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Comment by Kranar | Hacker News Reader

If you want something inflationary, why not a basket of currencies via the traditional finance system? One reason I like Bitcoin is because it's a deflationary asset which makes it unique among most other assets.

This site is overwhelmingly negative towards Bitcoin, but I feel like the negativity would only make sense if you had to make a binary decision to put most of your wealth in Bitcoin or none of it.

Having just some Bitcoin say 5%, is a reasonable way to preserve your wealth against what I find to be a very opaque system of finance where a lot of trust is being placed in a handful of people to keep things running smoothly.

If the U.S. government, the Federal Reserve, some crazy trade-conflict or other global unforeseen event takes place that results in unusual currency fluctuations, it's nice to have some of my wealth contained in a digitally secure global financial system.

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IMO what’s neat about cryptocurrencies is that they are programmable money. This means you could build inflationary cash which inflates at a fixed, fair rate, in an open and transparent manner (Dogecoin did this, for example). Bitcoin has obviously failed at being what the whitepaper said it would be: “A Peer-to-Peer Electronic Cash System.” A fair and open inflationary currency might stand a better chance.

Though I think it’s too late for other coins to fix this and present themselves to be an alternative; Bitcoin has already grown too big (too much trust & resources spent on it globally), and the failure of Bitcoin will probably mean the failure of crypto as a whole. So Bitcoin itself needs to actively fix this deflationary problem for crypto to be used as actual currency. The problem is most believers of Bitcoin want it to stay it as deflationary (as most are just speculators), and only a minority are really seeing the problem here...

All of the cryptocurrencies I've seen so far seem to based on a simplistic and fundamentally flawed view of economics. A long term trend (whether inflationary or deflationary) in the overall supply is insufficient to target price stability.

A currency's supply needs to increase/decrease in response to what's circulating at this moment in time. If the overall supply is increasing but everybody is squirrelling it away or deleveraging debt positions, then you're still going to have deflationary effects. Case in point, roughly 20% of USD was minted in the last year or so, with pretty much no inflation. Similarly with something like Bitcoin, if some event were to trigger a spending/selling spree (or a debt bubble were to form) then you would have inflationary effects.

What's needed is coordination to increase/decrease the supply as needed. That could be done with some kind of decentralised voting system. But I'm not sure it could react fast enough in a crisis, or be able to direct the action to the right parts of an economy to avoid the kind of damage that takes decades to undo.

Have you looked at https://reserve.org? Might interest you!

> some crazy trade-conflict or other global unforeseen event

if that event happens, either it doesn't affect you that much, or it affects you so much that bitcoin will not help.

There's no scenario in-between those two, for which i can see bitcoin be the rescuing currency.

Unless you're not in the developed world of course - like in venezuela, or turkey (likely to start to hyperinflate due to mismanagement from their central bank). In that case, bitcoin makes perfect sense to own.

You suggested something OP can invest in that has none of the technical benefits of cryptocurrency. If you think of cryptocurrency primarily as an investment (=speculation) medium with technological window dressing, that makes sense.

I too would like to see a cryptocurrency modeled on the idea that current democracies and their monetary systems aren‘t all bad: steady inflation, some degree of control over monetary policy for a state like body, programmable taxation... There are many thousands of projects in the space but somehow they all share a hardcore libertarian political orientation. I guess we‘ll let IBM contract with the ECB to build the future.

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