I'm not sure what you mean. There has been continued debasement of the dollar for more than a century. It's lost the large majority of it's original value. Our monetary base has increased massively just this year.
Thousands may be(come) worthless, just like money of the past, e.g. cowrie shells, but the most useful will persist.
It has many of the useful properties of gold and other precious metals like fungibility, immutability, and scarcity, but with the advantage of being infinitely divisible and easily transactable/transportable. By best performing, I mean it was the best performing asset of the last decade, bar none.
If you could build a competing currency with the network and computing power behind bitcoin, you might be on to something, but you need the network effect to succeed. You can't do much with one telephone. As for the backing, I'd ask you what backs the value of gold? Yes, it has some industrial uses, but it's most useful feature are it's abilities to act as sound money. There is no such thing as intrinsic value, only that value that humans assign.
Talking to people about bitcoin has such strong parallels with explaining the Starting Strength method. Most people are mired in the status quo and unwilling to accept that there might just be a better way despite demonstrated results.
Reason I'm asking and wrote what I did the way I did, is from remembering a bit of this country's early history. Are you suggesting we return to the Free Banking currency era of the 1830's - 1860's? Currency notes didn't always mean they were of any value if you tried to exchange it beyond the bounds of the region of the bank where it was printed. How many digital currencies exist right now, and how does their value (your worth) hold up if moving from one to another? I hate to say this or even realize I'm saying it, but some sort of national currency and central bank with oversight must exist. Also, what happens to your currency and value, let alone your ability to trade or access it if we were hit with a solar flare or EMP, either of which could take down our electric and communication grid? You'd have no ability to buy or trade and risk losing everything in a moment. To me, digital currency, or any kind of currency with no backing is just asking for trouble, and I'm very wary of all the claims otherwise.
Printing currency to pay off debts denominated in a foreign currency leads to inflation - Weimar Germany, Zimbabwe, Argentina...Take a look at Japan, they have been the champions of QE, which is the modern euphemism for money printing for close to 20 years, and I think they have had deflation for 13 of those. Ditto for the US, while Bernanke's QE 4,5 trillion QE program hasn't exactly led to deflation, it has not sparked inflation in the least. Ditto for the eurozone since about 2015. In fact, both Japan and the EU's "asset purchase programs" have been so non-inflationary, they have had to run up negative interest rates in order to try to spur economic growth by trying to provoke consumption, but the public has steadfastly refused to follow suit, choosing instead to save their cash, since it doesn't decline in value even with the negative interest rates. And I mean actual cash, there has been an increase of maybe 40 percent of euro notes in circulation ever since the ECB started QE, which is the complete opposite of the new classical dogma: https://arhivanalitika.hr/wp/wp-cont...0_Picture1.png
As far as Japan goes, they are probably the greatest cash holders in the world, remember videos of bags of cash floating in the flood after the Fukushima tsunami. I mean they hold actual cash notes in their mattresses.
Fuck, if shit gets bad enough, even a non-reserve country can run QE without serious damage to its currency, as long as it is doing it internally. Croatia, a nation of 4 million people, with no economy to speak of in worldwide terms, did it in March, and we had no effect on the exchange, because it was done on the internal market, in our currency. With everybody in the world increasing the money supply at the same time, the only thing that is going to happen will be a stagnation at the current level for a few years, which is not great, but hardly the end of the world.
@Laramie
I actually mean that the chance of reserve currency debasement at this point is completely non-existent. The dollar has lost its purchasing power during inflationary years, during speculative years and so on. There danger now is that cash will be stagnant, meaning that holding cash will not make you a ton of money. But forget the previous eras, the 2008 crisis has brought QE firmly into the mainstream in the US. Have you experienced heavily rising prices with the 2.2 trillion Trump stimulus package? And like, there are businesses centered around selling you gold and bitcoin and shit, claiming they are doing it because the fiat system is about to collapse. So why do these fuckers accept dollars and yen and euros for this if they know that the system is going down?
Yes, I am suggesting such a thing. Bitcoin transactions are already regularly accepted throughout the world. Billions of dollars worth have been transferred across international lines with low fees and no government oversight. Our government, and others, have been irresponsible stewards of fiat currency, especially after eliminating the gold standard in the 70s.
If the communications grid catastrophically fails, you won't be accessing your wealth via the traditional banking system either. In that scenario, I wouldn't recommend trading goods or services for Uncle Sam Bux, unless you need to burn the paper for heat.
I think Buterin has a blind spot about the government’s role in guaranteeing a currency. It’s an idea I’ve begun to grapple with somewhat recently. I’d hazard the guess that such guarantees overlap with national identity. I think Coin runs counter to that, and I will further guess that it is antithetical to human psychology.
Blockchain technology is a separate issue. I don’t doubt it can be useful at the implementation level in a myriad of applications.
True. I’ve always wondered what happens, though, when we default? Does the repo man show up with a tugboat and start hauling our aircraft carriers away?
I joke, of course, but truthfully this goes back to the currency being backed by perception and nothing other than what people will trade for it. That’s why, in my opinion, Bitcoin is legitimate even if it is just a string of 1’s and 0’s.
Yes it did. It is outside the consumer goods industries, so it's not measured.
Why Has There Been So Little Consumer Price Inflation? | Mises Wire
Dude, Where's My Inflation? | Mises Wire
Certain asset classes have seen high price inflation: the markets, housing, etc. It seems strange to me that the markets are at all time highs during a "Global Pandemic" when restaurants are at half capacity, millions are on unemployment, and we're printing money by the trillions in order to "stimulate" the economy. Housing prices seem to have surpassed 2008 levels, at least in my neck of the woods. It's incongruous. To be fair, it is a saving grace that the entire world is also printing money. If the dollar loses it's reserve status, which China and Russia are pushing for, its strength will fall.
The fuckers selling gold and bitcoin are acting as middle men and taking the safe route. They take their percentage fees without taking on too much risk the way bookies take their 10% by balancing one side's predictions against the other.