He/Him

Evil tankie and Stalin’s little spoon

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Joined 2 years ago
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Cake day: June 20th, 2023

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  • Why deflation is bad: deflation means that as time goes on the same amount of money is worth more. This means that a viable way to invest the money is to hold onto it. Say there is yearly deflation of 4%, that means any investment which has a return lower than 4% is losing you money. Additionally intelligent consumers will cut down on purchases since they can buy more for less later. This leads to economic slowdowns and can self compound if suppliers decide to lower prices.

    This is one reason why countries like inflation, it encourages spending and investment.

    Bitcoin and similar crypto require new coins to validate all previous coins and interactions. Each new coin is exponentially more expensive than the previous. Therefore Bitcoin wealth is extremely stratified to early adopters who built up a collection before the value became this obscene.