For the state issuing the currency, that's true. For the person in possession of it, not so much.

That depends if the individual is concerned with the employment rate, access to goods and services, and the overall health of the economy. Most normal people are. Personally I need to be employed, and there is no employment if no one is investing because they're afraid their dollar will be worth twice as much next week.

Do you think bitcoin is over or under valued right now? It's only a good investment if it carries real value and it's list price is too low. I can't fathom it being worth even 1/10 What it's currently listed for. Obviously people who own some would be reluctant to admit this.

Because up to now it hasn't been more than a minor annoyance - a fly on an elephant. At some point, if we are to believe the crypto bulls and it gets so big it starts to really matter, that will change

They don't hoard stocks, they attempt to increase value by investing money in growth sectors of the economy. Businesses need money to develop products and grow themselves. See how it works? Both parties are incentivized in their own way.

Real estate is what people live on/in.

Hoarding currency is idiotic in an inflationary environment. If bitcoin were the only currency, no one would invest and the economy would shrink, because people would be better off hoarding their currency than investing it.

It's really quite clear that bitcoin cannot possibly succeed; the predictions of its future widespread use as a currency are totally negated by the fact that no one will ever spend the thing because they only expect it to go up.

So deflationary (fixed supply) coins are self-destroying? Interesting idea. That view certainly fits with economic theory.

There's no basis for this outside of academia. If I have 10 Bitcoins and can buy a civic today, but if I wait 5 years I can buy a house, maybe I'll hold. But once I can buy a house, I may choose to sell for a house, even if I strongly believe that holding another 5 years would net me a bigger house, or a house plus a car. There's always uncertainty and people will in fact spend even if they believe it's going to rise in value due to having other bills, needs, desires, etc. Not everyone will simple hold forever. Some will undoubtedly realize their gains, some will plan poorly and need the liquidity right away, some will just want to spend and not wait forever etc.

Ask yourself: would you rather have 100% chance of a 100% paid off $25k car now, or a 90% chance at a paid off 100k house in 7 years?

The answer isn't easy. Everyone is different. People are impulsive. Some people want, or even need a car right now. People buy AND sell gold every day even though the supply is essentially limited and not growing quickly. Some just prefer cash to gold, or trading their gold for whatever else they want at the moment. It's not all about holding forever and getting richer. And it never has been

Ill have my popcorn ready. Just like this last presidential election. Man, what a **** show

This is dumb. You're not going to get there with "ask yourself this". It doesn't work like that. Everything is as normal with the wage clowns, but the investor class acts completely differently when there's deflation. If lending give you 2%/year, you lend. If holding gives you 2%/year, you hold. That's what causes contraction in deflation.

And WTF are you talking about with gold. More is mined every year. Gold supply has about a 2% inflation rate...about the same as currency.

I lol everytime I see this thread title, hahahahahahhahaa.

Right, but no one is going to buy a chocolate bar and pay 15% transaction fee surplus, and no one is going to invest in a company with 10%/yr possible return when you think bitcoin will go up 11%, so it's doomed to not be widespread. Big cross border transactions, illegal transactions, sure, as I've said many times ITT, but that isn't a good thing for it, because its current market price is totally contingent on it being used widely as a currency --->it has no other function.

Internally contradictory yes, and so doomed to fail as a widespread currency, though I do think cryptocurrency or something like it has some utility in replacing bank wires, etc, and blockchains are automatic databases, so that too.

I wouldn't consider my impact on the national economy when trying to maximize profit and safety of my assets.

First of all, it's not deflationary. It's decreasingly inflationary until it's eventually static. There will be some deflation due to lost keys, but that will be negligible.

Secondly, people will still spend on things they want, they will just have to want them a little bit more for it to feel worth it. Meaningless consumption would go down, and yeah, the economy would shrink. If that would be the reason, then I think it's unclear whether it's good or bad.

Millions of bitcoin are already lost or inactive.

In other words, it offers negative utility over our current financial options.

I don't know if you're being serious.

Yeah I think valid point. Except two things, there isn't a lot of smart money in bitcoin. Waaaay too many people buying at any price throwing loose calculations around how market cap wil be $25 trillion etc.

Second point is, you have to put a probability on your valuation. So if there is a 1% chance of a $25 trillion market cap, that would warrant a $250 billion market cap. But that is probably still insanely optimistic.

So lower the % to 0.1% and suddenly crypto's are very overvalued.

Also legitimate crypto use right now only validates a couple hundred million $ market cap at most currently.

It will not deter spending, it will deter investment. Because you can just sit on your currency and have it increase in value every year. That is bad. this is the major bear argument against most crypto's, since if it will be used in a widespread way, deflation will probably be in the double digits some years.

This also prevents adoption because it will attract too many speculators, making the currency too unstable.

Also if you held USD you would have lost a lot of money. But if you invested in the S&P 500 in the past 30 years, you would have made several % a year after inflation. That is the whole point, you buy investments with the cash you do not use, so a small amount of inflation each year doesn't matter.

This is only true if supply is the only factor in the price. Obviously it isn't. There's a limited supply of lots of things, it doesn't mean you hold them and they go up in value. For example, a 1/1 limited edition baseball card. There are many many factors that go into the price of Bitcoin, from possible future values, to interest rates, to consumer preferences, and many more.

Bitcoin is a dream come true for governments. It is a ledger of spending activity for its citizens. All they need to do is require the entities that issue it and facilitate its spending to follow KYC and AML requirements (done) and its way better than cash for the IRS, FBI, CIA, DHS, DOJ, and local law enforcement. It's also relatively easy to seize since so few people store their own private keys with the coins they actually use.

Anonymous cryptocurrencies present a much more interesting case. It's no accident that Coinbase deals with BTC, LTC, and ETH but not Monero. It will be interesting to see how countries handle Monero over the next few years.

When people say that big governments could break bitcoin at will, they are missing the point at both ends. Not only is it extremely difficult to make a distributed consensus protocol disappear, it is extremely counterproductive for a government to do so when they can simply utilize the ledger of activity for benefit.

What would be threatening to governments would be a fully anonymous cryptocurrency utilized solely in a peer-to-peer fashion with universal maintenance of private keys by each individual user at all times. This would be fully untraceable, untrackable, unseizable, and impossible to sensor.

Are you the type of person who needs to be always right? If people use it more and adoption grows, and especially the economy grows then with limited supply the price will go up over time.

This is what happened to the Chinese Renminbi after growth exploded in China over the past decades. And they actually printed a lot of Renminbi's to prevent the value going up too much!


This is the Yen vs the USD (inverse graph compared to above graph), as Japan caught up with the US:
https://tradingeconomics.com/japan/currency

Basic economics 101 dude.

It is a nightmare for politicians. Fractional reserve banking and crypto's don't go together very well. Governments like to promise citizens more than they can afford. So they need to borrow. As a government borrows, debt goes to unsustainable levels, and then they need central banks to save the day. That is why we got rid of the gold standard. The politicians who promise the most end up winning elections, and that results in too much leverage.

This is an interesting point. But I don't see the future of cryptocurrencies involving a war to the death with fiat and/or the fractional reserve system. If it offers some temperance to the leverage disparity you highlighted, then symbiosis is even more likely.

Cryptocurrencies will save time. The surplus free time will be used to borrow and spend fiat. Some of this borrowing and purchasing will be facilitated by blockchains. Some of the products will run on them. This will increase the value of the host chain's tokens. Some of that value will be realized in fiat currency. This potential relationship is not particularly far-fetched. If crypotcurrencies develop into a medium through which friction can be exchanged for time, the world economy will grow quickly.

No government wants symbiosis with a non-strong ID "blockchain" (and its dubious whether they want a part of distributed permissioned ledgers).

Due to the short holding period (how most people use it), the total crypto market is already really badly overvalued if it would not put a serious dent in at least some medium sized fiat currency. So by definition it will be at war with fiat currency if you think it will go beyond just a currency used by hackers and illegal marketplaces.

I have absolutely no idea what you tried to convey in that second paragraph.

He thinks that the fiat banking is holding back the growth of the global economy.

It is absurd.

Making a transaction costs almost no time. What makes an economy become wealthier is if we can produce more valuable goods and services in the same amount of time per person. This happens through increased specialization and increased use of technology. For example farming. farming a certain field would take a 100 people. Then they invented machines and new techniques, seeds etc, and the field could produce much more with only 10 people working on it. Then they invented combines, and now it takes the equivalent of maybe 3 people to farm the field. So those other 97 can do other things. And if they automate the manufacturing of combines enough, it can maybe be reduced to 1 person.

Money is just a way of keeping track who spent how much time on performing those tasks of creating goods and services. And people with special skills or ownership of goods that are in higher demand vs limited supply, get a multiplier on on how much time they can get from other actors in the economic machine. So an engineer gets a higher multiplier than a cleaning lady.

The only way money has an effect on the speed at which this process happens is if it is too inflationary or too deflationary. The speed of a transaction doesn't matter. Often companies get paid months later on their sales.

Another example automobiles. If we become richer that would mean we can create those with fewer people involved due to robots etc that work much faster and cheaper than humans. So 200 years from now, in today's money a car could only cost $1500. This means the average person can spend more on other things, because all those people that had to be involved in creating automobiles can now produce something else. So this creates more demand. And this increased available supply and demand is what makes an economy wealthier. Whether we use crypto or fiat matters very little in this equation..

hope this clears it up.