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Comment by JuliusBranson | Hacker News Reader

>Leaving aside the dubious idea that the Federal Reserve can give their friends the ability to print money

You didn't read my comment correctly.

I was referring to this part:

> stablecoins subvert the ability of the Federal Reserve to print money and give it to their friends at Goldman Sachs et al

But you said “their friends to print money” not “print money for their friends”.

Ok, fair, the part that I excerpted did confuse the two, but OP goes on to say:

> David at Goldman Sachs starts with 1 dollar, you each have 50% of the wealth in the "nation." David and his friends start printing themselves money

“David at Goldman Sachs” presumably refers to David Solomon, CEO of GS, and in this part of the post he and his friends are the ones printing the money.

True. It was definitely not a wildly coherent post.

What is the mechanism that ensures bitcoin inflates proportionally to the dollar?

(not an economist) If most bitcoins are bought with USD, all else remaining equal, wouldn't this automatically happen?

I'm not an economist either... but the buying power of your bitcoin goes down if people demand more of it for a given product. If USD prices rise, the bitcoin price will rise too, meaning your bitcoin wealth is affected by inflation, and you're not protected from the Fed printing money.

You assume there is a correlation between USD and BTC. Another way to see this is this:

If USD prices rise, the price of BTC will also rise, as BTC is another product you can buy with your USD. Meaning your bitcoin wealth is not affected by USD inflation.

But the price of bitcoin is unrelated, it seems, to any real world thing.

Pure speculation.

You could say that about the value of any currency though

No. In a currency with a lot of transactions there are plenty of real world hooks to hang their value on.

The volatility of Bitcoin, the fact it can hardly be used, the fact that almost no merchants accept it....

Perhaps inflation in the price of electricity, denominated in USD?

But when people say inflation in the context of cryptocurrency they usually mean "deflation".

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