Re:Ask HN: Why do negative crypto articles dominate on HN?
by laszlo-kiss on Wednesday April 13, 2022 @04:52PM
(#31020103)
I thought the Lira lost its value, which is 'inflation'. If it was experiencing deflation then it would become more and more valuable, because it is becoming scarcer.
Inflation is caused by the oversupply of money, it is because the government in charge of that currency is printing it w/o limits. It is a way to pay back loans with cheap money.
Indeed, governments can ban things, but if there is a market for the banned item then there is going to be a supply. Governments don't seem to have the means to block drugs entering prisons, how will they stop ordinary citizens that feel the need to protect themselves from doing what they need to do?
If any real cryptocurrency actually manages to catch on for normal payments, I'd expect the government to force businesses accepting it to only accept transactions from "validated" wallets to ensure that the proper amount of tax is being paid. Any "unvalidated" wallets would risk a visit from the local tax agency for attempted tax fraud or whatever. Technology won't stop legislation.
Also, if anything is inflated right now, it's the price of cryptocurrencies. They're volatile to a comical level and the ones that are reasonably stable have such high processing fees that they're utterly useless for actual payment. The solution proposed by enthusiasts seems to be centralization (Lightning network etc.) which ruins most of the theoretical benefits of cryptocurrencies. Nobody with the intention to buy groceries buys any cryptocurrencies, except for the one country where cryptocurrency companies have managed to convince the government that their system is a good solution (and even there the actual currency gets converted to US dollar in the end).
Inflation, artificial or otherwise, is simply something that can happen in a free economy. So is deflation, of course, but deflation tends to be bad for trade, so the world's current attempts to keep everyone rich revolve around artificial infinite inflation. Inflation, as a concept, isn't necessarily a problem; every currency on earth has suffered through it at some point. It's more of a consequence and a goal of economic policy than a disease to civilization. It's true, many collapses of civilizations have coincided with inflation events, but the economy is bound to collapse when a civilization collapses.
Turkey actually willingly let its currency deflate, with terrible results for the general population as prices for common items skyrocketed. Risking arbitrary spikes and dips in value isn't much better than the current system, in my opinion.