[young_unixer]

Yes. Cryptocurrencies are used because they're the only market that hasn't yet been regulated to death. People come to Bitcoin for 2 reasons, mainly:

1. It's a practical way to store value without the government destroying it by monetary emission.

2. People are free to speculate.

The solution to the first point is that governments should stop pulling the rug from under people's feet. Monetary emission should be predictable in the short, medium, and long term, or be tied to some real world indicator, like the cost of consumer goods. Just stop with this inflationary nonsense.

Problem 2 will be partially solved by time. Relative price changes in Bitcoin are reduced each cycle, so by the year 2030 the incentive to speculate in the short term will be much smaller. We will see it more as a long term investment. Another solution is to deregulate other markets so that we can freely speculate in them and stop putting as much attention to Bitcoin, but I don't think politicians are very eager to do that, and it could also have some negative consequences.

[jrek]

Monetary emission is already tied to the cost of consumer goods. Central banks make interest rate and reserve requirement changes that regulate growth in money supply. Those changes are aimed, in part, at achieving a price inflation target.

And price inflation, which is the relevant metric (as opposed to monetary inflation) in the context of a claim that the government destroys value, has been extremely predictable for 20 years.

This comes up again and again in bitcoin discussions. Money supply has to grow for price stability and to avoid deflation. This also applied even when there was gold convertibility.

What exactly is your issue with a growing money supply?

[vkou]

> What exactly is your issue with a growing money supply?

The primary issue is that simply sitting on a dragon's hoard of money should entitle me to a bigger share of the world's wealth, as time goes on, rather than a smaller share.

[Applejinx]

Socially, why? I could see making the argument for 'the same share, in perpetuity' as that is kind of the whole idea of what money is: parking value in some way.

Why bigger, exactly? What is the justification?

[XorNot]

Sarcasm (I presume) doesn't transfer well on the internet. The parent is pointing out the absurdity of the whole idea of deflationary currency: sit and do nothing, and force the next generation to turn over more of their productivity then you ever produced.

[arcticbull]

> The solution to the first point is that governments should stop pulling the rug from under people's feet. Monetary emission should be predictable in the short, medium, and long term, or be tied to some real world indicator, like the cost of consumer goods. Just stop with this inflationary nonsense.

That's literally exactly how it works right now lol.

> Freedom to speculate.

Have you seen the options market.

[bb88]

> 1. It's a practical way to store value without the government destroying it by monetary emission.

> 2. People are free to speculate.

So it's a store of value that's destroyable by speculation. That's, if anything, worse than the US Dollar.

[puchatek]

Doesn't look destroyable in the long-term

[cromwellian]

If some flaw is discovered in SHA-256 or other parts of the algorithm, like how MD-5 and SHA-1 had weaknesses, overnight the value goes to zero. Or if a basic widespread exploitable bug was found in most bitcoin stacks like Heartbleed, that went unnoticed, boom, value evaporated overnight.

You can based the entire world monetary economy on a single point of failure like this.

[celticninja]

This is true, it is also true that no implementation breaking bugs have been found for a long time and you can also be sure that there are any number of people constantly looking for ways in which to exploit bitcoins codebase to either steal, destroy or create new coins.

[ben_w]

Neither do tulips, doesn’t make them “a good unit of currency” or “not a massive bubble”.

But the core point bb88 was making is that it can serve at most one of those two goals: “store of value” and “good for speculation” are mutually exclusive. Something can be neither, nothing can be both.

[cromwellian]

Oh come on. My portfolio is safer in a diversified basket of stocks, bonds, real estate and other holdings than it is in bitcoin.

> we can freely speculate

Right, because that worked oh so well for Long Term Capital Management, or the 2008 Housing Crisis, or the Great Depression, or Dutch Tulips, or...

This libertarian, nay, Austrian, fantasy that if only we would deregulate everything, these incredible damaging boom/bust cycles and disappear and everything would be smoothed out are a discredited zombie theory that never dies.

[jokethrowaway]

While I agree with you on Bitcoin safety (your portfolio is safer because the only thing keeping BTC up is speculation), I don't think you can say the Austrian school is fantasy.

It hasn't been attempted and I think deregulation / decentralization of the economy has good chances of getting rid of boom/bust cycles.

Without a central bank playing with credit you wouldn't have boom / bust cycles: what's more likely is that you'll find smaller players doing boom / bust cycles in different industries with far less damaging effects.

I sympathise with the libertarian ideas behind BTC, but it's also the most inefficient and power hungry way of reaching the goal. This is a political problem and we need to solve it politically, not technically.

[ISL]

Boom/bust cycles preceded central banks.

[jokethrowaway]

Sure, but the problem was similar: unbacked money printed by banks and used to prop up the economy.

[arcticbull]

And they were a lot worse when no tools existed to mitigate.

[collyw]

Doesn't that make it a target for regulation, at which point it's value is likely to go down?