Yes. But crypto allowing for controled inflation that is needed for borrowing at reasonable interest rate has not emerged yet.https://twitter.com/MustStopMurad/status/993906998898036736 …
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Basic economics. You borrow 100 coins. Year later lender has to recieve some 105 (to profit and cover for risk). If the value of the coin increased by 20% due to fixed supply you are paying real interest rate of 25%. Unbearable.
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Wouldn’t Bitcoin’s value at final equilibrium grow at 3-4% purhasing power per year?
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Under some conditions it would grow at the pace of global real GDP, so yes. Conditions: that come to mind: 1) Stable velocity of money (BTC) (Unpredictable in long run IMHO). 2) Final equilibrium = Other forms of money/assets that are being replaced by BTC no longer exist.
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so it wouldn’t jump by a “sudden 20%”, wouldn’t be a “roughly predictable 3%” which would be factored into the loans/credit?
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1) I'm not sure if I understand the questions. Few more ideas: a) Final equilibrium can be a dynamic one (oscillating between complete dominance and some competition. Competing inflationary currency would be self defeating as its rise would diminish BTC's deflation.
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2) b) 3% deflation makes borrowing expensive, definitely encouraging other forms of money. c) You can model volatility, there is enough data and the general fact that volatility decreases with rising number of users is already obvious.
End of conversation
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