> and the key is that it cant be changed, which is very appealing

This is only very appealing if:

- It is never necessary to change monetary policy.

- The same monetary policy is appropriate for all nations.

- The monetary policy that was chosen by the bitcoin dev team is exactly the right one.

> The same monetary policy is appropriate for all nations

you're conflating. the concept of nation has nothing to do with the concept of money.

Sure it is. Hard money advocates see the Fed as some kind of parasitic liability on America, but it's quite the opposite. It's a weapon of war. A sovereign currency that can be manipulated is an instrument of empire. Eliminating it in a world where everyone has one would be akin to unilateral disarmament.

Generally speaking libertarian idealism is unthinkable until we have had at least 50 years with no war. It won't work in a violent, power-hungry world ruled by warlords and sociopaths. Getting rid of our warlords sounds great until you realize there are others.

* > [Money] is a weapon of war.*

This point is so true and so important it deserves special emphasis. If you imagine two societies at war, one with currency and other without, who wins? Clearly, the one with currency, because you can collaborate far better than the other, and war is won primarily by scale, which money can maintain.

And as for those that want to abolish currency, or nation-states, this is naive idealism: anyone who demolishes their nation-state will just get invaded and absorbed into one of the remaining nation-states. Peace lovers would do better to plot a course for peaceful subsuming of states into a larger entity, something like the EU model.

> Clearly, the one with currency, because you can collaborate far better than the other, and war is won primarily by scale, which money can maintain.

this is a weird hypothetical. i can't imagine a nation-state without currency and i don't think you can either. so how is it clear who wins?

i highly doubt isolated regime can somehow improve it's sustainability simply by manipulating money. Venezuela just had a massive devaluation - did it make Venezuela richer? did it improve it's economy or GDP? no, it's still the same corrupt country on a brink of collapse.

Venzuela is a great example of my point! If V got into a war right now, let's say with Columbia, how would that go? If the money is worthless in V, then how do you pay troops; how do you pay for the food for the troops; how do you pay for the gas to get the troops where they need to be; how do you pay for the weapons? If you don't pay for that stuff, how do you get it? Will people volunteer? How long can they do that until they starve? Or will you use coercion? Coercion requires troops, and also suffers from the starvation end-game, at both ends.

Basically, V can't fight a war until they get their money situation in order.

> an instrument of empire

i don't see the word "nation" in here. do you?

i don't care about empires losing their weapons. i would very much invite such an event and would do everything in my power to enable it.

The problem is when your empire loses its weapons but all the others still have theirs. Think China's trade policy is unfair now? Imagine if we had no tools for monetary policy. There would be much laughter in Beijing.

Only multilateral disarmament works for game theoretic reasons. I don't think soft disarmament in areas like aggressive monetary policy can be done until hard disarmament happens, so I write that stuff off until we've had at least 50 years with no major war anywhere on Earth. (Most smaller wars are proxy wars between major powers.)

Like most major innovations Bitcoin is ahead of its time. Maybe on Mars...

i totally understand your argument and agree that it is valid.

the difference here is that cryptocurrencies undermine isolated regimes even more than they do developed economies. being able to own something a government can't debase or manipulate is extremely useful for everybody.

Well, if they picked a policy that is very good, and the degree to which it falls short of the exact correct policy is small enough that the possibility of improving it doesn't outweigh the risks of it being changed for the worse, then the policy being unchanging could be a genuine advantage over other alternatives that aren't unchanging.

Right?

I think thats attempting to put the burden of a states monetary policy to a virtual currency. I dont think its necessary for bitcoin to fullfill some of the roles monetary policy does: bitcoin doesn't care about unemployment. At the same time it does not have the benefits typical monetary policy has: that it can force people to take the money, meaning that monetary policy in itself would be limited in effect.

> being deflationary predictably is better than unpredictably inflationary.

Unpredictable deflation is what bitcoin does, and with a fixed policy it can never do anything else. The amount of wealth generated by an economy grows in an unpredictable manner, and fixed monetary policy translates that fluctuation directly into the value of the currency. We learned this with metal currency. It didn’t go well.

Did we? The history of monetary policy crisis were not related to the metal as much as to the instability of banking. Bitcoin cant go broke like a bank can.

You can still have crises that aren't banking-related. When the New World was conquered, the mountains of silver and gold flowing back to Spain in particular caused inflation, no bankers involved.

I'm not sure if there's a direct equivalent for Bitcoin. My first thought is that there are probably a few large stashes of coins that the market assumes are "out of circulation" and priced accordingly.

Its true the metal created inflation, but I assure you it created less inflation issues that any paper ever, and could never create hyperinflation as we know it unless it rained gold or something.

Im unaware of big crisis stemming from that inflation, although I find it very amusing when Adam Smith or Ricardo talk about it without having the word in their arsenal. I loved knowing they were trying to define inflation without knowing what it was.

> Specially in this day and age, where bitcoin prices can be tracked to the second and prices changed accordingly across the board. Its interesting to see there's research talking about how the ability to price things faster has changed the effect of monetary policy on prices at all.

isn't this true for all currencies, virtual or not?

The Fed can easily replicate the benefits of cryptocurrency in seconds. They simply need to come out and say "We will only print X number of dollars, every Y number of months".

There you go. All the benefits of Bitcoin replicated in the USD, which is a far more widespread and versatile currency?

So why doesn't the Fed do it? Because it really is a terrible idea. It's like pegging your currency to gold, which was a terrible idea (although good for its time) and the delay in moving away from it probably cost tons of money and lives.

> say "We will only print X number of dollars, every Y number of months"

Easily said. Not so easily verified. Verifiable emission remains a big advantage of cryptocurrencies.

Bitcoin monetary policy can be changed. If there is a significant consensus then you can move to any set of rules. Bitcoin monetary policy cannot be unilaterally changed.

Consensus is difficult and slow, but when it comes to the world economy, that's probably the least-bad solution.

> Bitcoin monetary policy can be changed

People can fork bitcoin with a different monetary policy. I, and many others will continue to support the monetary policy as set out in the original white paper. Not much in bitcoin is sacrosanct, but 21 million coins is what makes it bitcoin for me.

I'm sorry but your analogy is stretched at best. Unlike gold, potatoes rot...

That was a reference to Venezuela, where I read that sometimes barter is done with potatoes. I didnt say its a good currency, but it has happened.