Check your financial privilege buddy. You may think that because you get paid in the world reserve currency with low inflation. Others are not as lucky, and this won't always be the case. Heard about de-dolloraziation?
And Bitcoin is so stable and international accepted and not able to be attacked by a 50% attack that it's better to use in a crisis than gold and food?
Have you seen someone trading worthless money into BTC in a crisis? No you have not.
Either you keep Bitcoin and start really using it globally or this argument is wrong.
Stability is an illusion. Everything is fluctuating in value every day. Some would argue that given bitcoin's fixed supply, it could be an asset against which everything else value can be measured accurately. An economical measuring stick, if you will.
> International accepted
Yes, except China!
> 50% attack
Buddy are you still in 2013?
> Crisis
Yes, there are some accounts of people fleeing the Ukraine war with their savings in a USB stick, Bitcoin sure is great in a time of crisis where criminals would be on the look out for shiny metal!
> start really using bitcoin..
What are you talking about? I'm using Bitcoin right now! I use it every day especially when I am soundly asleep knowing that my Bitcoin is safe and my purchasing power will grow in the long term.
Given your username, one would assume that you know the 3 uses of a money. But you know what they about assume-ing. I use bitcoin on a daily basis for the most important usage of a money - store of value.
I'm honestly not sure if this is rhetoric that's coming from the point of view of like a die-hard cryptocurrency true believer free market US libertarian, or somebody that's fully on board with the Russian and Venezuelan governments' stated anti-dollar perspective on global economics.
The whole globe should be Anti-dollar (and anti-government money from any country)! What gives the US the right to the global reserve currency and the power to export inflation?
Whatever you get paid in, you can convert the money into whatever currency you feel like afterwards. (Unless your country has weird capital or exchange rate controls, of course.)
What happens when costs get high? People innovate! When demand for bitcoin increases, more money will be invested in cheaper and more abundant power sources.
Isn't it? I see a lot of investment in decoupling supply chains from China which was a single point of failure and contributed to inflation when it closed down. Also a lot of investment in renewables or alt-energy sources after Russia decided to use NatGas as a tool in its current war.
Bitcoin makes people's lives better. A lot of people use it as a savings account. That's really great, especially for people living with a hyperinflationary currency.
It's actually good to have as an alternative to any centralized, government-backed currency.
We need an economy that isn't denoted on dollars or euros or similar. Bitcoin is a step towards that. And all the PoW "waste" is worth it. (Though I wish there was a better alternative that's more environmentally friendly while still decentralized like PoW so PoS isn't a good candidate)
Stocks -> can be seized by governments where the exchanges or actual companies are based.
Gold -> Good, and Bitcoin is like Gold in many aspects. While it doesn't have Gold's history yet, it has a few other qualities like easy transferrability and divisibility.
Other assets -> Like? ForEx is at the mercy of issuing government (just ask Russia who lost ~300B$). Land can be seized if it's outside one's jurisdiction.
In general, Bitcoin (like Gold) is a great asset to park some fraction of your wealth as a hedge against geopolitical risks.
It's difficult to buy stocks if you don't even have a bank account. Why wouldn't Bitcoin be a "savings account"? I use it as a savings account, it's really great. I put money that I don't need today there so I can have the same or higher buying power in the long term, regardless of inflation.
If I put money in my savings account, I can use it tomorrow. If you put money in your BTC savings account a year ago, your BTC is worth less than money under a mattress (or in a modest yield savings account).
You may want to invest in BTC, and that's absolutely fine! But it's not a savings account.
How is it easier to sell energy? Electricity is not digital, you need to build the wires, figure out the demand and fund the operations of the whole thing.
That’s already setup: they export something like ¾ of the electricity they produce to India. I suspect this is either trying to get higher rates or possibly challenges related to their seasonal hydropower issues – if India is building more capacity for the times when the water levels are too low, the long-term rates aren’t going to be going up.
I also speculate they have gotten all they can out of the arrangement. Or it just isn't as economically lucrative as holding back some of that power as a speculative bet on the future.
You don't need to build wires that spans half your country! Just a big building, some transformers or whatever equipment is used to consume the energy from the stranded producer and a lot of miners, as much as you can power!
Bitcoin is not deflationary. It just has a fixed supply.
People who held bitcoin from early on supported the growth of bitcoin by holding up it's value through the wild gut-wrenching rollercoaster ride that it has gone through. They should be rewarded for the risk they're taking on, having invested significant amount of their net worth in the face of harsh criticism such as yours.
Bitcoin and "crypto" are completely different beasts. Cryptos are unregistered securities masquerading as Bitcoin 2.0.
> Bitcoin is not deflationary. It just has a fixed supply.
Theoretically, yes, albeit with spherical cows in a vacuum models of how economies actually function.
Practically, keys get lost, so it's deflationary even if it totally replaced existing currency and everything else became steady state.
> They should be rewarded for the risk they're taking on, having invested significant amount of their net worth in the face of harsh criticism such as yours.
If "harsh criticism" was sufficient reason to deserve money, I'd still use my Twitter account to have angry conversations about things that don't matter.
To nitpick, Bitcoin doesn’t currently have a fixed supply. It has a supply cap that takes effect sometime in 2140. Bitcoin currently inflates by 6.25 BTC every
~10 minutes.
For the record, I agree that early Bitcoiners took an incredible risk on a highly volatile asset and they should be rewarded for such.
As I see it, this latest banking crisis is showing the world that there is more than one type of risk. Bitcoin has market risk but not counter-party risk.
As for bank deposits, while they have minimal market risk, they have significant counter-party risk.
The world is waking up to the fact that bank deposits are an unsecured loan to a risky counter-party that uses those deposits for highly leveraged speculative bets.
The big revelation is that deposits in a bank have two risks actually: A counter-party risk as you mentioned, but also a market risk. Inflation was/is in the double digit across the Euro and US economies. And that's for the government (CPI) numbers.
People never considered these risks before. A bank is a bank is a bank. And in the developed world, inflation is low. Now you have a situation where both narratives are being challenged. The system is under lots of strain.
Agreed, self-custodied bitcoin is the best way to mitigate third party risk. If some of these start-ups held a small amount of their reserves in bitcoin, they would not have had to panic to make payroll.
> Bitcoin is not deflationary. It just has a fixed supply.
Exactly. As the economy grows BitCoin will increase in value because its supply is fixed (not even gold or silver were even remotely as bad and when they were used as currencies).
Imagine a financial system with huge * huge interests rates * and and * huge deflation *. You can't because no central bank is run by people who are stupid and insane enough to try that? Well...
Something like that is 100% guarantee is btc becaomes a global currencies.
> They should be rewarded for the risk they're taking on, having invested significant amount of their net worth in the face of harsh criticism such as yours.
No they shouldn't. They contributed nothing to the society or economic growth. Even people investing in Credit Suisse should better rewarded than them from that perspective. Of course if there are other people willing to pay them huge amounts of money (yes money, not bitcoin) for their token well... it's their business).
> Bitcoin and "crypto" are completely different beasts. Cryptos are unregistered securities masquerading as Bitcoin 2.0.
Many other cryptos, well pretty much every one that doesen't have a fixed supply, like DogeCoin for instance would make much, much better global currencies than bitcoin.
When describing the currency itself, bitcoin is strictly not deflationary as the supply of it is never reduced, it's actually inflationary for the next hundred years or so until the full 21 million is mined. It might create a deflationary economy in that everything gets cheaper over time, priced in bitcoin. What is so wrong with that? Why can't you expect to purchase more goods in the future than today with the same amount of bitcoin?
There never has been a fixed supply world reserve asset, even gold has always been inflationary. I think it will usher in a "Golden" age for humanity where goods and services consistently increase in quality and value, while constantly reducing in cost. I'm very excited to step into the bold orange world.
P.S. I'm a bitcoiner not a cryptocurrency advocate.
Imagine an economy with both ultra high interest rates and very high deflation at the same time. Let's say CPI growth somehow falls to - 20% and the Fed decides to hike interest rates to + 20%* what do you think would happen? Well take the Great Depression and multiple it by N (no idea, I'd assume N >= 20 though).
Sound great?
How does close to zero capital investment into the economy sound? No loans, no VCs, no new factories/offices/shops/etc. no new anything... Investing into anything would be both very risky and likely still have a negative return compared to just hoarding money.
> I think it will usher in a "Golden" age
I think it would usher societal collapse and the end of human civilization (I seriously do.. of course I'm close to 100% certain that it can never happen, then again I'm not great at predicting the future).
*I would assume the numbers would be higher with btc.. but whatever
I don't think so. There will definitely be companies and startups that yield better returns than bitcoin. Especially when bitcoin stabilizes at a very high value, holders will start speculating.
> It might create a deflationary economy in that everything gets cheaper over time, priced in bitcoin. What is so wrong with that?
Because then investment ceases to be about trying to capture a share of the growing pie, and more a zero sum game which the small minority of people holding most of the financial wealth have little incentive to participate in, and so the mechanism by which stuff gets cheaper over time, priced in Bitcoin, isn't economic growth but just increasing desperation of people without Bitcoin to obtain it.
So all the worst parts of capitalism and none of the actual good parts, though I appreciate the idea is more appealing to people who imagine themselves as being the minority of idle rich.
For related reasons, the world would not adopt a deflationary currency for very long...
This has little effects. Inflationary systems where promoted by governments so that they can inflate their debt away and print money as needed.
You can have a deflationary system and the effects will be the same. People will always be looking for a stable store of value and a yield with variable risk. Instead of increasing/decreasing the money supply through interest rate, the price of Bitcoin goes up and down.
Solving a stable store of value problem (through Bitcoin, completely decentralized) is a 100bn/1Trillion market. And also will be a legitimate use case for Bitcoin and Cryptocurrencies.
Imagine an economy with both ultra high interest rates and very high deflation at the same time. Let's say CPI growth somehow falls to - 20% and the Fed decides to hike interest rates to + 20%* (and has no way to tweak or stop this policy anymore) what do you think would happen? (hint: the Great Depression would just be viewed as a mild temporary slowdown in relation)
Something like that is really not avoidable if btc replaces $/€/etc.
> debt away and print money as needed.
Which on balance has been a positive development compared to the system that preceded this (permanent boom and bust cycles prior to 1930 accompanied by extreme price swings in either direction)
Look at the 'USD inflation since 1800' chart. Would you really prefer the worth of your saving to swing up and down by 10% or more every few years compared to the relatively stable inflation after 1980s?
You got it wrong. The interest rate is used to manage the supply based on the rate/velocity of the economy. Not the other way around. If people want to build businesses, get married, have kids, build products, buy/sell, speculate, etc... having an interest rate, bitcoin, paper or gold, it simply doesn't matter. Places where the financial system is broken will use alternative means of payments.
Bitcoin is flexible. If there is a certain demand or necessity, people can build on top of it.
> If people want to build businesses, get married, have kids, build products, buy/sell, speculate, etc
Yes. 2-10000x (or whatever, depending on how rich you are) less than they do now. If hoarding money always provides a better return than investing or borrowing it why do anything else besides spending the bare minimum?
> Bitcoin is flexible
How exactly? AFAIK it has close to zero flexibility compared to Fiat money.
I'm sorry but overall I really don't understand what are you trying to say. Supply of money in relation to economic growth matters and it matters a lot. It's not just about 'means of payments' that is the easiest part.
> If there is a certain demand or necessity
Well there is no way to increase the supply of bitcoin? Is there?
When the currency is abundant, everything becomes scarce. When the currency is scarce, everything becomes abundant.
Real estate has been monetized because the money is too abundant. The marginal cost of the next dollar is near zero, which is not the case for houses.
The demand that monetized real estate and other scarce assets will find a better home in Bitcoin. At that point, Alice will have no woes about house prices as it will go down to it's utility value. When housing is demonitized, it will once again make sense to rent if you put your downpayment in a hard money.
I love the sting that HN has for bitcoin. Find me one other HN post that has full context. They're all links with the title of the linked source. This is a link aggregator.
