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please explain how bitcoin's inherent deflationary properties are actually a good thing and not just a ponzi scheme

actually don't, it's just going to be another 100-IQ take like everything else here

I will try it nostr:npub16h43mvfanfmsvkg86vgqwr4h268l23t6034wulepd0m4j3dky9ssraxymy

1️⃣ Scarcity as a Value Driver: Bitcoin is often considered deflationary because there's a limited supply of 21 million coins. This fixed supply, unlike the constantly growing money supply in traditional currencies, can lead to an increase in value as demand grows.

2️⃣ No Inflation: In a system where the money supply is constantly increasing (as with many fiat currencies), the currency loses purchasing power over time. With Bitcoin, this isn't an issue since the quantity is capped.

3️⃣ Not a Ponzi Scheme: A Ponzi scheme relies on deception, where returns for older investors are paid by the capital inflows from new investors. Bitcoin doesn't operate this way. Its value can rise or fall based on market forces of supply and demand, not a fraudulent structure.

4️⃣ Self-Regulating and Transparent: The Bitcoin protocol is open and transparent, and its rules, including its deflationary properties, are clear to everyone.

Bitcoin's deflationary properties make it unique and valuable to some investors, but it's not without risks or criticisms. It's a complex subject, and different people may arrive at different conclusions about the pros and cons.

A comprehensive explanation requires a deeper insight and a more comprehensive understanding, as Bitcoin is an ongoing process (hence the term "rabbit hole").

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victor 2y ago

This screams that it was written by ChatGPT, but I'll bite anyway.

1. Oh, so my "money" becomes more valuable over time no matter what? I guess there's no reason to spend it! I'll HODL it just like everyone else, and nobody will ever use it in the real world.

2. Inflation means I have to spend my money or it becomes worthless. Deflation means I better not spend my money, because it becomes more and more valuable, until newcomers/outsiders just don't even bother with it since the rich people who hold the currency (in this case bitcoin) only get richer while the little guy has to fight for increasingly tiny amounts.

3. Bitcoin's value rises and falls based on the almighty dollar. It is a fancy, fun investment toy. It is nothing more than another ticker on the stock exchange. This is a fact that bitcoin nerds ABSOLUTELY CANNOT come to grips with. Nobody who does bitcoin things actually produces anything of value in the real world; they just buy bitcoin and HODL it because "it just keeps getting more valuable," when in reality the value is only based on speculation and rich investors pumping and dumping it. So yes, not a "Ponzi Scheme" in the classical sense, but still a system that only benefits those on the ground floor.

4. Irrelevant to my question. I know it's transparent. Transparency doesn't make the deflation problem any better. (And, while we're on things irrelevant to my question, the transparency is a double-edged sword resulting in a privacy nightmare that lets bad actors track everything you purchase).

And of course you finish off with a subtly condescending, underhanded "you're too dumb, it would take too long to explain" style comment.

Typical.

DecentralizedDude 2y ago

All the points I have written correspond to reality. One should consider how long Bitcoin has been around and how it has evolved over time. Nowadays, it is so secure that even the most advanced technology couldn't hack it. A 51% attack wouldn't even be in an attacker's interest. Quantum computers are not yet advanced enough, and efforts are already underway to develop protection against quantum cryptography. Take a deep dive into various projects worldwide, and you will notice that it's not just about money. It's also about decentralization, changing lives in countries plagued by dictatorship and hyperinflation. As I mentioned before, Bitcoin is a process. I started as a crypto fan and invested wildly in projects I didn't understand. Now, I have been engaging with Bitcoin for a long time, and I am simply convinced of its potential.