Why is a fixed number of units bad monetary policy?
Discussion
consider that in an economy with a #Bitcoin hard cap
the more economic growth there is,
the more people are incentivized to hodl.
because their hoarded purchasing power increases in direct proportion to the growth,
but without any PoW on their part.
what is the natural result of that incentive structure?
People should be incentivized to save. That’s the point. And if everyone is productive and saving, it will benefit all those that are productive and saving equally. No one is benefiting at the cost of anyone else except if they were unproductive or not saving. And people still need to pay for food to eat, gas to commute, etc, so the economy will be chugging along. In fact, I would argue, as the value of Bitcoin increases, people would be more incentivized to spend their Bitcoin because they can afford more things. That’s why every time the price pumps, it hits a wall as new sellers come to market that weren’t there at lower prices.