You are viewing a single comment's thread from:

RE: Bitcoin Macroeconomics

in #bitcoin7 years ago (edited)

Hey Brandon, good to see you blogging on here and look forward to seeing a logical voice from outside the echo chamber I fear most of us live in.

I don't have an economics background, so I am hesitant to respond, but I think there are a couple issues with your outlook of probable negative freeroll:

  1. Digital currency isn't necessarily betting on a collapse of governments and existing fiat currencies. It has many other use cases than just medium of exchange (decentralized file storage, computing power lending, smart contracts, store of value, etc), but even as one it has a single better use case of transferring money across borders than individual country currencies. It doesn't need to become the only medium of exchange to grow, and doesn't need to replace the financial system within any individual country.
  2. A global decentralized cryptocurrency with public transaction ledgers held everywhere is very resistant to government action. Digital goods are tough to control, global digital goods without a centralized point are near impossible.

I don't really know how to address your point about governments being unable to fund and sustain themselves being terrible for crypto, but I think it is probably inaccurate; also in this case, the value of our cryptocurrencies (while they would be worth more than fiat) might be the least of our concerns.

Sort:  

I haven't been paying much attention to steemit the last few weeks, I assume the reward system has changed to something linear? My upvotes were worth about $0.20 previously, now much higher.

Yea you are right about the linear voting, also voting power has increase by a factor of five.
Edit: yep I can give myself 0.56 sbd

Re- your last point, see my book Setting Sun for the empirics on this. The US govmt is highly dependent on inflationary monetary policy as a method of funding itself; if alt currency largely took over, and inflation as a source of government funding was no longer an option, government finance would be in an impossible state. On the spending side, the problem is that most expense goes to transfer programs, which are hard to change. On the revenue side, the problem is that, despite trying many different tax regimes, some with tax rates much, much higher than today, the US government has been unable to raise much more than 20% of GDP as tax revenue. Also, presumably, heavy prevalence of alt currency would take away the option of a wealth tax (which I feel is a reasonable option and one that will be increasingly debated).

Points 1 and 2 don't change the fact that alt currency use is strongly against governments' interest. Given that alt currency use is against the govmt interest, they will seek to squash it. The mechanisms for doing this will tend to be random and unfair, but they can get it done in my opinion.