Because it can't. Even assuming everyone is on board with blockchains, removing the ability of the central bank to increase the monetary supply during recessions makes every downturn 10x worse.
(as unpopular as it may be with inflation this high right now)
That doesn't mean it can't function as a currency, just that it maybe isn't a good one.
This is an important distinction, because critics have adopted this talking point of "not a currency" or "can't be a currency" as some kind of binary, but then have terrible arguments backing this up. The difference between 2% inflation and 0% inflation is just that - 2%.
Mind you - Bitcoin is currently issuing at a rate of 1.5%. The reason it is volatile has absolutely nothing to do with it's "deflationary" nature.
Yeah I mean, given a sufficiently retarded government anything can function as currency, when we say "X can't be Y" we usually mean "X can't function as a Y properly"
> The difference between 2% inflation and 0% inflation is just that - 2%.
The point is that normal fiat currencies can be regulated by their central bank, the difference between 2% inflation and 0% inflation during a recession could be the difference between a manageable downturn and riots in the streets. That's an extreme example and often not the case, but why would you deprive yourself of the lever of money supply? There's a reason we're not on the gold standard anymore.
> Bitcoin is currently issuing at a rate of 1.5%. The reason it is volatile has absolutely nothing to do with it's "deflationary" nature.
Which makes it deflationary by definition if the economy is growing at more than 1.5%/yr in real terms.
Hmm... wait a minute, a small few holders of coins... can behave like a CENTRAL BANK ... ?!
I wonder what those few major holders think about crypto... ah yes, that it will free us all...
Before the constitution of the Federal Reserve, J.P. Morgan acted like a central bank by being the lender of last resort.
They'd form a guild, much like a large bank, and control large parts of the currency. Now, taking crypto people at their word, they dont want the gov to regulate that. So what does this mean?
We have a tiny feudal guild with control over the economy.
A central bank, with an inflationary currency, heavily regulated by the gov is nothing like this group of wannabe feudal lords. By comparison, modern central banking is vastly more democratic, and ran for the benefit of soceity.
That is unlikely to end well.
The ELI5 version is basically by implicitly telling everyone that JP Morgan would never be allowed to fail, then you are skewing free market risk/reward decisions and skewing money/resources toward too big to fail monopolies.
Given what I know about Austrian Economics, "debunk" is most likely too strong of a word here.