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"There's no chance of their having a conscious glimpse of the truth as long as they refuse to disturb the things they take for granted and remain incapable of explaining them. For if your starting point is unknown, and your end-point and intermediate stages are woven together out of unknown material, there may be coherence, but knowledge is completely out of the question."

Gigi 2y ago 💬 2

Plato on nocoiners:

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Discussion

moid 2y ago

I’m still stuck on deflation, sorry. In a world based on BTC, how does borrowing work? If the bitcoin that is owed is only ever more valuable would the interest rate have to be negative? Or at least less than it would be in a fiat world with inflation?

Bitcoin Bodi 2y ago 💬 1

The BTC isn't MORE valuable; the items you buy are LESS costly (1 BTC = 1 BTC). You don't pay the loan back with something that is inflatable (USD); You pay it back w BTC.

You borrow 1 BTC to buy a house w 1% interest. 10y later you have worked enough to pay off that 1.1 BTC. The house now costs less BTC.

Does that answer you? I feel like there's more to it.

moid 2y ago

Not quite, I pay back 1.01 BTC and now have a house that is worth less than 1 BTC, say .9 BTC

My point is that it encourages hoarding, why buy things now that will be cheaper tomorrow?

This is not necessarily bad, the planet will love it, but it won’t solve issues of inequality.

There’s a lot to like about bitcoin but I can’t get past this. I like strong money, I’d love to see the FED keep rates high. But deflation is uglier than inflation.

I welcome any links to articles on deflation and debt in a world with a fixed currency like bitcoin