History shows that societies with the hardest money win.
Wealth can't really use to purchase anything with is not real wealth. If you can't convert bitcoin to $/€ it becomes effectively worthless
> History shows that societies with the hardest money win.
Objectively not true. Look at what happened with Britain after 1918 when tried doing everything they could to stick with "hard" money and avoid devaluation/dropping the gold standard.
I agree, that is why Bitcoin was supposed to be electronic cash, you were supposed to be able to pay for everything with it.
Bitcoin (BTC) doesn't scale today to this purpose, but you can still use it to pay directly for some products and services as long as the other party will accept it. For those wanting Fiat money you could exchange BTC to stablecoins, even in a decentralized way like with ThorChain [0].
What's missing is some seamless bridge between stablecoins and Fiat payment methods and bank accounts. Then you could pay for anything. However I would argue that Bitcoin was meant to become the payment method, as Satoshi Nakamoto described in the whitepaper [1].
You can but generally you don't want to. Besides the technical issues it's a very volatile asset which means that you don't want to hold it for any extended period of time (IF you're only using it to pay for stuff).
> There will always be more volatility to the upside
That's a very strong statement.
The price of a house used to be 100 bitcoin, then 10, now it's 5. Wait 10 years and it'll be 0.5. Meanwhile, hold dollars and the price keeps going up. You are defacto forced to put your saving in an investment vehicle to keep up with inflation, taking on risk.
Yes. You got it. That's how you get economic growth. Instead of stagnation and deflation when you hoard gold or bitcoin. It's not exactly fair from the individual people perspective but for the society as whole it's objective the superior option.
> To the contrary
I know that reading comprehension is hard (even if the "IF" was in very big letters..). If your income is in $ and you buy stuff priced in $ AND you don't want to use crypto as an investment instrument but only for buying/selling good holding it for extended periods of time is not smart (same applies to foreign currencies in general they are just not as volatile).
[0] https://www.mail-archive.com/cryptography@metzdowd.com/msg09...
> Look at what happened with Britain after 1918 when tried doing everything they could to stick with "hard" money and avoid devaluation/dropping the gold standard.
Soft money wins in the short term. Hard money wins in the long term.
What do you mean by that? Repeatedly saying the same thing multiple times doesn't make it any more accurate. The type of "hard" money you're talking about only work in mostly static economies with untrustworthy and ineffective governments, under other conditions it inhibits growth and causes all sort of economic instability and much deeper boom and bust cycles (mainly for the "bust" part, Fiat money is the opposite).
It "wins in the long term" because it's sort of a fallback option when there are no other alternatives (i.e. most of human history) but far from the optimal one.
Hard money is fair money. Populations thrive when built on a fair foundations.
Does the stealth taking of my wealth and giving it to the bankers benefit or harm society?
"You have some pigs and I have some chickens, but I don't want pigs right now"
On top of that, it is the first global currency, that is internet native. It's an upgrade like going from papyrus/parchment to the printing press. The first printing presses were smuggled throughout Europe. But hey, stick with your evil fiat holy roman empire that steals from you. Don't ever question why inflation exists.
Don't want to give out your credit card to an untrustworthy or unknown website, but you still want to buy their ebook? Use Bitcoin. With credit cards, the private keys are used in every transaction.
Or you know... switch to a bank that allows you to get an unique card number for any transaction with a click of a button. Or use SEPA, or many other similar alternatives which (and I'm not overstating this) are 100-1000 times more efficient that Bitcoin.
You could say that they would have lost WWI without leaving the gold standard (other world governments followed suit by leaving the gold standard after Britain did) but imho the war would have ended sooner. Lyn Alden talks and writes about this quite a bit in her books and blog.
I mainly meant their attempts to get back on the gold standard in the 1920s. Unlike e.g. France and the other European countries which didn't really have a choice and had to devalute. It put Britain industry and economy at a disadvantage during the 20s (on the brightside Britain didn't suffer from the Great Depression as much..).
e.g. between 1910 and 1930 inflation in Britain only averaged 3.0%.
And between 1920 and 1930 it was negative (with 3.7% deflation, which is huge..) while the Franc lost ~50% of its value during those years.
As a consequence in Britain unemployment stayed high and there was hardly any growth in the 1920s. While France recovered much faster despite suffering much more during WW1: https://cdn.theatlantic.com/media/mt/business/112712krugman2...
Right. Like sticking to the nonsense that was the gold standard.
Inherently deflationary virtual token make an objective horrible currency. Believing otherwise puts you on part with the flat earth people.
Why's that then?
Deflation significantly inhibits economic growth, making borrowing much more risky and would result in significantly more wealth inequality than we even have now.
Why invest into anything when you can just hoard money and get richer by not risking anything?
> priced gold at its true value
Which is determined how and by whom? If you let the market do it's that basically (while not technically) Fiat...
I think I’d like that to be true, but I don’t see much evidence of it. Do you have some examples?
However although gold is hard, it fair to say that it was beaten somewhat by soft fiat money, simply due to the overwhelmingly better other monetary qualities of fiat (e.g. portability and divisibility) especially in the digital age.
Bitcoin is a hard money that takes the best monetary qualities of both fiat and gold, improves them, and combines them into a single asset with which neither fiat or gold (or shells or beads for that matter) can compete.
It would have been more accurate for me to have said "societies with the _best_ money win"
Not it doesen't. Also bitcoin is not money (why do people keep claiming this?), it's a speculative asset.
Okay
I have purchased items and payed off loans using BTC. So have millions of other people. You calling it not money doesn't make it so. Sorry.
I can exchange grain or aluminum for other goods and services and pay back my debts in them if the other party agrees. Does that those commodities money? If you think so and then yeah you're right about bitcoin too. Otherwise, it's not. Sorry.
[1] SEC vs. Shavers followed by FBI vs. Shavers
DOJ victim emails are neat!
This whole ETF thing has been a long time coming in terms of precedent at the legal level. Court cases are how things happen in America unfortunately.
Gold isn't money - it's a commodity. It isn't even a great store of value over that last thousand years or so.
It grows stronger/more efficient compared to others.
> Gold isn't money - it's a commodity. It isn't even a great store of value over that last thousand years or so.
I don't want to argue semantics, but yes gold certainly isn't great at storing value - its supply doubles every 40 years and over the last 100+ years has been slowly demonetised as economic value moved into fiat.
There is a lot more to societies than money. Can you do huge damage to societies from hyperinflation - for sure, but outside of catastrophic failures of money, not so sure there is a strong link.
Yes I'm assuming all else equal or when studied over a long period of time. Nowadays we can use our knowledge and intelligence to simply start using better money in advance.
> Can you do huge damage to societies from hyperinflation - for sure, but outside of catastrophic failures of money, not so sure there is a strong link.
I don't think you appreciate the damage that has already been caused by fiat. Look at USA, the UK and compare them to just 50 years ago. We think we are rich but it's just an illusion caused by devalued money. An average man used to be able to own a home, and support a wife and kids on his salary. Those days are long gone. The bankers are unjustly getting more and more powerful (far more powerful than the governments) while the people are becoming weaker and weaker.
I struggle to see shifts in earning power as a fiat issue. Why isn't it weaker unions in the US or UK, for example? Why not (de-)regulation or any other long list of things. The shifts in power are not a result of fiat or devaluation (why were only a few powerful in times with very hard money?). You can have places where less GDP is in the financial sector and still lower earnings cohorts had a miserable history (or even the median earner). Germany has a rather smaller banking sector than the US, but real earnings over that last 25 years have only moved a little (so has productivity).
The hope that somehow by changing the money a complex set of problems goes away is in error, I believe, and not helpful in addressing those issues. (You can also look at monetary reforms and see that those didn't magically solve all problems.)
People have been unknowingly getting pay cuts each year for the last 50+ years. They are unaware because they receive more currency units each year and are still able to afford the same everyday consumables.
They don't realise that the consumables have been getting cheaper and cheaper over the decades (through efficiencies of production) because currency devaluation causes prices to actually go up.
It's only when they try to buy hard assets like real estate that have retained their value and find them impossibly expensive, without understanding why.
Then you've got all the devalued pensions and savings, and other stealth wealth transfer through "capital gains" tax (the more the bankers print themselves money to lend out, the capital gains tax we have to pay) and income tax bands that don't track nominal wage increases etc.
GDP appears to increase, but it's just an illusion caused by the devaluation of the units it's measured in. In the US it has been going down for decades.
It is a slow transfer of wealth from the population to the bankers. People work harder, but find themselves increasingly struggling to survive. They become unmotivated and ultimately when the deterioration in living standards becomes too much, revolt.
And that's only within the country that's printing the money. For other countries using that currency, the effect is even worse as the entire country is stealthily looted.
All the time, the bankers are acquiring all this wealth and are becoming richer and more powerful than many people could imagine. Able to control governments and mass media alike.
This is why Satoshi Nakamoto created bitcoin.
Also, certainly it is not the bankers that are the super rich or even in control etc. (Btw., that also holds for the gilded age in terms of wealth).
Well the banks are collecting interest on every single dollar in existence. All created by them out of thin air. Currently that's in the region of $80T and it's been going in for decades, centuries even.
As far as house price inflation is concerned, depending on what your basket is, prices increased quite a bit more than the CPI basket (so up in value), if you hold the S&P next to it, not do much difference.