[edit] more importantly, the yen may have dropped 38 basis points against the dollar, however that doesn't necessarily represent a drop in domestic purchasing power at all. Just foreign purchasing power. This change makes imports into Japan more expensive and exports of Japanese products denominated in dollars more affordable to foreign buyers. You're measuring apples vs oranges in that comparison.

So yes, "real currencies" can and do fluctuate significantly in terms of exchange rates. It simply makes no sense to contextualize exchange rate fluctuations as "annualized inflation".

Bitcoin's purchasing power fell equivalently the world over and so inflation is a more useful benchmark to compare the loss in purchasing power than foreign exchange is.

When people point out Bitcoin's volatility, I wonder how else this could be accomplished on a decentralized and voluntary basis.

Which isn't to say that BTC will achieve that, of course. But unless it does, how could it possibly have a stable value in between? It's either worth $0 or ~$1-10mm per Bitcoin, and the market is having a vigorous argument about which.

The reason is simple: if you have the treasury mint a $1T coin and give it to me, then I throw it in a vault, and do not spend it then prices do not change. As such, the Austrian model is obviously incomplete as it does not take into account what happens to that supply.

You can see this play out in the macro. Since 1980 the M2 supply has increased 12X but prices are about 3X higher.

This system remains at equilibrium because supply went up, and velocity went down leading to neutral price action.

It analogizes this graph: https://fred.stlouisfed.org/series/PSAVERT

As your access to supply increases, your demand for more monetary units decreases. As your demand for monetary units falls below your demand for other goods and services you want in life, you spend some of it.

This is how markets function, right? This is why bubbles pop for example, eventually holders of an asset reach a price where they want to take some off the table.

"Everyone has a price."

Money in a vault has zero velocity, money being spent dozens of times a day has a very high velocity, most situations lie between, we need a meaningful way of discussing this that "monetary supply" does not capture.

  There is a common idea that high monetary velocity (GDP divided by broad money supply) is needed for inflation. However, the data show that this is not the case.

I'm curious, what's your definition of "hard money"? It's clear that your idea of "hard money" is very different than the parent's.

"No the context I'm used to is the only possible answer"

This combined with your mention of fear and pumping, it seems you have a heavy bias against cryptocurrencies so it's not worthwhile to continue this discussion with you.

I've followed the space very closely for 6ish years now, and I've made a lot of money on crypto both long and short, and I engage with a lot of folks both online and in real life who are both pro- and anti- crypto.

However, fundamentally, I'm with Jackson Palmer.

https://twitter.com/ummjackson/status/1415353991106420741

My contribution to the gradient of behaviors on that network was one where the Bitcoin asset was only used to cover transaction fees for the actual money being traded.

The whole "merchant adoption" thing was always a squirrel to me. When merchants will accept stable value assets more readily, or use those stable value assets for settlement, just like the US regulator greenlighted a few months ago.

[edit] Direct fees are lower than they used to be, and the energy cost is about now up to about $100-120 per transaction. While that's being socialized across block reward for now, when that ends, it will have to be born directly by customers or see the network become less secure.

That's true, total transaction revenue will need to go up. That doesn't mean per-transaction revenue needs to go up though.

Put another way, transaction volume needs to scale before inflation gets too low.

Good thing they decided to never scale transaction volume.

Regarding energy, if thats your battle then work on that aspect, there are some influencers aiming to convince miners to create a more energy efficient version of transaction propagation, settled on the Bitcoin network.

Again? Did some sort of protocol fork break colored coins or the omni network?

I’m looking forward to this all being standardized and wallets surfacing it after they agree on the protocols.