Comment by davewritescode | Hacker News Reader

Comment by davewritescode | Hacker News Reader

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On a philosophical level, I think the flawed premise you’re presenting here is that inflation is a problem that needs to be solved. Inflation is unpopular because it’s effectively a tax on unproductive wealth. Inflation incentivizes investment because idle wealth will lose it’s value at the rate of inflation.

On a technical level, Bitcoin is worse than a currency because it’s value can fluctuate wildly constantly and transaction fees are high. I don’t know what’s going to happen when we get a “Run on the bank” type of scenario but I suspect it’s not going to be good for the little guy.

The ability of central banks to manage a crisis isn’t a bug, it’s a feature. The trade off is one we’ve made throughout history, we have to give control to other folks who may not have our best interest at heart.

I fundamentally believe Bitcoin will collapse the next time we have a global economic catastrophe and it’ll have no tools to handle it.

This is where market competition is a great thing for people who believe in market competition. For people who like the central banking based financial system and think that inflation is a good thing can stay in it, and for people like me having an alternative is great, and it changed my life totally. I understand people who can’t bear the price fluctuations, as I have seen my net worth drop 80-90% 3 times in the last 8 years, and it wasn’t easy on me psychologically. I still use it, as I see a debit based financial system more honest than a credit based system.

Regarding the transaction fees it’s not higher or lower than the current system, but very different. For me it’s actually much lower than my bank fees (sending a wire transfer from Europe to US is usually $20 charge for me, while Bitcoin fees are usually about $0.8, but it’s changing over time depending the usage of the system).

> On a philosophical level, I think the flawed premise you’re presenting here is that inflation is a problem that needs to be solved. Inflation is unpopular because it’s effectively a tax on unproductive wealth. Inflation incentivizes investment because idle wealth will lose it’s value at the rate of inflation.

Inflation is a tax on those without assets or the available capital to invest in assets. It's a form of wealth transfer to those with assets. Increasing economic inequality is not good for anyone, and some would say the US is already close to a breaking point.

https://www.statista.com/statistics/219643/gini-coefficient-... https://blogs.imf.org/2020/12/11/when-inequality-is-high-pan...

> Inflation incentivizes investment

Inflation induces investment and consumption. Ultimately, central bank wants to create GDP growth through inflation because any GDP growth is good, that's the basic dogma.

Since we're talking about climate change, it's clearly morally wrong for the central bank to print money to create arbitrary GDP growth because GDP growth creates emissions and furthers climate change. It's a deathtrap really, and the most sinister mechanism ever created. We should probably ban it along with Bitcoin.

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