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Comment by ekianjo | Hacker News Reader

> that isn’t deflationary

So you believe inflation is a good thing?

Inherently deflationary asset guarantees it's going to be used as a speculation vehicle rather than money.

Bitcoin continues to inflate until ~2140. The difference is that it inflates in a predictable curve and is not subject to the decisions of central bankers.

Inflationary policies also have a very tight link with speculation in the economy. You only need to look at the past 2 years.

Bitcoin supply does grow until 2140. It will inflate only if the backing economy and users does not grow until then. If this growth outpaces the supply of bitcoins, it deflates. And just every economist (and every piece of empirical data we have) will tell you deflation is about the worst thing that can happen to an economy, in terms of monetary events.

> it's going to be used as a speculation vehicle rather than money.

I see this claim time and time again, but it's hardly convincing. Deflationary assets don't exist in a vacuum, they compete with inflationary assets that create value over time (such as stocks), and it's not a binary decision as to which one is going to be the best investment/use of your money. Additionally, the value of pretty much anything (whether deflationary or inflationary) is hardly a factor of their availability in the future but rather their actual or perceived utility at a precise moment in time.

...which is good because it helps us move away from the throw-away society mentality. Bitcoin is very effective environmental activism.

>Bitcoin is very effective environmental activism.

While using the per-design resource destroying, planet burning Proof-Of-Waste? Are you Kidding?

And no, deflation does not encourage more long term investments, it does simply encourage hoarding, not exactly a desirable thing, form any perspective. And of course it is the fatal (and likely never fixed) flaw in bitcoin-as-a-currency.

I find the GP's comment tenuous but I also find the environment-damaging rhetoric you and a sibling (and thousands of others) give on proof of work even more so. If you want to bite the bullet and say people shouldn't be able to pay for energy and do with it what they want, fine, but otherwise, price out the actual energy costs, and realize the purpose of such costs: security. Bank of America alone spends $1bn/yr on cybersecurity, bitcoin mining costs the world about ten times that. It's not that unreasonable. Another comparison is it's about 1/8th the US spending on cigarettes.

Bitcoin being deflationary helps us move away from the mentality of a throw-away society.

You can use the Lightning Network to use Bitcoin as a currency. It's almost instant and free.

> Bitcoin being deflationary helps us move away from the mentality of a throw-away society.

No, it does not. How could it? It does nothing but encourage hoarding. Not only that, but also a economy where everything is more scare tomorrow than today, is a economy in perpetual decline.

>You can use the Lightning Network to use Bitcoin as a currency. It's almost instant and free.

That does not side step the proof-of-waste on the main chain. This is a completely unrelated debate.

> everything is more scarce tomorrow than today No, in terms of Bitcoin everything is cheaper tomorrow than today. That's the opposite of more scarce.

Bitcoin mining accelerates the transition to renewables. https://www.whatbitcoindid.com/podcast/can-bitcoin-mining-sa...

No it doesn't. And you are moving goalposts. But still, it's a obvious and transparent lie. It wastes electricity that could have been put to good use, like power2(gas|ammonia|syngas|heat|cooling) or just normal, dispatchable consumption in a Wide area synchronous grid, a thing that exists pretty much everywhere where electricity generation is a thing.

And bitcoin does not use electricity, it just flat out wastes it. And that's not because bitcoin in itself is useless (it is), but due to the design of the Proof-of-Waste. Electricity use implies that electricity is converted into something. Every iPhone uses X Wh. If you dail up the usage, the output increases. It's not perfectly linear, but that's a reasonable approximation. Bitcoin is different: More electricity will never produce a better service, more bitcoins or whatever. Bitcoin will not ever get better by using more. And yet it is designed to waste a amount of electricity proportional to it's price. Oh, and it is only profitable to mine if you use a below-average electricity price. E.g. use the laxes regulations, the most polluting or the most illegal sources of electricity.

Unless this is sarcasm, do you wanna talk about the environmental ramifications of so much work being duplicated and dumped in the bitcoin network? Like, the sheer number of machines and waste heat that comes from nodes who weren't quite fast enough to get the payout, and just had to put all those calculations into /dev/null?

Bitcoin is very effective environmental activism. It makes renewables more profitable because it offers a base price for excess energy. Any place, 24/7.

https://www.coindesk.com/business/2020/05/19/the-last-word-o...

Furthermore, it can reduce the hidden costs of the petrodollar. https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-...

I think some inflation is good as it is an incentive to invest in capital projects. If you only have deflation, why shouldn't you hoard your wealth? I mean, since it's always going to be worth more tomorrow than today. Inflation is a shadow that people use to excuse their greed

It seems you assume investment is generally good. As you can see right now people invest in anything just to save their cash from rising inflation, but the investments often aren't sensible to put it mildly. Valuations of many companies based on realistic forward P/E ranges are outright silly. Nor is investing necessarily beneficial for society in general. In fact many of these corporations are outright destructive, but capital gets allocated to where it can multiply the best, not where it might have a positive influence on society.

It's the fiscal policy of many countries that's massively driven up asset prices including cryptocurrencies. Those who didn't invest saw their savings printed away.

Inflation (of IOUs) is good for those holding the actual wealth (resources, land, farms, factories, real estate, etc - often through public shares). It's good for those who have debt denominated in inflationary currency. It's definitely good for some people and their business. What many people simply don't understand is they're not part of that group.

This is something I’ve thought about and while I agree that a deflationary currency would be detrimental to our constant economic growth, I wonder if that’s actually a bad thing. Do we really want constant growth and pointless consumerism knowing what it is doing to our environment? Maybe a deflationary currency would be good, as people wouldn’t want to spend it on frivolous things and only use it to buy things they really need. I don’t really know where I stand, but I have come to doubt my initial concerns over deflationary money and I wonder what others think about such a radical shift.

While this is the most thoughtful comment, it seems like without the effective equivalent of population caps, price controls, and a large redistribution network, a deflationary system would involve people fighting over progressively smaller pieces of the pie, while those who have more than enough continue to take a smaller amount of their resources over time until the effective expenditures of the wealthy are effectively zero. This also would effectively bar new entrants to the system, so children, those with little access to tech and energy resources, and those in developing counties.

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