| ▲ | npoc 2 days ago |
| TLDR: to understand bitcoin you have to see the problem it's solving - most people are blind to it even though it affects their lives terribly. https://x.com/saylor/status/1878154748353818932 > "The block chain is, and always was, an extremely inconvenient database. How anyone, especially many intelligent people, thought it was realistic to graft a currency on top of such a unwieldy piece of technology is beyond me." The answer to your question is humans' inability to resist printing money out of thin air if it's possible to, and the disastrous effects it has on the world. Bitcoin is money that can't be printed out of thin air by anybody. The only way to obtain it is by providing work of equal economic value. Look up the M2 money supply over the decades and realise that each time it doubles, the value of your wages, savings and pension are halved. Worse still, that value is stolen, sucked out into the hands of the people above you in the fiat pyramid scheme (see the Cantillon Effect). It's one of the most important inventions in the history of mankind. This is because it shuts down the biggest scam in the history of mankind - central banking. Bitcoin's positive effect on the world is to restore power to the people and end their monetary-based enslavement - the changes will be profound. |
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| ▲ | rfw300 2 days ago | parent | next [-] |
| Your comment assumes that the purpose of an economic system is to preserve a financial status quo. It isn't, and shouldn't be. Inflation incentivizes people to put their money to productive uses in the economy (capital formation) rather than hoarding resources. |
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| ▲ | npoc 2 days ago | parent [-] | | The purposes of money are: - store of value - unit of account (a measuring stick for value) - medium of exchange Allowing the financial system to inflate the money supply destroys two of those fundamental qualities.
The fact it can additionally charge interest on the money funnels the stolen value into its hands. Interest on money loaned out is the only incentive required for putting money to "productive uses". Nothing about hard money affects that. In fact inflation only causes the people at the top of the pyramid to hoard all of the economic value instead. They are buying up and hoarding the entire world with the wealth they are taking from the people. | | |
| ▲ | Kbelicius 2 days ago | parent [-] | | Bitcoin was envisioned by its creator to be used as a currency. To buy and sell stuff using it. If you ask today what is bitcoin you'll be told that it is a store of value. The purpose of money is not to be a store of value. It can be, but that is not its purpose which the case of bitcoin clearly illustrates. > Interest on money loaned out is the only incentive required for putting money to "productive uses". And what is the incentive to loan money in your system? | | |
| ▲ | npoc 2 days ago | parent [-] | | To become a medium of exchange, it needs to become a unit of account. That will happen as it's value stabilises, and that will only happen once it's proved itself as a store of value. What if Henry Ford evisaged his Model T being used as a temporary alternative for when your horse is unwell? Or a fairground ride? Bitcoin is what it is. > And what is the incentive to loan money in your system? Interest - the age-old solution. Offer me interest that both compensates me for not having use of my money and for the risk of getting it back, and we have a deal. | | |
| ▲ | immibis 2 days ago | parent [-] | | Value can only stabilise if there's either someone in charge adjusting the rate of printing to maintain a stable value. It cannot be done algorithmically as there's no way to determine the value from inside the system. Non-deflationary currencies encourage hoarding which leads to wild swings in value. Deflationary currencies do much better. Look at the price chart of BTC vs XMR. | | |
| ▲ | npoc 2 days ago | parent [-] | | It depends how you measure value. By stabilise I mean stops growing in value by 50%/yr with big short term swings of 80%. As it matures and gets close to it's ultimate value, volatility will naturally reduce. Once it is used as the unit of account, everything else will fluctuate in value relative to bitcoin, which has more stable fundamentals than anything else on earth (fixed/zero issuance, liquidity etc), but this will be decades in the future when it's dollar value will be 8 or 9 figures in today's money | | |
| ▲ | immibis 2 days ago | parent [-] | | > By stabilise I mean stops growing in value by 50%/yr with big short term swings of 80%. Yeah, so that can't happen unless it's used for actual trade more than it's hoarded, which can't happen unless it's inflationary. | | |
| ▲ | npoc 2 days ago | parent [-] | | Not at all. It naturally stabilises the closer it gets to its ultimate market cap. The more it stabilises the more it will be used as a medium of exchange. | | |
| ▲ | immibis a day ago | parent [-] | | There is no evidence for this. When gold and gold-backed currency were used for trade, it fluctuated in value wildly and there were several depressions each decade. After centrally-issued fiat currency was introduced, it had a much more stable value, since it could be issued counter-cyclically. |
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| ▲ | globular-toast 2 days ago | parent | prev | next [-] |
| Alas, any comments trying to talk about the problem are getting buried. They don't understand the solution because they stick their fingers in their ears when someone tries to show the problem. Of course a solution doesn't make sense if there is no problem. We have to remember 2008 was 17 years ago. People who were born during the crisis are now adults. The tragedy is there might not necessarily be another huge crisis. We blew it 17 years ago. We didn't fix anything. People stopped talking about financial reform about a decade ago. So now we might just have to live with a system where a few elites are creaming the top of the money supply. A system where the brightest and most talented people go and work for something like Jane Street, spending their days playing games and trading bits of paper with each other, causing real effects for people doing actual work, but adding nothing of value themselves but taking loads. This Douglas Adams quote explains a lot: > I've come up with a set of rules that describe our reactions to technologies: 1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works. 2. Anything that's invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it. 3. Anything invented after you're thirty-five is against the natural order of things. |
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| ▲ | npoc 2 days ago | parent [-] | | The thing is - the world young people are accustomed to is just a carefully managed matrix. There are glitches. "Why do house prices endlessly rise?" "Why am I working so hard in such a technologically advanced world yet can't even afford to raise a family?" Once you see the reason, you can't unsee it. We also have Gresham's and Thier's Laws on our side. |
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| ▲ | immibis 2 days ago | parent | prev [-] |
| Bitcoin is also money printed out of thin air. Bitcoin is also a fiat currency. It may be impossible to change the rate of Bitcoin printing, but it's definitely possible to print more cryptocurrencies (see Ethereum, Monero, Solana, Tron, etc), it's definitely the case that bitcoin's non-deflationary nature is terrible for it as a medium of exchange as it encourages hoarding and destabilises the value, and it's definitely the case that it's impossible for any currency with a fixed issuing rate to maintain a stable value. |
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| ▲ | npoc 2 days ago | parent [-] | | Is monopoly money a threat to the dollar? Does Hasbro need to report to the Fed how much it has issued each year? People will only hoard hard money until they need to buy things after they've run out of the state's fiat tokens to try and sell. Look up Gresham's and Thier's Laws | | |
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