[roenxi]

It isn't a terrible currency because of the fixed supply pattern though; it is too volatile because there isn't a consensus on how to price it yet. At some point it'll be more like gold where the value of crypto is obvious and understood. And I think the major problem is it is too risky, a fat-finger mistake can deplete an entire wallet with technically no recourse.

[littlestymaar]

Gold is also a terrible currency in today's world, that's why it has been abandoned by everyone during the last century.

Of course bitcoin is broken in many additional ways, but the economics doesn't make sense in the first place. (And it was created and promoted by people who were confident that the Fed's intervention in 2008 was going to trigger hyperinflation, what happened in the following decade should give you a pointer how economically literate these people are).

[detourdog]

I believed that for a long time but I have come around that to the idea that it makes sense to have physical gold like a secondary savings account. I now understand how gold can be personally useful during normal economic times.

[JumpCrisscross]

> makes sense to have physical gold like a secondary savings account

That’s fine. That’s a store of value. Stocks and bonds aren’t currencies either.

[roenxi]

> Gold is also a terrible currency in today's world, that's why it has been abandoned by everyone during the last century.

Open to question how bad though; there isn't really such a thing as a good currency. If the argument is that the US dollar is the best we have it is a bit of a disaster; it can't even be used to compare values over a 12 month span, the inflation is significant. And as I recall the abandoning done in the US was because because Nixon said the US government wasn't winning the game and flipped the table as opposed to any fair process, vote or even market consensus that gold was a bad idea.

I'd agree if the argument was to anchor currency value to an energy commodity to preserve some sort of $/Joule energy measure. That'd be really helpful for using money to track value. I'm still not sure why people are so unhappy at the idea of using money to track some constant amount of value.

[sobellian]

The point of a currency is not to experience zero inflation, it is to facilitate commerce as a medium of exchange. If you want to save, buy appreciating assets.

> I'm still not sure why people are so unhappy at the idea of using money to track some constant amount of value.

What's the grand cosmic purpose of having something that holds a "constant amount of value" (whatever that means)?

[roenxi]

> What's the grand cosmic purpose of having something that holds a "constant amount of value" (whatever that means)?

Well, if a sandwich shop was selling sandwiches for $10 last year and $11 this year, it'd be convenient for me to have a way of telling if the real price of a sandwich has gone up without needing to do any calculations and look up statistical data. I think most people would benefit from that sort of comparative power to be honest; it is difficult to keep track of whether the offers being made are better or worse value as time passes. If the value of money were constant, then a $11 sandwich in 2024 would be guaranteed more expensive than a $10 sandwich in 2023.

I've talked to several people who are convinced the economy would collapse if that sort of constant pricing was normal practice. I have reservations about their claims.

[SiempreViernes]

But what purpose does the "constant value object" serve here? To evaluate if the real sandwich price has changed you need information about the sandwich (and the rest of the economy)...

[roenxi]

Seems like the easy way to get close to a 0-inflation policy. How would you get close to a situation where the price going from $10 to $11 indicated that the real price of a sandwich had risen?

[JumpCrisscross]

> it'd be convenient for me to have a way of telling if the real price of a sandwich has gone up without needing to do any calculations and look up statistical data

This is the core problem of economics. If we solve it, we solve, well, the economy. Nobody would need to buy anything; we could just produce and send everyone what we know they want. No need to consider unpredictable variations in individual choice and discretion.

Of course when you include that pesky individualism, this model breaks down. Because it becomes impossible to structure production today to perfectly meet demand tomorrow. Making currency transformations across eons breaks down because it doesn’t make sense to ask how many talents of silver Caesar would have paid for an iPhone.

> talked to several people who are convinced the economy would collapse if that sort of constant pricing was normal practice

No? Are you confusing what you described—which is the aim of price-level targeting—with fixed-price policy?

[roenxi]

> No? Are you confusing what you described—which is the aim of price-level targeting—with fixed-price policy?

There are people who seem to literally believe that without inflation people will refuse to invest in anything and choose to return to a cave-dwelling existence. I don't know how prevalent they are, but they turn up in these sort of threads.

[zie]

Because when the world blows up, people need someone to step in and get the system going again. If they don't it will take forever to get the economy going again.

See the GFC as an example. The US economy was about to implode, but the govt stepped in and said, heck no, not on my watch and fixed it. Instead of taking many many decades to right itself, we did it in 1 and the US govt made a nice profit to boot.

A counter point is Japan, they chose not to fix their capital markets and it's 30+yrs later and they finally are getting back on track.

[lupire]

Why on earth would you expect something literally called "currency" to have any longitudinal attribute in time? Currency is meant to be used immediately. That's it's entire value proposition, as the lubricant of trade. If your time horizon is longer, you shouldn't be holding your assets in currency.

[littlestymaar]

I'm going to stop here because of Brandolini's law. But I'd recommend you to read non-Austrian stuff on money.

At this point it's pretty clear that you have very strong opinions on stuff you have very shallow familiarity with, and the only way to fix that is to actually try understanding how the system works.

[lupire]

What is the unit of value? It doesn't exist.