing upon a price to actually having the materials in your warehouse. You could agree to hire someone and each week the wage you're paying changes in purchasing power.
How do you do accounting for a year? How can you plan ahead when you don't know if a bitcoin is going to be worth $5,000 or $50,000? How much profit will you make this year? Even if you can predict that, how much value does that profit represent?
This data should be proof positive that it isn't a store of value and isn't a unit of account. You don't know how much value you've stored after 1 year, you don't know how much stuff costs after 1 year, you don't know what to charge for stuff after 1 year, you don't know what to pay someone after 1 year.
It's divorced from the reality of how bitcoin are created, how typical users would acquire bitcoin, how bitcoin would typically be used, how currency markets work, and perhaps most importantly what's required under the law at the end of the day.
Bitcoin are typically created by miners. These are people or companies running computer systems using either GPUs or ASICs that complete the equations that run bitcoin behind the scenes. There are two methods for the miners to get paid: For a little while longer just mining pays in bitcoin as the supply grows, but in addition you can attach fees to a transaction that the miner can collect. The miners then convert those bitcoin into fiat currency because they are in the business of making money. More on that in a moment.
It's possible to mine bitcoin yourself, but the amounts you'd need to live a life or run a business aren't possible to mine without an unreasonable investment in mining hardware and at that point you're just a miner. Typically, end users of bitcoin will trade their own fiat currency for bitcoin using an exchange. This is not unique to cryptocurrencies; if I were to take a trip to the US, I would have to use a currency exchange to convert my Canadian dollars to US dollars similarly.
You can't just pretend that bitcoin don't have value relative to other currencies, because currencies other than bitcoin aren't traded for in order to get rich; People around the world buy Canadian dollars, for example, because they want Canadian oil, or metals, or wood, or pulp and paper, or food products, or to stay in Canadian hotels or eat in Canadian restaurants or to hire Canadian engineering firms or contractors or to buy Canadian houses or to pay Canadian taxes. The worth of that dollar is in the goods and services you can buy with that dollar. You can say "oh, the value of a bitcoin relative to the USD doesn't matter" all you want, but if I can sell my bitcoin for enough to buy a new Tesla one year and I can sell my bitcoin for enough to buy a used Toyota Corolla the next, that's a real difference in what's sitting in my driveway, and you'll care how much you're getting paid in how much stuff you can buy a lot.
Since Bitcoin isn't a currency, it isn't a good store of value, isn't a unit of account, isn't a method of exchange, you can't measure the purchasing power of a bitcoin, because you can't buy most things with bitcoin.
You might be able to find a land lord who is willing to transact in bitcoin, but your power bill is in dollars, your water bill is in dollars, your heating bill is in dollars, your phone bill is in dollars, the car dealership takes dollars, the insurance company takes dollars, and there isn't an alternative there. Virtually every grocer on the planet takes fiat currency and not bitcoin as well. You might be able to find some farmer somewhere who is willing to transact in bitcoin, but if you go to Sobeys or Safeway or Superstore, they want dollars. Even bitcoin miners deal in fiat currency because you need dollars to pay employees, to keep the lights on, to buy GPUs, and so on.
Even vendors who "take bitcoin" don't actually price anything in bitcoin because as the data already shows, the purchasing power of bitcoin is wildly unstable. What they actually do is convert the price of the thing in fiat currency to the equivalent number of bitcoin bought or sold on an exchange. When Tesla was selling their cars for bitcoin, they set the price in terms of how many bitcoin would buy against the car's price in US dollars the moment you started the purchasing process, and you could only press the purchase button for a short time, I think it was maybe an hour before the process reset and you'd need to get a new quote for purchasing the car in bitcoin because the price of bitcoin is highly unstable and they didn't want people getting a discount by preparing to buy the car when bitcoin was higher and finishing the purchase when bitcoin was lower. It's notable that they only continued this process until May of that year, so about 3 months total. They made an excuse about the environment, but I'm pretty confident the real reason they stopped is that bitcoin is a terrible method of exchange; Even with their pricing process being what it was, they couldn't immediately accept the bitcoin and convert it to fiat since it takes so long to process a bitcoin transaction.
Given all this, you have to judge its value compared to currencies whose buying power we know because despite their faults, they are a store of value, they are a unit of account, and they are a method of exchange.
Finally, there's the fact that you're a Canadian citizen, meaning that having a unit of account is very important because at the end of the day, you need to be able to tell the government how many equivalent Canadian dollars you made, and you need to convert some of your bitcoin into a percentage of your earnings, because you need to pay the government its taxes in Canadian dollars. Besides that, having to report income in Canadian dollars against a volatile currency makes taxation much more difficult because you not only have to record the transaction in bitcoin, but keep track of the exchange rate at the time so you can report the correct number of dollars.
Everything I wrote is cold hard reality. Sophistry isn't going to change the facts.
You claim the dollar is unstable compared to BTC. That is simply wrong. If that were true than the value of the dollar vs other major currencies would be just as volatile. Yet that is absolutely not the case. It is not as volatile against other physical monetary commodities such as gold and silver. Just against BTC.
Compare the liquidity of USD to BTC: it’s not even close. The number of transactions that occur in BTC is a rounding error to the dollar. That liquidity determines stability.
I say this as one who isn’t necessarily a fan of the USD. But I deal with actual reality, not my own fantasy world.
@sj_zero @11112011 @Leaflord @jeffcliff @midway
I kind of doubt that is even remotely close to the majority of BTC traders. That's what the dyed-in-wool acolytes do, but I'm incredulous at the idea that even a significant share of holders per coin are doing it because someday it will be a currency. They're trading in it or HODLing it because they think it will blow up again (like it already did), and they'll ride the next bubble into massive ROI.
The worst USD devaluation in the past 50 years was 35% over 3 years, and that was Reagan in the late 1980s.
Prior to that it was 60% by FDR to spur investment during the Great Depression, which while causing short term inflation (which is actually good for debtors!) also had the effect of -- again, this is critical for currency -- actually stabilizing it in the longer term.
@jeffcliff @11112011 @Leaflord @midway @sj_zero No, seriously, I can't let this one sit. In what way does the speculative bubble of BTC indicate literally fuck all about how the USD is managed? And that's just step 1 to get to how it is evidence that USD was ever devalued 90% in the period of a year, which is not a thing that has ever occurred.
Global my ass
Printing money is literally something that established currencies do all the time.
Matter of fact, *so does bitcoin.* It's literally in the design that money is constantly printed. That's what mining is.
(The great gag is that no matter how many people mine, the exact same amount of BTC is created, so the mining wars are literally over shares of a fixed resource)
@jeffcliff @11112011 @Leaflord @midway @sj_zero One thing that happens to M1 that will never happen to BTC (except, well.. *heh*) is that.... sometimes it *goes down* -- because CBs recognize the potential risk of overprinting and will work, after action is taken, to *claw it back down.* It's called qualitative tightening.
This is the sort of thing you do when you are looking for a currency to be *relatively stable,* which BTC... doesn't.
And we have literally no idea how often this has happened. And those coins will live on as orphans in the chain, now and forever, world without end, amen. (Latest estimates put it at 4M BTC. Just wow.)
The holy mystery man who begat us BTC never thought about how to address the waste. Brilliant eh?
> the existence of bitcoin *forces* them to "qualitative tighten",
No, dude. No.
They QT to literally prevent runaway inflation. (Like, say, losing 90% value in a year.)
Say you're paid in BTC in 2021 when it was 60K USD. That BTC is worth about 28K USD rn.
But if you're paid 60K real USD in 2021, it would be worth $52K now. Which ain't great, but it's *way* better than $28K.
If BTC were a currency standard for trade, there'd be riots.
60K USD March 2021 PP = 68.5K USD Feb 2023 PP
68.5/60 = .13 (the delta in pp)
Inverse the delta to get the fraction of 2023 PP versus 2021 PP: 1-.13 = 0.87
Multiply to the 2021 number to get the effective loss in PP of that 2021 $60K in 2023: $52K
(I'm happy for anyone to check my math / methodology here. IANAE.)
Now do this with BTC over the same period.
Reality check: Cryptos as a concept are only about 10 years old. Despite the magical lack of cryptos, CBs raised interest rates to reduce the money supply in the 50s, 60s, 70s, 80s, 90s, and 2000s. If we go by your prediction, you'd expect money supply should have increased less in the 2010s and onward since cryptos were there to "force them" to tighten money supply. Instead the opposite happened, and money has been printed more than ever before during the crypto era. That's an epic fail of a prediction.
The thing that causes CBs to act is the amount of buying power a currency has trading those dollars for real goods, services, or hard assets. When people are paying many more dollars for food, shelter, energy, that's what spurs CBs to action, not the price of fake Internet currency.
In reality, the scam crypto market actually likely moderates measurable inflation because dollars that might otherwise go into buying stuff that matters to Central Banks is going into trading around imaginary Techno Disney Dollars instead. It actually helps them print more money rather than forcing them to print less.
@PatriotReactor @11112011 @Leaflord @jeffcliff @midway @sj_zero it seems to me the reason crypto is dependent on dollar based exchanges because at the end of the day, people still need dollars to function in commerce.
If there's people looking at SVB (or CreditSuisse) and going "haha paper money bad" in response, but meanwhile handwaving FTX (and MtGox, and Quadriga, and Celsius, and 3AC, and and and), they're either hypocrites or kooks.
The fact that hypothetically you could find some electrical company in Texas that might accept a Bitcoin as payment, and you might find some water company in Indonesia that might accept Bitcoin, and a farmer somewhere in England who might accept Bitcoin for food, and a bus driver in Bangladesh who might accept Bitcoin, that doesn't make it a currency. It means that certain people are accepting a speculative investment in lieu of money, and whether you like it or not, they're only doing one of two things with it: either they are holding on to it with the hope that they will get more fiat currency for the Bitcoin tomorrow, or they are converting it to fiat currency so that they can buy the things that they actually need using something that is in fact a store value, a unit of account, and a medium of exchange.
There are anecdotes of people trading a tulip bulb for a house during tulip mania in the 1600s, because the tulip bulb was so valuable that it was considered a good trade, but that doesn't mean that a tulip bulb was a currency, it was a widely speculative investment, and that's where all of their value came from. The high price of tulip bulbs were never going to make back the money that they were demanding in actual flower sales.
Both metals have specific properties that made them extremely desirable to ancient peoples and the exploitation of those properties can arguably be credited for a lot of the industrialization concepts we've developed today. Not to mention they're finite in supply and not exactly easy to obtain (although much easier today than historically). I take the view that BTC is more akin to gold than any direct currency though.
Everyone already agrees that gold is inherently valuable, so why change it?
My point is that it may not be useful to us in the same way that it was useful to ancient people, but we don't need it to be.
Once, aluminium was considered the most valuable precious metal. It was so valuable that Napoleon III had a set of aluminium dinnerware he showed off as an example of his wealth and power. It was so valuable that the tip of the Washington monument is capped with a 6 pound tip made out of aluminium, the largest piece of aluminium used at that time in history.
The thing is, it turns out that aluminium isn't some insanely rare metal, it's one of the most common metals on earth. Eventually, processes were developed to turn plentiful aluminium ores into the metal, and the price plummetted. Today, we make everything from disposable drink cans to vehicles with it. If you gave someone a 6 pound tip of aluminium, it wouldn't represent as much value as 2200 man-hours of labor, you can pick up that much in a manufactured item for less than a day's labor at minimum wage.
In such a way, gold and silver could become useless as monetary metals as well. If we were to perfect asteroid mining, for example, and we were able to economically exponentially increase the availability of the metals, then the rarity of gold would no longer be a limiting factor.
The benefits of using rare metals as money are twofold:
1. It keeps governments honest in terms of creating money. If the government wanted a dollar in 1900, then they needed to dig up approximately 1.5g of pure gold. Same with silver, you need the silver to have the silver. This isn't perfectly effective, since governments created "debasement" where they start with the base metal and add other cheaper metals until the currency is useless anyway.
2. It ensures there's a value floor on the currency. If you need a certain amount of a valuable metal to create a coin, then that coin will always be worth at least as much as the metal used to produce the coin. In fact, many countries considered their silver coins to be basically interchangeable at certain points in history since an ounce of fine silver is as good as any other ounce of fine silver. We've actually got a problem here today where our money has been so badly debased that even the crude facimiles are worth more in terms of their metals than the currency itself is worth, leading to us eliminating the penny because the copper coated zinc made no fiscal sense to issue, and I'm certain that within my lifetime other coins will also disappear.
Of course, despite what some people think, it isn't a perfect solution either.
1. It locks useful resources up in vaults and wallets, and that's bad because precious metals actually have good uses. When aluminium became widely available, it became used for many things it wasn't before, and gold and silver would likely be the same if it was equally available.
2. It also gives disproportionate power to miners. If I buy a computer from Dell, what business does a guy who owns a gold mine have getting in on that by selling the economy an ounce of gold that I'll solely use to tabulate the fact that I paid for the computer?
3. Fractional reserve banking sort of breaks the benefits of hard currencies, since you can have an economy that should have X dollars that instead has X+Y dollars where Y is dictated entirely by the banks. The danger of a bank run is built into the fact that fractional reserve banking is basically a scam where you tell two people they each have the same dollar.
4. Honesty just isn't very fun sometimes. Leverage and money printing are a two sided coin -- on one hand, the bad sides are that the value of people's hard work is degraded by the government's inflation tax, and the bust of the cycle means a lot of people get really badly hurt because they get in over their heads and take a lot of other people with them. On the other hand, the good sides are that inflation means debt is always shrinking at a certain rate, and there's always an incentive to make more money, and while the bust hurts, the boom feels great and sometimes something wonderful results from the risks people take during the boom such as our entire modern world.
Economics isn't simple because it isn't a hard science, it's a social science with hard constraints in the real world. If you have 1kg of bread you can't magic a second kg of bread into existence, but every single person can have a different opinion as to the value of that 1kg of bread and the aggregate of all those opinions matters, especially when people can choose to use their own resources to make more bread, or they can choose to consume their resources so there won't be any more bread, and a thousand other little things.
As long as GDP is at least reasonably predictable and the government itself hasn't collapsed, fiat is a lot more functional. Credit spends the same way as cash, so anything that allows for credit creates an opportunity for an expanded money supply. I am strongly anti-usury and believe credit shouldn't exist without equity (stonks) as a backer and using the equivalent of liens against defaulters would be the superior choice. Regardless, having PM collateralized currency allows actual currency attacks by foreign nations and is thus impossible in a global economy without the use of a secondary fiat currency which functionally defeats the purpose. All it takes is hoarding enough of a country's currency to functionally freeze the economy.
> our manufacturing base since the 1970s, when Nixon closed the gold-window permanently.
That's also around the time that women began entering the workforce in huge numbers, effectively doubling the workforce and depressing wages. There's a ton of socioeconomic disruptions at that time period, and I think trying to credit or blame any one particular thing for the turmoil is a common but extremely flawed way of looking at the situation.
One of the claimed reasons for holding foreign debt is local currency stabilization. A small nation with a more volatile economy having a sizeable chunk of stable debt from the world's reserve currency is very helpful from a "creditor" perspective (makes me sick typing that), which functionally makes the currency a safer option than it otherwise would be. Globally, this is very common. I actually eyeroll when I hear people talk about "China owning the US!" because they hold some treasuries.
But in reality, the vulnerability is more real PM tied currency because the metal creates a price hazard independent of the country's own credit worthiness and confounds trade and exchange in "exciting" new ways.
>Why manufacture when you could print it for free, right?
For sure. My point on women mass entering the workforce is that it's a likely indicator of a change in type of work, but I forgot to expound. We both agree that a lot of stuff happened socially and economically during that time. I don't discount the change towards pure fiat as a major factor although I think it was done as a proactive intervention to allow for economic expansion absent manufacturing and other traditional GDP generators.
@sj_zero @11112011 @PatriotReactor @Leaflord @jeffcliff @midway fuck, there was a town in Alaska iirc where people started using previously received checks as "currency" because there was no atm in town. so you'd give someone a $21.40 check you got from someone else along with a $9.15 check you got for someone else to cover your $28.50 purchase and they'd hopefully have a $2.04 or so check to give back
checks aren't currency though. they just became currency analogs in an extreme situation
@jeffcliff @11112011 @PatriotReactor @Leaflord @BowsacNoodle @midway @sj_zero bro both Canada and the USA are like 300 years old... The pound sterling is 1200 years old, and it's *still* the #4 most held global reserve currency.
Bitcoin is like 15.
Even if you extend the logic (disingenuously) to include things like E-Gold, the concept of digital "coin" is still only like 25 years old.
And if you think BTC is going to last remotely as long as the Roman Empire did... perhaps all hope is lost.
or probably because they're capitalists and they aren't going to spend money creating a product that no one is going to want to buy (in sufficient numbers for them to turn a profit on it), now that the bottom has fallen out
> As a value store, stability is great.
would you agree or not agree that in order to be a functional currency that it has to be a good value store.... and thus, stable in value?
if so, BTC (and nearly every other digicoin outside pegcoins [which is cheating]) fails this metric quite horribly, and far worse than USD for sure. You'd have to dig down to like =ZWL to get worse than BTC.
> inflation resistant currency
Please do show me how btc is not subject to inflation
The only possibly reason btc is not subject to inflation is... dun dun dun... because it's not a fuckin currency
90% devaluation in a year is what you call fuckin inflation dude. Like that's literally a 1000% CPI increase.
If the price of something is 3.60¤ in Mar 2020 and 40¤ in Mar 2021... my friends, you got inflation, right here in bitcoin city.
this is kind of like saying if we keep using enough coal plants, coal power will become clean
By the same argument, one could say if we keep using fiat, it too will become inflation resistant. But you say, but it hasn't, there's 100s of years of evidence. Well, BTC has maybe 15 years of evidence, so how can you draw conclusions? Especially when that evidence so far is... not good.
if by "extremely valuable" you mean "incredibly space and bandwidth wasteful and also comparably incredibly expensive per transaction" sure
blockchain has very limited actual well suited applications. People acting like it's the new cloud computing or the new Ruby or the new BeOS or... actually those are very apt comparisons.
blockchain is a hammer, not everything is a nail
@jeffcliff @11112011 @PatriotReactor @Leaflord @BowsacNoodle @monsterislandcolonizer @midway @sj_zero if you said "would you like a mountain of yellowcoin or a mountain of imaginary magnetic charges and electrical impulses in a virtual space" i would quite definitely take the yellowcoin over the digital wooden nickels
double standard fail
that's the whole flaw here, you put fiat on impossible standards while simply ignoring how bitcoin fails and *has* failed at every single one of them
it's somewhere beyond dishonesty and dangerously toward religious kookery
you think the ftx holders aren't being made whole?
Crazy idea, maybe the reason banks are bailed out for fiat and not for BTC is because, oh i dunno, 99.99% of people actually use fiat and it actually matters
if BTC were to replace fiat I guaran fucking tee you there would be BTC bank bailouts.
that's not even remotely germane to the topic of fiat vs fake money
Or, they do it because of supply side trickle down economics bullshit. Still... irrelevant to to the topic of currency.
Bank bailouts aren't even in the same department as monetary policy. The Fed is not involved in bank bailouts. It's purely economic policy. Economic policy is the same regardless of what the currency is.
@jeffcliff @11112011 @sj_zero And before you say it, I would bet 100 satoshis that if we were all using BTC and it suddenly lost 90% of value in the course of one year, we would either (or both) 1. abandon BTC as a currency and 2. be scrambling looking for ways to get more money into people's hands.
Our society has a big problem: People take big risks to get rich, then when they become rich they buy politicians, and when the natural consequences of taking stupid risks occur and they're supposed to lose their money and power then the politicians step in and use our money and our kids money to bail them out.
When we remove the factors that limit bad behavior such as protecting banks from collapsing under the weight of their unmanaged risk, then we break the game, and suddenly the only way to succeed is to take big risks without any regard for the consequences. It's the famous privatizing the gains and socializing the losses. Meanwhile, the people who are responsible get out-competed since there's no benefit to doing the right thing.
From this point of view, it's predictable that the collapses would get bigger and bigger and we wouldn't learn any lessons from them.
I wrote a long paper on the monetary causes of virtually every recession in the US. Limit the money supply and make fractional reserve banking difficult to abuse and you'll end up with a nice boring economy, you won't need to take everyone's money and give it to the richest people every 10 years just to prevent a collapse.