As the economy grows, the fed prints more fiat, thus debasing it
How would that work in #Bitcoin?
What's the economics?
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#asknostr
Discussion
Decentralization means that you control yourself without being supervised by others. Do you know what dollarization means?
Dollarization is when you use the USD instead of your domestic currency?
I'm just wondering when an economy expands, companies need credit to produce more cars. That also means people get wages and more buyers enter the market. This causes inflation
How would it be different in #bitcoin?
I sent my explanation to you in a private letter, so you can have a look.
As you said, if it is simply dollarization, the premise is that the US dollar is used all over the world. As early as 2010, there were signs that the meaningful currency Bitcoin was born. Its significance is to become a global mobile payment currency. In this way, all countries will use Bitcoin as a unit, so there will be no inflation. The biggest reason now is that the same car may sell for 10k in the United States but may need 20k in Canada. This is the so-called inflation phenomenon, so please give it to him.
I don't know if this is correct, but I think so.
The fiat money supply is a function of addition and multiplication, and is increased not to accommodate a growing economy, but rather almost exclusively because it a debt based monetary instrument.
Because there are no physical, technical, or mechanical constraints to the supply of fiat currency, its supply will perpetually increase due to the borrowing required as a result of its devaluation over time and the associated interest. It’s a complete doom loop.
#bitcoin is simply a function of division, as it is fixed in supply (constrained by the network rules). As an economy grows and requires a more precise coincidence of scales, the #btc unit is divided to accommodate the exchange of goods and services for #bitcoin.
As long as a monetary good is reasonably and easily divisible, any fixed quantity of that money can serve any economy of any size and complexity.