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by seibelj
2027 days ago
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I disagree on both points. The US government has deemed US dollars to be the only thing that can be used to pay taxes, so therefore it has some root value. On commodities, if there is strong demand for gold, uranium, corn, etc. the market can respond and invest more capital into creating them. Bitcoin - not so. No matter how much more capital is invested in mining, the rate of inflation is fixed, and the pie is just split differently. But there cannot be an influx of new Bitcoin above what is specified in the protocol. |
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This is incorrect. Just because we pay taxes in dollars doesn't give it any intrinsic value. It has been decreed by the US government that we do so but that doesn't change the underlying fact that the dollar is based on… nothing other than a promise of the government that it's useful.
Because more gold can be mined and more dollars can be printed, each block of gold and dollar loses value, because they're not scarce.
A dollar in 1913 had the same buying power as $26 in 2020 [1]. Bitcoin is hard money; it can't be deflated and it can't lose buying power like all fiat currencies do.
[1]: https://www.thebalance.com/what-is-the-value-of-a-dollar-tod...