Agree Bitcoin is way too volatile currently to consider currency. Other competitors are doing a little better, but it's still very early. I think we will get there. The currency use case is definitely the hardest by far to crack.
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Replying to @aboodman @ErikArvidsson
It's worse than that: purchasing-power volatility is *built in* to most of these systems. You can't say "audit the Fed!" and then imagine that somehow crypto-whatever-these-things-are will deliver us from inflation (volatility) with zero evidence.
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Replying to @slightlylate @ErikArvidsson
I don't agree that purchasing power volatility is "built in". Can you justify that?
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Replying to @aboodman @ErikArvidsson
Deflationary effect is basically key to mining. Or do I misunderstand the artificial scarcity of coin mining divorced from productive allocation of capital?
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Replying to @slightlylate @ErikArvidsson
There's a difference between volatility and (predictable) inflation or deflation. USD inflates predictably, it's not considered volatile. It doesn't seem likely to me that either volatility or deflation is inherent to crypto.
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Not personally bought off on "currency needs to inflate at 3% per year" but seems like such a thing might be implementable. Much more important is low volatility, which seems could emerge as market size matures (gold has relatively lower vol and still tiny market)
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Replying to @aboodman @ErikArvidsson
Predictability is literally the opposite of volatility. The thing to watch is the long-term effectiveness of the Fed on this. Meanwhile in crypto-speculation...
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Replying to @slightlylate @ErikArvidsson
I asked you to justify that volatility was intrinsic to crypto. You responded that deflationary effect was intrinsic. But it sounds like we both agree this isn't the same as volatility?
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Replying to @aboodman @ErikArvidsson
Deflationary effect is built into mining scarcity as only supply source.
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It’s basic to bitcoin model: limited total supply == higher prices over time. That’s deflation.
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Volatility is predictable side effect: rising prices make this a speculative asset class.
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