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Comment by lisper | Hacker News Reader

These two things are not unrelated. Moderate inflation is a feature, not a bug. It encourages people not to hoard currency for too long, which keep the economy humming along. One of the reasons the Great Depression lasted as long as it did was the Fed's tight money policy. And one of the reasons that neither the Great Recession nor the covid pandemic turned into Great Depression II is that the Fed opened up the floodgates.

Bitcoin is deflationary by design. That makes it a great asset but a terrible currency.

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It's a feature! You see, it incentivizes spending, speculation, and investing, which are the only important economic activities, and punishes savers, which are miserly cash-hoarders who selfishly want to save for retirement without having to gamble.

Yes, that's exactly right.

BTW, you apparently don't understand what "saving" actually is. There are two kinds of saving. You can save by putting cash under your mattress, or you can save by putting money in the bank. These operate in fundamentally different ways. When you put money in the bank, it gets loaned out so that people can use it for productive activities. When you put it under the mattress it just sits there. It's very hard to lend bitcoin because there is no way to record a bitcoin transaction as a debt in the blockchain. All bitcoin transactions are structured as cash payments. So "saving" bitcoin is necessarily under-the-mattress type savings rather than in-the-bank type savings. This is one of the fundamental limitations of bitcoin, and one of the many reasons why it cannot be a currency, only a commodity.

there are plenty of ways to lend crypto now, many use etherium

Sure. But I was talking specifically about bitcoin, not crypto in general.

You can lend bitcoin on etherium using erc20 defi platforms

https://milkroad.com/lend/btc/#:~:text=In%20DeFi%20BTC%20len....

Sure, but to lend your bitcoin you have to transfer it to a lending platform, which is to say, to a trusted third party (TTP). The whole point of bitcoin is supposed to be that it does not rely on a TTP. If you're going to trust a TTP to administer your loan, you might as well trust them to keep the ledger too. As soon as you lend your bitcoin you lose all of its purported advantages, including inflation protection. All you're left with is a ridiculously high electric bill.

that’s not true, you can lend over defi using erc20 contracts

You can lend ethereum coins that way. You can't lend bitcoins.

You can lend WBTC, which is nearly the same thing

You and I have different ideas of what "very nearly" means.

Money

> Moderate inflation is a feature, not a bug.

Maybe from your perspective. From mine, it's as unwelcome of a "feature" as malvertising. If I can choose to opt out of this "feature", I will, and I do.

Thank goodness we have the legal freedom of choice to do so, and that bitcoin really exists, rather than still just being a concept on paper.

> It encourages people not to hoard currency for too long, which keep the economy humming along. Who defines 'hoard' and 'too long'? If your definitions don't match mine, why should I be forced to respect your opinions? Simple answer: I choose to ignore them, because I can. I don't recognize anyone's right to devalue the product of my labor, even if they do it "for the good of society as a whole". Society's well-being isn't my problem, my well-being is.

>And one of the reasons that neither the Great Recession nor the covid pandemic turned into Great Depression II is that the Fed opened up the floodgates.

You want to talk about real bubbles? Look no further than the increase in value between securities and house prices relative to average incomes. That's the fed's money spigot. It didn't save the day, it just hyperinflated the bubble.

> I don't recognize anyone's right to devalue the product of my labor…

This bit I agree with, although I would add that salary (i.e. plain cash) alone as the fruit of labour is insufficient and unfair, and amounts to wage slavery.

> Society's well-being isn't my problem, my well-being is.

Those are interlinked, as living in a bunker is not good for your wellbeing.

> I don't recognize anyone's right to devalue the product of my labor

If you were operating in a barter economy, as you seem to wish for, the value of your labor would not be guaranteed to have stable value either, and would likely be far more volatile (especially depending on what the product of your labor is... you think farmers can demand their product not decay in value over time?). You just wouldn't have a convenient boogeyman to complain about, but I guess that's better to you?

> It didn't save the day.

It absolutely did. Unemployment during the Great Depression reached a high of 25% and was above 15% for nine years (which would probably have been longer if not for WW2). Unemployment during the covid pandemic reached a high of 15% and dropped below 4% less than two years later.

> it just hyperinflated the bubble.

It didn't do that either. Inflation reached an annualized high of 9.1% in June 2022 and is now down to less than 5% less than two years later. That is not hyperinflation. Hyperinflation looks like this:

https://apnews.com/article/argentina-inflation-december-annu...

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