Virtually no mainstream economist advocates a perfectly hard currency. This is either an indictment of hard currencies, or an indictment of mainstream economists. You can probably guess how I feel.
Unfortunately, discussions on this subject can rapidly become arbitrarily politically incorrect. If you're interested, I'd be happy to send you a link to a very non-mainstream source (but would rather not post it here). My email address is in my profile.
Bitcoin has experienced more inflation than any other developed country's fiat currency in recent times, with prices rising 700% in just a few months.
Re:Bitcoin rises
by jacoblyles on Wednesday March 20, 2013 @03:53AM
(#5406069)
You got that backwards. Inflation is when the price of money falls relative to other goods.
Not him, but Bitcoin sort of had that, too. With the price going to one tenth of its former value in few months.
Meanwhile, there are some other basic features of the currency which seem undesirable to me. In particular, the built-in (and ever-increasing) scarcity of coins means that the value of the currency will always, continuously, rise. That seems great, except that an economy built entirely on Bitcoins would therefore have an economic disincentive to investment -- if you can make 5% return by just sitting on your coins, why would you invest in a new business and create jobs and risk getting less than that?
Bitcoins do seem pretty attractive on an individual level, but at the macro scale they worry me, and I'd love to hear somebody with an economics background chime in on these points.