💥𝗙𝗨𝗗 𝗙𝗥𝗜𝗗𝗔𝗬💥

It's that time of the week again.

On this weeks' edition, we have the following question:

𝗙𝗨𝗗:

𝘐𝘴𝘯'𝘵 𝘉𝘪𝘵𝘤𝘰𝘪𝘯'𝘴 𝘧𝘪𝘹𝘦𝘥 𝘴𝘶𝘱𝘱𝘭𝘺 𝘢 𝘱𝘳𝘰𝘣𝘭𝘦𝘮? 𝘞𝘰𝘯'𝘵 𝘪𝘵 𝘭𝘦𝘢𝘥 𝘵𝘰 𝘥𝘦𝘧𝘭𝘢𝘵𝘪𝘰𝘯, 𝘩𝘰𝘢𝘳𝘥𝘪𝘯𝘨, 𝘢𝘯𝘥 𝘦𝘤𝘰𝘯𝘰𝘮𝘪𝘤 𝘴𝘵𝘢𝘨𝘯𝘢𝘵𝘪𝘰𝘯?

Here is my response:

(𝘉𝘰𝘰𝘬𝘮𝘢𝘳𝘬 𝘪𝘵)

𝗙𝗨𝗗 𝗕𝘂𝘀𝘁𝗲𝗿:

This common objection to Bitcoin's fixed supply stems from misconceptions rooted in mainstream economic theories. The fear of deflationary spirals, where decreased spending leads to decreased prices, further causing decreased spending and so on, is largely a product of observing economies heavily influenced by central bank policies.

In reality, 𝗱𝗲𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗶𝘀 𝗡𝗢𝗧 𝗶𝗻𝗵𝗲𝗿𝗲𝗻𝘁𝗹𝘆 𝗯𝗮𝗱. Instead, it's a sign of 𝘪𝘯𝘤𝘳𝘦𝘢𝘴𝘦𝘥 𝘱𝘶𝘳𝘤𝘩𝘢𝘴𝘪𝘯𝘨 𝘱𝘰𝘸𝘦𝘳. Think about it: if your money can buy more goods and services over time, isn't that beneficial?

Historically, periods of mild deflation have been associated with prosperity, innovation, and growth. The late 19th century in the U.S., for instance, was a period of tremendous technological progress, and prices generally fell during that time. 👇👇

The assumption that people will indefinitely hoard money, waiting for prices to drop further before spending, overlooks human time preference. nostr:npub1gdu7w6l6w65qhrdeaf6eyywepwe7v7ezqtugsrxy7hl7ypjsvxksd76nak wrote an incredible piece on this for nostr:npub1z9fmym2dwme3p9vdscsj626ehr78qyj5gvu4su5k3fuwcxzw3xfsu6ue69 and of course covers it in his books.

The truth is, 𝙝𝙪𝙢𝙖𝙣𝙨 𝙫𝙖𝙡𝙪𝙚 𝙩𝙝𝙚 𝙥𝙧𝙚𝙨𝙚𝙣𝙩 𝙢𝙤𝙧𝙚 𝙩𝙝𝙖𝙣 𝙩𝙝𝙚 𝙛𝙪𝙩𝙪𝙧𝙚. While a person may delay a purchase in anticipation of future price drops, there will always be present needs and wants that money will be spent on.

Furthermore, a fixed supply money like Bitcoin promotes long-term thinking, savings, and sustainable growth, as opposed to the short-termism induced by inflationary fiat systems. In a Bitcoin economy, wasteful ventures are less likely to be funded, while projects that provide genuine value will attract capital. It shifts the economic paradigm from one of debt and consumption to one of saving and investment.

In essence, a world with Bitcoin as a fixed supply money wouldn't be stagnant—it would be characterized by genuine, sustainable growth, where individuals enjoy the fruits of increasing productivity and technological advancement without the erosive effects of inflation.

How was that answer? 😏

𝘛𝘩𝘪𝘯𝘬 𝘪𝘵 𝘸𝘢𝘴 𝘨𝘰𝘰𝘥?

Give it a Like, and bookmark it,

𝘒𝘯𝘰𝘸 𝘴𝘰𝘮𝘦𝘰𝘯𝘦 𝘸𝘩𝘰 𝘯𝘦𝘦𝘥𝘴 𝘵𝘰 𝘴𝘦𝘦 𝘵𝘩𝘪𝘴?

Repost & send it to them 📩

𝘛𝘩𝘪𝘯𝘬 𝘺𝘰𝘶 𝘤𝘢𝘯 𝘥𝘰 𝘣𝘦𝘵𝘵𝘦𝘳?

Leave your own response in the comments below 👇