El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

Post by jml7c5 » Mon, Jun 14, 2021, 10:06 AM UTC

willmadden wrote: post #251

rawtxapp wrote: post #144

Earlier quoted context omitted.

> You are 100% incorrect. Bitcoin is wildly deflationary. Therefore it does not encourage an economy to function, it encourages people to hold onto it with white knuckles. It's not oil for the economy, it's sand. In my opinion, that's the biggest lie that people have been made to believe to justify constant stealing of their purchasing power over time. People will always spend money for things they need, they will al…

Correct. Keynesian economics is a fraud we're taught to disguise the fact that we're being robbed. You don't need an inflationary currency for a currency to work. Gold and silver worked just fine for thousands of years, and only ran into problems when corrupt governments and banks printed more paper receipts than they had reserves. Central banking just legalized this practice for private profit, and then the peg to g…

Gold is inflationary. Mining increased amount available by ~2% each year.

Post by thehappypm » Mon, Jun 14, 2021, 4:18 PM UTC

lowkey wrote: post #328

thehappypm wrote: post #327

Earlier quoted context omitted.

Bitcoin is actually inherently shrinking in supply. Once the 21 million are created there can only be coin loss (via lost or destroyed wallets). And a deflationary currency is far from desirable.

I have heard lots of hand-waving arguments for why a deflationary currency is bad, but they have never made much sense to me. A deflationary currency doesn’t mean no one will ever spend or invest. It simply means that there is less forced incentive to spend and consume in order to avoid inflation. Inflationary currencies are like a tilted playing field, they artificially force savers to spend or invest in risky asset…

Since inflation and deflation are just monetary things, things like wages and asset values should move in lockstep with it, and this has historically been true. Wages go up over time, as do things like gold prices and stock indices, in dollar terms.

So why do governments prefer slight inflation? A slight amount of inflation first allows governments to print a bit more money than they're collecting, which allows them to spend a bit more. Comparatively, in a deflationary world, they would need to collect more taxes than they spend, which would be tough both politically and tough for balanced budgets, since government spending is useful.

Deflation would mean that you basically get a net worth bump just from holding on to cash. You would have a real, tangible benefit of not spending money but rather keeping it in a bank account. Money in a bank account does not contribute to productivity. Money spent, or invested in companies doing productive work, is preferable. To counter inflation you at the very least need to invest in something like a CD, which the bank can then use to loan out mortgages and the like, keeping the money flowing.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin