[jonahbenton]

Thank you, agree with that, and actually was not suggesting to stick with medium of exchange for technical considerations. More about product focus. The BTC people have the asset/inflation hedge thing nailed. Leave them to it. Disentangle the things that are money.

Here, prices in the offset ecosystem are going to float because goods are exposed to/sources from the actual money ecosystem. There will be aspects of inflation, both colloquial and technical. It doesn't sound like they understand the claim anyway. Just let it go. Focus on liquidity, fraud, utilization, ergonomics. Get trains riding on those payment rails.

[centimeter]

If there’s no compensating benefit that necessarily requires inflation, why would I (as a rational self-interested person) ever prefer to keep any of my holdings in an inflationary asset? If you can come up with a great inflationary payment system, someone should just copy it but make it deflationary, and it’s instantly better. (Unless there is actually some killer feature that requires inflation.)

[jonahbenton]

Well, I would argue credit is the compensating benefit- and killer feature- that historically goes hand in hand with inflation, and I would say it this way- credit is generally the mechanism by which assets are discovered and incorporated into the economy, thus "inflating" it (not the technical definition of inflation, of course) and benefitting all. Technical definitions of inflation are just various measures of changes of liquidity in the credit economy.

Whether a deflationary payment system is instantly better, for me, that's a philosophical argument, between liquidity and value.

Life is uncertain. Humans take risks, invest, speculate, even just work- they need liquidity to do so, and credit mechanisms and accounting provide a structured way to do so.

I am interested in what Offset discovers, and think there is new value to be discovered in keeping a (necessarily inflationary) credit system separated from the rest of the financial world.

Cheers.

[centimeter]

I think I need to clarify a bit - I'm distinguishing "endogenous" inflation (money printing) from "exogenous" inflation (credit), because credit has natural feedback mechanisms that make it less/not disruptive to pricing.

The presence of credit denominated in some asset does not make the asset "inflationary", even if the effective supply can fluctuate. You can certainly have credit (and concomitant liquidity benefits) in a deflationary asset - this kind of lending happens millions of times every day when people acquire locate for a short sale in the securities market.