Definancialization / Hyperfinancialization | Hacker News Reader

Definancialization / Hyperfinancialization

mylessnider.com

16 pointsalexgiann17 comments

This article is manifest nonsense. It's the usual "fiat" money is bad and bitcoin is good story, heavily salted with a series of non-sequiturs.

They can't even get the simplest of facts right. The government doesn't "print" money, it has no ability to do that. The Fed can create and destroy money and it does so for carefully considered reasons and with a well defined strategy.

Bitcoin adherents don't want to know that because they're in the business of starting with their conclusion, and desperately working backwards in any possible way they can.

One of the claim made here is that we are wasting time putting our money to work. I would argue the contrary. In a world where people are just putting their savings under their mattress, it's a shame.

Money is energy. Instead of let it aside "in case we need it later", it should help other people to grow, and give them an extra pair of hands.

If we don't want to waste time looking at where to invest it, then taxes to put dormant money into a sovereign fund, which in return will give out the interest in the form of social measures, is something that can be done as well.

Two questions for the author,

You say bitcoin can’t be debased. How is that true? Aren’t there a few big holders of btc?

If they decide to exit all at once wouldn’t the value crash?

And in the last paragraph you mention “the core value proposition of bitcoin”

What do you believe that is?

Those "few big holders" havent created any of their own BTC, they just own a part of the 21 million BTC that can exist- if they sell, sure the price might fall, but its not debasement like with the USD where they just print more dollars, 'out of thin air'

Is there a practical difference?

“The price may fall” is a nice way to say “the value would be mostly erased”

Like with any store of value, the value of bitcoin is backed by the fact that people believe it holds value.

Unlike gold, however, bitcoin has no practical value in and of itself. (Gold, at least, looks pretty and doesn’t really decay. It’s a great conductor of electricity too)

Bitcoin also isn’t as eternal as gold. In a doomsday scenario where global internet access goes down, gold would still work, bitcoin would not.

You can’t debase gold either.

So what value does bitcoin have? It’s easier to transfer, maybe? (One must compete with gas prices IIRC)

“the value would be mostly erased” implies that the price goes down to 0, which is alot more extreme than price fluctuation. Gold wouldnt survive your doomsday scenario either, if youre going that far to find the fault in bitcoin then you will also have to concede that your gold is just going to be a metal, worthless in a scenario where guns and bullets mean holding power, no matter how pretty it looks or which technologies depend on it.

So perhaps bullets would be the best store of value?

if you expect doomsday to come anytime soon, sure

Metro had it right

> “the value would be mostly erased” implies that the price goes down to 0

No, it means the value would be much much closer to 0 than it is now. That’s why I said “mostly erased” and not “entirely erased”

> Gold wouldnt survive your doomsday scenario either

Yes it would… if the internet goes down, gold will still “survive.”

It’s not going anywhere…

> if youre going that far to find the fault in bitcoin then you will also have to concede that your gold is just going to be a metal

“a metal” has inherent value as a material. A record in a digital ledger does not…

> worthless in a scenario where guns and bullets mean holding power, no matter how pretty it looks or which technologies depend on it.

You say that, but historically gold was valuable even though technology didn’t depend on it and even though guns existed. Even before that, actually.

It’s strange that I need to explain that…

inherent value as a material assuming there is a market to sell it at, no? We were talking about your doomsday scenarios, no internet and all, which means there wont be a market. So yes, even if it "survives", its just a metal. No inherent value except maybe when civilization is rebuilt we can use it to make technology. Historically gold was valuable because it was somewhat rare and you could barter with it.

> no internet and all, which means there wont be a market

Please tell me that you know that markets have existed and exist without the internet.

In those markets, gold is and was valued…

> Historically gold was valuable because it was somewhat rare and you could barter with it.

Historically and currently. The existence of the internet doesn’t change that…

Now add Tether into the equation. RIP Nikolai Mushegian.

How is it "debasement"? People create bitcoin for no particular reason except that they can and the Fed creates (and destroys) money as a part of managing the currency.

Bitcoin has wild swings in value just because. It has no inherent value so it can be priced at anything. Meanwhile the Fed manages the USD to keep the currency stable, ie avoiding inflation or deflation as much as possible.

You can't debase bitcoin because it has no basis to begin with.

> People have been convinced that they need to “put their money to work,” “make their money grow,” “own productive assets,” and “earn yield.” Lewis argues that the reason for this is money printing. The government prints money, the money supply grows, prices increase, and the purchasing power of any money held as savings decreases. If you’re just holding money, you’re bleeding value.

Controlled inflation is what the author is describing. I think the importance is that it provides the slope that keeps the economy from stagnation.

Lest we forget, the US intentionally moved away from the pension system. Reduction of labor unions, changes in tax law in reference to 401k plans and creation of IRAs — these are the decisions that shaped the current economic system.

It is disturbing that this is being framed as a conspiracy, while not describing the reasons behind it. Stagnant “dark money” pools are a grim idea for future economics.

There are financial instruments that adjust what you have in them with the inflation or something close enough, they may be a better way to protect the value of your savings.

And about the safety of bitcoins, during a free fall drop of bitcoins value in 2022 Coinbase suspended withdrawals.

I love how one of the most volatile assets on earth—- which could also be made illegal—-is a more viable alternative to real estate or equity for wealth preservation.

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