[nordsieck]

> As has been remarked over and over again, they don't solve any above board problem more efficiently or with lower expense than existing technologies.

If you mean by that, it's possible to have a fiat currency with no dilution, that is true.

Crypto currencies are fundamentally a political innovation; it is much more politically expensive to force dilution onto a crypto-currency than a fiat one. Whether that's valuable enough, I suppose we'll see.

[chii]

> a political innovation

if a regime is threatened with removal of a sovereign power (issuance of currency), i'm sure they will forcifully retake that power by outlawing the means of doing so. Bitcoin is of no exception. political problems can only be solved with political tools, not technological tools.

[nordsieck]

> political problems can only be solved with political tools, not technological tools.

Yes and no. Some technology changes the balance of power.

One of the best examples is the innovation of gunpowder weapons and the rise of democracy. It's not the case that the invention of the musket and cannon was solely responsible for the fall of monarchy and the rise of democracy. But it certainly helped.

Is crypto-currency that sort of innovation? I guess we'll find out.

[geekpowa]

Dilution / inflation is a feature not a bug. Money should be put to work doing productive stuff in the economy, not hoarded.

Also crypto currencies, are not currencies. They are commodities. It is far more accurate, conceptually to think about them the same as precious metals and grains, not dollars.

[nordsieck]

> Dilution / inflation is a feature not a bug. Money should be put to work doing productive stuff in the economy, not hoarded.

There are few people who are interested in crypto-currency and have not heard this argument in many forms. Crypto-currency fans generally either don't care or don't think it's true.

[chii]

whether crypto fans think or believe it to be false (or not care) is irrelevant. Crypto has only shown the characteristics of a speculative commodity (like gold), and the laws of economics are as universal as any other law - bitcoins cannot become a currency unless it is done by fiat (like how china is exploring doing so right now, but with their own version of a crypto-currency where they control the chain).

[hnews_account_1]

> the laws of economics are as universal as any other law

No they are not.

Can people please stop and think for a second before they vomit everything on their minds onto the keyboard and hit enter as fast as they possibly can in an attempt to make themselves heard in the noise?

See what that looks like? Think about these things before you write them. Physical laws are immutable. If they not, they aren't a law. Economics is entire a human endeavour. The laws are what we want them to be.

Now I'm not justifying anything crypto related with that statement. I'm just saying you need to think before you type.

[chii]

> Economics is entire a human endeavour. The laws are what we want them to be.

no, that's just wishful thinking. Laws of economics are a description of human behaviour, and unless the human condition changes, it will always reflect self-interest and greed. Physical laws aren't "laws" in the same sense as human laws, but descriptions. Economic laws are the same; they describe what people would do under different incentivization schemes.

In this case, despite the proponents of crypto wanting it to be a currency, it has still languished as a commodity. This is due to the economics of using it, the interactions of it with the wider economy, and various other factors that i've termed under the umbrella of 'law of economics'.

[vinniejames]

There are no laws of economics, only unprovable theories subject to irrational markets and human behavior

[jerry1979]

If crypto's legacy plateaus at "digital gold" I'll feel satisfied.

[hnews_account_1]

> Dilution / inflation is a feature not a bug.

This is not true. We have simply adopted a system where it is a feature. We did not have steady enforced inflation until the 1950s. There are entire schools of economics that believe the concept of controlled inflation should be relegated to the past, and replaced with market ruled inflation / deflation.

I'm not saying I understand how such a fictional world will work (and I am a finance professional so I understand this very well already), but people always saying "inflation is necessary" are people with no imagination who don't look at history.

Greenspan thought we'd solved the problem when he realised he could just keep lowering interest rates and growth will keep on happening. Turns out Bretton Woods withdrawal and the stagflation of late 70s gave enough cushion for him to test his hare brained schemes on the world and lead to the explosion of growth that came afterward. And then 2008 happened. Turns out Mr.Yes-Market was wrong all along.

[geekpowa]

Inflation is an emergent property of money. It isn't set or enforced it just naturally happens because of money. Monetary policy can be set to try to corral it to certain ranges based on economic beliefs about what rate of inflation implies in terms of growth and risk.

2008 happened because of bad debt. That the bad debt was cheap debt certainly poured fuel on the fire, yet the fundamental issue was deregulation and high risk lending practices that followed from that deregulation.

[hnews_account_1]

> Inflation is an emergent property of money. It isn't set or enforced it just naturally happens because of money.

All of this is wrong. Inflation is a supply / demand problem plain and simple. It has nothing to do with money. What money does have to do with it is when the fed devalues the dollar to drive up inflation. It is not natural. It is clearly controlled. If the fed didn't exist, we'd face both inflation and deflation only based on supply and demand. So we'd never have a steady increase in prices (unless the royal mint of our fantasy land was really opening up the spigots, in which case they're the same as the fed).

> 2008 happened because of bad debt.

Yes. But what people don't see is the sequence of events that led to it. If you're in finance, it's blatantly obvious, but outside it, it's shrouded in mist because no one famous will put it in an understandable form.

2008 happened primarily because of Alan Greenspan. What people don't realise is that none of the world leaders since the 1980s have done anything of consequence compared to what Greenspan did. His policy of "let's just keep the pumps open" have inflated markets and literally powered this exponential tech growth we're seeing now. My conjecture is that it'll stall out. Money doesn't grow on trees however much we may want it to.

2008 was the culmination of this 3 decade long money pump. But what did the fed do when it realised 2008 was happening? Oh that's right - it pumped even more money. But that's a topic for another time.

[aeternum]

Debt levels are now higher than 2008 levels, what's different? https://www.marketwatch.com/story/us-consumer-debt-is-now-br...