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Comment by dontTango | Hacker News Reader

Ethereum removed the 100M soft cap on EIP 669.

This was quietly slipped through with no debate. ETH shouldn't be trusted.

Can you provide evidence of no debate, and reasons on why the soft cap is a bad idea when transactions burn eth anyways and the eth inflation rate is around 4% per year, and slated to drop to 0.5%-2.0% with the transition to ETH 2.0?

typical monetary policy issue, if it is easy to change - they will keep changing

EIP669 was a difficulty bomb delay. The difficulty bomb was never intended to make monetary policy. The point was to keep upgrades from failing to deploy due to node operator complacency. The difficulty bomb forces them to upgrade their code in some way, either to the upgraded version, or to the same old version with a bomb delay.

Issuance right now is 2 ETH/block. The white paper just promised 5 ETH/block forever.

https://ethereum.org/en/whitepaper/

Inflation is good for currencies / anything that's meant to be used.

One exception to this that pops to mind is computers, which have gradually gotten cheaper. Even though you always get a better one if you wait, it hasn't deterred consumers.

That's not a exception; in fact it's probably the most blatant supporting evidence available for "Inflation is good for [...] anything that's meant to be used.". Computers have been undergoing borderline hyperinflation (factor of two every year-and-a-half or so) for decades, and this is extremely good for anyone who wants to use a computer.

You got it the wrong way round. Deflation means when prices are dropping. The price of computers has fallen over time predictably and exponentially, and yet that hasn't stopped people from buying them. The Keynesian argument against deflation is that it disincentivizes people from spending money as they expect prices to drop. This disincentive hasn't prevented the computer industry from being a huge success. The fact that you know that if you wait some time you can get a faster and cheaper computer doesn't prevent you ad infinitum from buying computers.

Kinda unintuitive, but if you look at processing power as a currency, it is actually undergoing hyperinflation (number of computers + processing power increases every year). Meaning you buy a computer, assuming its value will drop (due to the inflationary nature).

> if you look at processing power as a currency, it is actually undergoing hyperinflation

So in relation (for this particular scenario) the USD is undergoing hyperdeflation..?

Whatever you call it the psychological effect with computers is the same as with a rising bitcoin price - you get more bang for the buck the longer you hold off on your purchase.

> So in relation (for this particular scenario) the USD is undergoing hyperdeflation..?

Relative to computers/processing power, yes, although you generally wouldn't describe it that way, since USD is (comparatively) stable with respect most other stores of value - it's computers that are changing in value, so it's computers that should be described as undergoing inflation.

Relative to (the relevant average of) other stores of value, dollars are undergoing inflation, just more slowly than computers.

> Meaning you buy a computer, assuming its value will drop (due to the inflationary nature).

Exactly. Similarly, if you buy a dollar, its value will drop (though not as quickly).

OTOH, bitcoins are the opposite of both dollars and computers: bitcoins are deflationary, and rise in value. This is a terrible property for a currency, since it encourages speculation and hording in preference to circulation.

Except processing power is not a currency, so it's the opposite way round...

If you're looking at USD as the base asset, computers are undergoing inflation, not deflation. Both USD and computers are inflating in supply, but computers are inflating faster (in terms of processing power at least)- hence the continuous drop in price. You could argue USD is deflating in comparison to computers, but computers are not deflating in comparison to USD.

Edit for a bit more clarity: Inflation / Deflation is relative to a "base asset" which is considered unchanged in value. For USD this is normally a standard basket of assets (foreign currencies or a "market basket").

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