Hacker News Reader

> Yes I do. Why? Because they handled it for hundreds of years, and it works all day everyday.

Do you mean to say that you are fine and dandy with your purchasing power eroding over time?

All governments eventually start tinkering with the money supply. It's all well and good that you trust your government to do the right thing, sadly that's not the case for a large portion of the worlds population. Have you seen Turkey lately? Lebanon?

> The number of transactions is a measurement of efficiency.

The number of transactions would be the same, regardless of energy spent on mining. Be it 1 joule or a million.

> Only between 2 parties, after opening a channel between them, which requires: A transaction. And neither party can use any of the funds transmitted via the payment-channel in the wider network until the channel gets closed, which requires: Another transaction.

This isn't correct. The Lighning Network isn't just a channel between two parties. It's a network of channels between participants that allows you to transfer to any part of said network. You can open a channel to someone and never close it. Why would you? There are channels that are multiple years old at this point.

> The banking system imposes no such limitations: A transfer can be initiated at any time to any IBAN in the world, with no prior agreement, the energy cost is miniscule, and the moment the transfer is completed, the funds are available to the other party for transactions to whatever other IBAN they want.

This is really looking at the current banking system with rose-coloured spectacles wouldn't you say? What about the billions of people that do not have access to banking? You don't think there's any value in those people being able to use something like Bitcoin to interact with the wider international markets?

> Do you mean to say that you are fine and dandy with your purchasing power eroding over time?

The Euros purchasing power has remained stable even through the worst financial crash in recent history.

So yeah, I think I'll be fine.

Hello, I'm Venezuelan, I have clients in the United States (I'm a software development).

Show me how to open a bank account using this monetary system that you love so much, so I can receive payments from those clients and feed my family.

With Bitcoin I can open an account from my bedroom, for free.

And I assume you then exchange your Bitcoin to USD or VEF, and proceed to use the standard monetary system. Or do you pay for your groceries with BTC?

> And I assume you then exchange your Bitcoin to USD or VEF, and proceed to use the standard monetary system. Or do you pay for your groceries with BTC?

/u/danlugo92 wouldn't necessarily need to open a bank account. There's always the black market. Maybe bitcoin to cash is the best approach?

> Or do you pay for your groceries with BTC?

In some places I can yeah. Most that do accept crypto go the Binance route.

I fail to see how this is all relevant, you're just moving the goal posts now.

How is asking whether you can actually spend a currency moving the goal posts?

I think a better example of moving the goal posts would be how Bitcoin has gone from “currency", to "store of value", to "digital asset".

>Because they handled it for hundreds of years, and it works all day everyday.

Yeah that great depression that started in 1929 and sank the world, the stagflation of the 1980's, the crisis in 2008, the 7% inflation this year, all evidence the govt does a great job handling it

If we're going to discuss crushing inflation and prices, shouldn't we also consider BTC and other coin's wild volatility? 60k one day, 40k the next. That's not a very stable system either.

I think you’re conflating the economy and the monetary system. The latter is part of the former, but only part.

Money itself is mostly done fine. Mostly: There are exceptions, but (outside of wars) I know if only a handful of examples where governments had something less stable than Bitcoin.

How is it fine? Even a currency like the USD has lost most of it's value over time: https://howmuch.net/articles/rise-and-fall-dollar

I guess you could call it stable. A stable decline!

Indeed it has.

First: That, within certain bounds, is deliberate — a small level of inflation helps the rest of the economy by encouraging spending. The last thing you want is people HODLing their paycheques.

Second: your link shows an average halving time of the US dollar purchasing power of 22.5 years. Bitcoin has about the same price today as it was 6 and 12 months ago, but was about double that 3 and 9 months ago. Even the Brexit referendum’s effect on the GBP would be hidden in the noise of BTC’s volatility.

First: Ok, so. Let's imagine that there was a perfect sound money. One that couldn't be tinkered with, one that couldn't be debased. Would you still need to "encourage spending"? I definitely do not think that's a given. I'd even argue that the need to intervene in the economy by playing with the cost of money is a symptom of the current system.

Second: Yes. No one is denying that Bitcoin is volatile. If you pick any arbitrary period of time you can come up with whatever statistic you want. This is not sound argument IMO.

1. Crudely speaking, money that stays in a savings account acts like money destroyed, i.e. deflation. Deflation encourages more people to do the same, because the effective savings interest rate is ≈ $nominal_interest + $inflation, leading to a spiral.

Except: money stuck in savings accounts also means the money isn’t spent on goods & services, so fewer jobs are supported, so productivity goes down, which is effectively +ve inflation even with the money supply perfectly fixed, but fewer jobs also encourages more savings and also triggers a spiral.

Which effect dominates (+ve or -ve inflation) depends on other factors, but both ways are a spiral of economic pain.

2. What? This is specifically about which is worse, how can you not make this type of comparison?

And now it’s too late to edit, I see an error:

> $nominal_interest + $inflation

Should either be:

> $nominal_interest - $inflation

Or:

> $nominal_interest + $deflation