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Comment by bloppe | Hacker News Reader

To understand the initial arguments, look no further than the Genesis block, which includes this text:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

In many rich countries, all signs point to nasty inflation for the foreseeable future. Bitcoin is inflation-proof because there is no central bank that can print more Bitcoin. Having a secure system with that property means accepting some tradeoffs in terms of usability and efficiency, compared to a centralized database.

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> there is no central bank that can print more Bitcoin

It turns out this doesn't matter: you can't hear the inflation argument over the volatility. The amount of goods you can buy per Bitcoin changes dramatically on a month by month basis. It's just that everyone loved it while it was going up, but that's not actually guaranteed!

Also, you can't print more Bitcoin, but that doesn't matter: you can fork it (people have, BCH), or you can just endlessly spawn new token chains, or you can have things which both sides regard as abominations but are somehow immensely popular: stablecoins. These give you the legal stability of crypto tied to the price stability of the dollar. It turns out that what people actually wanted was several hundred billion dollars of virtual poker chips.

but there's no compounding interest. no dividend based on future cashflows.

holding stocks of a diverse index seems better on the long run, no?

Check out how $100 put in bank deposits or S&P500 have done versus gold over the last 50 years. You will find that these do not generate real returns when measured against sound currency either.

$100 put into S&P 500 in 1975 would be about $7500 today, or about $1250 in 1975 dollars.

$100 put into gold in 1975 would be about $2600 today, or about $440 in 1975 dollars.

S&P 500 would have had 3x the returns of gold.

check your numbers with a purchase date of 1971.

I'm not sure how you reached this conclusion. I did as you suggested. $100 invested 50 years ago into gold would be worth $3000 today. $100 invested into the S&P500 50 years ago would be worth $6870.

https://www.macrotrends.net/2324/sp-500-historical-chart-dat... https://www.macrotrends.net/1333/historical-gold-prices-100-...

Indeed. The crypto crowd seems to assume that the options for your savings are cash or bank deposits, or crypto. That's nonsense. A balanced portfolio of stocks (with some bonds maybe to reduce vol and improve your Sharpe Ratio) handily beats inflation. Heck, even bonds alone have mostly had positive real yields.

This also supports and funds the productive economy, unlike crypto.

Not using your cash also helps the economy. More exchange of money means more velocity means decrease of value of the money.

By not using your cash (by for example holding crypto) you’re making the money that circulates higher value

Until you hold a passport of one of the US enemy states, which are plenty of and have permanent risk of getting your account frozen and money stolen.

Crypto doesn't have this issue.

Usually, yes. But the government can still tank the economy in all sorts of ways. It happens more frequently in some countries than others, but it can happen anywhere.

If you only care about inflation, real-estate in desirable locations is also inflation-proof. You can't print more land in San Francisco, London or Hong Kong.

Clearly crypto is more accessible to more people than is San Francisco, London, or Hong Kong real estate.

Way less liquidity and way more administrative overhead, but sure

Yeah but you can also have a disaster strike in that place (say, a nuclear accident) that will obliterate your real-estate value. Or general society changes that will make a city much less desirable (see the "rust belt"). Of course, nothing is without risk - so in that sense, it's not surprising that real-estate has risks. But that's what I wanted to underline, nothing is "inflation-proof". There's no guaranteed way to preserve wealth (much less increase it). None.

While there is no bulletproof way to preserve wealth real-estate is one of the most sound one compared to others. A nuclear accident can be insured and general social decline happens over many years or even decades that gives plenty of time to react.

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