Re:Bitcoin Is Fundamentally Flawed
by Houshalter on Tuesday April 09, 2013 @12:20AM
(#5516428)
The boom and bust cycle wasn't caused by deflation and it hasn't gone away today either.
> it will always be tempting to keep your Bitcoins in your pocket and let them appreciate instead of using them for needed goods and services.
What's wrong with this? If you choose to take a choice which actually makes you better off, how is that a bad thing? Shouldn't people saving/investing their money be encouraged?
>And certainly, no one will take on debt denominated in Bitcoins.
They would if the interest rates became low enough to make up for deflation. As you claim, more people would save a deflating currency, which will further push down interest rates (since when people save money they usually invest it or put it in a bank which loans 90% of it back out.)
Inflation necessarily makes everyone worse off. The person that prints money can now buy more goods. But the amount of goods in the economy doesn't change. So there is less for everyone else. It's effectively a very confusing and indirect method of wealth redistribution.
> it will always be tempting to keep your Bitcoins in your pocket and let them appreciate instead of using them for needed goods and services.
What's wrong with this? If you choose to take a choice which actually makes you better off, how is that a bad thing? Shouldn't people saving/investing their money be encouraged?
>And certainly, no one will take on debt denominated in Bitcoins.
They would if the interest rates became low enough to make up for deflation. As you claim, more people would save a deflating currency, which will further push down interest rates (since when people save money they usually invest it or put it in a bank which loans 90% of it back out.)
Inflation necessarily makes everyone worse off. The person that prints money can now buy more goods. But the amount of goods in the economy doesn't change. So there is less for everyone else. It's effectively a very confusing and indirect method of wealth redistribution.