If you live in a country with a crappy gov/central bank, why store your wealth in a non-productive money asset if you can access a productive asset like S&P 500 or some other equity index instead?
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But then also zero upside potential (or basically zero)
Mostly correct. But the reason we hold money is because of future uncertainty. In a sound money scenario, holders of money would receive a slight 'growth deflation' benefit to holding money anyway - i.e. real cost of goods/services falls over time
![MuchBitcoin⚡[patch/upgrade ur bitcoin core client]](https://pbs.twimg.com/profile_images/539111913020325888/jrnjQgFB_normal.png)
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Not sure I understand: the implied return then comes because (due to deflation) they can buy more stuff?
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Yes, under a sound money standard, we should anticipate our money has a slight appreciation in real purchasing power Contrast that with now where holding fiat gives you a slight loss every year
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Ah! Just wanted to ask about inflation. Also: what do you mean by "sound money"? This rather random Google search isn't helpful
pic.twitter.com/oHJV7rmL72
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sound money refers to money chosen on the market for money (w/o govt intervention). Sound money can be contrasted with fiat/easy money. If you're interested to learn more, maybe check out my podcast series here:https://stephanlivera.com/2018/07/26/launching-podcast-slp1-saifedean-ammous/ …
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sounds good - bookmarked :)
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Bitcoin will eventually become deflationary because people lose private keys, leave dust amounts on old addresses, etc.
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Agree on the dust part. Unsure about losing keys: under the assumption that bitcoin= new money, storage systems will improve.
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It’s not hard. If there’s an amt of economic activity that grows on avg 3-5%/y using a fixed supply currency, how much would the value of that currency grow (on avg over time)? Compare that to losing 3-10%/y in fiat to inflation. This is why people, given a choice, will-> scarce$
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