Re:El Salvador to adopt Bitcoin as legal tender
by lottin on Sunday June 06, 2021 @08:49AM
(#27412799)
> The fixed currency supply guarantees it
No, it doesn't. Bitcoin can lose 50% of its value in a matter of hours, as recent experience shows, despite being in a limited supply.
Re:El Salvador to adopt Bitcoin as legal tender
by fladrif on Monday June 07, 2021 @06:38AM
(#27421006)
So the only way bitcoin isn't deflationary is if demand for it continually goes down over time until it's irrelevant. If demand either goes up or stays the same, it will behave deflationary (wallets getting lost). This doesn't seem to be a good performance pattern for a currency.
Re:El Salvador to adopt Bitcoin as legal tender
by imtringued on Sunday June 06, 2021 @08:53AM
(#27412823)
You're right a fixed supply isn't enough to guarantee it, you still need productivity growth and technological progress, something we've had for a long time. Given enough growth a 50% crash is nothing.
This has been a key part of the sales pitch for a decade: buy now and it’ll be worth more later, guaranteed, but that’s not good for an economy since it heavily incentivizes holding onto anything you aren’t forced to spend. Since Bitcoin has no innate demand, that’s an especially dangerous cycle since almost everyone has alternatives.