Bitcoin Is a Terrible Currency, and Not for the Reason You May Think

I don't find this argument persuasive. If the currency is liquid, you can simply spend the new currency rather than the old, while using the old currency you would have otherwise spent to acquire the new currency. The spending will have negligible impact on your investment outcomes, and you'll be supporting the currency that you're investing in.

Bitcoin is only hyperdeflationary because it's being pumped, to my mind. It's mostly used as an investment and speculation tool, not as a currency, that is, not for paying for goods and services.

It's not (yet) "digital gold", but rather "digital tulips" [1].

[1]: https://en.wikipedia.org/wiki/Tulip_mania

Agree. BTC is now a speculative tool similar to gold. If you want something that is more like a currency then bitcoin cash is better. The fees are like one penny.

Also I don't think the deflationary is an issue because of how fast crypto can change hands. For example, I go to buy a t-shirt for $10 and I pay the merchant $10 equivalent in bitcoin cash. The transaction confirms in 10 minutes or less and the merchant can send the crypto to an exchange to immediately convert it to fiat or any other crypto of their choice. Also most likely in the future, merchants will use some sort of centralized payment processor so when the buyer pays and the transaction confirms the seller immediately gets fiat cash instead of crypto, assuming they want fiat of course.

So the whole idea that crypto doesn't work as a currency is mostly a moot point IMO. Most people are thinking about that issue from a macroeconomic perspective as in if one crypto was used as the official currency. The days of that is coming to an end IMO. The future is going to be multiple cryptocurrencies competing with traditional fiats. The payment processors of the future will be able to process hundreds of different medium of exchanges through their point of sale system. A merchant has nothing to lose by accepting 100 different medium of exchanges if the other medium of exchanges are simply be converted to whatever the merchant's ideal store of value is.

Then it simply comes down to individual merchants and consumers deciding what medium of exchange to use and that is good for everyone. More freedoms is better. I think we can all agree on that.

Tulips are a dumb analogy. There, I said it.

Tulips come from seeds and are ornamental, once they are dead they can no longer be traded for value. There is no limit to the world-wide supply of tulips, and there is no such thing as distributed international observation and participation in tulips.

To further my antagonist response, the Smithsonian Mag recently did a report explaining that Tulip Mania was also not really a Tulip Mania and that reports were highly exaggerated; an author of a recent book on that time claims that there really is no lesson to learn from Tulip Mania, as tempting as the comparison may be.

https://www.smithsonianmag.com/history/there-never-was-real-...

Bitcoin doesn't inflate enough, so there's no incentive to spend it.