this post was submitted on 02 Nov 2023
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I tried buying something using crypto on Coin base back in the day. Signed up, transferred $100 into Eth, had to wait two or three days for Coinbase to do their due diligence or whatever, and then it was down 50% by the time I could use it. (I think China banned crypto or something?) I just pulled out my credit card and bought the item directly, and never touched crypto again
The problem is that the item you were buying was priced in terms of fiat currency, such as dollars or euros. When items are priced in crypto, then they don't fluctuate, because, for example, one bitcoin will always be one bitcoin, no matter what. Whereas a dollar will not always be a dollar. A dollar in 1914 would have bought a lot more than a dollar does today. The three good monies are silver, gold, and crypto. The first two can only be manipulated by going into space and getting asteroids to get more, and the third can only be manipulated by worldwide community consensus, which is really hard to obtain.
But with a hard coded money supply, you cannot control inflation. The inflation won't be in terms of dollars, it'll be in the number of coins required to buy whatever, you know like how inflation doesn't make euros less valuable versus dollars, it makes euros less valuable versus bread
First off, let me say that I am no monetary expert. Now, with that said, once something like Bitcoin hits its 21 million cap, there will never be any more Bitcoin. So wouldnt thar be deflationary due to lost coins, etc? Now in this case it can be argued this is a bad thing because miners need fees to secure the network. If there are no more coins being released to secure the network, then fees will have to make up for it, and that could drive the cost to transact up, which would be a bad thing. Something like Monero takes another route where 0.6 new Monero will always be released, but that the inflation is asymptotically 0 because that new 0.6 Monero makes up less and less of the entire supply over time. This would allow for the replacement of lost coins as well so that one coin doesn't become infinitely valuable.
Now imagine central bank halving their value to reduce inflation. Its the same thing but you don't have any control over the money you earned spending the time you did to earn that money. If there was an alternate currency which is not controlled by any government or inflation of a single government that crypto currency.