For example - if there is more demand for energy, energy prices might go up .. but it helps energy sector .. that is the key argument to support bitcoin despite the fact that it is an energy hog !
Isn't it ?
Discussion
Energy will always be useful when it's needed, and thus it will always have a price and will always be a worthy endeavour for people.
As citizen Pedro said, I think that holders help everyone by contributing to the creation of this future bitcoin standard where prices will be cheaper for everyone (if you’re not a hodler now you won’t get the investment gain, but you still get the benefit of living in a world with ever decreasing lower prices, and all the other consequences related to using perfect engineered money like bitcoin!)
About the energy part, I’m not 100% cause I’m still reading about this, but I think the main point is that btc allows energy that would be wasted anyway (as excess) to be used for mining (incentive). Also, btc searches for the cheapest possible energy, which is renewable, thus promoting use of clean energy.
Bitcoin sure opens up trapped energy but that is not the only benefit .. energy industry has been sluggish for last decade because the demand is consistent .. actually reduced in COVID times .. .
Same thing about Solar. . I invested in First Solar IPO hoping that everyone would grab solar .. but the market never took off .. because supply outstripped demand ..
One downside of bitcoin standard is it promotes a culture of scarcity.. which exactly opposite to the nature of commodities.. you want more wheat .. more grains .. so that poor is well fed ... If the price kept on falling , and Govs couldn't subsidize than no one will produce commodities... A scary situation particularly for the plebs
So you say that btc creates demand for energy thus forcing the existing sluggish energy sector to update and improve?
I don’t think scarcity of money will create scarcity in commodities. This point is expressed very well by Jeff Booth (just listen to some podcast or his book “the price of tomorrow)
Yes on first ..
I have listened to Jeff .. he doesn't focus on commodities per se .. generally falling prices is good .. but commodities behave exact opposite..that is the reason Govs all over the globe subsidized farmers ..
I think the logic is that a true free market (without government intervention) is self regulating, thus always balancing supply and demand.
If people want wheat someone will make it because there is profit to make
Exactly.. profit motivation in commodities is a scary situation for the poor .. and those stuck in commodity production .. natural state of the world is - there is no profit in feeding and clothing eight billion people ! No one does it without tax payer subsidy
It works well for iphones and discretionary spending ...
Argument is simple ... If the value is driven by scarcity..why should you be in mass production ?
I don’t follow you dude…people will always need/want clothes and food, and the market will provide it.
I believe the main thesis is that having hard money that truly reflects value, allows for the market and its participants to self balance because if there is demand for something, someone will always provide it (no need for government subsidy or intervention)
Okay .. let me ask in a different way .. is there any nation where agriculture is not subsidized ? .. like discounted water , discounted or free electricity.. and finally state controlled price to give farmers a basic minimum ?
I guess our disagreement is that you believe that only government can provide this things, while I believe that the free market is also capable to provide this things
If it is left to free market than eggs will be ten dollars a piece :-) .. and wheat shall be 100 dollars a kilo .. why ..because private enterprise works with profit motivation .. profit is direct outcome of scarcity - point in case is #bitcoin - you know very well :-)
Commodities are the exact opposite of scarce mindset .. we want them abundant .. in a scarce mindset ven water and air will be monetised ..
This is the reason , when it comes to inflation , no one cares for inflation in gold or homes or yatchs .. the CPI is computed on a very narrow basket of commodities .. bread , milk , eggs etc ..
Why ? Because if poor people didn't get food and clothes ..they show up on streets .. and rightly so ..
Btw .. it is not something I have discovered.. the reason Nixon was forced to unpeg dollar from gold was exactly the same .. people can still adjust to high prices of commodities.. but they can't take in massive swings in the prices ..
Gold pegged currencies - which follow free market hypothesis - are very inefficient in controlling price swings .. that is exactly why Fed function is very important .. not to say Fed can't be improved .. there are ton of opportunities to improve ... But the function itself can't be eliminated