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Comment by fasteddie31003 | Hacker News Reader

I am bullish on Bitcoin. In the words of Elon "The best part is no part". Bitcoin gets rid of monetary policy. Think of all the wasted effort to maintain interest rates at a level that some economists come up with. Monetary policy will only result in some sort of inflation. Just delete all of that nonsense .

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That's really not how any of these things work. Bitcoin is completely separate from monetary policy, changes in interest rates are a useful tool and inflation isn't necessarily bad.

It's cool to be bullish on Bitcoin but this kind of reasoning shows a serious lack of understanding.

So if you were given the choice of having two currencies. One with inflation and one without inflation. You would pick the one with inflation?

Note the talk of Bitcoin's being deflationary refers to the technology, not the exchange rate.

> if you were given the choice of having two currencies

If having = "to personally own with the hopes that the price goes up", then you pick a currency with limited supply.

If having = "to have it be the currency on which your entire economy runs", you should pick a currency which doesn't have a limited supply.

Dollars were in limited supply too, and they aren't anymore for a very good reason. Here's Ray Dalio trying to summarize some of the relevant economic principles in a video - https://www.youtube.com/watch?v=PHe0bXAIuk0

To be fair, the question was "with inflation" or "without inflation" (inflation rate of zero). A currency with a limited supply results in deflation as the economy grows. Deflation gives an advantage to savers, the same way inflation gives an advantage to debtors. A currency with an unlimited supply which is supplied at the same pace as economic growth results in zero inflation. And that's nice because then the government isn't giving anybody an artificial advantage. Zero inflation means a level playing field.

> To be fair, the question was "with inflation" or "without inflation" (inflation rate of zero).

As you're pointing out, currencies don't have built-in inflation or deflation, that's why it didn't make sense to answer the exact question that the parent comment was asking.

I would pick a stable currency with a predictable 2% CPI inflation rate. Why? Because I don't want people to sit on their money and do nothing with it. Remember all these people that regretted spending their Bitcoin? With a deflationary currency every payment you do with your currency is regrettable. You will always think that if you had waited 50 years longer your kids would have become trillionaires.

Bitcoin does absolutely not get rid of monetary policy. It just has it's own kind of monetary policy. Which, to be clear, has been tried and tested in the form of gold standard and deemed not satisfactory.

Further, bitcoin has absolutely nothing to say about amount of currency in circulation in a world where credit is used to create currency (i.e. modern world).

> has been tried and tested in the form of gold standard and deemed not satisfactory.

I believe the comparison is unfair:

    - Gold can't be transfered in under 10 minutes halfway round the planet

    - Gold can rather easily be confiscated

    - Gold is very hard to subdivide to tiny quantities

    - Gold can easily be "faked", especially for tiny amounts.

    - Gold's supply is not really finite

    - [edit]: carrying 100kg of gold across a border is - to say the least - problematic

Those have very little to do with monetary policy (https://en.wikipedia.org/wiki/Monetary_policy)

Plus, in the modern credit-money world, an IOU from a bank worth 1 BTC, IOU worth one ounce of gold and IOU worth $1[1] have precisely same technological properties and limitations.

[1] A.K.A "Money in your bank account"

I do believe these statements as the best way anyone could have defined.

And when it comes to Buying Bitcoin over gold https://www.buyucoin.com/buy-bitcoin-india this is the apt choice

Which is exactly why, over the long term bitcoin will continue to go up in value. As more and more countries debase/devalue their currency bitcoin will just keep going up and up.

> Which, to be clear, has been tried and tested in the form of gold standard and deemed not satisfactory

Deemed unsatisfactory by who? The money printers? The banks? Yes, the people who make money off of lending money, something clearly prohibited in Islam, Judaism, and Christianity.

Clearly people want no part of this anymore, that's why bitcoin and other crytpocurrencies have a significant value proposition for many.

>Think of all the wasted effort to maintain interest rates at a level that some economists come up with. Monetary policy will only result in some sort of inflation. Just delete all of that nonsense .

I hope you like unemployment because economic policies that increase CPI inflation are the primary tool against fighting unemployment and drive as much economic growth as possible. 2% CPI inflation is all it takes.

Of course, governments are too incompetent to actually do things that increase CPI inflation so they just do asset inflation because pandering to the wealthy is what the governments are best at.

Could you link to studies that show CPI inflation create employment? What mechanism causes employment from inflation?

Bitcoin is a deflationary asset. You already have a big chunk of the float in the hands of a very very few people. If they were serious about replacing fiat, you’d come up with a currency that’s inflationary and one that tracks pace of innovation. USD derives most of if not all of its entire value from...US military. No one is going to go to war to save bitcoin. NO ONE.

First the bankers, next we need a cryptographer to obsolete the politicians.

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