“Unlike private bonds or government bonds, which promise a future payment or stream of payments, or a stock claim, which provides a future stream of dividends, fiat money has no intrinsic value.” -@stlouisfed
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2/ A refreshingly frank discussion of
#bitcoin and fiat from the@stlouisfed here: https://research.stlouisfed.org/publications/review/2018/02/13/is-bitcoin-a-waste-of-resources/ … Warning: it’s not all bullish.7 replies 18 retweets 52 likesShow this thread -
3/ To start, it was amazing to read the
@stlouisfed’s frankness on fiat: “It is purely a bubble: We value it only because we expect other people to accept it in exchange in the future.”3 replies 19 retweets 47 likesShow this thread -
4/ Equal frankness from
@stlouisfed on$BTC: “Bitcoin's designers may have successfully set up a system in which#Bitcoin could be valued, but they certainly did not provide the mechanism—elasticity—that would create price stability.”6 replies 6 retweets 30 likesShow this thread -
5/ As I’ve said many times before, $BTC’s volatility will drop over time as liquidity builds, but I doubt it will ever hit the low short-term volatility levels seen in most fiat given its inelastic supply.
6 replies 10 retweets 29 likesShow this thread -
6/ Such a lack of price stability mechanism is a long term argument against
#bitcoin’s viability as a medium of exchange.2 replies 10 retweets 31 likesShow this thread -
7/ And so while I agree
#bitcoin’s supply (disinflationary going on deflationary) is constructed for it to be an amazing store of value, that will likely be at the expense of its use as a medium of exchange.19 replies 21 retweets 66 likesShow this thread -
Replying to @cburniske
Did gold have a (relatively) un-stable price when it was more commonly used as an MoE? Or did the small amount of supply elasticity help stabilize the price?
1 reply 0 retweets 0 likes
Gold isn’t AS deflationary as Bitcoin’s will be. Gold’s inflation is around 1.5-2% per year.
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