Comment by PragmaticPulp | Hacker News Reader

Comment by PragmaticPulp | Hacker News Reader

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> let cryptocurrencies take away one of the primary powers of the state: minting and control of the flow, supply, and thus value of the currency

I think crypto proponents have exaggerated the threat that cryptocurrency poses to government controlled currencies. The narrative plays well to audiences that distrust institutions and want to be early adopters of a new cryptocurrency paradigm (in which they would be at the top of the wealth spectrum), but the reality is that cryptocurrencies are additive on top of existing currencies, not replacements.

In practice, average people in average countries (e.g. not Venezuela) benefit more from having centrally controlled currencies than they lose. Average people also benefit from having an established currency rather than being forced to switch to one that is majority controlled by a few early adopters. If you think wealth inequality is bad now, the wealth inequality in a hypothetical Bitcoin economy would be orders of magnitude worse.

The idea that one day Bitcoin will reign supreme and everyone will be forced to buy 0.0000001 Bitcoin to get any transactions done is attractive to someone who wants Bitcoin prices to go the moon, but the average person wants nothing of the sort.

The crypto world has moved way past bitcoin, that’s just what the media likes to talk about - there are stablecoins 1:1 tied to US dollar, what if you could use those, sidestepping the whole credit card/bank etc industry?

That’s of course still tied to the money policy controlled by Fed - the trend in the latest few months is coming up with a coin that is by design stable and therefore useful as a day-to-day currency, but the supply is controlled by a DAO.

The average person definitely doesn't want to use bitcoin, but they also do not want their savings & spending money to devalue.

Debt levels are quite high, so governments must either continue expanding the money supply or must increase interest rates and bankrupt a significant proportion of citizens. It's not an easy choice and throughout history most governments have chosen the devaluation path.

If you think wealth inequality is bad now, the wealth inequality in a hypothetical Bitcoin economy would be orders of magnitude worse.

Please explain, is this belief because wealthy people have front run Bitcoin by accumulating it early on?

As it stands now, fiat currency drives wealth inequality when the federal reserve injects trillions of dollars into the system. That money makes its way to store of value assets like stocks and real estate. Poorer people tend not to own those assets, but of course would one day like to. Since most of their net-worth is comprised of cash, they suffer the most when cash is devalued by printing. Every day that passes makes it more unlikely that they will ever own those safe haven assets, or they'll own proportionally even less.

In a Bitcoin economy, there is no flip of the switch, no button to be pressed that allows this to happen. In a hyperbitcoinization event, where all the world's wealth is transferred into Bitcoin, the earliest people are rewarded the most. But no further arbitrary devaluation of assets can occur. Monetary saving power is restored to people, not governments.

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