Fixed monetary supply might be one thing in theory, but fixed credit supply is the death knell to an economy. And the two are usually complimentary. Monetary supply can fill in the potholes of weakening credit supply when the latter contracts - and it inevitably will when the private issuers that generate those debt contracts pull back in a recession. If you have your hands tied to some constrained supply like gold or bitcoin, like what happened to the central banks after World War I and into the Great Depression, you end up backed up against a wall.

That said there is certainly something that's personally appealing about an asset that's guaranteed to maintain the supply side of the equilibrium. As an investor you only have to consider demand. But for any kind of widely used currency that backs an economy it's going to be problematic.

Newer cryptocurrencies have more sophisticated governance structures than Bitcoin (see: Tezos). Some of them could allow for an elastic monetary supply. The downside of these systems is that it takes a lot of work to properly encode the specific set of rules which decide when to increase the supply, and how to distribute the new supply. The upside is that these rules actually exist and are unambiguous.

It's appealing because it keeps politicians honest, but if you have honest politicians it is just a thought experiment.

I think a constrained monetary supply just means the politicians we elect have less influence over the economy than the people with the most wealth. In either scenario, there will be untrustworthy politicians who need to be out voted or voted out.

The last 60 years on a macro level have largely proved the Keynesian model. I think we're right to put faith in politicians in general. The solution might just be holding currency from another nation instead of your own.

I am mostly talking about Europe. The Eurozone basically makes fiscal stimulus impractical even though keeping it alive absolutely requires it.

Every time I hear people talk about Keynesian economics ruining everything I am thinking "no such thing happened". QE fills bank reserves, interest rates drop on their own, banks never lend out money, stock market goes up without any actual investment, there is unemployment caused by the macroeconomic structure of the economy, investors are flooding governments with their money by buying bonds, inflation remains stubbornly low, trump cuts corporate taxes.

The fact that things are reversing in the US is a good sign for the US economy as a whole. Biden is actually doing the fiscal stimulus that the economy was asking for decades. There may be a short term crash in the future but it's only going to get rid of the unproductive part of the economy to make everything ready for more long term growth.

Meanwhile Europe will be stuck forever if the Eurozone doesn't resolve its structural problems.

This just isn't an accurate portrayal of any of the serious criticisms of Keynesian economics.

>It got us out of the Great Recession and it’s been 12 years. Maybe the consequences haven’t fully manifest, but another Great Depression would have been guaranteed hell.

It feels like an unfair argument you're having because of course the opponents' whole argument is that the consequences haven't manifested AND that they would be far more dire than a continuation of the Great Recession / another Great Depression. As wealth gaps widen, as inflation rises, as our debt grows, it's possible to see a worse future ahead than one where we continued into a depression.

In hindsight, we all know the problems which led to the fall of various empires (Roman, Mughal, etc.) but if you lived at the time, this same argument could be made against you for sounding the alarm: "Yeah, maybe it's better to not constantly expand our Empire and rely on mercenary soldiers who have little loyalty to a place they've never even been to, but can you imagine the hell if we lost the war against the Gauls??" (forgive me if I mangled the history there).

I will take this opportunity to throw this link up: https://fredblog.stlouisfed.org/2018/11/how-expensive-is-it-...

The energy consumption is definitely bothersome but overall I am glad that bitcoin exists.

You are right that BTC isn't that useful as cash. I don't think BTC will be dominant forever, there are already superior cryptocurrencies for use as actual normal currency. If/when another crypto really does fill that void and achieves major adoption, I think BTC will probably retain some value, for speculative reasons and also just because it has the oldest chain.

You can create as many BTC#3 EGold-plus ... as you wish, and future generations will.

Agreed.

> and have adopted than a company with real infra

Disagreed. Cloning is super-easy, adoption is super-hard.

> The fact that pretty much every crypto of non-trivial float trades in lock step with BTC definitely supports the "no intrinsic value" theory.

They are highly correlated but certainly not lock step, see the 1 month ETH/BTC chart. Assets on the stock market are also highly correlated to each other, so I don't quite follow.

Seems easy to craft some counterexample, like "Doge acts as a marketing campaign for crypto as a whole and will lead to net-inflows to the BTC market".

That's fair, but I doubt it would deviate very much from the top 5-10, and that each of them would have significant differences from each other (ie not carbon copy clones). I would argue that most of the value in those top 5-10 was net-new and not a dilution of Bitcoin.

The notion I'm arguing against is that me creating MyCoolCoinX on the fourth page of coinmarketcap is somehow diluting BTC, any more than some new pink sheet penny stock is diluting AMZN.

Doge is an interesting case, in that it is the same tech as BTC with just some parameter tweaks. My guess is that most Doge investors are newer to the market, and wouldn't have otherwise invested but I could be wrong.

It makes some sense to me. When BTC was smaller in capitalization it was easier to double your money. Now smaller coins attract dollars that otherwise would have pumped up BTC so growth stagnates. BTC was considered the most stable of them all and I now find those claims somewhat dubious, they're all extremely volatile

Do you mean perceptually, or in actuality?

Dogecoin means more to me than BTC. Good luck convincing me, or those that share my belief, otherwise

If I put $500 into either, it'd be Doge.

I have put about $1000 into various cryptos as a hedge, but I fully expect to lose it all and the day can’t come soon enough.

My point is that Doge doesn't necessarily take cash inflows away from BTC, describing a possible mechanism for the opposite phenomenon, not that anything needs a marketing campaign.

2/ a lot of people are acutally using it as a store of value / currency: from drug dealers to people in states with failed economy such as venezuela or turkey, to chinese people wnating to somehow escape the system.

3/ btc is a gateway currency to other more useful currencies surch as eth / monero / zcash

4/ How is the "no profits / revenue" makes any sense for pricing a financial object in 2021 where amazon for example literally never ever gave a dividend to the shareholder, meaning, whatever you say, that people holding amazon stock are doing it ONLY for speculation of the "perceived value" of the price ?

In the end, btc is not that much more a "baseless asset" than most of the stock market currently.

The use is store of value. There are been a lot of cases where btc has been more stable than national currencies.

So if BTC ends up being too illiquid and slow - build another coin.