Re:Bitcoin Isn’t Tulips, It’s Open Source Money
by dcAM on Friday November 24, 2017 @03:00AM
(#15770012)
I don’t follow your point about deflation.
Ultimately price change has to be neutral in the medium/long run.
Simply, interest rates would become higher because of deflation.
If I lend you 1 Bitcoin today and value will be 1.1 tomorrow, I need to factor that in the interest rate I ask you, on top of the prevailing real return to investing.
In my view, the problem it’s a matter of transaction costs induced by continuosly changing prices.
Ultimately price change has to be neutral in the medium/long run.
Simply, interest rates would become higher because of deflation.
If I lend you 1 Bitcoin today and value will be 1.1 tomorrow, I need to factor that in the interest rate I ask you, on top of the prevailing real return to investing.
In my view, the problem it’s a matter of transaction costs induced by continuosly changing prices.